Kathianne
05-06-2016, 02:00 PM
Well heck of a way to start out. Better headline: "Invest In America At Own Risk." Hell with being stable.
http://www.nytimes.com/2016/05/07/us/politics/donald-trumps-idea-to-cut-national-debt-get-creditors-to-accept-less.html?_r=0
[QUOTE]Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less
By BINYAMIN APPELBAUM (http://topics.nytimes.com/top/reference/timestopics/people/a/binyamin_appelbaum/index.html)<time class="dateline" datetime="2016-05-06" itemprop="datePublished" content="2016-05-06" style="font-size: 0.6875rem; line-height: 0.75rem; font-family: nyt-cheltenham-sh, georgia, 'times new roman', times, serif; color: rgb(0, 0, 0); margin-left: 12px;">MAY 6, 2016</time>
One day after assuring Americans he is not running for president “to make things unstable for the country (http://www.nytimes.com/2016/05/05/us/politics/donald-trump-president.html),” the presumptive Republican nominee, Donald J. Trump (http://www.nytimes.com/interactive/2016/us/elections/donald-trump-on-the-issues.html?inline=nyt-per), 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 (http://topics.nytimes.com/top/reference/timestopics/organizations/t/treasury_department/treasury_securities/index.html?inline=nyt-classifier) 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.”
Indeed, the Congressional Budget Office projects (https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51129-2016_Outlook_Summary.pdf) that interest payments on the federal debt will climb to $500 billion in 2020 from roughly $250 billion this year. That is based on a projection that rates on the benchmark 10-year Treasury will reach 4.1 percent in late 2019, still a low level by historical standards. If rates were to climb more quickly, or reach higher levels, debt payments would be higher.
<figure id="electoral-map-trump-clinton" class="interactive promo layout-small" style="margin: 7px 30px 15px 0px; position: relative; border-top-width: 1px; border-top-style: solid; border-top-color: rgb(226, 226, 226); padding-top: 15px; border-bottom-width: 1px; border-bottom-style: solid; border-bottom-color: rgb(226, 226, 226); padding-bottom: 15px; width: 180px; overflow: hidden; max-width: 300px; cursor: pointer; float: left; clear: left; color: rgb(51, 51, 51); font-family: nyt-cheltenham, georgia, 'times new roman', times, serif; font-size: 16px;">https://static01.nyt.com/images/2016/05/04/upshot/electoral-map-trump-clinton-1462320994125/electoral-map-trump-clinton-1462320994125-master180-v2.png
The Electoral Map Looks Challenging for Trump (http://www.nytimes.com/interactive/2016/05/04/upshot/electoral-map-trump-clinton.html)</figure>Pressed to elaborate on his remarks, Mr. Trump did appear to step back. He said that he was not suggesting a default, but instead that the government could seek to repurchase debt for less than the face value of the securities. The government, in other words, would seek to repay less money than it borrowed.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said that she shared Mr. Trump’s concern about the size of the federal debt, but that the issue needed to be addressed through changes in fiscal policy — some combination of less spending and more revenue.
“It’s a policy problem, not a debt-management problem,” she said. “When it comes to fiscal responsibility, people are always looking for the easiest of answers. If there were low-hanging fruit here, the Treasury Department would already be on it.”
http://www.nytimes.com/2016/05/07/us/politics/donald-trumps-idea-to-cut-national-debt-get-creditors-to-accept-less.html?_r=0
[QUOTE]Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less
By BINYAMIN APPELBAUM (http://topics.nytimes.com/top/reference/timestopics/people/a/binyamin_appelbaum/index.html)<time class="dateline" datetime="2016-05-06" itemprop="datePublished" content="2016-05-06" style="font-size: 0.6875rem; line-height: 0.75rem; font-family: nyt-cheltenham-sh, georgia, 'times new roman', times, serif; color: rgb(0, 0, 0); margin-left: 12px;">MAY 6, 2016</time>
One day after assuring Americans he is not running for president “to make things unstable for the country (http://www.nytimes.com/2016/05/05/us/politics/donald-trump-president.html),” the presumptive Republican nominee, Donald J. Trump (http://www.nytimes.com/interactive/2016/us/elections/donald-trump-on-the-issues.html?inline=nyt-per), 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 (http://topics.nytimes.com/top/reference/timestopics/organizations/t/treasury_department/treasury_securities/index.html?inline=nyt-classifier) 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.”
Indeed, the Congressional Budget Office projects (https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51129-2016_Outlook_Summary.pdf) that interest payments on the federal debt will climb to $500 billion in 2020 from roughly $250 billion this year. That is based on a projection that rates on the benchmark 10-year Treasury will reach 4.1 percent in late 2019, still a low level by historical standards. If rates were to climb more quickly, or reach higher levels, debt payments would be higher.
<figure id="electoral-map-trump-clinton" class="interactive promo layout-small" style="margin: 7px 30px 15px 0px; position: relative; border-top-width: 1px; border-top-style: solid; border-top-color: rgb(226, 226, 226); padding-top: 15px; border-bottom-width: 1px; border-bottom-style: solid; border-bottom-color: rgb(226, 226, 226); padding-bottom: 15px; width: 180px; overflow: hidden; max-width: 300px; cursor: pointer; float: left; clear: left; color: rgb(51, 51, 51); font-family: nyt-cheltenham, georgia, 'times new roman', times, serif; font-size: 16px;">https://static01.nyt.com/images/2016/05/04/upshot/electoral-map-trump-clinton-1462320994125/electoral-map-trump-clinton-1462320994125-master180-v2.png
The Electoral Map Looks Challenging for Trump (http://www.nytimes.com/interactive/2016/05/04/upshot/electoral-map-trump-clinton.html)</figure>Pressed to elaborate on his remarks, Mr. Trump did appear to step back. He said that he was not suggesting a default, but instead that the government could seek to repurchase debt for less than the face value of the securities. The government, in other words, would seek to repay less money than it borrowed.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said that she shared Mr. Trump’s concern about the size of the federal debt, but that the issue needed to be addressed through changes in fiscal policy — some combination of less spending and more revenue.
“It’s a policy problem, not a debt-management problem,” she said. “When it comes to fiscal responsibility, people are always looking for the easiest of answers. If there were low-hanging fruit here, the Treasury Department would already be on it.”