Posted on 08/12/2016 4:41:01 AM PDT by Kevin C
Donald Trump appeared to change his stance on the federal debt Thursday, saying that, with interest rates low, the U.S. should borrow money to spend on infrastructure rather than lowering the $14 trillion federal debt.
"This is the time to borrow," the Republican candidate said in an interview on CNBC Thursday morning.
"Normally, you would say you want to reduce your debt, and I would like to reduce debt too," Trump said, before explaining that "the problem is you have a military problem, you have an infrastructure problem — a tremendous infrastructure problem, and you have other problems. And also, the asset is your rates are so low."
Trump's campaign has previously stated implausibly ambitious goals for reducing or outright eliminating the federal debt. Trump has also, however, muddied the waters with ambiguous statements about refinancing or renegotiating the debt.
On Thursday, he struck a much less hawkish tone on federal deficits and spending, suggesting that the U.S. needed to spend more than $500 billion on new infrastructure.
Congressional Republicans have sought to move the government in the other direction, proposing budgets to balance the budget within 10 years and begin reducing the federal debt.
That is just it private business does build our roads and bridges, and public buildings via a bidding process, they also provide our Military hardware, uniforms the same way. It goes to the LOWEST bidder, of course it is a RIGGED process so only a company in a certain congress critters district gets the bid. Even the guards at the post gates are Rent a Guard more often than Military Personnel. They are armed with just 40mm.
Man, they did a total remodel of a very usable Navy Exchange that only needed the leaky roof repaired. But they did not remodel the Pharmacy to make it handicap friendly. Since DOD has MANDATED all Tricare Life retirees over 65 to use the base Pharmacy for daily meds, this has created a big problem, it’s to small to handle electric wheel chairs or walkers. They also built a new large building still don’t know what it’s for, when we had empty ones available that were remodeled after the flood of 2010, our Navy Base got no coverage by the media like Nashville did, the entire south side was under several feet of rushing water. We are on the other end of the state. http://www.navy.mil/submit/display.asp?story_id=53035 Serve Pro came in and did the clean up.
Then the year before they repaved a perfectly good Commissary parking lot and did a mini remodel all out side contractors.
No Paul Ryan who gave Obama everything..you have to grow your way out of debt. You think a swing voter cares about the debt?
If you just cut off spending it would cause a massive recession and he would be destroyed..you slow it down, cut taxes then reverse it
You can’t cold turkey a heroin addiction..if you do the patient dies
Who advised him to say something that stupid?
We spent 300 billion on “stimulus” under Bush’s last year, about a trillion on “shovel ready jobs”, and all anyone can say is infrastructure is old and falling apart.
Where did it go if not to critical infrastructure? Buy land for parks and put in biking paths, put in fountains and art, stuff that looks good in an article at an opening ceremony and is done quickly, not bridges, roads, sidewalks.
WAKE UP, TRUMP!
I know that, but that's not what you said. Regardless, the actions taken under Obama drove up the federal debt. What Trump seems to be saying is that driving up the debt some more doesn't bother him. I hope that is wrong and that he clarifies his position soon.
So private investors are selling the bonds and using the funds to build bridges, roads, and airports. So those same private investors will be the ones paying off the bonds. Where do they get the money to pay them off?
Understand. I wasn’t clear on that. The point is they created debt and falsified collateral for the debt with worthless MBSs and T-bills bought with debt. Fakery.
I watched the interview being discussed. I’ll re-watch it, but it seemed to me Trump was sort of thinking out loud. The interviewers pressed him on how he could afford the infrastructure spending. He talked about privatizing some of it, discussed how tax revenues would increase with companies bringing back their cash from overseas. Then he said that while government is different from a private business, and while normally doesn’t like debt, he does like using leverage as a businessman.
He made the point that while interest rates are low now, they can’t stay at zero forever, and when they start rising to historically normal levels it will be extremely expensive for the government, so it might be smart to borrow now before borrowing becomes prohibitive with higher interest rates.
This is a work in progress and Trump didn’t seem to commit one way or another but was rather weighing possibilities. I’m sure this is something he’ll continue discussing with his economic team, and if it’s a mistake, they’ll let him know. I didn’t get the impression that he was talking about massive Keynesian style borrowing but rather weighing the possibility of borrowing in the short term to take advantage of an opportunity that won’t be there when interest rates rise.
Funniest line in the article:
“Congressional Republicans have sought to move the government in the other direction, proposing budgets to balance the budget within 10 years and begin reducing the federal debt.”
I wholeheartedly agree with your last sentence.
Well that is the democrat position. When interest rates do rise the interest on the debt alone will swallow up the budget.
What you are describing is what standard federal debt is—provided through bonds for investors.
Oh! You better watch out, you better not cry
Better not pout, I’m telling you why
Santa Claus is comin’ to town.
No, no I am not. WTF is with you people? Have you never heard of the friggin’ MTA or a sewer district? I thought we all dropped pretending to be numb after the fifth grade.
What are you talking about—he just said he wants to increase our debt with the same kind of infrastructure spending that Democrats and Keynesians are always talking about. Government spending is not actually the “investment” that liberals regularly refer to it as.
Promising to enact the Democrat agenda, just a little more efficiently than the Democrats, is the usual excuse of the GOPe to be allied with them in increasing the role and reach of the government.
He campaigned on paying down our debt, not increasing it.
But yes, he has been stating as well that he’s for more infrastructure spending.
Now we know how he intends to reconcile the two, which is to drop the former and adopt the full, traditional, Democrat position.
You’re talking about muni bonds backed by promised streams of revenue. There’s not new revenue coming in from building airports or hospitals without having the federal government taking a role in our society that is neither constitutional nor needed.
Those are still government bonds, only sweetened by a heightened/elevated guarantee of payment that is already implied in US bonds to a level that local governments can’t match. (That is why more local bonds usually pay at a higher rate as well.)
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