Trump: No need to worry about debt default

[TomCADem]

Source: USA Today

People worried about the U.S. government defaulting on its debt “are crazy,” according to Donald Trump in an interview with CNN’s New Day Monday morning.

"People said I want to go and buy debt and default on debt, and I mean, these people are crazy," said the presumptive GOP nominee. "This is the United States government. First of all, you never have to default because you print the money, I hate to tell you, OK?”

* * *
On Monday, Trump expanded on his earlier comments, saying: “If we can buy back government debt at a discount, in other words, if interest rates go up and we can buy bonds back at a discount, if we are liquid enough as a country, we should do that. In other words, we can buy back debt at a discount."

And Trump thinks his plan will work because: “I'm the king of debt. I understand debt better than probably anybody. I know how to deal with debt very well.”


Read more: http://www.msn.com/en-us/news/politics/trump-no-need-to-worry-about-debt-default/ar-BBsOxNs?ocid=iehp

[Fred Drum]

1. debt default ???

who is owed what

[world wide wally]

2. Mostly the American people in the form of Government Bonds

[Fred Drum]

3. good statement, i don't disagree

the american people you refer to, curious i am

don't say all of us , you know thats not true

[world wide wally]

6. It's al done with mirrors you know. If you have an IRA or TSA or any kind of personal retirement

account, some of it is tied up in Gov. Bonds

[progree]

8. I have 3 IRA accounts with no bonds in them whatsoever

There are all-equity options for most 401k's too.

If you have an IRA or TSA or any kind of personal retirement account, some of it is tied up in Gov. Bonds

I don't know what a TSA is, but the rest of the above is simply not true.

[Fred Drum]

9. and if i don't

well , i guess i was left behind.

must be cause i'm not worthy

[progree]

11. Social Security Trust Fund and Medicare Trust Fund are entirely U.S. Treasury securities

[Fred Drum]

12. had a snarky answer then

realised you're right

edit

thought about it some more. SS is not invested in anything , check your facts

[progree]

13. What do you think is in the Social Security Trust Funds then?

How are the trust funds invested?

By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.

More: https://www.ssa.gov/oact/progdata/fundFAQ.html#&a0=1

Currently payroll taxes are not sufficient to meet all of Social Security's benefit expenditures. Fortunately, the SSTF bonds are earning interest to make up the shortfall, and this enables Social Security to pay promised benefits in full.

If the U.S. government refused to pay on these bonds, then SS benefits would have to be cut (which is what is projected to happen when the Social Security Trust Fund runs out in about 2034 - unless Congress does something).

(Edited to clarify that SSTF bonds aren't being drawn down presently, but rather the interest they earn is sufficient to make up for the shortfall in payroll taxes)

[Fred Drum]

16. SS bonds ??

please , a quote should not be hard to find

is it 1% or 2 %

can i invest, or only the select.

capitalism requires a market

[progree]

17. See #13 - I edited just as you posted.

[Fred Drum]

22. we are both arguing the same point

the interest is fictional, SS is paying itself interest

continue if you disagree

[progree]

27. OK - you have one federal fund owing another federal fund -- the SSTF -- money

For decades, the SS portion of payroll taxes was more than enough to pay benefits. The surplus was loaned to the general fund, and special issue bonds were issued to a Social Security Trust Fund.

Now that the SS portion of payroll taxes aren't enough to meet SS benefits in full, some of the interest payments on the SSTF bonds are being used to pay SS benefits.

Ultimately, taxpayers are having to come up with the money to pay the interest and ultimately the principal on the SSTF bonds.

One fund owing another, both funds part of the federal government... One pocket owing another....

Whatever, if the federal government stopped paying interest on those bonds, SS would not be able to pay benefits in full. That's the current law and setup, and in that sense it is not fictitious.

[progree]

18. The Social Security system is not "capitalism"

[Fred Drum]

25. i missed this post

social and socialism is not lost on me

[progree]

21. Actuarial note #142 explains how they come up with the interest rates on the bonds

https://www.ssa.gov/OACT/NOTES/note142.html

[Fred Drum]

24. as a mathematician

i wish i went actuary 25 years ago

it pays to lie, with facts backing you up

SS comes out of the budget every year. if SS pays interest on its imaginary fund, i want a piece

[progree]

30. "if SS pays interest on its imaginary fund, i want a piece"

SS doesn't pay interest on it. The federal government does. If it didn't, and you were a SS recipient, your benefits would be reduced. Unless Congress rewrites the law to change the system, that's how it works.

On edit: the federal government is paying itself interest -- I don't disagree.

[Fred Drum]

32. you might be wrong

you might want to look a little closer, but again, we're on the same side

edit : i might be wrong, but i usually reject that because, i'm not wrong, ever

[progree]

33. "you might be wrong" - about what, so I can look into it a little deeper

Wish you weren't so cryptic.

[Fred Drum]

34. its aspy

i have trouble communicating sometimes, its not you

the gov't isn't paying itself interest, that doesn't make sense. maybe it does, they take a small portion of your funds, and pays it to your fund.

edit sarcasm escapes me, sounds so good as i type

[lancer78]

41. The government borrowed money

from social security trust fund to finance general expenditures (military, education, roads ect.). The general fund then issued IOU's to the SSTF in the form of bonds that pays Interest (This shows as interest paid on our national debt).

[mdbl]

49. and the lazy ass politician would rather just bankrupt SS

than pay it back. What a great country this is.

[progree]

51. It makes sense to me. And it is what will keep SS beneficiaries getting

their promised benefits in full now and in the future, until the SS Trust Fund is exhausted, around 2034. After that, the benefits will have to be cut by about 25% to the level that matches SS tax revenues. That's the way the law is written -- unless it is changed. True, the money to pay the interest and redeem those bonds comes from the general taxpayer (income taxes mostly).

Just like the pension fund for federal workers is a federal fund. Nobody who receives such a pension would consider it somehow fake because it is a federal fund, and not some Vanguard fund invested in Treasury securities or whatever.

the gov't isn't paying itself interest, that doesn't make sense. maybe it does, they take a small portion of your funds, and pays it to your fund.

[SunSeeker]

4. You never know what is going to come out of Trump's mouth. nt

[cstanleytech]

5. Well he must know what he is talking about seeing as hes filed for bankruptcy 4 times. nt

[mdbl]

50. so we already donated to his campaign whether we like it or not

[pnwmom]

7. So the King of Debt wants to be President of the United States. No, thanks. n/t

[Roy Rolling]

10. Another thing "no need to worry"

Apparently, we don't need to worry that Trump will repeatedly contradict himself. The delf-delusion is complete when he says "I'm the king of debt. I understand debt better than anybody"

Yes, four bankruptcies where he defaults on debt makes him an expert at defaults.

[Feeling the Bern]

14. "YOU CAN PRINT MONEY!" Does this motherfucker know anything about the German 1923

hyperinflation? All they did was print money.

IT isn't the fucking money, asshole. It's the perceived value of that money. Money has value because it is a scarce resource, which is why it is the #1 thing economists look at.

If you print more just to print more, you lower its value by making a scarce resource not-so-scarce, raising inflation and destroying the economy.

Some people are stupid. Some people of full of shit. Some people are fucking nuts, as George Carlin once stated. This motherfucker is all three! Stupid, full of shit and fucking nuts!

[Fred Drum]

19. you CAN print money

if you have a printing press

its really not that hard, and currently printers are $10.00 an hour, looking at my inkstained fingertips

[Feeling the Bern]

23. Nice snark and sarcasm. Love the joke. But this motherfucker is serious

And the money he will print will ruin the economy.

Anyone with a basic understanding of economics knows that.

He went bankrupt running a business where people lose more than than win and pay you to play and he wants to do the same the US Treasury.

And he will still get 25-30% of the fucking vote minimum.

[Fred Drum]

26. trump is obviosly a charlatan

i feel the bern

the majority, not so much

edit to add we live in a country of morons, hopefully you're not one of them

[Feeling the Bern]

28. I am a moron. But I did learn my lesson. And moved out of the country 10 years ago overseas

But I do like watching the animals in the zoo burn it down slowly. The entertainment value is high.

[Fred Drum]

29. you still have to pull the "D" lever

no text needed

[Feeling the Bern]

40. I will, but if Bernie isn't the nominee, I will vote against Trump and not for HRC

[Fred Drum]

31. slightly off topic

bills draft any good ???, i like my steelers

[Feeling the Bern]

39. Ragland, Lawson and Adolphus Washington are all Game 1 starters on Defense

Baby Gronk is a very serviceable FB/TE

And Eric Striker will probably be a UDFA steal.

I'm happy with the draft. First three rounds got as an "A" rating from most pundits.

[Fred Drum]

44. schedule not out yet, don't think we play

but i like the bills , donahue and you know

[PatrickforO]

15. Aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaagh!!!!!!!!!!!!!!!!!!!!!

DON'T let this moron anywhere NEAR the White House.

"Oh, yeah, you bet! I'm gonna get you a really good deal!"

Bull shit.

[jtuck004]

20. So he says a stupid thing, peopelcall him on it, he googles it and then angles for the

question again so he can sound like he knew what he was talking about all along - if you people could just keep up.

Real estate swindler. Fraud and hot air are so much a part of his lifestyle he thinks there is no art to running the country. It's just pick the right answers and everyone will follow along.

It was in Spokane this weekend, said something about some minimal immigrant problem here, and "don't worry, we're gonna build the wall".

People's kids are gonna spit on his name.

[Bernardo de La Paz]

35. King of debt? No, Trump is the King of Bankruptcies. Serial bankruptcies. . . nt

[Bernardo de La Paz]

36. Rasing interest rates through the roof by printing $19 Trillion will hurt Americans very badly. . nt

[Fred Drum]

37. interest is a man made concept

is 19% too high

is 190%

how about 13.45% and an extra payment now and then

7% about right, take your pick. the average consumer can't pick and choose

take it or leave it. and those pills your taking, $1200 for cipro or india

IF YOU CANT SEE THE SYSTEM IS BROKEN, i can show you a nice pair of glasses, rose colored, FITS THE PRESCIPTION

[Bernardo de La Paz]

38. Medical science is a human-made concept

Your post has no logic.

If you abolish interest rates, like Sharia-law banks, people will simply work around it.

Interest rates are there because they work.

There are plenty of things to fix with the monetary system and capitalism, but abolishing them won't work and won't happen.



P.S. Don't try any more personal insults. I'm not taking "those pills", and even if I were, it's my affair, not yours.
PPS: Woman make things too.

[Fred Drum]

43. since you appear to disagree with me

it's tough. i can't let it go

the word "abolish" wasn't there, you can read right

fix the monetary system was your suggestion, and mine , i agree completely

those pills were referencing the HIGH cost of medicine, wrong on any level

not sure why you disagree with me

edit : read it three times, i apologize , when i said "you" it was third person, not you

[Hekate]

42. What a recipe for hyperinflation, ending with taking a wheelbarrow of paper money to buy bread...

Don't laugh -- it's been done before in several countries; just print money until it is worthless.

Any Democrat who launches a nasty protest against either of the two Dems in the race instead of Tinyhands Trump is no Democrat at all. He is the most dangerous demagogue I've seen in this country in my life, and his pigheaded ignorance is part of the danger.

[AngryAmish]

47. Quantitative Easing was printing money

[muriel_volestrangler]

48. Though Trump is now proposing do it when interest rates are high

and then, it would be more likely to have an inflationary effect.

I expect he'll have to back out of what he's said now, after a few people on Wall St say "what the fuck, Donald, you're saying you're going to print money to pay off the federal debt? That'll drive down the worth of the federal debt we hold, dumbass! You're not meant to hurt us!"

[TeamPooka]

45. I heard Trump wrote a whole book called The Art of the Deal but when I checked it the book

only had a Chapter 7 and Chapter 11.

[Festivito]

46. He does not express how being IN the system is different from BEING the system.

And, that lack of expression scares me under the threat of a Trump presidency.