cans are understandably frus- trated by the perception that the government is willing to use their taxpayer dollars to cover the losses of wealthy and powerful coastal elites. Abroad, the consequences have been perhaps even more disastrous — both for other nations and the longevity of the US dollar as the world’s domin- ant currency. Higher interest rates mean devel- oping nations have to spend more money to access US dollars to fund investment projects as well as service existing loans. This has crippled their economies, leading to a global economic ripple effect from poor financial policy in the US. This has driven many weaker econo- mies straight into the arms of China, which is eager to conduct business in yuan rather than dollars. Dozens of nations in Africa and throughout Southeast Asia are succumbing to pressure from Beijing as US interest rates continue to rise. The full consequences of this global de-dollarization are only now begin- ning to come into focus. Without seri- ous policy reversal in Washington, America may be on the cusp of losing its decades-long status as the world’s greatest economic superpower. Andrew Abbott Andrew Abbott is the pen name of a writer and public affairs consultant with over a decade of experience in DC at the intersection of politics and culture.
the US economy and the world. At home, ordinary
Americans are struggling to afford basic goods. Industries that rely on cheap capital are also suddenly scrambling for money — a fact that in part led to the collapse of two large regional banks, Silicon Valley Bank and Signature Bank. Other regional banks have lost billions in stock value and account withdraw- als, and the threat of a wider banking crisis continues to loom. Many econ- omists are also predicting a broader economic recession for the US this year. More bad financial decision-making surrounding the bailouts of Silicon Valley Bank and Signature Bank has also aggravated fears of a broader banking collapse. In addition to increased uncertainty about banking rules and regulations, many Ameri-
p r e - pan - demic growth once the pandemic subsided, however, the Biden administration has continued to print trillions of dollars now that the crisis is over. Predictably, inflation soon spiraled to levels not seen in nearly four decades, topping nine percent in 2022, and has remained persistently high. But as the Federal Reserve has raised interest rates to offset inflation, the Biden administration and Democrats in Congress have not responded with the necessary spending cuts. The fallout from this untenable strat- egy has been felt throughout both
But as the Federal Reserve has raised interest rates to offset inflation, the Biden administration and Democrats in Congress have not responded with the necessary spending cuts. The fallout from this untenable strat- egy has been felt throughout both the US economy and the world.
38 • AMAC Magazine
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