Trump wants to treat U.S. Treasury Bond holders like the suckers who lent him money in Atlantic City
One day after assuring Americans he is not running for president “to make things unstable for the country,” the presumptive Republican nominee, Donald J. Trump, said in a television interview Thursday that he might seek to reduce the national debt by persuading creditors to accept something less than full payment.
Asked whether the United States needed to pay its debts in full, or whether he could negotiate a partial repayment, Mr. Trump told the cable network CNBC, “I would borrow, knowing that if the economy crashed, you could make a deal.”
He added, “And if the economy was good, it was good. So, therefore, you can’t lose.”
Such remarks by a major presidential candidate have no modern precedent. The United States government is able to borrow money at very low interest rates because Treasury securities are regarded as a safe investment, and any cracks in investor confidence have a long history of costing American taxpayers a lot of money.
Experts also described Mr. Trump’s vaguely sketched proposal as fanciful, saying there was no reason to think America’s creditors would accept anything less than 100 cents on the dollar, regardless of Mr. Trump’s deal-making prowess.
Think about it from the perspective of a Trump potential voter. Republicans have told you your whole life that US should manage its finances like a family does around the kitchen table. And for a decade now, families have been told that if they get in financial trouble, call your creditors and get workouts on credit card balances, mortgages, etc. And the creditors have plenty of payment programs that accept less than the full amount. So why (from the Trump potential voter perspective) should Trump manage the US debt any differently?
True. This will not hurt him with his base. Only people who live in reality will care.
And sadly… the 4th estate isn’t in the reality arbitrating business anymore. Although I have to admit that the NYT takes a nostalgic stab at holding this plan up to reality in the lede and with the experts they talk to.
Except that the biggest US Debt creditor is the US. Trump’s bullshit (and CNBC for not calling him on this) pushes the canard that foreigners own our debt. Social Security doesn’t get paid back by getting creditors to take a haircut.
What do we do when the media NEVER calls him out? you know it’s gonna happen.
Trump : some crazy shit
Sane person: no, that isnt true
Wolf Blitzer: well, lots of opinions here, we’ll be right back with a youtube of a cat
That’s why im afraid of this election.
In other words, Ben, you’re worried that the country is made up of a majority of functional morons.
If that’s the case, does it really matter who wins the election? Isn’t the bigger problem at that point the fact that we live in a country with a majority of morons?
Not majority, no. But factor in the apathetic ones and consider our low voter turnout and who votes……….
Distinction without a difference.
Trump is not as big a problem as a nation full of morons is.
@anonymous
//Trump is not as big a problem as a nation full of morons is.//
Trump is symptom not problem.
Exactly.
The only path I can discern to a Trump victory (barring a terrorist attack, which I do NOT think would make people choose Trump but I could be wrong about that) is chaos, and I think I see the direction it will come from.
Trump crowds will only get more aggressive now that he’s the nominee, and larger and larger groups of protesters will show up to battle them, quite likely literally.
Demonizing minorities and “hippies” will follow. Worked for the until-this-year most despised presidential candidate of all time. And I think the Hillary folks are correct that nominating Bernie would have played into that.
You know the nation is in decline when 10’s of millions of people believe every word of a talk radio entertainers and deny established science
If you lent money to someone who can print more money at will, then why on earth would you ever accept partial repayment???
That’s totally nuts, and even an idiot should be able to figure that out.
@LE: In theory, those newly printed bills are worth less because the money supply has grown, so the effect on the bondholder is the same either way.
However, this shows why Trump is spectacularly unsuited to be president: He sees money the way a borrower does. The government is run by and for lenders.
“So all good, except the United States is not a struggling casino. It’s a sovereign nation with sovereign debt.”
And in that one observation, we see the fallacy of running the Government like a business.
Welcome to the first day of the next six months. This is how it’s going to go, week after week.
1. Trump says or tweets insane thing that exposes his ignorance and complete unfitness for the presidency.
2. When, instead of giving him a “oh, he’s just saying crazy shit because he’s Trump, not because he’s an ignorant fool who’s the living embodiment of Dunning-Kruger syndrome” pass, the MSM goes “whoa, that’s really just breathtakingly stupid and crazy,” aide walks crazytalk back.
3. MSM gives collective sigh of relief and moves on to next story.
4. Trump comes out and doubles down on crazy statement.
5. Press ignores it as “old news.”
-ncsteve a commenter at TPM
Social Security doesn’t get paid back by getting creditors to take a haircut.
Social security is a tax. The SS system is a Ponzi scheme by statute.
Current tax collections (the money that we employees and employers pay in to the system) are immediately spent on current obligations (the money our parents collect each month.)
I’m not sure how SS needs to get “paid back.” It is idiotic to consider potential SS recipients as “creditors”. They/we (I’m including every person who has paid in to the SS system here) are not creditors. We are tax payers. We pay SS taxes for 40+ years & hope to collect as much as our parents collected.
FWIW, I’m not against SS, SSI, SSDI or the other multitude of gov’t “handout” programs.
I’m simply against the lie that SS taxes are an “investment” that pays dividends. That’s just not true.
Raise the cap. We should pay all year.
http://www.salon.com/2016/05/06/our_awful_elites_gutted_america_now_they_dare_ring_alarms_about_trump_sanders_and_cast_themselves_as_saviors/
Social security is a tax. The SS system is a Ponzi scheme by statute.
Social Security is insurance. It is as much insurance as your life insurance or your medical insurance. What you pay in is spent on the pool of people who need it. And when you need it, you get the payout. It isn’t an investment or a ponzi scheme.
Your payroll taxes are not entirely paid out on current obligations and they haven’t been for awhile. There is a SS surplus and that surplus is in US treasuries. Because your representatives in Congress have been spending that surplus. If US bonds are to take a haircut, then there is no paying back of the obligation to SS.
You should all read the Salon article mentioned by LeBay. Another good read is Thomas Frank’s book, “Listen Liberals, or Whatever Happened to the Party of the People”.
here’s a bit from the Salon piece:
“The Hillary supporters have the authoritarian mentality of small property owners. They are the mirror image of the “realist” Trump supporters, the difference being that the Trump supporters fall below the median income level, and are distressed and insecure, while the Hillary supporters stand above the median income level, and are prosperous but still insecure.
To manipulate them, the Democratic and Republican elites have both played a double game for forty years and have gotten away with it. They have incrementally yet quite comprehensively seized all economic and political power for themselves. They have perverted free media and even such basics of the democratic process as voting and accountability in elections. Elites on both sides have collaborated to engineer a revolution of economic decline for the working person, until the situation has reached unbearable proportions.
The end of the Salon article:
“The stock market may be doing well, and unemployment may theoretically be low, but people can’t afford housing and food, they can’t pay back student loans and other debts, their lives, wherever they live in this transformed country, are full of such misery that there is not a single word that an establishment candidate like Hillary Clinton or Jeb Bush says that makes sense to them.
This time, I truly believe, there’s not a dime’s worth of difference between them. When they did have a difference to choose from—i.e., the clear progressive choice, Bernie over Hillary, who consistently demonstrates beating Trump by double the margins Hillary does—the elites went for Hillary, even though she poses the greater risk of inaugurating Trump as president. And now you want us to listen to your panic alarms?
They are the mirror image of the “realist” Trump supporters,
Any author who would cast Trump supporters as “realists” isn’t worth reading.
The number of people in the US who actually understand (even in a rudimentary way) how national debt is structured and how financial markets work: maybe 1 million.
The number of people in the US who have no understanding whatsoever of how national debt is structured and how financial markets work, but who hear radio ads every week telling them that they can pay back the credit cards or pay off the IRS for pennies on the dollar and believe that something like that could obviously be done to the US national debt (which is all held by Arab Sheikhs and Chinese Warlords, anyway): about 319 million.
95% of the Americans who actually vote don’t care if repudiating part of our debt will cause banks and the financial markets to go into chaos because they’d do the same with their own debt in a heartbeat.
That’s what you need to think about if you really think this will hurt Trump.