Posted on 05/06/2016 5:38:20 AM PDT by reaganaut1
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.”
(Excerpt) Read more at nytimes.com ...
The Cruzsaders were and are all about maintaining the status quo, keeping the Republicans as the go along to get along gang. If Trump is elected there will be some tumultous times. The Uni-party will not go away quietly. Expect the uni-party to try to thwart Trump every step of the way. It will be interesting to see who Canadian Cuban Ted sides with, Trump or the Uni-party.
The Tariff
We reaffirm our belief in the protective tariff to extend needed protection to our productive industries. We believe in protection as a national policy, with due and equal regard to all sections and to all classes. It is only by adherence to such a policy that the well being of the consumers can be safeguarded that there can be assured to American agriculture, to American labor and to American manufacturers a return to perpetrate American standards of life. A protective tariff is designed to support the high American economic level of life for the average family and to prevent a lowering to the levels of economic life prevailing in other lands.
In the history of the nation the protective tariff system has ever justified itself by restoring confidence, promoting industrial activity and employment, enormously increasing our purchasing power and bringing increased prosperity to all our people.
The tariff protection to our industry works for increased consumption of domestic agricultural products by an employed population instead of one unable to purchase the necessities of life. Without the strict maintenance of the tariff principle our farmers will need always to compete with cheap lands and cheap labor abroad and with lower standards of living.
The enormous value of the protective principle has once more been demonstrated by the emergency tariff act of 1921 and the tariff act of 1922.
We assert our belief in the elastic provision adopted by congress in the tariff act of 1922 providing for a method of readjusting the tariff rates and the classifications in order to meet changing economic conditions when such changed conditions are brought to the attention of the president by complaint or application.
We believe that the power to increase or decrease any rate of duty provided in the tariff furnishes a safeguard on the one hand against excessive taxes and on the other hand against too high customs charges.
The wise provisions of this section of the tariff act afford ample opportunity for tariff duties to be adjusted after a hearing in order that they may cover the actual differences in the cost of production in the United States and the principal competing countries of the world.
We also believe that the application of this provision of the tariff act will contribute to business stability by making unnecessary general disturbances which are usually incident to general tariff revisions.
And there it is. The largest holders of Treasuries are banks that are members of the federal reserve system. Surrendering their treasuries for less than par, with an agreement to amortize the write down against their capital over the next (??? 10? 30? 50?) years would probably sound a lot better than “Hey guys, we’re bankrupt, so if you want some electrons back for the electrons you sent us a few years ago, raise an army and come take them.”
The hogs that have been slurping at the taxpayer filled trough since the 1930’s can go on a dammed diet for a decade or two, IMO.
When you get someone to accept less than what they are honestly owed, then that is only acceptable in bankruptcy.
Trump is basically saying the US should go bankrupt.
He is talking out of his ass.
These same banks and the Feds are now pushing negative interest rates.
We already have had 7 years where almost no interest is paid on deposits.
We have all been stolen from.
Quite frankly, negative interest rates are the last firewall before a collapse.
They are all desperate for the merry-go-round to keep spinning until 1/20/17.
“Make a deal to pay off Treasury bond holders at less than 100%. OK. But that will be the last Treasury bond ever sold. We will be on a cash basis after that.”
In an age of negative interest rates, don’t be too sure.
With less debt, governments are seen as better credit risks.
I’m convinced I’ll like some of what trump would do and hate some - like all of the presidents.
He will certainly rock the boat - but I think it needs rocked hard. Many will panic and get seasick.
The problem is that if the debt buyers take talk like this seriously, the interest rates WILL go up, and a lot more than a couple of percent. We've got to hope that some adults in his organization sit him down and talk some sense into him about global economics.
HAHAHHAHAHAHAHA — the paper and coins you and everyone else are carrying or storing in vaults are an infinitesimal and meaningless percentage of the actual money supply in this country and indeed, the entire world...
Money is created by banks, currency by governments. And the currency in this country (and the entire world) is backed by nothing more than a pack a bankers and their bought and paid for whores in the government saying “this green paper has value”. Every time a bank shoves a few electrons in the form of a loan or buying a bond from Uncle Sugar, it creates money.
Government needs to spend less. Period.
Trump said he “might” try something like that. What is wrong with bandying around ideas? It is obvious the uniparty has no idea how to solve the problem. AND THAT IS THE PROBLEM! Government doesn’t know how to live like families must.
When sane families have a problem they discuss ALL the alternatives (even idiotic ones) then reach a consensus. Since when is it prudent for a family or a business to continuously spend more than it takes in?
I think Trump is on the right track.
The fed will have lost nothing, but you still show lack of understanding. If the government repays all the QE back to the fed, $4.5T of money supply leaves the economy. I take it from your comments you regard QE was not a good thing, which on some level I agree. So if the government demands, let say, 50% haircut, then $2.25T of QE remains in the money supply. QE becomes permanent.
Certainly, Trump is not about Conservatism, either.
Trump or Hillary is the worst set of options of the last 50 years.
Hillary is a crooked politician. Trump is absolutely clueless about how things work.
Certainly, Trump is not about Conservatism, either.
Trump or Hillary is the worst set of options of the last 50 years.
Hillary is a crooked politician. Trump is absolutely clueless about how things work.
Certainly, Trump is not about Conservatism, either.
Trump or Hillary is the worst set of options of the last 50 years.
Hillary is a crooked politician. Trump is absolutely clueless about how things work.
You keep repeating that like it's some kind of mantra. It won't work because a lot of people won't be able to afford to keep buying the stuff when the price goes up 20%. For most Americans, the immediate effect is going to be a substantial reduction in their standard of living.
Foreign countries default on us many times over....and we give them MORE money.
“The Federal Reserve can certainly take less.
They created the money out of thin air, and they can make it disappear also.”.................
Are U (gasp) suggesting we ask the ‘Stockholders of the Federal Reserve Bank’ to absorb some losses ?
Make that old money crew (( Morgan,Mellon,Rockefeller, Harriman etc etc)) pay for the havoc they have created for friendly politicians over a 100 years??
YOU’VE GOT MY VOTE !!!
Yanno the FED was supposed to C that our dollar was sound..They were 100% successful if U think going from 100 cents to less than 1 cent is good ( in 103 years ) !!
Although it seems the fed creates money out of thin air, it at least has to balance the ledger- this is called buying US bonds (which has always been the mechanism to control the money supply- popular media thinks it is the discount rate). If Trump discounts (renegotiates) the bonds, then the ledger is balanced with a loss by the fed and the money remains in the economy. So you laugh at me, but you made my point.
The “long run” that Keynes so airily dismissed worked out well for him and the other New Deal folks — he and they are actually dead. But now the rest of us are going to have to demolish the economic house his theories built on a foundation of thin air, Monopoly money, and promises to repay.
Will it be an orderly demolition or a collapse? That will be the fundamental question over the next two or three decades, I think.
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