“The dollar is the world's reserve currency,” is a statement as American as apple pie. But in a new op-ed for the New York Times, Jared Bernstein, a former economic adviser to Vice President Joe Biden, says that has got to change.

“The problems that having the dollar as the primary reserve currency are causing in our economy and have been causing for years, I think, are deeply underappreciated,” said Bernstein, now senior fellow at the Center on Budget and Policy Priorities. “They include a large and persistent trade deficit, so we’re exporting millions of good jobs overseas… We’ve ended up with asset bubbles, and a marked budget deficit, high unemployment.”

The dollar became the world’s reserve currency in 1944 at a conference in Bretton Woods, New Hampshire. Following World War II, a group of world leaders agreed to move away from the gold standard and peg their currencies to the dollar; at the time, the U.S. dominated world trade and held most of the world’s gold. “There was a point in time where I think that privilege helped us a great deal; that’s well behind us now,” said Bernstein.

It’s a truth generally acknowledged among investors that having the dollar as a reserve currency keeps interest rates lower and helps stave off inflation. But Bernstein says that’s missing the point.

“I’m not arguing that we should devalue or deface the dollar; I’m actually making a free trade argument which is that the value of the dollar should be set in international markets,” he said.

As far as higher interest rates, “It’s true that we’d probably see somewhat higher interest rates but that would be associated with much higher growth,” he said.

In the end, Bernstein’s argument boils down to trade. More specificially, the U.S. trade deficit. When we talk about the trade deficit, we’re looking at how much more the U.S. imports than exports. In 2013, we imported $475 billion dollars worth of goods more than we exported. Our deficit with China was $318 billion.

“That may sound kind of wonky and not that important,” said Bernstein. “But the end result of that problem is that our exports to the rest of the world are well more expensive than their exports back to us. So by exporting their excess savings to us, they’re importing jobs and labor demand that ought to be here.”

That relationship between the U.S. and China in particular has garnered a great deal of scrutiny over the past five years.

But Chinese currency policy has been shifting. The country has been advocating the use of the Yuan (also caused Renmibi) in transactions outside of Asia. A growing number of European centers are settling trade disputes in Yuan instead of (you guessed it) dollars. That also means a growing number of countries are keeping foreign exchange reserves in Yuan.

Bernstein supports this trend, but says that letting the Chinese be the proactive party is not the way to go. “We can’t let this fix itself,” he said.

General consensus is that no currency will be able to de-throne King Dollar in the coming years. But the question Bernstein is hoping people start asking is… should they?

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