Trump: This Is The Time to Borrow - The American Spectator | USA News and Politics
Trump: This Is The Time to Borrow

In an interview with CNBC’s Squawk Box, Donald Trump said the time has come to borrow money to pay for infrastructure projects:

QUICK: How do you pay for all that, Mr. Trump?

TRUMP: So we need to fix our country. We’ve spent so much money in the Middle East. $4 trillion they’re saying now. That means we spent more than that. But we’ve spent all this money in the Middle East. And by the way, we are now further away from something happening in the Middle East than if we did nothing. Had we done nothing, we would have been in better shape in the Middle East we spent $4 trillion and maybe even 5 — and we are right now much further away, I mean, like not even close, much worse shape than had we done nothing.

QUICK: How do we pay for that? And is it going to be public money? Is it private money? And as Wilfred just asked, what level of debt to GDP would you feel comfortable with?

TRUMP: Well, you could have combinations of private money you can even privatize certain things. Basically you’re going out and borrowing money on the United States to rebuild your infrastructure. It would be infrastructure money and maybe there’s ways of giving additional, you know, credits to people that buy these bonds. Frankly the interest rate would be so low.

QUICK: That sounds a lot like Larry Summers.

TRUMP: Normally you would say you want to reduce your debt. And I would like to reduce debt too as much as anybody. The problem is you have a military problem, you have an infrastructure problem, a tremendous infrastructure problem. And you have other problems. And also, the asset is your rates are so low. What’s going to happen when the rates eventually will go up and you can’t borrow, you absolutely can’t borrow because it’s too expensive? It would destroy our balance sheet, totally destroy the balance sheet. So you’d be paying so little interest right now. This is the time to borrow.

When President Obama leaves office in a little over five months, our national debt we be at or near $20 trillion. It will be effectively twice as much as when he took office. And Trump says this is the time to borrow?

When I spoke to Tea Party rallies circa 2012 and 2013, there was fierce opposition to raising the debt ceiling. The very idea of borrowing more money was heresy. And yet many of these Tea Party activists now support Trump hammer and tong. It’s amazing how yesterday’s heresy has become what makes America great again.

The crux of Trump’s argument is that we should borrow when interest rates are low. When he says that he’s sounds like one of those mortgage lender commercials. But isn’t this precisely what created the housing bubble in the first place? Let’s say Trump is elected and Congress goes along with his spending plan and the bubble bursts? Do we have yet another bailout? Do Tea Partiers want to elect Trump only to go all the way back to 2008 possibly on an even larger scale?

Of course, it’s Thursday and Trump could be of a different mindset by Friday at 4 p.m. But let’s say he would pursue such a fiscal policy if elected President. Combine that with a rejection of free trade (i.e. scrapping NAFTA) and the 2008 financial crisis could look like good times by comparison.

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