| HappySqurriel said: I can demonstrate why it doesn't work ... If the USA devalued their dollar by 40% they would increase the cost of foreign goods and services, and all commodities by 66%. Gasoline prices (for example) would increase from $4 per Gallon to $6 to $7 per gallon, food bills will skyrocket, and most people will be forced to cut back or demand higher salaries. If people cut back all the currency devaluation did was lower the standard of living of the people in your country (essentially cutting their wages), and if people get a salary increase to maintain their standard of living their goods and services cost as much as they did prior to the currency devaluation. In general, people who earn more have more negotiating power and will likely be able to get increased salaries while people who earn less will not be able to. The net result of this is that most currency devaluation results in less equal distribution of income. The funny thing is that most people who are against inequal distribution of income are for currency devaluation. |
Not really. Devaluation is hated largely by anti-free-trade groups, the problem being that such groups are mostly perceived as fringe nuts nowadays. But you can look at the hardships faced in countries like Argentina that had to devalue for trade purposes and know that the left is no friend of devaluation for trade purposes, just of, paradoxically, economic stimulus. Though i personally tend to disbelieve in pure monetary stimulus, but rather that stimulus should be used for future investment
Monster Hunter: pissing me off since 2010.
