Last Monday, the Bush administration made yet another request of the American economy. According to an article titled “U.S. Push for Weaker Dollar Rattles Markets Around Globe” in Tuesday’s Wall Street Journal, Dubya and his sidekicks publicly encouraged the goal of a weaker dollar against foreign currency.

This objective is aimed primarily at Chinese and Japanese money, with the Euro taking a close second. Essentially, this action would make the dollar cheaper in other countries, and they believe this action will enable U.S. manufacturers to compete better in their own soil, and in foreign markets, and stabilize a yo-yoing economy.

While these are obviously good intentions, I believe the changes could bring about some unforeseen results. The American government should try its hardest to keep itself out of global market operations.

First off, the plan would be more effective if carried out over a large amount of time, instead of so abruptly. Many economists believe a long-run change would be better, as it would make imports more expensive in the U.S. market, and U.S. exports more expensive overseas.

An instant dramatic change in foreign exchange rates to the dollar may cause U.S. investors to freak out, lose confidence in their investments, and cause markets to go down or fluctuate. This is not what we want in an unstable economy.

A weaker dollar would also mean a strong currency in foreign countries, prime players being Japan, China and Europe. This has the potential to delay export-backed expansions in these countries, because their exports are now more expensive in the United States. This would mean demand for these products in the United States might decrease.

It must also be taken into account that sometimes Japan and China sell their currencies for U.S. dollars to keep their inflation rates down. This method has worked well for them, so basically no motivation exists for them to change it. They may be resistant to accept the weaker U.S. dollar, because it means their practices may not be as effective.

According to China’s State Administration of Foreign Exchange, China plans to keep their exchange rate of the yuan “basically stable.” China could also protest the policy by selling their currency for Euros or gold instead of the dollar. Economist David Hale predicts if this happens, bond yields could rise anywhere from .5 to 1 percent. (Hint for people clueless at to what this means: high bond yields are not a good thing.)

Another aspect to take into account is the ever-widening U.S. budget deficit. The United States relies on many financial instruments to finance its budget deficit, among those being investments in Treasury bills, stocks and bonds from foreign investors. In the last 12 months, foreigners have purchased $233 billion in U.S. Treasury bonds. This seems like a random number, until we mention the fact that, according to the U.S. Treasury’s Web site, www.ustreas.gov, there were $257 billion in bonds issued total. This means roughly 90 percent of all financing of our nation’s debt actually came from outside foreign investors. If they reduce their buying power in the United States, that would mean less investing and less financing of our national debt. That is definitely not what we need.

Finally, the U.S. dollar is already suffering through a sluggish year in foreign trading. According to www.xe.com, the dollar was trading at 1.144 to the Euro, an eight-week low. The dollar is also at a 33-month low against the Japanese yen. This may seem like good news to the Bush administration, since the dollar value to foreign currency is lower and weaker, but the Dow Jones Industrial Average was also down 1.13 percent as of Tuesday.

So why should you, a college student, care about international affairs concerning foreign exchange rates? As the world becomes more globalized, more business is being done internationally. This means that when or if you ever graduate and get a real job, more likely than not your employer will do some sort of international business.

Also, if you ever plan on traveling or even working abroad, this is something you will experience firsthand. You will have to exchange your money for their currency, at whatever the current rate is. For example, for the time I visited Spain this summer, the average exchange of Euros to the dollar was 1.1522 (www.xe.com). Last summer, the average was around .9408. This is about a 19 percent decrease in buying power of Americans in Spain, over the course of one short year.

So in conclusion, this is not a policy to be taken lightly. We should consider the costs of a weaker dollar value against foreign policy, and be aware of it, because it might affect us directly or indirectly someday.