Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less


#1

NY Times:

Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less

One day after assuring Americans he is not running for president “to make things unstable for the country,” the presumptive Republican nominee, Donald J. Trump, said in a television interview Thursday that he might seek to reduce the national debt by persuading creditors to accept something less than full payment.Asked whether the United States needed to pay its debts in full, or whether he could negotiate a partial repayment, Mr. Trump told the cable network CNBC, “I would borrow, knowing that if the economy crashed, you could make a deal.”

He added, “And if the economy was good, it was good. So, therefore, you can’t lose.”
Such remarks by a major presidential candidate have no modern precedent. The United States government is able to borrow money at very low interest rates because Treasury securities are regarded as a safe investment, and any cracks in investor confidence have a long history of costing American taxpayers a lot of money.
Experts also described Mr. Trump’s vaguely sketched proposal as fanciful, saying there was no reason to think America’s creditors would accept anything less than 100 cents on the dollar, regardless of Mr. Trump’s deal-making prowess.

“No one on the other side would pick up the phone if the secretary of the U.S. Treasury tried to make that call,” said Lou Crandall, chief economist at Wrightson ICAP. “Why should they? They have a contract” requiring payment in full.
Mr. Trump told CNBC that he was concerned about the impact of higher interest rates on the cost of servicing the federal debt. “We’re paying a very low interest rate,” he said. “What happens if that interest rate goes two, three, four points up? We don’t have a country. I mean, if you look at the numbers, they’re staggering.”

More proof, as if any were needed, that Trump is a moron.
His alleged deal-making ability will not translate to running a country. Asking creditors to accept less than full value is ridiculous. It works for a hotel financed by junk bonds and, on a larger scale, I just read that Puerto Rico’s creditors have proposed a plan where they would accept $.50 on the dollar. Heaven forbid the US should ever find itself in such straits.


#2

I would think the first step to getting out of a hole would be to stop digging.

Someone should ask both these immoral and unacceptable candidates what they would do to eliminate the budget deficit first. Especially since it is going to skyrocket over the next five years as Social Security, Medicare and Obamacare explode in costs.


#3

Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less; isn’t rocket science its actually what everyone does with dept, quite common. Whats amazing is no-one else thought of the common procedure of negotiation in eight years? :confused:

This too…

I would think the first step to getting out of a hole would be to stop digging.


#4

Was Mayor Bloomberg a moron?

He ran NYC like a business and was highly successful. To automatically think that Trump can not do the same with the country is not logical nor fair.

Deals are what makes this world go round, but for some reason, deals in government went out of vogue awhile ago. Politicians that make deals these days are panderers and pariahs, so now nobody cuts deals and nothing gets done. Trump, like him or not, knows how to cut deals and he will pick people that know how to cut deals. With Trump, everything will be up for negotiation, and that might be just what this country needs to clear the logjam that our government has become…


#5

A number of years ago, I had to negotiate a credit card debt. They agreed for less, which was good. My credit rating went down…which was bad.

The US has a credit rating as well. Paying less than what we owe could lower our credit rating. A lower credit rating will effect interest rates.

So, I’m not sure it’s a good thing.

Mike Bloomberg is actually pretty smart. He went from being the son of a bookkeeper for a dairy company to getting his MBA at Harvard.

Trump has a bachelor’s degree from Wharton.


#6

Yes, it might not be the best thing, but it is an answer and an option. And it’s better than anything the other candidates ever mentioned. Wait, did the other candidates ever mention the debt crisis at all?

The fact that the NY Times would automatically poo poo it makes me think it’s probably a good idea…:smiley:


#7

My idea is to work to bring back manufacturing to the usa from overseas by fixing the tax rates so manufacturubg here for a fair living wage still allows a company to operate in the black. This would then provide JOBS for our economy and result in less impirts and more exports. Also stop aid to any countries connected with Al Quida or ISIS. Also stop funding overseas abortions. Stop funding planned parenthood would save over 500 MILLION a year.

Tax and spend more (bernie) or get creditors to accept less (trump) aren’t going to reduce the debt so its gone.

Really wish we had a fiscal CONSERVATIVE running…we don’t.


#8

I wonder if this will mean cutting everyone’s Social Security Payments by 50%. Or doctor’s medicare payments by 50%. I guess we’ll see.


#9

What is this thing you call, “a fiscal conservative”?:confused:

I’ve never seen one…:shrug:


#10

Yes, it might not be the best thing, but it is an answer and an option. And it’s better than anything the other candidates ever mentioned. Wait, did the other candidates ever mention the debt crisis at all?

Amen, and no, one might assume “debt crisis” was deleted with the PC conversation apparently.

I would have to think most of us had gone through something similar as Mary I know I did with student loans.


#11

This is funny! We just finished beating Argentina up and forcing them to honor their debts after they tried to do exactly the same thing, and now Trump wants to do it here?


#12

We could employ other big ideas from the corporate world. Don’t they make companies leaner and more profitable by selling assets? So let’s sell off states that are costing too much welfare and not pulling in enough tax revenue. Or sell off intellectual property; we have a lot of patents we could auction off. Or how about leasing national parks to hotel and amusement-park developers? Or better still, to strip-mining companies! We’ll be in the black in no time! :thumbsup:


#13

it happens all the time with credit cards.


#14

We are already in financial dire straits. Get a clue.


#15

I agree with you.


#16

Sounds like you really know how to run a country.


#17

Isn’t this what those debt negotiators do?

I don’t know that it would work for the greatest debt in history, though!

ICXC NIKA


#18

Methinks that was satire, C77!


#19

It might be possible for a country to renegotiate an interest rate without destroying it’s credit rating but to have them accept less principal is called a default. Paying most of the debt back but not all might keep a nation from a “junk” rating, but forget about borrowing more money.

This is why you don’t want someone whose business background is riddled with bankruptcy to have the check book. Just saying.:twocents:


#20

don’t forget those people who bought bonds for their grandkids, the states and local governments that bought bonds, the 401K’s that have money invested in T-notes. I think there is only about 35% held by foreign investors, the rest is held by US citizens.


DISCLAIMER: The views and opinions expressed in these forums do not necessarily reflect those of Catholic Answers. For official apologetics resources please visit www.catholic.com.