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Wednesday, May 30, 2007

My Two Cents (Currently 1.47 euro pennies and falling)

Is There Any Good News from the Bush Administration?

I read in a Spanish economic journal an opinion that the dollar will make a 20% gain against the euro. The dollar has been sliding against the euro for the past several years and has been tanking pretty good since I arrived over six months ago. I certainly would not expect a 20% gain any time soon. The U.S. economy is being crippled by the Iraq War and Bush is digging a hole that we won’t escape from any time soon. This is worse than Ronald Reagan’s tax cuts (some of which he was smart enough to repeal, unlike Bush’s tax giveaway for the richest Americans) coupled with a heavy increase in defense spending. The Reagan crisis wasn’t rectified until Bill Clinton took office and was able to balance the budget almost ten years after Reagan left the White House.

I don’t think that America has even begun to see the ill effects of George W, Bush’s completely irresponsible fiscal policy, irresponsible for everyone except those profiting from the war and, of course, the oil industry. Business is always good for the oil industry, especially when administration after administration refuses to acknowledge that we even have an energy problem in the U.S. and citizens don’t even bat an eye when gas prices spike upwards of a dollar or more over a couple of months. According to Republican thinking, people are supposed to scream bloody murder when taxes are raised to provide more government services for citizens, yet when gas prices gouge a family’s budget so that Exxon can reap $36.2 billion in profits last year, we are supposed to sit back and admire the marvelous ways of the free market.

I think that $4 a gallon would be the best thing imaginable for the American economy. Higher fuel prices would more accurately show the true cost of petroleum which would steer our economy towards fuel efficiency. This has been the case in Europe for years as you can quickly see by the efficient cars they are forced to drive and the mass transit systems already in place. Higher taxes on gas would channel our economy towards efficiency and we could use the revenue to speed along the process. The tax now is being collected by the oil companies. They use their gains to buy second and third homes around the world, private jets, and for propaganda to poison the minds of Americans against alternative energy and the ills of pollution. Show me a “scientist” who opposes the consensus view on global warming, and I’ll show you someone who receives regular checks for the oil industry. They use the profits they gain from us to pollute not only our environment, but our minds if we allow them.

I made a bet with a friend a few months ago. He said that gasoline would drop to $1.50 a gallon before it inched back up to $3 a gallon. He lost that bet. Higher gas prices have an effect on just about every aspect of the American economy because we have done absolutely nothing in the last 30 years to do anything that would change our complete dependence on oil, imported or otherwise. Higher fuel prices coupled with our growing national debt due to the war probably means that the dollar won’t soon be making any gains against the euro.

I would like nothing better than to be wrong about my predictions for a continued weak dollar, I have a lot at stake in the matter as an American living in Europe on American currency. I would say that the dollar has fallen about as far as it can for now against the euro, but this doesn’t mean that it has to go up. I predict a less than 5% adjustment, either up or down, for the next year. I hope that I am wrong.

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