Posted on 04/02/2016 4:22:32 PM PDT by Hojczyk
Donald Trump said in an interview that economic conditions are so perilous that the country is headed for a “very massive recession” and that “it’s a terrible time right now” to invest in the stock market, embracing a distinctly gloomy view of the economy that counters mainstream economic forecasts.
The New York billionaire dismissed concern that his comments — which are exceedingly unusual, if not unprecedented, for a major party front-runner — could potentially affect financial markets.
Over the course of the discussion, the candidate made clear that he would govern in the same nontraditional way that he has campaigned, tossing aside decades of American policy and custom in favor of a new, Trumpian approach to the world.
In his first 100 days, Trump said he would cut taxes, “renegotiate trade deals and renegotiate military deals,” including altering the U.S. role in the North Atlantic Treaty Organization.
He insisted that he would be able to get rid of the nation’s more than $19 trillion national debt “over a period of eight years.”
Most economists would consider this impossible because it could require taking more than $2 trillion a year out of the annual $4 trillion budget to pay off holders of the debt.
“I know the Wall Street people probably better than anybody knows them,” said Trump, who has misfired on such predictions in the past. “I don’t need them.”
(Excerpt) Read more at washingtonpost.com ...
Oh my, talk about radioactive. Trump must be lead-clad.
"Strikes...like with an airplane?" ~Hillary
It's just how he rolls.
True... you can’t get a Beluga whale from 0 to 1000 mph in 1.5 seconds without breaking it up. Do we want propulsion or do we want explosion?
But that little nicety taken care of, at least Trump is thinking about some kind of grand plan. To get halfway there in twice the time would be an amazing feat.
Everybody knows he’s Mr. Hyperbole by now, or has no excuse not to know.
Still I think he’s giving America the signal that how fast it can move, isn’t being given an upper limit by him.
“I like Trump but he’s starting to jump the shark here.”
In other words, it is best to lay back and let the debt destroy our civilization.
You've got it backwards. The negative interest is for the lenders, not the borrowers. You give me $100 trillion for a year, and I give you back $98 trillion at the end of the year. I keep the $2 trillion, not you.
Trump's got a massive tax cut plan, and the only thing he commits to cutting is spending is waste fraud and abuse.
Sounds like the GWB plan.
Don't forget all those jobs coming back after he makes all those phone calls. They will boost tax revenue so much it will be balanced in 7 years.
I was too quick in my comment.
Trump is not just balancing the budget in 8 years, he is eliminating the entire national debt in 8 years.
That’s more than $19 trillion in 8 years.
Over 2 trillion a year.
Has Cruz promised us anything as great as this??
Maybe his secret plan is to put the US treasury in debt consolidation, to stiff the US debt holders just like deadbeat credit card holders stiff the credit card banks of most of their debt (and pay 20% interest on their car loans)
Hey, POTUS Trump will be screwing those no good Chi-coms out of the money they loaned us. We hate them anyway. They stole our jobs.
AMERICA FIRST! Vote Trump!
What could go wrong??
I didn’t write it too clearly but I was suggesting tongue in cheek how the gov’t could solve its debt problem.
And the solution was the gov’t borrows 100 trillion and pays back 98.
And it reduces the national debt by 2 trillion dollars.
Bingo
But Trumpiters believe he will just stiff all the US creditors of that $19T, like maybe they stiffed their credit card banks in debt consolidation.
Just read the comments here. They believe ANYTHING he says.
Massive tax cuts. Welfare to corn ethanol and fully funding Social Security and Medicare.
Stiffing our creditors and borrowing all that $$$ to pay for it while he makes China send back out manufacturing plants.
JUST BELIEVE!
I’d bet money half a million bureaucrat positions could easily be eliminated.
Cut spending to the bone-—or build the economy such that it pays the bills.
When Hannity asked Trump to jump on his “Penny Plan” which is to reduce every budget line item except SS/M by 1% per year, Trump said “I like that. But I think much more in most areas.” Hey, if you just put a hiring freeze on Federal employment, attrition from retirement would cut that workforce in half in 7 years.
Trump’s plan relies on a combination of corporate and working class tax cuts and trade policy corrections to incentivize businesses to come back to America and grow the economy at “impossible” rates — like 6% or more — while making deep spending cuts everywhere except SS/M and the military. 6% GDP growth is not actually uncommon following a recession, and if we consider that we have been treading water in GDP terms for the last 7 years, Trump’s policies really could give us the recovery we’ve been waiting for. We could go from a $18T GDP to a $27T GDP in eight years while spending drops to and holds steady at $2T.
That combination of a larger economy that generates even more tax revenue while reducing spending could actually mean surpluses of $1T in the first few years and $3T in later years. Still tough to eliminate $19T in 8 years.
If you look at a pie chart of Federal spending, there is easily $1.5T per year that could be eliminated. $1T of that is welfare and we already know that if you insist people work for welfare, they opt out. That would pay off $12T in debt in 8 years.
If you look at past recessions and depressions, GDP growth in following years has been as high as 12%. If Trump’s policies could get just 6% for 5 years, tax revenues would have risen by $1.2T per year. Less in early years, more in later years, for a total of $8T additional revenue over the 8 years.
$20T easy peasy./s
You could actually eliminate the deficit with a single action:
Require welfare recipients to take random drug tests and work for their benefits. Treat them as — low paid — employees would be treated by any company.
When this has been done at the state level, welfare rolls drop off dramatically. Since $1T of the budget is one welfare program or another, cutting half of it eliminates the deficit.
There is another $500B that can be eliminated by turning the Departments of Education, Energy, EPA, BLM, etc. into think tanks with no field offices or enforcement arms.
Each 5% growth in GDP is roughly $1T, and an overall tax rate of 20% (lower than current) nets $200B/yr additional revenue. We never got the usual GDP growth rates following the last recession, so new policies of lower corporate and working class tax rates, border adjustment tariffs and repatriation of offshore deferred profits could easily jumpstart a decade of 5+% GDP growth.
If Trump was allowed to do things his way, paying off the debt is actually possible. Of course, there are an awful lot of sacred cows and their supporters fill Congress, so Trump won’t have it all his own way. The question is how successful he’ll be in convincing the people that eliminating the debt is actually possible if only Congress would do what Americans want.
When did Trump say he supported “ethanol subsidies” ? In Iowa, I heard him say he supported “ethanol mandates” but mandates are not a cost to the GOVERNMENT budget, they are a cost to CONSUMERS’ budgets.
He likes the threat ethanol is to OPEC, or did you think cars needing 10% less gasoline doesn’t matter to OPEC ? If the ethanol industry dies, that threat goes away. OPEC has spent two years overproducing in a panic, trying to drive American oil out of business, make ethanol uncompetitive, and make electric vehicles less cost effective. If they could only eliminate the competition, they could cut production and jack oil back up to $120.
Anything that cuts profits of OPEC countries by 70% has got to be a good thing and we shouldn’t scoff at any of them.
Trump is an unconventional thinker and I believe there was more than just “pandering to farmers” in his support of ethanol.
The Federal Reserve has been loaning money to banks at 0%. What is to stop them from providing refinancing at 0% to buy back the debt they don’t already own ? Then we stop issuing any new T-Bills to anyone. All our debt is at 0% interest and we owe it to ourselves. We save the remaining interest portion of the debt service payments. All of those T-Bill holders that got redeemed early now have cash that needs to be invested somewhere else like the stock market or corporate bonds.
Also remember that Trump expects huge economic growth from his pro-business and working class tax cuts and import tariffs. 5% GDP growth is almost $1T per year, and nets $200B/yr in additional tax revenue. Plus his special tax rate for repatriation of offshore corporate profits would be a one-time infusion of $2T cash pumped into the economy. The tariffs on imports mean those repatriated corporate profits go to expand/rebuild American manufacturing.
Then there are the actual budget cuts. I’ve heard him scoff at Hannity about across the board 1% per year cuts, say there is a “lot more” than that to cut immediately in everything but military and SS/M spending. Even in the military spending he seems to think that he can offset some of it by making foreign government cough up more and eliminating some of the excesses in weapons development and procurement that result in $500 toilet seats. He’s also talked about huge amounts of fraud in Medicare, so that spending in not sacrosanct either.
If you look at the budget, it is easy to find at least $1T per year that SHOULD be cut.
I’ve heard Trump address healthcare costs somewhat. One point I think is interesting. Allow re-importing of America-made pharmaceuticals and import of foreign-made pharmaceuticals. American pharma companies sell the same drugs in America for much more than they do in foreign countries.
Re-importing will cause pharma to raise prices in other parts of the world so they cannot be re-imported and undercut their US prices. That will be tough, though, because they will be competing with foreign makers both abroad and at home. This should result in slightly higher prices abroad but much lower prices here. A big chunk of Medicare and Medicaid costs is prescription drugs, so it should reduce those budget items somewhat. Doesn’t sound like a huge amount to me, but I like the principle of competition reducing the gouging of Americans to benefit foreigners.
Implement random drug testing and require work (actual work ala picking up roadside trash, cleaning graffiti, etc. and not work for someone else or school) to receive any welfare or housing assistance.
Half of recipients will drop out rather than work and be drug tested. Another $400B/yr saved.
PS. For SSDI fraud, I think more focus should be put on the doctors and revoking their medical licenses as well as prison time if they are complicit in this and Workman’s Comp fraud. And if SSDI has been approving recipients WITHOUT doctor’s reports, that should never have been allowed in the first place.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.