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Fallout sure to follow US currency bill

By Zhong Sheng (People's Daily)

15:39, October 14, 2011

Edited and Translated by People's Daily Online

Why is Washington so slow in developing an effective plan for addressing its economic problems? Why do people say that the economic problems facing the United States are in essence political problems? The Currency Exchange Rate Oversight Reform Act of 2011, a bill recently passed by the U.S. Senate to force China to revalue its currency, has again deepened people's understanding of these questions.

The U.S. economy is facing a difficult situation, but few people would believe that the United States is left with little choice or that existing economic problems will lead to the decline and fall of the superpower. Many U.S. experts and scholars are busy collecting theoretical and practical evidence to prove that the United States will not decline. "The gloomy predictions of absolute American decline will turn out to be as misleading as similar predictions in decades past," Joseph S. Nye, a former U.S. assistant secretary of defense and a professor at Harvard University, wrote in a commentary published in Lianhe Zaobao.

The Washington political circle is more of a noisy stage than a political decision-making center. Those politicians seldom introduce effective and promising policies, and even if they do bring forward a good proposal, it is likely to be blocked by his or her opponents.

Politics in Washington have been constrained by some shortsighted proposals and decisions, which is the actual risk facing the United States. Another show held by the congressmen on Capitol Hill has made the whole world aware that this risk is mounting.

Can the United States really address its economic and employment issues by imposing tariffs on Chinese goods and forcing the RMB to appreciate? The related advantages and disadvantages are evident. The economic and trade ties between China and the United States are highly interwoven, so the United States cannot unilaterally gain benefits from the moves. The issue that can be understood by those with the economic common sense has dramatically become a "knack" of U.S. congressmen to address problems. The congressmen’s moves can at most prove that they are doing something and attempting to use the so-called political decisions to cater to voters.

The United States used to use China and the RMB exchange rate issue as scapegoats when its economy was in trouble. Facts have shown that such moves do not reduce but rather increase the problems facing the United States. They can only obstruct rather than promote the economic recovery of the United States.

When politicians in Washington are focusing on using political shows to please voters and concentrating on irresponsibly transferring its crisis to other countries, people should indeed think over the prospect of the decline of the United States.

The bill passed by the U.S. Senate will not only waste time but it will also weaken the public confidence in the U.S. politics.


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