Sunday, April 03, 2016

Donald Trump predicts massive recession, debt crisis looming, yet claims he can negotiate national debt down in eight years


Donald Trump is reported to have said that the US faces a massive recession and stock market crash soon. He also claims that if he is elected president he can retire the debt in eight years (two terms).  Reuters has a typical story Sunday afternoon here.

Bob Woodward (from Watergate days) and Robert Costa have a detailed report in the Washington Post, with video (link).  Economists say Trump’s math on paying off the national debt is off, that it would take over 50% of revenues to do this in two terms.  But Trump claims he could negotiate down the debt agreements.

Woodward describes Trump as having said we were in stock market bubble and he would not advise people to buy stocks now.



Trump’s statement was viewed as unusual from a Republican candidate, to give such a bleak view of the economy.  Trump has also suggested he would not want an “outsider” for Vice President.
 
Trump’s reasoning seems to have more to do with increasing debt than anything else (it doesn’t sound rooted in Porter Stansberry’s ideas about reserve currencies). But Ted Cruz has, in the past, suggested the US could let some debts slide and not raise the debt ceiling.  It sounds like Trump thinks we’re headed back to another debt ceiling crisis.

Trump was accompanied by his son. The interview was conducted at his new hotel site in Wahington. \
Steven Ginsberg discussed Trump’s interview on CNN Sunday afternoon.


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