When A Reality Show Becomes Reality

Trump is not a real economist; he is just playing one on his latest reality show, “The Great Republican Candidate!” If I did not know better I would think he was a parody or the leading character in a particularly stinging satire. The role he is playing is the political equivalent of a rogue bull leading a stampede of dumb asses. Since the GOP herders were not able to head him off they are now divided about what course to pursue. Some of them are falling in line behind him while others are hanging back in the hopes of being able to say “I told you so” when he leads the herd off the cliff!

What has real economists wetting themselves is that Trump's incredible ignorance and naivete about the national debt and the world economy are causing him to advocate some really dangerous actions. In regard to the national debt it appears that Trump has embraced the iterations of the Greedy Old Plutocrats without understanding their code. They do not see the debt per se as a problem. Their objection is really about what the borrowed money is paying for, or more accurately the fact that they are not making a profit off of the programs the borrowed money funds. If you privatize those programs the plutocrats will go to great lengths to defend the spending no matter how wasteful that spending may be. If you do not believe me, just look at the attempts to privatize Social Security, Medicare, and even education, and ask yourself how much money we waste on the military industrial complex. Everyone who has looked at it will tell you we are not getting our money's worth from defense contractors, yet there is always this absurd call to spend more rather than becoming more efficient.

All right, I will admit that it is easy to see why the Trumpster might be confused. After all, starve the beast is a subterfuge. All of those dire warnings about the national debt are because you cannot whip up hatred for programs that actually help people unless you are able to connect those programs to something people perceive as a threat. And the fear of being indebted to other countries goes clear back to the very beginning of our republic. A perfect example of how we as a nation have reacted to this fear is the debt ceiling. The debt ceiling dates back to WWI and was designed to make it easier to finance the war through the sale of bonds by removing the requirement for congress to approve each issuance of the bonds to be sold. The problem with the debt ceiling, however, is that it does not serve its intended purpose. Rather than preventing us from incurring debts it gives the lunatics (usually ignorant Republicans) a convenient way to repudiate our debts and thereby blow up the world's economy! In recent decades it has become the tool of economic terrorists who have gone much farther than the Greedy Old Plutocrats are prepared to go in opposing the debt and the disfavored programs. Even the Koch brothers were telling Ted Cruz we had to raise the debt ceiling the last time it was raised

Enter the Trumpster. Most Presidential candidates are smart enough to realize they do not know all that a President needs to know. Most Presidential candidates are smart enough to set aside their egos and hire experts to advise them about the economy and other issues. Donald Trump is not that bright. He is acting as if he believes the myth that businessmen are better at managing the economy than real economists are. If you follow his business model it is perfectly reasonable to say debt is power. If you owe the bank 50 thousand dollars the bank owns you. If you owe the bank 50 million dollars you own the bank, and you can make the bank discount your debt if that is what you want it to do. But that does not mean that the most powerful nation in the world can or should force its creditors to discount its debts. If the Trump Organization defaults on the payment of its debts there will be a negative impact on the market but the creditors who suffer the loss will not take the national or world economy down with them! If the united states defaults on its debts or refuses to pay the full amount of its debts as Trump is advocating the currency market will be thrown into turmoil and stock markets will crash. What Trump is advocating is an insane remedy for a problem that is largely non-existent. I guess that is what happens when the line between a reality show and reality becomes so blurred.