That’s the real rub. something like 70% of the public debt is held by Americans in the form of retirement funds, personal investments, etc.
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Wow, that sums it up perfectly! Certainly I agree, his base won’t care about this one bit.
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No one will ever point out how foolish he sounds, so – no problem!! He just adds it to his towering stack of wins!
Actually, even insult comic is too nice a term for him. Bankrupt King would be my choice. It encompasses everything he says and does.
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That’s incorrect. @beachgirlinland got it right…when interest rates rise, bond prices fall, and vice versa, for what should be obvious reason (if I can get 10% on a loan now, then a bond paying 9% is worth less).
Purchasing back bonds on the market is something ANY issuer can always do, including the federal government.
The only thing “par” means is that at the end of the term of the bond, the issuer must pay the holder that amount. So if you hold a t-bill or a t-bond that comes do…you get the paid the full face value of that instrument on that day.
The absurdity of what Trump is talking here…putting aside monetary policy concerns for just a minute, is that he is implying that he somehow knows more than the market, and that buying bonds at a “discount” is some sort of savings. It isn’t. Its merely retiring the debt early. Now taking back monetary policy concerns again…that an be a problem. Because when the government starts buying up large amounts of treasuries, it is taking money out of the economy, which tends to make economy’s contract.
It gets even more confusing, because in the scenario Trump is talking…ie, rising interest rates, buying up treasuries on a large enough scale that it would have a noticeable impact upon the national debt…would drive the interest rates back down (less treasuries on the market means more demand for them, which makes price rise, which means interest rates fall). So its a self defeating exercise.
What Trump is really doing here is what every con man has said since capital markets came into existence…that he can outsmart the collective market.
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I read ‘somewhere’ that this is the RepCon band that Trump has hired…
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One would hope. But the so-called news is more infotainment than real analysis, breaking down complex problems and solutions to be understandable to the layman, and really pointing out the problems with the moronic and dangerous crap not just Drumpf, the but the GOP at-large tries to peddle.
And the sad thing is, far too much of the electorate doesn’t want to know, and wants simple “answers” to problems they truly don’t understand.
And yes, that sounds condescending, but it does’t make it any less valid a statement.
That’s what I kind of thought. There’s no point borrowing at the higher rate in order to buy back the bonds with a lower rate-it should be something of a wash. Unless, of course, there is some advantage to exchanging a lot of debt at a low interest for less debt with a higher interest rate. This might be advantageous for an individual, but I don’t see the benefit for a nation.
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Either he’s lying or he’s got a Alzheimer’s problem. But I don’t remember Reagan suggesting others were lying. He just forget what the subject was entirely.
Thus The Donald is lying and wants us to forget he does it all the time. Thankfully, there are tapes to prove what he said.
Not that this makes any difference to the crackpots who are going to vote for him. Luckily, their numbers are small and are dwindling down to the just the Palin people. The rest of the Republicans are just saying they will vote for Trump so he doesn’t have another royal temper tantrum and threatens to fire all of them.
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Who are we going to believe, the New York Times or a blustering serial liar?
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It’s a shell game. Trump excels at it. But then he never has to pay off any of his creditors.
We as a nation will have to pay in some way either with higher inflation, lower retirement savings in our 401ks or our allies ditching us with threats of getting even. And Trump wants to give Japan a nuclear weapon.
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I knew a guy who sold yachts and yacht repairs to guys like Trump. He demanded cash up front. He said guys like Trump never paid their debts.
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The only reason Trump is a billionaire is that he inherited 4 Billion and hasn’t lost all of it …yet.
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You’re not wrong, but I think that now that they don’t have to follow 17 candidates around, news media can focus its budget on one person. Having Trump on is great for ratings, but so is having a panel of “experts” ripping into things he says while clips of him are played. Plus, as the election nears, more and more people will see Trump less as entertainment, and more as a politician. Vanity coverage will give way to actual policy discussion, if only because people want to see it.
You can’t show footage of a car crash forever. Eventually, getting an interview with Trump won’t be nearly as big a ratings boost as digging up and breaking some scandal or past misdeed. America’s voracious appetite for “infotainment” gets significantly more carnivorous as time goes on and the election gets closer.
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beachgirl is right and there is more to it than that. First, we would need to have a budget surplus to actually reduce the debt, and in the process of buying back a lot of debt, the price would go back up and interest rates would fall. Further, even if the US bought back discounted bonds and had to reissue new bonds for longer terms, the interest rate for longer terms is generally higher and there’s no real savings or debt reduction.
I thought I’d add this coda since I learned it at Wharton – JUST LIKE DONALD TRUMP SHOULD HAVE. So much for his business acumen. He’s just a spoiled rich-kid moron and couldn’t run a 7/11.
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Ok Democrats, you have your assignments cut out for you. Go find everyone who lost their shirts on one of those Trump branded condo deals that he got such a big thrill out of renegotiating. We need campaign commercials featuring the sympathetic ones. I’m talking little old ladies, retired New York firefighters, the works.
Don’t kid yourself. Trump doesn’t really excel at this. His companies went into bankruptcy four times. Like any company in bankruptcy proceedings, he negotiated to restructure the debt. That’s a pretty common situation. Note that Trump ended up losing most and, I think, eventually all, of his equity in the companies as a result of the restructuring. The “victory” for him, if any, was that he was able to get out from under his personal liability for the debt, although I believe he did have to kick in some money. In at least one of those deals, the banks put Trump on a personal budget, probably to ensure some payback by him personally. These were not brilliant business maneuvers; they were the results of bad business judgments on his part.
It’s my understanding that the major banks won’t lend to him or his businesses any more, which is why (1) most of his business at this point is licensing, with him taking small equity pieces and management fees, and (2) he’s developing the hotel down in Washington DC with funding from private Russian interests.
Trump has developed a very successful brand (although I think he has severely damaged it in this campaign), but I doubt you would find a Fortune 500 company that would even consider this guy for CEO based on his record and personality.
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I was just going to post along that line, I’m kinda liking Donald Default.
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Unless I were really strapped for cash, why would I sell the bond back to the US government at less than par?
He is making no sense. Why would anyone sell the debt at a discount unless Trump threatens to default or he has destroyed the US economy so people think they may not get their money back.