this post was submitted on 05 Jul 2025
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90% of the strength of the USD comes from global savings and investments.
When national debt increases, the bond market is incentivized. The bond and stock markets have an inverse relationship, creating a bear market for investors, and deflating the USD internationally.
Deflating USD internationally is good for exports though and that seems to be in line with what Trump is promising, no?
Sure, if we’d already have shifted to a manufacturing economy. We’re still substantially dependent on imports. A weaker dollar means more expensive goods for consumers, on top of the import tariffs.
Sure, just saying that it’s not black and white. Economics and fiscal policy have been drenched in political ideologies but they’re just tools. Some people might think that if they had well paying manufacturing jobs they’d be afford to buy that expensive domestically produced stuff. American fiscal policy since the 70s has thrown people in manufacturing under the bus (under the guidance of both parties) so it’s natural there’d be some knee-jerk reaction in form of Trump eventually.
There are very few small businesses in manufacturing. Creating jobs in unskilled labor is far from helpful to our working class. Most of the prosperity from such a shift will go to corporations and shareholders, while the increased cost of imported goods falls squarely on the working class.
Even if it ‘works,’ it doesn’t work for 95% of us.
Dunno, the most prosperous time for the US was when it was manufacturing things. Probably has something to do with 90% tax rate on the wealthiest though too. Either way, neoliberalism taught people that they can only count on themselves so if some people voted against status quo it could have been that things weren’t that good for them.
Yup. It absolutely does have to do with the taxation of the wealthy. We were also leading manufacturing in the late 19th century, when the Robber Barons owned everything while the working class suffered.
That’s one part of the equation. The other is that for a currency to be viable for global trade you have to kill your domestic production, British Empire did something similar around 1840 (although it was agriculture then). There may yet be some unexpected benefits to US downscaling from a global power to a regional one. Whomever steps up to take this role will face similar dilemmas and compromises that those empires had to.
To an extent. The US pulls additional leverage with USAID and unwanted military intervention, and China is doing quite well in BRICS with an export heavy model.
Not everything empire does is evil of course but the main takeaway to what Trump is doing is liberals crying about losing that empire and I have the smallest violin to play because US was not behaving responsibly in that role. In my country that US influence can be seen via US media selecting their chosen neoliberal party and going hard with supporting them, with ruinous results as expected. Too bad it’s done mostly via WB Discovery (USAID too but to a lesser extent) so that’s going to continue for the foreseeable future.