Is a strong dollar a good thing for the U.S. economy or a bad thing?
As employment stagnates, manufacturing continues its slump, and overall confidence in the U.S. financial system wavers, the nation’s economists have begun abandoning their homes and sending their loved ones overseas. “We’ve noticed a trend among the leading economic thinkers, be they Keynsians, supply-siders, or students of the Austrian school—they’re putting their families on one-way flights out of the country, often leaving half-finished survival bunkers behind them,” Paul Klement, an analyst with the Brookings Institute, told reporters Tuesday. “The flights aren’t on domestic carriers, either. I think they saw something in that last transportation industry report that really spooked them.” At press time, none of the nation’s economists could be reached for comment
via www.theonion.com
I looked it up ... and it turns out a strong dollar makes exports more expensive and imports less expensive. If you are a mercantilist (one who thinks a trade surplus is good for the economy because the national income accounting identity shows that GDP is smaller with a trade deficit) then you think this is a bad thing for the U.S. economy. But, if you have a more nuanced view of the social welfare of people in the U.S., you might consider inexpensive imports to be a good thing for U.S. consumers. Also, you might consider that a trade deficit is a symptom of a strong U.S. economy. If imports are normal goods then higher U.S. income leads to increased demand. Weak export demand might be symptomatic of a weak global economy.