Donald Trump Will Be An Economic Disaster And ‘King Of Debt’ Proposals Are Proving It
Donald Trump is proving to be, not just a little ignorant on the economy, but downright dangerously stupid when it comes to economic matters. The latest edition seemed to come last Thursday when he floated the idea of creditors taking a reduction in the face value of their debt or defaulting on the national debt. As if that wasn’t bad enough, he tried to clarify the first botched idea today by suggesting a second disastrous economic plan straight out of post-WWI Germany. Trump declared himself the ‘King of Debt’ and apparently wants America to join in his debt-laden kingdom.
Trump’s comment Thursday that immediately drew deserved scrutiny from experts was:
I would borrow, knowing that if the economy crashed, you could make a deal.
Translation: he’s going to pay back less than he borrowed. This idea was called “stupid”, “irresponsible”, “ridiculous” and even “treason” and justifiably so since it would amount to an economic disaster for the United States. MarketWatch described the absurd thinking of Trump on this brilliantly:
[contentblock id=7 img=gcb.png]
It’s incomprehensible that, decades after Trump began to go through bankruptcies, debt restructurings and the like, he hasn’t figured out that those deals ended with him being stripped of control of assets he spent years trying to build up.
Yes, his creditors wrote down debt at the Plaza Hotel. They also booted him out. Yes, his creditors restructured and wrote down debt at Trump’s casino companies, and he hasn’t controlled them in years. Same thing at his giant Riverside South development on Manhattan’s West Side. It’s why Trump would have been better off putting Dad’s dough in an index fund way back when.
Mr. Trump, your creditors reduced your debt in order to get you to go away. Did you miss that?
Instead of spending a few days realizing his mistake and trying to prepare himself to be a responsible leader, he tried to say he was misquoted and then pitched a plan just as idiotic as the first. Speaking with CNN, he stated:
[Y]ou never have to default because you print the money, I hate to tell you, OK?
In other words, you can just print money until you are out of debt, according to Donald Trump. While this is a form of what the U.S. and other countries have been doing with quantitative easing, the problem comes when you add the projected explosion in debt under a Trump presidency. Trump’s tax cuts have been projected to add $12 trillion to the debt over the next decade while, of course, saving him and his wealthy brethren millions. Add in some of the other assumed disasters that are Trump’s economic plans and that $12 trillion easily gets a lot worse.
CNN absolutely roasted the idea of printing money to avoid default by the self-proclaimed ‘King of Debt’ with a few sentences everyone should read:
[T]he federal government doesn’t have any money to buy debt back with. The U.S. already has $19 trillion in debt. Trump’s plan would require the U.S. Treasury to issue new debt to buy old debt.
Or it would require the Federal Reserve (America’s central bank) to buy the debt. That can cause inflation (or even hyperinflation), and send prices of everything from food to rent skyrocketing.
And that’s to say nothing of the fact that the president doesn’t control the Fed, so it’s unclear how Trump could even get more money into the economy that way.
Not only is the plan a known disaster waiting to happen exemplified by conditions in the Weimar Republic in 1920s Germany, it’s evident Trump isn’t even aware he wouldn’t control the tools to carry out his idea.
There are plenty of reasons to dislike the idea of a Donald Trump presidency. But the dangerously idiotic economic ideas he has championed to this point are beginning to stick out as the worst of the worst. Electing the ‘King of Debt’ will lead to economic catastrophe for the vast majority of Americans and shame on us if we allow that to happen by voting him into office.