Trump’s Idea to Cut $19 Trillion National Debt: Get Creditors to Accept Less

May 7, 2016 in News by D


Donald Trump has proposed that he will slash the $19 trillion national debt by persuading creditors to accept less than full payment.

Trump, the presumptive Republican nominee for president, recently toldCNBC he could use his business savvy to reduce America’s debt burden by pushing creditors to accept write-downs on their government holdings.

“I am the king of debt. I do love debt. I love debt and I love playing with it,” he told CNBC on Thursday. “But of course now you’re talking about something that’s very, very fragile, and it has to be handled very, very carefully,” he said.

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,” the New York Times explained.

However, rates are expected to continue rising over time.

“What do we do with all of the money that we owe everybody when rates go up and now all of a sudden we have to borrow at two points more. One point more even is devastating. But two, three, four, five points more. It’s a real dilemma,” he told CNBC.

“I would borrow, knowing that if the economy crashed, you could make a deal,” Trump said. “And if the economy was good, it was good. So therefore, you can’t lose.”

Bloomberg News noted that “since the founding of the country Treasury secretaries have been unwavering in their commitment to always make good on government obligations, an assurance that’s helped make U.S. debt a haven from risk around the world.”

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