Wall Street: Trump's debt policy smacks of bankruptcy
Wall Street: Trump's debt policy smacks of bankruptcy
His vow to 'make a deal' with creditors would undermine U.S. economy, bankers say.
By Ben White05/10/16 05:15 AM EDT
NEW YORK — Donald Trump has a debt problem.
Twice in the past five days the presumptive Republican nominee has said things about dealing with the $19 trillion federal debt that left Wall Street terrified, Republicans dumbfounded and Democrats licking their chops.
The trouble for Trump began Thursday on CNBC, when he appeared to suggest that as president he would not repay all the U.S. debt owed to creditors. Asked whether the U.S. should repay its debts in full or ask creditors to take less, Trump said: “I would borrow, knowing that if the economy crashed, you could make a deal.”
Financial experts instantly leaped on the comments, suggesting that Trump — who is no stranger to bankruptcy as an executive — would allow the U.S. to default for the first time in its history, an event which could send interest rates soaring and tank the U.S. economy.
Trump went on CNN on Monday morning to clear things up.
Of course he would never allow the U.S. to default. Anyone who suggested such a thing must be “crazy.” What Trump meant to say was that if interest rates rise he would consider buying back existing U.S. debt at a lower prices. As interest rates rise, the price of existing debt goes down.
“In other words, we can buy back debt at a discount. People said I wanted to go and buy debt and default on debt, these people are crazy,” Trump said.
Read more: http://www.politico.com/story/2016/05/trum...
Follow us: @politico on Twitter | Politico on Facebook
His vow to 'make a deal' with creditors would undermine U.S. economy, bankers say.
By Ben White05/10/16 05:15 AM EDT
NEW YORK — Donald Trump has a debt problem.
Twice in the past five days the presumptive Republican nominee has said things about dealing with the $19 trillion federal debt that left Wall Street terrified, Republicans dumbfounded and Democrats licking their chops.
The trouble for Trump began Thursday on CNBC, when he appeared to suggest that as president he would not repay all the U.S. debt owed to creditors. Asked whether the U.S. should repay its debts in full or ask creditors to take less, Trump said: “I would borrow, knowing that if the economy crashed, you could make a deal.”
Financial experts instantly leaped on the comments, suggesting that Trump — who is no stranger to bankruptcy as an executive — would allow the U.S. to default for the first time in its history, an event which could send interest rates soaring and tank the U.S. economy.
Trump went on CNN on Monday morning to clear things up.
Of course he would never allow the U.S. to default. Anyone who suggested such a thing must be “crazy.” What Trump meant to say was that if interest rates rise he would consider buying back existing U.S. debt at a lower prices. As interest rates rise, the price of existing debt goes down.
“In other words, we can buy back debt at a discount. People said I wanted to go and buy debt and default on debt, these people are crazy,” Trump said.
Read more: http://www.politico.com/story/2016/05/trum...
Follow us: @politico on Twitter | Politico on Facebook
Remember, that this country just came out of the worst recession since the Great Depression, of The Republican Bush administration. This country don't need to go back into another under another Republican admininstration.