Trump changes from one bad idea to an even worse one about the nation’s debt

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.”

(Getty Images via Business Insider)

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6 comments on “Trump changes from one bad idea to an even worse one about the nation’s debt

  1. Bill says:

    The fact that Trump calls for buying back debt once again shows that he is like the Platte River, a mile wide and an inch deep. Trump advocate3s increasing the debt. To buy back debt you need money. The federal government doesn’t have any money to buy debt back with. Print more money? Sure, go ahead and devalue the currency and perhaps cause inflation or hyper-inflation. The U.S. already has $19 trillion in debt. Sure, go ahead and add more trillions to an almost insurmountable burden of debt.

  2. Steve says:

    “Who owns the most U.S. Treasury bonds? China? Japan? Saudi Arabia?

    The answer: None of the above.

    It’s us. We Americans own almost $5 trillion in Treasury bonds, all told. That’s more than twice as much as China, Japan and all the oil exporting countries put together.

    And so when Donald Trump monkeys with the U.S. government debt, as he has in two interviews in the past few days, this isn’t just a matter of abstract economics or of sticking it to foreigners.

    It’s about threatening to take your personal 401(k) out into the back yard and beat it like, as they say, “a rented mule.”

    And yet people with those very investments in their retirement funds are for Trump and defend their positions like crazed lefty’s defend their support for Sanders who would do the very same thing!
    Albeit in a slightly different way.

    http://www.marketwatch.com/story/trump-just-threatened-your-401k-2016-05-10

  3. nyp says:

    So if we own our own debts, why do people get hysterical about the national debt?

  4. Steve says:

    If you think back a while, I posted much the same, nyp.

    People don’t know, so they believe all the hype. Liberals and Conservatives (Republicans and Democrats), both do little to help make the truth widely known.
    In fact, I would bet it takes active research and investing to discover this stuff. Most people would rather not work at managing their own money.

    But, think about it, if the populace did clearly understand this; what would we force our politicians to do?
    I think it is in the political establishment’s interest to let the public remain voluntary mushrooms on this and several other things.

    BTW, DIS may be a buy in the morning.

  5. Rincon says:

    Well put Steve. The details can make all the difference.

  6. […] Thus, I may only pout and stamp my feet and shout, “Look here, look here,” because I said it first: […]

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