The US faces a dilemma of abundance as reserve-currency primacy abroad quietly crowds out production at home.
The US labors under a paradox of preeminence: the dollar’s exclusive status as the world’s reserve currency, a structural advantage so durable it has come to feel like destiny.
The “exorbitant privilege” lowers borrowing costs and weakens fiscal discipline, catalyzing chronic budget deficits and propelling public debt onto an exponential trajectory. At the same time, persistent global demand for dollars keeps the exchange rate structurally elevated, undermining exports and entrenching current-account deficits.
These imbalances are…
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