Money: Balancing Act

Alone among the major nations, the U.S. has permitted its citizens to spend, lend and invest their money freely almost anywhere in the world. This unshackled capitalism has helped dozens of foreign economies, brought the U.S. worldwide economic power and prestige, and earned considerable profit for American industry. In one sense, clearly, the free outflow of capital is a distinct asset. In another, it is an increasingly serious problem, since it is a major source of the U.S.'s payments deficit and the cause of its stepped-up loss of gold.

Last week Lyndon Johnson took both aspects into account with...

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