May 23, 2024

Greenback Warfare: The Treasury Department’s Approach to Global Economic Security

U.S. dollar dominance exists as an essential element of U.S. national power on par with more visible military and diplomatic tools. Architected at the end of World War II through the Bretton Woods system, the U.S. dollar’s global role for trade and finance underwrites sustained military expenditures, generous foreign assistance, and agenda setting within multilateral institutions. It allows the United States to borrow at favorable rates, import cheaper goods, and sustain economic sanctions.

Rumors about the demise of the U.S. dollar remain premature.

Despite its long history, the dollar’s preeminence and advantages face both international and, increasingly, domestic threats. Overseas, partners and adversaries continue to vie for an alternative currency or mechanism to move value at the scale, speed, and predictability of the U.S. dollar. Some international stakeholders lost confidence in the United States because of domestic shocks including the policy and regulatory failures that enabled the 2008 financial crisis and the unpredictability of the Trump administration. To many people overseas, the United States could no longer serve as a guaranteed bedrock of economic order and as a safe harbor for investments.

Whether these concerns are repairable or represent the beginning of an inescapable decline for U.S. economic power is at the center of Saleha Mohsin’s “Paper Soldiers: How the Weaponization of the Dollar Changed the World Order.” Chronicling four decades of U.S. economic leadership, Mohsin brings to life the often technical and dull world of financial markets in a thoroughly researched, accessible, and engaging narrative.

Read the full article from Lawfare.

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