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REUTERS CLAIMS TRUMP WOULD CAUSE RECESSION:
2016-05-16 14:50:12 Post No. 74171012
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REUTERS CLAIMS TRUMP WOULD CAUSE RECESSION:
Anonymous
2016-05-16 14:50:12
Post No. 74171012
[Report]
>Trump wants to be seen as a responsible business executive. Ironically, given his hostility toward Latinos and other immigrant groups, his messages most resemble those irresponsible populists who have repeatedly ruined Latin America. On three big macroeconomic issues -- debt, inflation and financial regulation -- Trump would put the United States firmly on the road to becoming Argentina, a once-prosperous country until Juan and Eva Perón took over.
>On debt, Trump believes the more the better. His companies issue a great deal of debt because, in the downside scenario, developers like Trump can find ways to pay less than the face value of what is owed. He recently said this approach is an opportunity the U.S. Treasury is losing out on.
>The U.S. government, however, is not a speculative real-estate company. Alexander Hamilton realized, at the very start of the nation that having the federal government pay its debts in full, as well as assuming the states’ debts, was of fundamental importance. This was crucial not just for public finance but also for the ability of the private credit markets to operate in a reasonable fashion. And this is what Washington has done for more than 200 years.
>“Risk-free debt” is how U.S. debt is described in the world of finance. Once you introduce default risk into those calculations, interest rates would spike for both the government and the private sector.
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