E. J. Dionne Jr. - Billions for Guns, Vetoes for Butter - washingtonpost.com

Always insightful, this is a thoughtful op-ed. I was watching Kudlow on CNBC this morning and he was hectoring one of Paulson's boys about the weak dollar. He made the point that the the US had comparable rates of growth with EU. He kept saying the underlying fundamentals should keep buoying the US Dollar. I would like to know the cost of the Iraq War on the US Dollar. Isn't the sheer number of dollars being blown in Iraq not good for the US balance sheet? If a currency trader knows that the US government is hemorrhaging cash on a wasteful war (versus more roads, health care or R&D) wouldn't that alone lower the value of the dollar. Simple supply and demand right? Sure that US economy is huge, but the uncertainty of how much we're wasting in Iraq should be hurting the dollar.