Trump's latest brain fart: Slash the debt by stiffing US creditors

[Torie]

And of course, Trump can just do it, because he is such a great negotiator. I am at a loss for words with this one. Man, this has turned into a total cf and it keeps getting worse! I can't wait for this election to be finished, and Trump out of the news, and out of my mind.

[ProudModerate2]

Now that is nuts !
But of course, trump's uneducated base will swallow it up, like they have with everything else that their Fuhrer has said.

[Wisconsin+17]

You must be logged in to read this quote.

Oh my.

Remember what I said about the 'kick the can' election.

[ag]

Lord, save us. The guy wants to destroy the financial system for good.

[BlueSwan]

The sad thing is that there is quite a big audience for pure insane populist notions like this. "F**k the creditors" has lots of appeal to the Sanders crowd as well.

[Santander]

The US and other countries already have the power to basically do this through inflation, so it's not really that big of a deal. He'll have people who actually know about these things running the show if he gets into office.

[Meclazine for Israel]

Probably should not start shadow boxing China and Japan and orher US creditors until he gets elected.

It's just smoke and mirrors.

Half of these ideas will remain as ideas.

[dax00]

At least we know he won't be sneakily pulling strings around the debt issue. I appreciate his transparency.

There are so many red herrings in this thread already....

[Torie]

The US and other countries already have the power to basically do this through inflation, so it's not really that big of a deal. He'll have people who actually know about these things running the show if he gets into office.

I think you read Trump's mind. Hey, I want inflation to come back! But then interest rates on Treasuries will ratchet up (their maturities are far shorter on average then they were back in the late 70's and early 80's, when long term bond holders got really screwed). And that creates a big cash flow problem. So how do we deal with that? Well just get the creditors to take a haircut. Problem solved!

Inflation only "works," and then works only in the short term, when it is a big surprise. Once it isn't a surprise, then it does not do much, except make the economy less efficient. But with maturities on treasuries now much more short term, the "benefits" of the big surprise becomes diluted and degraded, like watered down beer.

[DemPGH]

Obviously, all he's doing is suggesting that we try to renegotiate what we owe these people because it's for the overall good and because recent and current leaders in the USA continue to make stupid decisions that invite financial insolvency. It's hardly "stiffing" anyone and it's worth throwing on the table.

[Torie]

Obviously, all he's doing is suggesting that we try to renegotiate what we owe these people because it's for the overall good and because recent and current leaders in the USA continue to make stupid decisions that invite financial insolvency. It's hardly "stiffing" anyone and it's worth throwing on the table.

Yeah, and I would like to "negotiate" a haircut on my mortgages. Keep hope alive. Trump claims he doesn't use drugs, or booze for that matter, and to the extent that is true, I admire his ability to fantasize like this without any help from recreational substances.

[ag]

Obviously, all he's doing is suggesting that we try to renegotiate what we owe these people because it's for the overall good and because recent and current leaders in the USA continue to make stupid decisions that invite financial insolvency. It's hardly "stiffing" anyone and it's worth throwing on the table.

Whenever US even hints about renegotiation, it will lead to a dramatic reallignment of the world financial system. Treasuries will stop being the standard of secure debt. US will have to start paying a lot more for future borrowing, dollar will stop being the main international reserve currency, etc., etc. Sure, US will be easily able to negotiate a haircut (it has the power), but it will wind up paying tenfold within literally a couple of years.

[Torie]

Obviously, all he's doing is suggesting that we try to renegotiate what we owe these people because it's for the overall good and because recent and current leaders in the USA continue to make stupid decisions that invite financial insolvency. It's hardly "stiffing" anyone and it's worth throwing on the table.

Whenever US even hints about renegotiation, it will lead to a dramatic reallignment of the world financial system. Treasuries will stop being the standard of secure debt. US will have to start paying a lot more for future borrowing, dollar will stop being the main international reserve currency, etc., etc. Sure, US will be easily able to negotiate a haircut (it has the power), but it will wind up paying tenfold within literally a couple of years.

You sir are getting way over the head of some of these kids I am afraid. "International reserve currency?" Is that some sort of plot of the evil international bankers, hatched by the Bilderberg Group, who hate America, and want to thwart it ever becoming great again - you know, like it was when sodomy was a felony, restrictive racist real estate covenants the norm, along with poll taxes, and if you had a decent job, you needed to wear a grey flannel suit, with a crew cut hairdo (yeah, respectable women didn't work, and to avoid giving them temptation to do otherwise, were discriminated against wholesale in the workplace, particularly for those lucrative upper middle class jobs), and preferably a pretty stay at home wife who was a great hostess, and the air quality in Los Angeles something on the order of a toxic waste dump, and rivers were synonyms for sewers, and in Cleveland's case, caught fire?

I demand answers, and I want them now!

[Sbane]

Oh Donald Trump will destroy America in so many diverse ways. I for one can't wait!

[muon2]

The US and other countries already have the power to basically do this through inflation, so it's not really that big of a deal. He'll have people who actually know about these things running the show if he gets into office.

I think you read Trump's mind. Hey, I want inflation to come back! But then interest rates on Treasuries will ratchet up (their maturities are far shorter on average then they were back in the late 70's and early 80's, when long term bond holders got really screwed). And that creates a big cash flow problem. So how do we deal with that? Well just get the creditors to take a haircut. Problem solved!

Inflation only "works," and then works only in the short term, when it is a big surprise. Once it isn't a surprise, then it does not do much, except make the economy less efficient. But with maturities on treasuries now much more short term, the "benefits" of the big surprise becomes diluted and degraded, like watered down beer.

In fact I was surprised that Geithner didn't pull an inflation surprise to cover the debt incurred by the 2009 stimulus. It's a tool that sits in the kit of every currency creator.

[Torie]

Oh Donald Trump will destroy America in so many diverse ways. I for one can't wait!

This is sort of like the taie of the "hatching" and spread of the AIDS virus. If you had just arrived from Mars, you would refuse to suspend your disbelief about what was obviously a rediculous novel, because it was just that outlandish.

[ProudModerate2]

Obviously, all he's doing is suggesting that we try to renegotiate what we owe these people because it's for the overall good and because recent and current leaders in the USA continue to make stupid decisions that invite financial insolvency. It's hardly "stiffing" anyone and it's worth throwing on the table.

Whenever US even hints about renegotiation, it will lead to a dramatic reallignment of the world financial system. Treasuries will stop being the standard of secure debt. US will have to start paying a lot more for future borrowing, dollar will stop being the main international reserve currency, etc., etc. Sure, US will be easily able to negotiate a haircut (it has the power), but it will wind up paying tenfold within literally a couple of years.

You sir are getting way over the head of some of these kids I am afraid. "International reserve currency?" Is that some sort of plot of the evil international bankers, hatched by the Bilderberg Group, who hate America, and want to thwart it ever becoming great again - you know, like it was when sodomy was a felony, restrictive racist real estate covenants the norm, along with poll taxes, and if you had a decent job, you needed to have a grey flannel suit, and preferably a pretty stay at home wife who was a great hostess, and the air quality in Los Angeles something on the order of a toxic waste dump, and rivers were synonyms for sewers, and in Cleveland's case, caught fire?

I demand answers, and I want them now!

Yes ag.
All it takes is some moderate economic comprehension to understand the disaster that Little-Hands-Drumpf-Fuhrer's idea would cause.
But of course, trump supporters just excuse this madness as "just ideas" and that it only shows proper "transparency."
Wow ..... trump followers are a mess !

[Sbane]

Oh Donald Trump will destroy America in so many diverse ways. I for one can't wait!

This is sort of like the taie of the "hatching" and spread of the AIDS virus. If you had just arrived from Mars, you would refuse to suspend your disbelief about what was obviously a rediculous novel, because it was just that outlandish.

At least he will lose the general, one hopes. Of course, if there is one person who can lose to Trump, it's Hillary.

[Negusa Nagast 🚀]

He's even more adamant than Bernie on destroying the United State's financial system and tanking the economy with it.

[KingSweden]

Obviously, all he's doing is suggesting that we try to renegotiate what we owe these people because it's for the overall good and because recent and current leaders in the USA continue to make stupid decisions that invite financial insolvency. It's hardly "stiffing" anyone and it's worth throwing on the table.

I get the sense you don't know much about finance.

[Absentee Voting Ghost of Ruin]

And of course, Trump can just do it, because he is such a great negotiator. I am at a loss for words with this one. Man, this has turned into a total cf and it keeps getting worse! I can't wait for this election to be finished, and Trump out of the news, and out of my mind.

I wonder if he knows that the huge majority of federal debt is owned to the US public?

I mean, at this point it wouldn't surprise me that he's either trying to deliberately screw over the public and the nation, or if he's just dumber than a sack of rocks.

[Torie]

And of course, Trump can just do it, because he is such a great negotiator. I am at a loss for words with this one. Man, this has turned into a total cf and it keeps getting worse! I can't wait for this election to be finished, and Trump out of the news, and out of my mind.

I wonder if he knows that the huge majority of federal debt is owned to the US public?

I mean, at this point it wouldn't surprise me that he's either trying to deliberately screw over the public and the nation, or if he's just dumber than a sack of rocks.

Hey, that's a great idea. Just default on US Treasuries owed to China! Brilliant! That will teach those cheaters!  By the time Trump is done with them, China will have ceded Hong Kong to the United States.

[ag]

Oh Donald Trump will destroy America in so many diverse ways. I for one can't wait!

This is sort of like the taie of the "hatching" and spread of the AIDS virus. If you had just arrived from Mars, you would refuse to suspend your disbelief about what was obviously a rediculous novel, because it was just that outlandish.

At least he will lose the general, one hopes. Of course, if there is one person who can lose to Trump, it's Hillary.

He, probably, has a 30% chance of winning as of today. If I knew that I have 0.3% chance of something similarly horrible, like having an inoperable cancer within 6 months, I would be in a state of panic - and that would only be a concern for myself, not for the society at large. We all live on a volcano now.

[ag]

He's even more adamant than Bernie on destroying the United State's financial system and tanking the economy with it.

I mean, Sanders would not be nearly as damaging to the US or the world. For god's sake, having Tsipras as the US president would still be less horrible. This is approaching Maduresque levels of irresponsibility.

[Darthpi – Anti-Florida Activist]

I'm going to go out on a limb and say this isn't the kind of stuff that is going to bring Paul Ryan on board.