Sunday, May 8, 2016

Trumpian Economic Policy

I saw this at Charles Pierce's blog and really need to put it up here for future reference. I'm not an economist or a billionaire. But, I know there's something wrong with this.

 Donald J. Trump, suggested that he might reduce the national debt by persuading creditors to accept something less than full payment.

Asked on Thursday 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.”

It's the kind of logic you'd hear from a 12-year old or a Green Party candidate. Apologies to all preteens who might come by. 

Any measures that would reduce the value of the existing debt, making it cheaper to repurchase, would increase the cost of issuing new debt. Such a threat also could undermine the stability of global financial markets.

Yeah, I knew there was something wrong with it. 

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