Wealth & Money Quote by Martin Feldstein

There is a quiet flex embedded in Feldstein's technocratic calm: the United States can take a hit to its currency and call it policy, not crisis. When other countries see their exchange rates slide, they often get the full punishment cycle - capital flight, ballooning foreign-currency debts, inflation spikes, political panic. Feldstein is pointing to the structural cheat code that makes America different: the dollar isn’t just a national currency; it’s the world’s default instrument for trade, savings, and safety. If you borrow in your own currency, a weaker exchange rate doesn’t suddenly make your debts unpayable. It simply reshuffles who bears the cost.

The intent is strategic, almost reassuring. A “more competitive dollar” is a euphemism for depreciation framed as responsible adjustment: exports get cheaper, imports get pricier, the trade gap narrows, manufacturing looks less punished by globalization’s arithmetic. The subtext, though, is less cozy. This isn’t just about trade. It’s about privilege. The ability to finance deficits in dollars lets the U.S. externalize risk onto global holders of dollar assets, who absorb the loss in purchasing power when the dollar falls.

Context matters: Feldstein is speaking from an era when “global imbalances” were a central anxiety - America consuming more than it produced, the rest of the world recycling surpluses back into U.S. assets. His line reads like an argument for managed decline rather than austerity: adjust the price of the currency instead of the living standards at home.