Weaponizing the Dollar: Why Washington’s “Economic D-Day” Will Backfire

This week, I’ve been discussing the economic issues facing America and how our elected officials choose to do nothing to improve the situation in real terms—only empty promises and rhetoric. Yesterday, I wrote about how our national debt has reached $40 trillion and a few days ago about the student debt crisis and our federal government’s involvement.

With our precarious economic situation, it is almost humorous that our government is putting out these bizarre, sweeping warnings to our allies and trading partners around the globe if they trade with Iran. Promising an “Economic D-Day,” President Trump has promised severe financial penalties for those who dare to trade with Iran. When will our government wake up to the fact that the sanctions we put on these countries simply do not work and are highly immoral? We’ve had various economic sanctions on Iran for over 40 years, with nothing to show for it.

I mean, let’s get our own economic house in order before sending out these dictates to other countries. The latest Treasury auction was a s*itshow, showing how difficult it was to find buyers of our debt. Our federal government may want to use the global financial networks as some seemingly unlimited political weapon; they are ignoring the economic reality back here at home: using the U.S. dollar as an instrument of global coercion destroys trust in our currency and accelerates the de-dollarization of the world economy.

Let’s face reality: economic sanctions and financial blockades may make some Americans feel good that something is being done to those evil people over there, but the reality is we’re shooting ourselves in the foot. The fact is that this latest threat of secondary sanctions makes the claim that America has universal jurisdiction over private contracts and commerce between foreign entities. Forcing foreign businesses to comply with U.S. executive decrees violates our nation’s sovereignty and undermines international rule of law.

In the process of all this, forty years of economic embargoes have proven that economic sanctions have done nothing to remove leaders from power while they also hurt private commerce, inflate local living costs, and deprive citizens of those countries of basic medical supplies and food.

And over here in the U.S., we deal with the blowback, causing our dollar to decline, creating enemies that were unnecessary, and causing the sanctioned countries to trade in alternative currencies. No one is hurt but ourselves.

Might I suggest that true national security and global stability cannot be coerced through Treasury decrees, and to get our U.S. Dollar back on firm footing, we must go back to open trade and liquidity. Mutual economic dependency via voluntary trade reduces international conflicts far more effectively than strong arming coersive blockades of money or goods. When we trade freely, nations have a vested economic interest in peace. America should get back to its original foreign policy, focusing on defending Americans’ constitutional liberties here at home rather than policing the voluntary transactions of businesses and individuals across the globe.