Great, Donald Trump Threatened To Default On The National Debt
Source: Huffington Post
Great, Donald Trump Threatened To Default On The National Debt
05/06/2016 06:04 pm ET | Updated 13 hours ago
Zach Carter
Senior Political Economy Reporter, The Huffington Post
Analyzing Donald Trump policy proposals is a fool’s errand. I am a fool: Behold my errand.
The presumptive GOP nominee has an idea for dealing with American debt and infrastructure. The first half of his plan makes sense. The second half is insane.
Trump laid out his plan during a CNBC appearance, which was flagged by Binyamin Applebaum at The New York Times. Interest rates on U.S. debt are very low right now, and have been for years. This makes it a great time for the government to borrow money and spend it on public needs. Roads, bridges, whatever. If there’s something that needs fixing in the United States, borrowing money to fix it is a pretty good idea right now. The boost that this improved infrastructure will give to our economy will be worth it. The economy would grow, boosting tax receipts for the federal government which would make the new debt easy to manage.
Trump believes this. So does Paul Krugman. So far, so good. But then Trump suggests something truly destructive.
“I would borrow, knowing that if the economy crashed, you could make a deal,” Trump told CNBC. If the U.S. borrowed too much and invested its fresh cash in unproductive products, Trump would tell creditors to accept less than what he’d initially agreed to.
Another way to describe this plan: “I would default on the national debt.” Except Trump also told CNBC that he wouldn’t default on the debt, because advocating contradictory positions is part of his #brand.
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Read more: http://www.huffingtonpost.com/entry/donald-trump-default-national-debt_us_572d08e3e4b096e9f0917fac
