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Trump at Long Last Considers a New Haircut

Presumptive Republican presidential nominee Donald J. Trump has long been notorious for paying his creditors less than promised and threatening  lawsuits more costly than the remainder if they objected, and while bragging about his untold and undocumented wealth has on four occasions resorted to bankruptcy filings to pay out mere pennies on the dollars owed for his failed casinos and strip joints. We’re told by his so-loyal-he-could-shoot-someone supporters that such ruthlessly unscrupulous business practices are precisely what’s needed to deal with those duplicitous Democrats and “establishment” Republicans and wily Chinamen and assorted other foreigners to make America great again, but even as we contemplate the horrible alternative of presumptive Democratic nominee Hillary Clinton becoming president we do not find the argument at all persuasive.
With our government already $19 trillion in debt and the shortfalls on all its grandiose entitlement promises rapidly approaching all-the-money-in-the-world levels, Trump has already proposed several you-can-believe-him-they’re-great solutions. He told The Washington Post that he could entirely eliminate the national debt within eight years with no tax increases just by renegotiating all of the country’s trade deals in a really great way, believe him, and then a couple days later he told Fortune Magazine that he’d never said he could eliminate all the debt within 10 years and only expected to reduce the debt a “percentage,” because of all the other great things he plans to do about infrastructure and such, and when asked what percentage he replied “It depends on how aggressive you want to be,” and that “I’d rather not be so aggressive.” More worrisomely yet, he also told the CNBC cable news network that he’d handle the debt of the casino and strip joint that America has lately become by the same means that have worked out so well for himself in the past, by asking the country’s creditors to accept less than what was promised.
Asked by his stunned interlocutor if he was really talking about renegotiating sovereign bonds already issued by the government of the United States of America, Trump replied in typically un-parsable English that “I don’t want to renegotiate the bonds, but I think you can do discounting, I think, you know, depending on where the interest rates are, I think you can buy back — you can — I’m not talking about with a renegotiation, but you can buy back at discounts.”
The presumptive Republican presidential nominee’s typically un-parsable English allowed him much wiggle room as he inevitably walked back his comments, as the notoriously straight-talking truth-teller so often does, so the very next day he was on CNN assuring another national television audience that “People said I want to go and buy and default debt, and I mean these people are crazy. This is the United States government. First of all, you never have to default because you print the money, OK?” None of which is at all reassuring.
Call us crazy, but our best reading of Trump’s earlier comment suggests that at least in one particular moment in time Trump was actually talking on national television about paying the country’s creditors less than was promised but somehow achieving this feat without a renegotiation. This is what’s known in economics as “crazy talk.” Any debt that is paid at less than what had been contractually promised has most certainly been renegotiated, whether acknowledged or not, the entirety of the financial and political world would surely regard it as a default by the world’s biggest-or-second-biggest-economy-depending-on-the-accounting-methods, and although this method has previously worked out to the benefit of Donald J. Trump there is simply no explaining how it might work out to the benefit of America or the rest of the world. Given the chance to print his own money, just as President Barack Obama has done during the past seven-and-a-half years or so while doubling the national debt, we aren’t at all certain that the failed casino-and-strip-joint owner would avail himself of the opportunity. It didn’t work out well for the Weimar Republic or Zimbabwe or any of the other casino and strip joint countries that tried to inflate their way out of debt, but we’re assured by his so-loyal-he-could-shoot-someone supporters that the oft-bankrupt Trump is such an exceptionally shrewd businessman that this time will surely be different.

Which is not to say, alas, that the most likely alternative is any better. The presumptive Democratic nominee has also pledged to keep her hands off those entitlement programs that are driving the country toward inevitable bankruptcy, which would involve a fight that neither of these self-described fighters have the stomach for, and unlike her most likely rival she’s not only ambiguously open to negotiations on taxing the public to keep the economy limping along even if those tax increases hinder economic growth and wind up reducing public revenues but is enthusiastically for them, so we take care not to endorse either of them. We’re still  looking around for some third  or fourth option that might be more appealing, and although haven’t settled on any yet,  and although we admittedly don’t hold out much hope that there is one, be assured we’ll keep trying.

— Bud Norman

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One response

  1. For reasons that are obvious, people want to paint their political opponents in the worst possible light. If Marco Rubio once supported “comprehensive immigration reform” which included amnesty for those already here, his opponents will say that he’s not allowed to change his mind and call him either a liar or a waffler if he does. If Donald Trump calls for a halt to immigration by Muslims until we figure out which ones are going to hack us to death he’s asked if it means that he would stop the newly elected Muslim major of London – who’s Muslim – from entering the country. And if he says there will be exceptions he’s ridiculed.

    Which brings us to reducing the debt via means other than paying it off as it comes due. Are there financial arrangements that people make all the time to pay off debt that ends up benefitting both parties? Why, yes. Imagine that you borrowed a million dollars with a promise to pay it back in 50 years at 3% interest. That’s a 50 year bond at 3%. After a while assume that interest rates on 50 year bonds have risen to 4%. You approach the lender and tell him that you are willing to pay off the loan today, and give him the opportunity to lend the money out and get a higher rate of interest. In return you ask him to discount the bond by 5%. The lender wins if he takes the offer and you win because you have cut your indebtedness by 5%. Everybody’s happy and comes out a winner.
    I can understand why the reporter is baffled because the reporter is economically and financially illiterate. It happens to reporters all the time. They were fed a load of BS about the Iran deal by Ben Rhodes, an aspiring novelist who has a “Mind Meld” with Barack Obama and ate it up because they were too stupid and ill-informed to know better.

    I hate to say it because it seems counter-intuitive, but Trump is a master of nuance. Trump haters can’t stand it because he talks in short, declarative sentences that connect with people. They believe that nuance is only possible if you speak in long, convoluted sentences read verbatim as they are projected onto a TelePompTer. The smart people “misunderestimated” Bush II because of his accent, they are making the exact same mistake with Trump, in spades.

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