The aff’s wild economic policies could definitely shake confidence in the dollar – the impact is based upon perception!
Dr. Carla Norrlöf, Senior Fellow @ the Atlantic Council, professor of Polisci @ University of Tornonto focusing on the hegemony of the dollar, "Dollar dominance: Preserving the US dollar’s status as the global reserve currency", testifying to the US House Committee on Financial Services Subcommittee on Financial Institutions and Monetary Policy, published by the Atlantic Council, 6-8-2023. https://www.atlanticcouncil.org/commentary/testimony/dollar-dominance-preserving-the-us-dollars-status-as-the-global-reserve-currency/. Accessed 6-29-2023 by NT-JJ
While the dollar enjoys an extraordinary lead over other international currencies, it is not invincible. Poor domestic policies could shake confidence in the dollar. Structurally, the United States’ liquidity-creating role—providing dollar assets to the rest of the world—and the ability to invest in the United States can interact unfavorably with low savings in the United States, resulting in large deficits, rising public and/or private debt. Unlike the euro-zone, however, the United States does not face the prospect of involuntary sovereign default because the dollar is a convertible sovereign currency. The recent specter of US default, a possibility which arises periodically, is entirely voluntary and due to a self-imposed debt ceiling. In the United States, the upper bound of the debt limit is rather determined by foreigners’ willingness to hold dollars, at worst resulting in inflation and depreciation. Although the United States cannot be forced to default, such an adjustment process may not be benign.