The way to create jobs in the United States, according to the President Obama Export Initiative, is to double exports in the next five years. This export goal could support 2 million new American jobs, According to C. Fred Bergsten, Director of Peterson Institute of International Economics.
Bergsten in The Washington Post article of February 3, 2010, “How best to boost U.S. exports,” states that the U.S. sells nearly $1.5 trillion worth of goods and services annually to the world which creates nearly 10 million good paying jobs. Most significantly, maintaining a competitive exchange rate for the dollar with other countries, will help the U.S. in its drive to increase jobs and exports.
Get the Dollar Down and More American Jobs
"Every $1 billion of additional exports will produce about 7,000 very good jobs," points out Bergsten. Dan Froomkin in The Huffington Post, October 15, 2010, "Job-Creation Idea No. 10: A Lower Dollar Would Level The Playing Field," points out that a high dollar acts as a tax on U.S. exports and a subsidy for U.S. imports. The result is a terrible hit on American manufacturing jobs.
Froomkin reports the progressive economist Dean Baker explains that a 30 percent dollar over-valuation of the American dollar means that the U.S. is providing a subsidy of 30 percent for imports and a 30 percent tariff on exports. This is what has given the U.S. a huge trade deficit. Baker claims the U.S. would have a more healthy manufacturing sector if it got the dollar down.
Clyde Prestowitz, a former Reagan official who runs the the Economic Strategy Institute, believes a lower dollar will help the American economy. He believes other nations should reevaluate their currencies so that the dollar is worth less. Prestowitz thinks this major U.S. reevaluation of the dollar should be done through the International Monetary Fund and the World Trade Organization.
Keep the U.S. Dollar Strong
Robert Reich, The Huffington Post, October 3, 2010, "Why It's Foolish to Weaken the Dollar to Create Jobs," feels that weakening the dollar to create jobs is wrong. Reich states that no country wants to loose jobs because its currency is higher than the dollar. Subsequently, a lower dollar policy will encourage currency wars.
Reich believes that a weaker dollar will make America poorer. His reasoning is that the U.S. imports about 18% of its goods. With a weaker dollar the U.S. will have to pay18% more for its imports. In another words, a dropping dollar is like an extra 18% tax on what we buy.
America Needs Jobs
The United States is in an economic quagmire. America can no longer rely on its antiquated consumer driven economic model for the necessary volume of new jobs. The majority of Americans aren't buying stuff because of economic uncertainty. Many economists agree that keeping the U.S. dollar at a competitive exchange rate will enhance the export sector which should create jobs in the United States. For now, this means letting the dollar continue to drop in value.
John A. Marinchek - John is a student and writer of Social-Economic issues, the Human Potential movement, and Martial Arts. His specific interests deal with ...
