Get Smart

The Economist:

People saddled with mortgages worth more than their homes are less able to move in pursuit of new jobs … this erodes America’s famed flexibility.

“People are trying to figure out what is in their self interest,” Barack Obama’s Treasury Secretary said to The Wall Street Journal. “It’s not a test you solve in two weeks. It’ll take three to five years.”

Thomas Jefferson was tested with The Declaration of Independence, stating that the purpose of American government is to effect safety and happiness. He was inspired by simple Common Sense declaring security as “the true design and end of government.”

Economic security will only be achieved through monetary stability, contrary to Obama’s chaos. He insists that the dollar is “in alignment” with major currencies, thus eliminating any desire for a devaluation that would increase American exports abroad, making them less expensive and, as a direct result, more competitive.

But Obama also promises to increase wages in the United States by 2011, precluding the other way to decrease manufacturing costs that would price American exports competitively in international markets.

Obama’s economic chaos is further complicated by his policy failures that have led to unemployment growing more than 26%, with an administration that has also contributed to persistent weakness in the housing market.

America’s flexibility is in its national interest, rebalancing the world economy with a stable dollar functioning as a commodity reserve currency, i.e., unit of account.

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References

Barack Obama, The Plan: Barack Obama’s Promise to America and His Plan for the Economy, Iraq, Healthcare, and More (Seattle: Pacific Publishing Studio, 2009).

Tamim Bayoumi, Barry Eichengreen, and Mark P. Taylor, eds., Modern Perspectives on the Gold Standard (Cambridge: Cambridge University Press, 1996).

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