FIRST ON FOX: The United States must catch up to China’s digital currency in order to avoid a threat to America’s “dollar dominance,” economic experts say in a new policy volume compiled by former House Speaker Paul Ryan.
“American Renewal: A Conservative Plan to Strengthen the Social Contract and Save the Country’s Finances” outlines solutions to America’s emerging fiscal crisis that is “entirely of its own making.” It features policy prescriptions from 19 scholars, mostly from the American Enterprise Institute, and is aimed at pushing concrete solutions that Congress can enact before the country is engulfed in a “debt catastrophe.”
Ryan, R-Wis., told Fox News Digital in an interview ahead of the book’s release that it was “designed to prevent America from going down the path of a debt crisis and losing the dollar as the world’s reserve currency.”
“If we lose the dollar as the world’s reserve currency, it will massively inflict fiscal and monetary damage to our country. It will make it harder for us to finance our government, our social safety net and our economy, frankly, because interest rates will be much higher,” he said. “The fiscal policies in this book are proposals designed to fix these programs so that they’re reliable and solvent and that they don’t go into a debt crisis.”
The former speaker wrote in a forward to the volume released Thursday that America’s system of “self-governance” established over the last 250 years is being challenged worldwide by “by China’s repressive regime and other authoritarian strongholds.”
“The rules that apply to other nations don’t always apply to the United States, or at least not in the exact same way. Yet the U.S. cannot forever defy the laws of economic gravity,” the forward said, referencing the more than $31 trillion the country holds in national debt and 40-year inflation high.
Ryan says that “the world is going to digital currencies,” which presents both a challenge and opportunity for the U.S. as the new technology is taking over worldwide.
“If America wants to maintain its place as the keeper of the reserve currency of the world, which gives us huge privileges and advantages as a country, then we too should digitize our dollar so that we have the attributes of a digital dollar, which is frictionless money, which is much more efficient money,” he told Fox News Digital. “But more importantly, show the world how a free society should handle this challenge by having a two-tier system which guarantees the government has no role in the management of our money. Because the Chinese, the way they will manage money, violate privacy and liberty.”
The former speaker said a proposal for a central bank digital currency (CBDC), presented by leading economic scholar and former member of the Federal Reserve Board of Governors Kevin Warsh, is a tool that will advance national interests by encouraging competition without unnecessary government intrusion.
“The two tier [CBDC] system guarantees that there … is a layer between the citizen and the government for the money,” Ryan explained. “That’s why that proposal is there, because we know where the world is going. We want to get ahead of it. And we want to make sure that we can lead the world in making sure that digital money maintains our core principles of privacy and liberty.”
Warsh, now a Hoover Institution scholar, made the case for a U.S. CBDC that could be a solution to the problems that other digital currencies pose.
“I do not expect China’s fiat currency to dislodge the U.S. dollar on the world stage in the next decade,” wrote Warsh, who sits on the boards of UPS and Coupang, a leading Korean e-commerce company. “But the coupling of two powerful trends — the emergence of great-power rivalry and the technological revolution in financial infrastructure catalyzed by the creation of blockchain technology — represents a consequential threat to the extant American-led financial architecture.”
“Unless American policymakers recognize the new technology frontier, the U.S. runs the risk of losing the privilege of currency dominance,” said Warsh.
The book is designed to “start debate” in Congress in order to fix the problems facing the nation.
“And what this book is attempting to do is to start that debate. It is to get our country and our political leaders and policymakers looking at and talking about the really big problems confronting America,” said Ryan.
“And if we’re going to compete successfully with China, then we’re going to have to fix our problems from within,” he stated.
Ryan’s biggest achievement in his 20 years in Congress was his tax reform plan, he told Fox News Digital, calling it an “immensely important down payment.”
But he said that “we can go even further in the same direction and deliver even better results for the American people with an even better tax system, building on the successes we got in the Tax Cuts and Jobs Act. And this is a proposal to do that.”