Snow Refuses to Develop Plan to Deal withPossible Sudden Decline of the Dollar

Washington, D.C. - Congressman Brad Sherman on Wednesday questioned Treasury Secretary John Snow about whether the Treasury Department is developing a plan to address a sudden, precipitous decline in the value of the U.S. dollar.

Testifying before the House Financial Services Committee, Snow cavalierly dismissed the possibility as œremote.

œYoure so confident in the smooth realignment of currencies that theres no reason to have a plan for a sudden and catastrophic decline in the dollar? Sherman asked. Snow said, œI think that prospect is remote.

Sherman has urged Treasury and other government officials to address the possibility, acknowledged by many economists, that the dollars value could drop " perhaps by as much as 20 percent in one week or 50 percent in one month " due to balance of payments problems and other factors.

Sherman has drafted and soon will introduce legislation to create a high-level task force to identify effective policies to put a brake on such a massive decline in the dollar and policies to deal with the aftermath of any major decline.

œIf you had asked most foreign and defense policy experts prior to September 11 how likely it would be that a group of less than 20 al Qaeda terrorists could kill 3,000 people in the United States, the answer would have likely been ˜remote, Sherman said. œI believe that there is a less-than-remote possibility that the dollar will decline over the next several years. The question is by how much, and how quickly?

œFor relatively little in expenditures of money and time, we should be able to come up with a plan to address sudden dollar decline, Sherman added. œWe seem to have an aversion to planning for traumatic events " be they nuclear terrorism or an economic catastrophe. I see little downside to being prepared.