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That's true. The US dollar reserve status is a contingent factor however. How do we maintain it? An obvious factor is our military capacity. That means defense
by andrewjl 6y ago
That's true. The US dollar reserve status is a contingent factor however.
How do we maintain it? An obvious factor is our military capacity. That means defense spending. Under a capitalist system that also requires a competitive commercial defense sector and also a strong economy capable of sustaining such a sector via tax revenue.
Most tax revenue comes from individuals. In an era of mobile capital, corporate taxation is sub-optimal. So the economy's health is linked to the prosperity of individuals, in aggregate. Prosperity can come from competition, but the most durable forms of prosperity are tied to increasing productivity.
Continuing on this first principles trajectory should lead to a stable structure. It's not one that is dominated by "print-and-export-dollars"-style industries.