Decline of the dollar is bad for the reputation and influence of the US

Analysis

The falling dollar: most people believe a weaker dollar is bad for the influence and reputation of the US, for consumers and the economy – and for exports. Half the public knows it has fallen “a lot”.

What do Americans know, think and believe about the decline of the US dollar against other major currencies such as the Euro? A new Harris Poll finds that most adult Americans (79%) know that the dollar has fallen against other major currencies and half (51%) know it has fallen “a lot”, over the last few years. Majorities believe the decline of the dollar is bad for the reputation and influence of the United States, bad for consumers and the economy and (contrary to the consensus among economists) bad for American exports. These are the results of a nationwide Harris Poll of 2,565 US adults surveyed online between October 9 and 15, 2007 by Harris Interactive®.

The main findings include:
More than three-quarters of adults (79%) know that the US dollar has declined against other major currencies over the last few years, and half (51%) know it has declined “a lot”. The more education people have the more likely they are to know it has fallen a lot (62% those with post-graduate education compared to 44% of those who never went to college); A smaller majority (57%) knows that the dollar has declined against the Euro, and only 35% know that the Euro has become much more valuable in relation to the dollar. This is known by 56% of those with post-graduate education but by only 22% of those who never went to college; Most people believe that the decline of the dollar is bad for just about everything:

68% of adults think it is bad for consumers;
66% think it is bad for the American economy;
61% think it is bad for the reputation of the US;
60% think it is bad for the ability of the US government to influence other countries; Furthermore few people understand that a weaker dollar makes it easier for American exporters to compete internationally. More than half (55%) of adults believe a weaker dollar is bad for US exports; The fact that a weaker dollar should help exporters is better understood by people with more education (42% of those with post-graduate education and 34% of college graduates compared to only 11% of those who never went to college). What is remarkable, however, is that even among those with post-graduate education more people (49%) think a weaker dollar is bad for exports than understand that it helps them (42%).

So what?
The answers to the question on exports suggest a very low level of economic literacy. Given the widespread belief that the weak dollar is bad for just about everything, and the fact that almost all this decline has occurred since President Bush became president, it is, perhaps, surprising that Democratic candidates and leaders have not used this more forcefully in their criticisms of the Bush administration.

How much has the dollar declined against the euro?
The dollar reached its high point against the Euro on the 26th October, 2000 when one Euro was worth only $0.8252. Currently (as of October 26, 2007) one Euro is worth $1.438. This is an increase of 73% in the value of the Euro, or a decline of 42% in the value of the dollar. (more tables )

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