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Basically every economic indicator indicates that the American economy is in the best shape it has been since september 11th (and it was vastly overinflated before then). If it were not for Katrina the US would have run an even deficit last year. An amazing accomplishment, and the decision to cut taxes by the republicans was one of the greatest economic decisions of our time.
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Are they really? Which indicators would those be? Is your assertion that Katrina cost the US Federal gov't over $320 billion, or roughly 2.6% of GDP. If you remove the budget deficit, US growth last year was well negative.
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Wheter or not people are trading with US dollars is going to have no effect on this. The US could care less if people stopped trading in US dollars, they would simply print less currency to compensate.
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Clearly untrue. If countries use US currency as a reserve currency, the US effectively exchanges paper for real goods. In effect, the world is loaning the US money with interest equal to the negative of inflation. If the US$ comes flooding back to the US b/c foreign economies stop holding it, this would cause massive problems for the US and the rest of the world.