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

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New York Times: “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.”

Opinion: The full Faith and Credit of the United States of America is behind every one of the 19 trillion dollars of the nations debt. Because of full faith and credit, nations lend us money at very low interest rates because there is no risk to the return of their capital.

If that faith and credit is shattered, interest rates would rise exponentially to adjust for risk, while interest payments on new debt would skyrocket. If that were to happen, the economies of China, Japan, Russia and the European Union would implode, and with it the United States dollar.

Other than that, it’s a swell idea.

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