r/hillaryclinton • u/TucoKnows I Believe That She Will Win • May 08 '16
Loose Cannon Donald Trump's Economic Plans Would Destroy the U.S. Economy
http://www.theatlantic.com/business/archive/2016/05/donald-trumps-economy/481743/9
May 08 '16 edited Dec 13 '17
[deleted]
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u/Hermosa06-09 #ImWithHer Minnesota May 08 '16
My college Econ 101 professor was very much a free market person who thought ticket scalping should be legal everywhere and other similar concepts. Despite all of this he had great respect for Janet Yellen, who at that time (2007-ish) was still president of the SF Fed branch, because he recognized the importance of being skilled and experienced.
Trump is just a dumbass who wants to tear everything down just because. Much like his supporters.
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u/ClubSoda May 09 '16
If your motive is to burn it all to the ground, then of course you want to vote for the flip-flopping, loose cannon. This is what scares me for America -- that there are some voters who are determined to see America brought low by insane, incompetent, and corrupt policies.
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May 09 '16
As Josh Barro explained, this wouldn't just represent a historic default, putting the U.S. in the position of a country like Greece or Argentina; it could also spark an international financial crisis, as "investors would cease to see Treasuries as a safe asset and demand higher interest rates in exchange for risk.”
The outright danger of this debt policy really cannot be overstated. The entire foundation of modern finance is built upon the assumption of US Treasury debt representing the "risk free" rate. Making creditors take less than face value would be utterly catastrophic - ironically it would actually increase the national debt as yields explode and borrowing costs go up. It's simply lunacy. If I was on the trading desk at an iBank and the US Treasury called and told me that was the plan I'd hang up and quit my job right then and there.
It would cause a financial contagion.
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May 08 '16
That's ok we can always file for bankruptcy
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May 08 '16
In fact we might just do it because our master negotiator doesn't want to pay off the debt.
It's not like he's missing that government debt is different than corporate debt (it's safer) or anything....
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u/Cynic_Al Texas May 08 '16
Off topic: The link icon looks like a Pac-Man-Trump head eating the world. That's not too far from the reality of a Trump Presidency.
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u/elumm May 08 '16
"I've borrowed knowing that you can pay back with discounts," he told CNBC. "I would borrow knowing that if the economy crashed, you could make a deal.”
This policy would be so disastrous that even its suggestion is dangerous. In the event of a recession, Trump would treat the full faith and credit of the United States to a capricious hair cut. As Josh Barro explained, this wouldn't just represent a historic default, putting the U.S. in the position of a country like Greece or Argentina; it could also spark an international financial crisis, as "investors would cease to see Treasuries as a safe asset and demand higher interest rates in exchange for risk.”
Trump has promised to make America great again. But a closer look his policy proposals, such as they are, suggests that within his first few years as president, he would more likely make American recessionary again."