Thirty Years Ago, Many Economists Argued That

We Pay Some Price When Necessary To Bring Down Inflation But That Price Is Temporary And Is Not Large Relative To The Permanent Gain From Reduced Inflation.

Although Economists Have Studied The Sensitivity Of Import And Export Volumes To Changes In The Exchange Rate, There Is Still Much Uncertainty About Just How Much The Dollar Must Change To Bring About Any Given Reduction In Our Trade Deficit.

But The Primary Reason For Wanting The Dollar To Become More Competitive In The Near Future Is That We May Need An Increase In Exports This Year And In 2007 To Sustain The Economy's Current Pace Of Expansion.

The Only Way That We Can Reduce Our Financial Dependence On The Inflow Of Funds From The Rest Of The World Is To Reduce Our Trade Deficit.

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.