Is the U.S. doomed if USD is debased?

There is a lot of fear out there, linking the recent weakness of USD to the long-term doom of the U.S.  Even if we do not consider that USD is still not below the level in 2007 on a trade-weighted basis (there was not much of this kind of discussion then), this fear is completely baseless.

We do not have to look far back into history to have so many countries seeing their currency depreciated at some point and then come roaring back to the top of economic form.  Among developed countries, Britain and Canada easily come to mind.  Was Britain cursed when the pound collapse under Soros attack?  One key reason for the recovery of many countries is export driven growth.  That aside, using currency to measure a country’s long-term prospect is misguided.  It is the economy, stupid ;=).  Whenever faster growth and fuller employment happen, either due to currency devaluing or not, the currency is likely to appreciate again. 

So in today’s U.S., anything that could help improve growth and employment, including devaluing USD, should be considered as a viable policy tool, and is likely to result in long-term appreciation of USD.