To finance this trade deficit, the U.S. has to borrow from the rest of the world or sell American assets like stocks, businesses, and real estate to the rest of the world.

We are particularly poor at the open economy issues.

Even if the dollar does decline during the coming months, the delays in the response of exports and imports to the more competitive dollar will mean that the increase in aggregate demand from this source may not happen for a year or more.

Domestic inflation reflects domestic monetary policy.

We pay some price when necessary to bring down inflation but that price is temporary and is not large relative to the permanent gain from reduced inflation.

After all, an overvalued dollar gives us the ability to buy foreign goods at lower prices. And the existing volume of exports brings more yen and euros than they would if the dollar were more competitive.

But then in April of 1985 the dollar began a sharp decline. The dollar's trade weighted value fell 23 percent in just 12 months and by a total of 37 percent by the beginning of 1988.

I think that over the last few decades, we have seen better economic outcomes than in the past.

Although economists have studied the sensitivity of import and export volumes to changes in the exchange rate, there is still much uncertainty about just how much the dollar must change to bring about any given reduction in our trade deficit.

First, I think the science of monetary economics has clearly gotten better.

But the primary reason for wanting the dollar to become more competitive in the near future is that we may need an increase in exports this year and in 2007 to sustain the economy's current pace of expansion.

The more competitive value of the dollar turned around the trade deficit.

Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd out private investment or require higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.

A second reason why science cannot replace judgement is the behavior of financial markets.

But because we in the United States finance our current account deficit by borrowing in our own currency, we can move to a more competitive dollar without the adverse effects that followed currency declines in other countries.

The price of imported oil in the US doubled between summer 2003 and summer 2005, reducing consumers' purchasing power by more than 1 per cent of gross domestic product.

The good news is that a competitive dollar in the global market and a strong dollar at home are compatible in both the long run and during the transition to a more competitive dollar.

A rise in the level of saving can reduce aggregate activity temporarily but only a sustained high level of saving makes it possible to have the sustained high level of business investment that contributes to the long-run growth of output.

Homeowners who refinanced their mortgages took out cash and reduced their monthly payments at the same time. Much of the cash obtained by refinancing was spent on consumer durables, home improvements and the like.

And finally, no matter how good the science gets, there are problems that inevitably depend on judgement, on art, on a feel for financial markets.

An increase in the relative price of products from the low wage manufacturers in Asia and Latin America will also make those products less attractive to American consumers.

Thirty years ago, many economists argued that inflation was a kind of minor inconvenience and that the cost of reducing inflation was too high a price to pay. No one would make those arguments today.

To finance this trade deficit, the U.S. has to borrow from the rest of the world or sell American assets like stocks, businesses, and real estate to the rest of the world.

The only way that we can reduce our financial dependence on the inflow of funds from the rest of the world is to reduce our trade deficit.

Unless the trade deficit shrinks, the combination of the trade deficit and the interest and dividend payments to foreigners will grow ever more rapidly.

My theme this evening is that America needs a competitive dollar.

In short, both experience and economic theory imply that the US could now t to a more competitive dollar without experiencing either increased inflation or decreased economic growth.

So just as I want pilots on the planes that I fly, when it comes to monetary policy, I want to think that there is someone with sound judgement at the controls.

Inflation is lower and more stable and the real business cycle fluctuations are more modest.

If the Federal Reserve pursues a strong dollar at home while the dollar becomes more competitive in global markets, we can achieve both price stability and a more balanced path of economic growth.

There is no executive order; there is no law that can require the American people to form a national community. This we must do as individuals and if we do it as individuals, there is no President of the United States who can veto that decision.

Every American deserves to live in freedom, to have his or her privacy respected and a chance to go as far as their ability and effort will take them - regardless of race, gender, ethnicity or economic circumstances.

Under current law volunteers who are not working with an official nonprofit organization are not covered by the Volunteer Protection Act. Therefore, there are absolutely no legal protections for the average American who wishes to volunteer.

There are those, I know, who will reply that the liberation of humanity, the freedom of man and mind, is nothing but a dream. They are right. It is. It is the American Dream.

The thing is there have been American movies that are similar to Solaris, like Alien had a lot of things that are similar, although it's also got the horror element.

On the road to equality there is no better place for blacks to detour around American values than in forgoing its example in the treatment of its women and the organization of its family.

The generic Canadian style of illustration is different from the generic American style.

But the deep desire for peace remained with the American people.

And while the U.S. can never be 100 percent safe from a future strike, our government is working around the clock on measures to protect the American people.

All we're getting from the Democratic majority in Congress and from this White House is more bailouts, more spending, more planned stimulus, more deficits and debt, and the American people have had it.

Who cares about that stuff? This is America, not Jerusalem. I'm an American. Let Harry be a Jew.

The greatest public health threat for many American women is the men they live with.

The belief that the good in American society will finally win out... I don't believe any more.

I suppose, in a way, this has become part of my soul. It is a symbol of my life. Whatever I have done that really matters, I've done wearing it. When the time comes, it will be in this that I journey forth. What greater honor could come to an American, and a soldier?

But the Congress has made the determination that certain kinds of information can be protected even though the American people may want to have access to information.

No one will burn out doing aerobic running. It is too much anaerobic running, which the American scholastic athletic system tends to put young athletes through, that burns them out.

I was on TV for almost sixteen weeks during American Idol. It's at the point now where it's old.

What I think we need to do to engage the American people in a conversation about entitlement reform is to have a bipartisan group of people who come together and put every solution on the table, every alternative on the table. And then we ought to engage in a long conversation with the American people so they understand the choices.

I'm not a Democrat, I'm not a Republican-I'm an American, I'm a human.