Ignorance or Nihilism

So, Trump and the national debt. He's just throwing ideas out there, most of which betray an impressive ignorance of how national debts work. His latest is to have the US declare bankruptcy for negotiation purposes. This is not how national debts work. Moreover, this is not how America's global financial position works. Beyond the practicalities, there is, in fact, a clause in the Constitution forbidding such.

Freeper Trump supporters are thus left with two options. The way I would expect, given Freepers' already weird and idiosyncratic economic understanding is for them to go along with Trump, using increasingly improbably logic to explain how his ideas are totally awesome. But more than a few preferred to explain how the economy is doomed anyhow so nothing matters.

As expected, SoFloFreeper analogizes America to a giant car company:

This is exactly what Obama did to the bond holders of GM and Chrysler, right?

Anyone remember the NY SLIMES raking Hussein for that?

Brilliant prefers to analogize us to Greece. Who would bail us out in this situation is far from clear, though:

In other words he wants to do the Greek strategy. Tell them you’ll default unless that agree to take less than they are owed. But I have to say I think that is actually inevitable irrespective of what Trump says. He’s doing us a favor by saying it now rather than pretending the problem doesnt exist.

exit82 isn't clear on the specifics, but money is imaginary:

The Federal Reserve can certainly take less.

They created the money out of thin air, and they can make it disappear also.

exit82 continues his vague understanding that the Fed is running some kind of scam:

The Fed created $4.5 trillion of new debt with zeros and ones on an electronic screen.

It was called QE.

Now we have to pay it back with interest.

If they take a haircut, what have they lost?

Because haircuts are coming.

exit82 then goes full apocalyptic nihilist:

What I understand is the the world financial system is on the verge of collapse.

The numbers will soon be meaningless.

All economic and monetary theory has been turned on its head in the West.

Debt that cannot be paid is no longer an asset but a fig newton of someone’s feverish imagination of value.

This will soon be happening everywhere.

Greece, Cyprus, Puerto Rico are but the harbingers of things to come.

Worldwide resets are looming.

Utmost Certainty agrees - America's bankruptcy is inevitable, and Trump's just the one to see us through!

It was always going to come to this anyway. What’s being presented here isn’t that outlandish.

csvset knows all bad things Trump seems to say are Cruz plots:

we’re watching Loser Cruzers campaign for the Butcher of Benghazi. How principled and conservative of them. Once again we see that the Cruz Crusade was never about conservatism.

The Cruzsaders were and are all about maintaining the status quo, keeping the Republicans as the go along to get along gang. If Trump is elected there will be some tumultous times. The Uni-party will not go away quietly. Expect the uni-party to try to thwart Trump every step of the way. It will be interesting to see who Canadian Cuban Ted sides with, Trump or the Uni-party.

Mouton blames the media for asking a gotcha question:

The point of this is the press asks questions and gives a Hobson’s choice for responses. Which ever choice DJT (on anyone they wish to demean) makes, they print it as his idea when in fact he is given a stupid choice to begin with. Did the interviewer note that about half the debt is owed to the US Trust funds? IOW, the government is already doing exactly what they suggest DJT wants to do, simply by cutting or stringing out Social Security and other benefits already. Bet they did not cover that one.

DoughtyOne thinks they key is to put everyone to work. Shazam!

We have 94 million people out of work.

The tax revenues from them being employed would be $2 trillion per year into the government coffers.

That would reduce the debt rather decently.

L,TOWM is another guy super interested in the economy, but not so much as to understand anything:

The largest holders of Treasuries are banks that are members of the federal reserve system. Surrendering their treasuries for less than par, with an agreement to amortize the write down against their capital over the next (??? 10? 30? 50?) years would probably sound a lot better than “Hey guys, we’re bankrupt, so if you want some electrons back for the electrons you sent us a few years ago, raise an army and come take them.”

The hogs that have been slurping at the taxpayer filled trough since the 1930’s can go on a dammed diet for a decade or two, IMO.

Like his fellows, L,TOWM finds our lack of a gold standard to mean nothing matters:

HAHAHHAHAHAHAHA — the paper and coins you and everyone else are carrying or storing in vaults are an infinitesimal and meaningless percentage of the actual money supply in this country and indeed, the entire world...

Money is created by banks, currency by governments. And the currency in this country (and the entire world) is backed by nothing more than a pack a bankers and their bought and paid for whores in the government saying “this green paper has value”. Every time a bank shoves a few electrons in the form of a loan or buying a bond from Uncle Sugar, it creates money.

He's so close, though! If he only thought of what would happen if the government said 'this green paper has less value' he'd be going somewhere!

L,TOWM finally concludes that what we need is a healthy bank freeze:

And when the assets are redeemed for an amount of electrons less than their carrying value, what balances the other side of the ledger?

Reserves (equity).

And when a bank’s reserve amounts gets too low, how many new loans can it make? That is how the money supply will get reduced, sir.

Ohioan mixes up selling bonds with issuing them.

The fact is that the market price of indebtedness always fluctuates; buying back debt is done all the time in the free market, and taking advantage of those fluctuations is simply prudent stewardship.

It is also ridiculous in the extreme to wax sanctimonious about the Federal debt. Since Roosevelt devalued the dollar in 1933, reinforced manifold when Nixon took us off the gold/exchange standard, a falling dollar has cheated debt holders with regularity.

The New York Times is pretentious. It is not fair, balanced or even particularly well informed. It certainly does not respect any sort of journalistic duty, worth defending, in its dealings with its readers.

central_va argues, as he often does, for a return to the protectionism of the Great Depression:

A 20% across the board import tariff balances the Federal budget tomorrow. It is what he founding father would do in this situation but then again they would not have let this go on this long to begin with. Never the less it is the right solution and has sound historical president.

This results in a tiresome dataless slapfight about how inflationary tariffs would be in the modern era.

litehaus is yet another who makes the banks a scapegoat (fair), who will coincidentally bear all the burden of this, somehow (ridiculous):

Are U (gasp) suggesting we ask the ‘Stockholders of the Federal Reserve Bank’ to absorb some losses ?
Make that old money crew (( Morgan,Mellon,Rockefeller, Harriman etc etc)) pay for the havoc they have created for friendly politicians over a 100 years??

YOU’VE GOT MY VOTE !!!

Yanno the FED was supposed to C that our dollar was sound..They were 100% successful if U think going from 100 cents to less than 1 cent is good ( in 103 years ) !!

9YearLurker thinks the key is lots of municipal bankruptcies:

What should happen is for the fes to stop all grants to states, states in turn reduce their grants to localities, and those stae and local govnments to give their creditors haircuts, as required.

TheNext has never heard of the Full Faith and Credit clause, though that's really the least of his problems:

The Federal Reserve is NOT a voluntary contract.

The people are not obligated to pay. It is not like a car payment.
No nation’s people are required to pay their central bank.
Zip. Zilch. Nada.
Central banks are a fool’s scam.
Govt is the Big Lie.

Go Trump Go!

ConservativeWarrior has faith in Trump's economic understanding because Trump is rich. No word on all the rich folks who think Trump is nuts:

So clueless, in fact, that he’s a billionaire.

So clueless that he’s won the GOP nomination with unprecedented voter turnout and tiny expense.

Things are so bad now that aMorePerfectUnion is all for economic chaos:

Make a deal to pay off Treasury bond holders at less than 100%. OK. But that will be the last Treasury bond ever sold. We will be on a cash basis after that.

In an age of negative interest rates, don’t be too sure.

With less debt, governments are seen as better credit risks.

I’m convinced I’ll like some of what trump would do and hate some - like all of the presidents.

He will certainly rock the boat - but I think it needs rocked hard. Many will panic and get seasick.

It comes down to BagCamAddict arguing that economic suffering is good for our nation's character, and we really should all be making a lot less money:

I worked a job once where we all suddenly faced 25% pay cuts. Were we all upset? Absolutely. When we all asked ourselves: Would we rather have a job, earning 25% less money, or be unemployed? We unanimously got happy about the pay cut, and keeping our jobs.

The vast majority of Americans have never been given the opportunity to face this choice. Corporate greed prevents company execs from facing their OWN 25% pay cut, so they can't imagine their workforce would happily take a 25% pay cut if it keeps the factory from moving to Mexico or China.

Everyone in America, and I do mean everyone (even those on minimum wage**), could handle a 25% pay cut. But most people are so selfish, they won't even talk about it.

**And to save repeated back and forth on this: This country hasn't known hardship since WWII, let alone The Depression. Low-income families could choose to combine households to save housing expenses -- but they don't, because they think they are entitled to owning and living in their own home. Hispanics, Vietnamese, and other ethnicities often combine families into one household to save money. Every low-income group could do the same. But the Democrats believe no one should "have to" share a roof in America. For me, it's simple math. If you can afford your own roof, you can have your own roof. If you can't, then you can't. Same with a Lamborghini.

I mean, when you're so divorced from reality you're divorced from Freepers' reality? That's impressive.