Washington Post columnist Fareed Zakaria writes that the dollar “gives Washington unrivaled economic and political muscle.” But that's like saying that rising usage of the meter as a measure of length would strengthen the French. Meaning it wouldn’t. A meter is a measure, as is a currency a measure.
Zakaria adds that “when Washington spends freely, it can be certain that its debt, usually in the form of T-bills, will be bought up by the rest of the world.” It may seem that way, but Zakaria would likely agree there's more to the story. In the 1970s, soaring yields on various Treasury bonds, notes and bills were evidence that the U.S. could borrow to spend not so “freely,” and only at nosebleed rates of interest.
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