White House economist Jared Bernstein told a congressional hearing that there was “some evidence” that China wanted the US dollar to lose its status as the world’s reserve currency. But Senator Bill Haggerty stressed that the biggest threat to US dollar dominance comes from within.
China wants US dollar to lose status as global reserve currency, Bernstein says
White House economist Jared Bernstein responded to several congressional questions about the U.S. dollar’s status as the global reserve currency during a hearing on Tuesday about his nomination to chair the Senate Banking Committee’s Committee of Economic Advisers. answered.
A current member of the White House Council of Economic Advisers, Bernstein joined the Center on Budgets and Policy Priorities after serving as Vice President Joe Biden’s chief economist in the Obama-Biden administration, where he became a senior fellow. served. 2011-2021.
At the hearing, Senator Bill Haggerty (R-Tennessee) cites efforts by several countries, including Brazil’s President Luis Inacio Lula da Silva, to threaten the US dollar’s status as the world’s reserve currency. and called for a halt to dollar trading. control. Emphasizing China’s praise for this, the Tennessee senator asked Bernstein, “Do you agree that China would like to see this happen?” A White House economist immediately responded:
I think there is evidence that there is.
On why China wants to reduce the dominance of the US dollar, Bernstein said: He added: If we could control the reserve currency, we could impose sanctions like we did against Russia, and it would be quite effective. ”
The debt ceiling and the ‘greatest threat’ to the US dollar
Senator Hagerty expressed concern about the “incredible debt piled up” by the U.S. government and the “interest costs incurred by the CBO.” [Congressional Budget Office] In fact, it is projected to be larger than our entire defense budget. ”
But Bernstein said, “One thing the dollar can really do to maintain its status as a reserve currency and protect its value is to raise the debt ceiling.”
Commenting on the possible loss of the US dollar as a reserve currency, Hagerty stressed the importance of getting fiscal policy in place. “I think fiscal spending is going to let the market dictate what happens to the dollar as a reserve currency. To ourselves, we know China wants us to do it.”
China wants us to lose our status as a reserve currency, but I think the biggest threat comes from within by allowing our spending to spiral out of control. is the path we are on now. I need to get it back under control.
Do you think the USD will lose its status as the world’s reserve currency? And do you agree that the greatest threat to the USD comes from within? Let us know in the comments section below.
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