Obama links U.S. dollar's woes to Bush policies
GARY, Indiana (Reuters) - White House hopeful Barack Obama on Thursday linked the dollar's steep slide to imbalances in the U.S. economy and Bush administration policies, which he said had put the country deeply in debt.
Obama, who is battling Hillary Clinton for the Democratic presidential nomination, said Americans were buying more products abroad than they were selling to overseas markets.
"We are spending all our money, spending overseas and spending dollars and nobody is buying things from us," Obama told a town hall event in Gary, Indiana, in response to a question.
"What happens is Saudi Arabia's got a lot of dollars because they're selling a lot of oil. In China, they have a lot of dollars because they're selling us all the things all the stuff we used to make right here in Gary," Obama said.
"And at a certain point, they say you know, we have enough dollars," he said. "Our banks are full of them right now."
The dollar has lost roughly 40 percent of its value since 2002. In recent months, the pace of the dollar's drop has accelerated as investors around the world have lost confidence in the health of the U.S. economy.
Obama, who has taught constitutional law at the University of Chicago, used a professorial style to giving a longer version of the answer that modern U.S Treasury secretaries routinely offer when asked about the U.S. currency -- that its value reflects economic fundamentals.
But he went a step further in saying that President George W. Bush's policies have hurt the economy and therefore weakened the dollar.
"We've been borrowing money like nobody's business from China. We're like that cousin who always comes over and never seems to have job. You know that guy who always has new rims on his car," Obama, who is vying to be the Democratic nominee against Republican Sen. John McCain in the November election.
Obama said that the national debt has gone up sharply because of the Iraq war, which by the time it is over "will cost us over $1 trillion."
At the same, Bush has given "tax cuts to some of the wealthiest Americans who didn't need it and weren't even asking for it."
"The point is, the way to strengthen the dollar is to strengthen the economy and the way to strengthen the economy is to invest in our infrastructure, invest in our information systems, roll back those Bush tax cuts, end this war, get our budget in balance," Obama said.
"If we do those things then over time, the dollar will actually get stronger," he said.
(To read more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at blogs.reuters.com/trail08/)
- Malaysia military tracked missing plane to west coast: source |
- Malaysia air probe finds scant evidence of attack: sources |
- Ukraine forms new defense force, seeks Western help |
- UPDATE 1-Missing Malaysian plane last seen at Strait of Malacca-source
- Freescale loss in Malaysia tragedy leads to travel policy questions