Helping Americans understand just how rich we are

To a first approximation, no. Being the world's reserve currency is a prestige thing for central bankers, but the tangible benefits for the US economy are negligible.

To a second approximation, there's a little benefit. You can think of dollar bills as interest-free IOUs issued by the US government. Each of them is an IOU the US government doesn't have to issue in the form of a government bond. There's a benefit to the US in the interest it's not paying on the bonds it's not issuing. How large is this benefit? With 10-year treasury bonds yielding about 3.5 percent a year, and with a cash circulation of maybe a trillion dollars abroad, it computes to an income of $35 billions a year. Sure, that's a lot of money for an individual. But compared to America's $15-trillion economy, it's petty cash.

That said, and given that it's such a paltry sum, it's highly likely then that if I were to request a check issued in my name for an even way more paltry sum, say 1/100 of a percent of the $35 billion, a check would be in the mail forthwith.

As I said, it's a large sum for an individual. But you're spreading it among more than 300 million individuals -- not 10,000 individuals as your "1/100th of a percent" suggests.

'Twas a joke, Thomas, a wee bit of friviolity, [I think I just invented a word, or in other words, I neologized] not a swipe at your reply.

Thanks for explaining it to me and so thoroughly. I appreciate it.

I think there is a lot more than a little benefit.
Having the US dollar as the main international reserve currency has permitted, over the years, the US to incurr in external deficits that would not have been tolerable for other countries (and would have meant IMF intervention with stern measures).
But I think the thread is not about this.

Nothing -- except that it's likely to frustrate the purpose of your own thread. Remember, it's about "helping Americans understand just how rich we are". By getting testy with Americans who don't get it yet, you're not helping them understand. On the contrary, you're needlessly provoking resistance and making it hard for them to understand what you're trying to explain.

The Italian Lira never was a main international reserve currency. That didn't prevent Italy from running even greater deficits than the US while the Lira existed. Likewise for the Japanese Yen. But I agree, that's probably a different thread.

Nope, just misspelled it.

Well said; thank you.

Your "we are top dogs" chest thumping is ugliness particular to America for one.

It's Koyaanisqatsi.

Definition: ko.yaa.nis.katsi (from the Hopi language), n. 1. crazy life. 2. life in turmoil. 3. life disintegrating. 4. life out of balance. 5. a state of life that calls for another way of living.

Americans will do nothing about it. The answer has something to do with the philisophical/social concept of "the economy". You could go to the very top of the chain of cammand and ask "Why do we have so many aircraft carriers?" and the only answer is "Because we can." It's nihilism.

they're psychotic. they're insane.

It's just not in the same league of misery TKO. You (and I) have lived charmed, spoiled lives and it's frustrating for me to see real misery equated with such first world angsts.

I don't seek to take anything away from your experience, I just think it's a risible contrast to the kind of misery I'm talking about.

Then add groupthink on top of this and you have America.

http://en.wikipedia.org/wiki/Groupthink

Thats what I think anyways.

I appreciate the way you've presented the arguments but I'm not sure it will make the "top dog" types give a "****" so I'll opt for censure of the ugly attitude myself.

Who is equating? I am just not interested in taking the conversation there. Even at the roughest points in my family's life, I've known exactly how fortunate we have been. I lived under no illusion that we were close to the very bottom. However, you've so blatantly declared I have no understanding of this topic (read: whereas you do), and by your assertion make it clear that you have no interest my "spoiled" view point. What am I supposed to post here RG?

As Thomas stated, how does any of this help people understand how rich we are? What makes you think that you understand that fact (We are rich.) better than anyone here in this thread?


Then you'll kindly keep your keyboard off of my life in the future. Your comments were far out of bounds. You've no qualification to speak on what I understand and what I am able to contribute here. You're no more impassioned about this topic than anyone else. You're no more horrified by the terrible realities of 3rd world poverty than anyone else. Just because I or anyone else do not express themselves in the way you choose to, is no reason to dismiss with such an authoritarian zeal.

I agree with you about not handicapping 3rd world nations with tariffs and leveling the playing field. This seems to me fair, and sensible. Why not keep the topic here? You introduced this topic by demonstrating the overproduction of aircraft carriers and relating their value to what potential good that money could do in a humanitarian sense globally. Why not keep the topic here?

Speaking to the title of the thread, what about my (and other Americans) wealth, do you think I don't understand? How does someone convince you that they do understand their wealth? What actions should I as a consumer do to improve my global impact? What actions should I take as a citizen to advocate the enabling of developing nations?

These questions are harder than making angry bold print posts, and in my opinion (an opinion you've declared not to value), are much more important.

Can we move on?

T
K
O

2 comments -

1, our status as 'top dog' is only temporal. We are not inherently better than other countries and we will not REMAIN top dog. My point wasn't to show that we are better, or superior or something, but to say that we are being looked at to solve the problems because we happen to be on top of the heap right now - and for that reason only. You could have addressed your comments to any country on the planet and they would have been equally valid, in terms of their foreign and economic policies.

2, it's not chest thumping. It is a realistic way of viewing the world. I don't think you properly assessed my comment or it's place in our discussion.

Cycloptichorn

I take it your argument, Robert, focuses on these two points you made a couple of pages back.


In response I would make the following points;
1. Americans are fortunate indeed. We inhabit a country with ample natural resources and have fewer adverse historical burdens toi bear than some other nations. However, that alone certainly does not explain our relative wealth. There are far less economically successful nations with the same gifts of fortune.
2. You have not made the case at all that America is more niggardly than other rich nations. Our total giving includes a much larger share of giving by individuals and private organizations than that of other OECD nations, and that alone says something significant. We have also maintained a much larger defense establishment than other OECD nations, something you have argued is a waste that would be better used in such giving. Many of us don't agree with you on this score. Certainly through the fall of the Soviet Union, now 20 years ago there was a clear need for it, and our military itself beneffitted other nations otherwise in peril.

Throughout our history America has advocated free trade and economic policies that promise economic benefits to poor nations that have the will to produce and export.

3. You have not addressed two key questions. First what is the cause of poverty? Second, will giving by richer nations alleviate it significantly,. or is something else required? Until you do this, I think you are merely making a lot of wind.

Standing ovation for this thread and your every last argument on it, Robert.

I think you've caught Deist and Cyclo on shaky ground, and they're simply in denial and trying to cover it in deliberately obtuse fashion. The guy eating the several hours old food out of the fast-food dumpster is infinitely better off than the North Korean trying to feed his starving family tree bark. The guy begging at the intersection with literally millions of dollars worth of automobiles passing by it is infinitely better off than the vast majority of people in the Congo. Cyclo talks about "security" as if losing a job or being a paycheck away from being homeless is even in the same category of living where you'll likely never have a job in an American sense, let alone a decent roof over your head. It's easy to think living on a meager $1500 a month is poverty, if you can pretend you don't know there are dozens of nations where the average citizen wishes he could earn that in a year. "Poverty is poverty" is an absurd position to take when you consider just how low that scale can go.

What really irks me about their reactions; is they don't seem to be getting it that you're advocating nothing more than a level playing field. A chance to compete. As if the Indian hoping to bring $6,000 a year home to his family doesn't need a job a whole lot more than the guy who can make triple that on unemployment.

I believe the heart of the problem is more than Cyclo's admitted apathy... it is a fundamental ignorance of the mechanics of an economy. I tried once before (unsuccessfully) to explain that the global economy isn't a big pie with only so much to go around. Two centuries ago, Adam Smith detailed perfectly why the more currency changes hands, the more wealth is actually created. This is where the nonsensical theories that a hand up to the next guy necessitates an emptier pocket for everyone else fails on merit. Maybe Thomas could explain it better.

I think it's tragic that guys as clearly intelligent as Cyclo and Deist choose not to learn the truth, because they are precisely the type of men who would support and spread your lesson if they took the time to understand it.

For what it's worth, I think your position is completely reasonable to say the least, if a bit too conservative for my taste. I advocated a more direct approach a few years back and was met with similar resistance. On this thread, I suggested 10% of whatever we deem necessary for Military Spending be allocated to feeding, watering, and providing the most basic education and healthcare to everyone on earth (after learning that such a sum would actually cover these expenses). Two of the first 3 responses actually suggested that would be worse because of over-population issues. Disgusting.

I find it pathetic and cowardly that so many Americans are afraid to compete with their fellow man on a level playing field. And the level of apathy towards millions of starving children is well beyond disgusting.

Keep up the good work!

Not exactly true. Where Robert's living now the U.S. Dollar rules and doesn't suffer the daily devaluation of the native currency. I suspect he'd have to look pretty hard to find a merchant who wouldn't accept it.

When the Ogallala aquifer dries up Americans will adopt a more realistic perspective.