It’s one ingredient that does help prop up the US, but really similar fiscal means are available to countries that fulfil all these conditions: 1. Have their own central bank and currency, 2. Have flexible currency exchange rates and not peg to a commodity or other currency, and 3. Exclusively issue bonds in their own currency (that their own central bank exclusively issues).

Apart from the US several countries meet this threshold, including the UK, Canada, Australia, New Zealand and Japan. On the other hand, the Eurozone countries do not, and this helps some of the member states, but only at the expense of some of the others.

Those criteria you list make for independent monetary policy making. Not at all the same thing as world reserve currency.

You don’t see oil markets trading in New Zealand dollars. Or half the world holding large amounts of Aussie dollar in their forex reserves. Or a bunch of Canadian gov bonds. Or benchmark their rates against the US in reporting.

If the US prints more half the world carries the pain but US gets all the benefit. Lose reserve currency status and that so called exorbitant privilege goes up in smoke. Along with the financial system built on it

New Zealander here. Our stock market (businesses) are nothing like the US market. It isn't a relative size thing - there really is worse choice here.

Last I looked I recall 39% of the US stock market is owned by foreigners. Fair enough since say Apple revenue I'd say 60% from foreign sources.

65% of world equity values come from the US, which is a crazy, crazy amount.

Like, maybe that's sustainable but it's certainly not sustainable in a world where you're pissing your trading partners off on a daily basis.

The problem is (whether it's real or not) the majority of the US population feels the economic prosperity is being used against them.

You might say it's a PR problem, others might say it's an actual problem. Either way it's going away now.

The prosperity is going away. The inequality behind the feeling is not going away, it's getting worse.

In what way is prosperity going away?

Today, nearly everyone has pocket computers, cheap internet, longer lifespans, better healthcare, cars that last decades, homes with plumbing, electricity and climate control, etc.

Poverty has been declining for decades.

Your life looks much better than your parents, and looks much, much, much better than your grandparents.

The US has recently been reversing as many of the policies that created and maintained that prosperity as possible.

This is a capitalists hand wave and hides many issues and tries to halt any discussion. It’s a cliche at this point. Now talk about housing. Are we better off there? My parents had it pretty good. They have a pension and worked at a public corporation even. They get their health care covered in retirement. I don’t get anything guaranteed for my retirement. They paid 50K for their house that is worth at least 550K now. Have salaries kept up? We have cell phones so it’s all OK I guess, why are you all complaining? Go watch some Tik Toks and count your blessings.

It's well known that in the US people are doing much more poorly than their parents on average.

Except having what are essentially televisions in their pocket. That's the one win they get.

When someone says it's well known fact - it usually means there is no data to proof this statement.

Doing more poorly? but everyone has all kinds of home appliances, nice reliable cars with tons of features, more people have college degree, bigger houses, etc.

> Your life looks much better than your parents

In what way?

> and looks much, much, much better than your grandparents

I'm not so sure about that one, either—my grandparents had to go to war to kill the Nazis, and it's looking like we're going to have to do that again.

America's prosperity relative to its peers. America used to be a clear #1. Trump's policies seem designed to ensure that America will lose its place as #1 and let peers like China and Europe overtake it.

Sure. I don't think the inequality was the primary complaint though.

Any conversation about trade imbalance is silly if you only look at goods and ignore services.

In New Zealand as a purchaser of a lot of US services and few US goods, I can see why countries want to create tariffs against US services.

World police is also not an argument anymore. Noone has faith into current US administration. They simply can walk away from their allies or even stub into their back.

Services are white collar and goods are blue collar.

Trump was elected by blue collar workers and his plan reflects that.

Fine: just don't write economic arguments if that is what you want to say.

Blue Collar workers: ~ 30–35% of working population. Policy that screws your country and the other 2/3rds of the population is bad.

I do think a country needs a manufacturing base if it wants to support a military without getting pwned.

His trade deficit calculations also reflects this, and he gets pissed off when someone like Canada or the EU call him out on it. Canada’s digital services tax modeled after Europe, for example, was a non-starter for the Trump admin even though he didn’t bother to include services in his trade deficit calculations.

Alternatively, Trump is extremely transactional and actually thinks that trade deficits represent other countries taking advantage of the US.

For example, tariffs on agricultural products that won't grow in the US do not fit into any sort of rational model.

That isn't alternatively, it's parallel. Trump is an idiot and may or may not understand any of this. But his economic team does have a plan.

My comment just outlines that plan.

Expecting people that don't exist to take jobs that are lower value than working at McDonalds is not "a plan".

Plenty of US manufacturing already pays close to retail wages and these geniuses want to reshore stuff with much lower value add. It's delusional.

I don't understand why this is downvoted, I think people are thinking you are promoting a view, while you are non-judgmentally guessing.

And I do agree with you, I think the current administration is focused on devaluing the dollar, while trying hard to minimize collateral damage such as higher rates.

I don't think this is going to work, but I can see a lot of ways in which it could. Future will tell us.

Can you break down the isolationist streak for me?

The US government seems to want to intervene in every place it can, and doesn't look anything like say old school China or Japan. It seems like some people see anything short of maximally interventionist as isolationism, and I don't understand it.

He is talking about financial isolationism, aka protectionism. Tariffs lead to trade wars which will lead to the USD no longer being the world reserve currency.

Wouldn't "financial isolationism" just be not trading period, in other words plain old isolationism?

Being a little isolated seems like being a little pregnant.