The over-valued dollar is causing the United States to run large trade deficits. The huge trade imbalance was one of the main factors that led to the bubble driven growth of the late 90s and this decade. This is why people who know economics everywhere see it as crucial to have the value of the dollar decline. That will make imports more expensive and U.S. exports cheaper, thereby moving trade closer to balance. But, Roger Altman is desperately afraid about this sort of correction. He wants to keep the dollar over-valued and is willing to raise taxes and cut important social programs in this hope. A lower dollar might be good for the economy, but it is not good news for Wall Street, hence Mr. Altman's concern.
--Dean Baker
