If you were worried about whether Donald Trump would destroy our economy, you don’t have to worry any more. In an interview last week on CNBC, Trump explained how he was going to destroy our economy. Bonus points: he will not just destroy our economy, but likely most of the world economy.
Don’t believe me? Just read this article by Matthew Yglesias in Vox.
Short version: you remember how the out-of-control national debt is a really bad thing. Heck, most of the argument against Obamacare was that it would explode the national deficits (it didn’t, but still). Well, according to Trump you don’t have to worry about that any more. Trump just said “I am the king of debt. I love debt. I love playing with it. … I would borrow, knowing that if the economy crashed, you could make a deal. And if the economy was good, it was good. So therefore, you can’t lose.”
Trump is describing his career as a “successful businessman”. Using his Trump brand, he has repeatedly borrowed other people’s money for a series of “huge” projects. When the projects failed, he declared bankruptcy, leaving his investors holding the bag. When they succeeded, he raked in the cash, despite having invested little of his own money. You could call it a “celebrity economy”. Trump’s brand is a license for him to print money.
There’s just one problem. As Yglesias puts it:
With his statement, Trump not only revealed a dangerous ignorance about the operation of the national monetary system and the global economic order, but also offered a brilliant case study in the profound risks of attempting to apply the logic of a private business enterprise to the task of running the United States of America.
If the United States were forced into bankruptcy, all hell would break loose. Your savings would likely lose most of its value, including your home. Many businesses (including most banks) would fail. Unemployment would spike to unprecedented levels.
Want even more evidence that Trump could cause this? Trump recently proposed that Puerto Rico declare bankruptcy to solve their financial problems, even though doing so is illegal. Taking advantage of the bankruptcy laws to dump his debt on other people has worked very well for Trump, and it is the only game he knows.
Hillary needs to push “bankruptcy, bankruptcy, bankruptcy” so people know that the little man doesn’t get paid when the thief declares bankruptcy.
Trump is actually right on Puerto Rico, if still ignorant of it. Puerto Rico SHOULD be able to declare bankruptcy, but for some reason (which no one can identify) their doing so was made illegal. It’s funny reading him completely missing the point of the question and ending up on the “wrong” side of his party on the issue. Jon Oliver did a great bit on Puerto Rico’s debt crisis:
On the “out-of-control national debt” I think we need to remember that national debt isn’t a bad thing, and that US debt is actually a pretty safe asset. In fact, part of what’s wrong with the GOP is that they think any debt is a bad thing (and, incorrectly, that our debt is out of control), when most economists would argue that it’s vital. Trump, in his infinite stupidity, has mixed the two ideas: our debt is out of control (incorrect) and we need to default to get out of it (moronic).
Paul Krugman goes into this issue here in a perfectly titled article: http://www.nytimes.com/2016/05/09/opinion/the-making-of-an-ignoramus.html?_r=0
Ultimately, Trump is taking one step forward and two steps back with both of these. He almost seems able to accept that debt is OK and that Puerto Rico shouldn’t have special restrictions on them (two things the GOP can’t or won’t realize), but then he either doesn’t know enough to make the connection and proposes the worst possible fixes-that-aren’t-fixes (which is the bread-and-butter of GOP policy making).
The US & world economies are doing just fine heading down the rabbit hole without the Donald.
Privatize profits while socializing risk is the American Way, after all. Except, when it’s the whole country (and we know who takes the risk), who gets the “profits?”
Might be better to just print up enough currency to cover everything and give each of us ten years wages, or twenty, even, to do with whatever we please. Sure, there would be raging inflation… but the point is that EVERYBODY could pay down their debt with inflated currency and start over. “Start over,” being the operative phrase.
And ponies. Ponies for everyone.
Thatguy, thanks for the excellent John Oliver and Paul Krugman links. Definitely worth watching/reading.