Even If The Dollar Does Decline During

The Price Of Imported Oil In The Us Doubled Between Summer 2003 And Summer 2005, Reducing Consumers' Purchasing Power By More Than 1 Per Cent Of Gross Domestic Product.

An Increase In The Relative Price Of Products From The Low Wage Manufacturers In Asia And Latin America Will Also Make Those Products Less Attractive To American Consumers.

To Finance This Trade Deficit, The U.s. Has To Borrow From The Rest Of The World Or Sell American Assets Like Stocks, Businesses, And Real Estate To The Rest Of The World.

Increased Government Spending Can Provide A Temporary Stimulus To Demand And Output But In The Longer Run Higher Levels Of Government Spending Crowd Out Private Investment Or Require Higher Taxes That Weaken Growth By Reducing Incentives To Save, Invest, Innovate, And Work.

First, I Think The Science Of Monetary Economics Has Clearly Gotten Better.