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Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less
Moreover, the "idea," such as it is, lacks the understanding that 75% of all U.S. debt is held by other Americans. These are the people that Trump is saying should not get what they were promised.
Why would a retire citizen in Milwaukee, who bought government bonds because of their safety, agree to accept less than the face value of the bond? Why would they and why should they? They have a contract with the U.S. government who agreed to pay the amount due at maturity.Asked whether the United States needed to pay its debts in full, or whether he could negotiate a partial repayment, Mr. Trump told the cable network CNBC, “I would borrow, knowing that if the economy crashed, you could make a deal.”
He added, “And if the economy was good, it was good. So, therefore, you can’t lose.”
Such remarks by a major presidential candidate have no modern precedent. The United States government is able to borrow money at very low interest rates because Treasury securities are regarded as a safe investment, and any cracks in investor confidence have a long history of costing American taxpayers a lot of money.
Moreover, the "idea," such as it is, lacks the understanding that 75% of all U.S. debt is held by other Americans. These are the people that Trump is saying should not get what they were promised.