Trump wants to run the US like a Trump business and not pay back creditors
- Thread starter wildchild
- Start date
This is huge news. The biggest we've seen from Trump.
Renegotiating the national debt is essentially a default. Even discussing the issue at that level causes investors to back off and higher rates.
I haven't done all the math on this. But I will say this either makes Trump a fool or brilliant.
I see where's going though. He understands the mechanics of the debt.
Tariffs bring industry back which balances the budget. Once that's done, the bleed stops. Then, he wants to go to the table and knock the piss out of our creditors. He will target foreign ownership - Japan, China, Saudi's etc. He may even stiff them. Afterall, that foreign debt stock is essentially held by currency manipulators who stole our jobs. Trump may consider the default as punitive. That's the angle.
Even if he can write off half the debt, rates could easily triple or higher. So he's got some work to do. I still must consider this more.
On the face of it, it's brilliant though. Paying our creditors less then what we owe......bully tactics to write off debt. It's brilliant. BUT.
He may even write off debt held by the Federal Reserve. That's all bullshit money that should be written off anyway.
Honestly, I don't see how Trump makes it through his Presidency if he gets elected. Tens of trillions are on the line, and Donalds here to upset the apple cart.
Renegotiating the national debt is essentially a default. Even discussing the issue at that level causes investors to back off and higher rates.
I haven't done all the math on this. But I will say this either makes Trump a fool or brilliant.
I see where's going though. He understands the mechanics of the debt.
Tariffs bring industry back which balances the budget. Once that's done, the bleed stops. Then, he wants to go to the table and knock the piss out of our creditors. He will target foreign ownership - Japan, China, Saudi's etc. He may even stiff them. Afterall, that foreign debt stock is essentially held by currency manipulators who stole our jobs. Trump may consider the default as punitive. That's the angle.
Even if he can write off half the debt, rates could easily triple or higher. So he's got some work to do. I still must consider this more.
On the face of it, it's brilliant though. Paying our creditors less then what we owe......bully tactics to write off debt. It's brilliant. BUT.
He may even write off debt held by the Federal Reserve. That's all bullshit money that should be written off anyway.
Honestly, I don't see how Trump makes it through his Presidency if he gets elected. Tens of trillions are on the line, and Donalds here to upset the apple cart.
This was yesterday and perhaps the day before on CNBC...
If a U.S. default were to ever come to fruition, it would result in such a massive rewrite of valuation methodology and infrastructure that basic lending, financial services and liquidity of all kinds could grind to a halt for years or maybe even decades while everyone litigated their way back out of the resulting structural and credit stone ages.
It's about as strategically silly (or just uninformed?) as his suggestion that we nuke ISIS.
It's about as strategically silly (or just uninformed?) as his suggestion that we nuke ISIS.
That's one opinion.
Either way, America can't pay the national debt back. Nor can it grow its way out of it.
So we're getting a default, one way or the other. Everyone has known this since Obama doubled the national debt.
So the question becomes do we continue with the same song and dance and kick the can downt the road. Extend and pretend?
Or do we actually face the inevitable and do something about it?
Yes, the financial system will get fucked up. Excuse my language. But it's going to happen regardless.
So better to do it on OUR TERMS, then the markets. That's the brilliance of this plan. Trump ain't waiting for a massive sell-off in Treasuries before he acts. This way, we get the jump on the market, which otherwise, the outcome would be horrific.
This way is better. I'll say that.
The biggest issue with besides the obvious effect on interest rates is the fact that investors put their money in treasuries specifically in case of economic turmoil. The full faith and credit of the US goverment to pay it creditors has been a foundation since Washington. I would say it has served us quite well.
The US is insolvent. Either we extend and pretend, or we face the music. Either way, there is no way America can pay back what it owes OR grow its way out of it. Everyone knows this.
So whatever elected official you put in the Whitehouse, you're going to have to deal with it. Trump is just broaching the subject. Others don't even touch it. It doesn't make him more guilty or the others less guilty.
The debt is there. Obama and GW are responsible for most of it. It ain't going away. We can't pay it back. We're almost at Greek levels.
What do we do?
Search the topic and you might be surprised. In historical terms there is absolutely nothing to see there. The debt is fully reasonable in proportion to the size and growth rates of the economy and manageable by conventional policy.
Oh I have. Can you post those historical charts that prove otherwise? You realize the post-WW2 economy was totally different, right?