General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsTrump has already damaged our economy
For a presumptuous presidential candidate to suggest that the United States might default on it debt, and negotiate a "haircut" for the bondholders, is itself damaging, even if he is defeated in the GE.
Krugman has the basic idea. But I don't think he goes far enough. If US debt is not a safe asset, then there is no safe asset -- and a world without a safe asset is one that we have not experienced since sometime in the 1700s. If he were to go forward with it, a worldwide economic collapse that would make 1929 look small is a real possibility. Even to bring this possibility into a presidential campaign in this country will create uncertainty and risk that can to major harm to our economy, and others.
By the way -- a lot of US debt is held by the Social Security system, so a "haircut" on US debt would put SSI in real danger of insolvency, far more than it is now. And a lot is held by the FED, which -- I'm pretty sure -- could not even negotiate about a "haircut" without explicit authorization by Congress. Fat chance. And it's pretty clear that The Donald doesn't know any of this.
StarTrombone
(188 posts)It's a privately owned system
It isn't a government agency
The Fed does not answer to congress
And it's part of the problem
I would venture to say that Trump is well aware of it
scscholar
(2,902 posts)These private people took our money!
StarTrombone
(188 posts)And if Trump can give those bastards a "haircut" he'll have my support
#auditthefed
MH1
(17,635 posts)StarTrombone
(188 posts)and does anything to corral the Fed I'd support that
You understand the difference?
You can be damn sure Hillary won't
rogerashton
(3,920 posts)and that act makes it independent of the executive branch. The governors and executives are politically appointed. Its profits revert to the federal government. It is "privately owned" in the same sense that Trump is a successful businessman. This response is a bit of radical-rightwing baloney. The follow-ups are pretty much the same.
StarTrombone
(188 posts)Isn't that interesting
Right-wing baloney my ass
#auditthefed
JPZenger
(6,819 posts)The Federal Reserve is not a grand conspiracy.
In any case, Trump's rise has caused great uncertainty in international financial markets. Investors hate uncertainty, and their caution hurts economic stability and growth.
If Trump gets into a trade war with China, who will be the biggest losers? Possibly the Walton Family. I wouldn't be surprised if they started secretly running pro-Hillary ads.
Hortensis
(58,785 posts)an alarmed Charles Koch expediently abandoned his normally profitable "libertarian" principles to quietly support the government bailout and prevent his investments from collapsing.
The loose Trump flywheel's entirely likely to do very widespread damage, so it wouldn't be a bit surprising if, for instance, Koch very quietly redirected his manipulations also. No one believes he would hire a Democratic candidate to process time cards at Georgia-Pacific, much less want one for president, but that's, of course, beside the point.
Odin2005
(53,521 posts)Renew Deal
(81,897 posts)His solution makes sense in the corporate world.
I don't know how the republicans can keep a leash on him if he wins. He'd be Kim Jong Un with an army.