I’ve referred to Donald Trump as clueless, rudderless, a cipher, a darting water bug, a train wreck and a human Etch-a-Sketch, but his comment on CNN today about the country never having to default on its debt, which he suggested as a possibility days earlier, because the government prints money is either dangerously ignorant or reckless and destructive beyond imagination.
Trump said today:
If interest rates go up, and we can buy bonds back at a discount, if we are liquid enough as a country, we should do that. In other words, we can buy back debt at a discount. People said I wanted to go and buy debt and default on debt, these people are crazy. This is the United States government. First of all, you never have to default because you print the money, I hate to tell you.
As Business Insider noted, paying debt by printing money causes inflation and destroys entitlement programs such as Social Security and Medicare.
Actually, Trump did not call for a 100 percent default, but suggested the country could negotiate to pay something like 80 cents on the dollar. That would be wonders for the nation’s credibility and credit rating.
Business Insider concluded: “So Trump’s observation that it’s theoretically possible for the government to avoid default by printing money is technically true. But any actual implementation of that plan would likely be as big of a mess as his initial plan of offering an overt haircut to creditors.”