Econopoetry: the Perfect Storm?

The three most vexing economic threats of 2005 are mounting debt in the U.S. (see below), the decline of the dollar abroad, and the growth of the U.S. trade deficit. Could these three be solved by a "perfect storm", an economic disaster in which the problems cancel each other out? This would doubtless involve a major downward correction in U.S. standards of living, but it could be a good thing if, unlike the crashes of 1929 and 1973, it left us with high employment and productivity.

Here's the concept: downward pressure on the dollar causes a voluntary or involuntary devaluation. This mitigates debt as nothing else can; only those with variable interest rates still pay full price. Likewise, if it is severe enough, the devaluation could address much of the trade deficit. What it would not fix, of course, would be our internal problem of growing national debt; but it would at least allow us to start again from a better platform.

The same thing could be accomplished, and with a lot less turmoil, if everyone just agreed to cut back a bit and save some money. Unfortunately, fiscal discipline at any level seems to be a thing of the past.