Washington: Republican presidential candidate Donald Trump has said that the US will never have to default on its debts, because it can always print more money.
“This is the United States government. First of all, you never have to default because you print the money. I hate to tell you. So there’s never a default,” he told CNN in a phone interview
Responding to questions over recent comments indicating that as president, he would renegotiate US national debt rather than pay creditors in full – which could spur a global financial shock – Trump, according to CNN, said the notion that he would default on national debt is “crazy.”
In an attempt to clarify his stance regarding potential default on national debt payments,
“People said I want to go and buy debt and default on debt, and I mean, these people are crazy. This is the US government,” Trump told CNN on Monday “First of all, you never have to default because you print the money, I hate to tell you, OK?”
Late last week, Trump said that as president, he would “borrow, knowing that if the economy crashed, you could make a deal.” He added, “And if the economy was good, it was good. So, therefore, you can’t lose.”
Trump’s comments alarmed many, as defaulting on national debt would send reverberations throughout global finance given US debt is considered about the lowest-risk financial asset the world over. On Monday, Trump addressed his previous comments.
“I said if we can buy back government debt at a discount, in other words, if interest rates go up and we can buy bonds back at a discount – if we are liquid enough as a country, we should do that,” Trump said. “In other words, we can buy back debt at a discount.”
Trump, the billionaire real estate magnate, called himself the “king of debt,” going on to reference his purchase of discounted mortgages during the housing-bubble collapse that trigger the 2008 recession. However, a nation is different from a business, he said.
“In business (debt buyback) happens all the time. I bought mortgages back when the market went bad, I bought mortgages back at tremendous discounts, and I love doing that,” he said.
“There’s nothing like it actually, it gives me a great thrill. But in the US with bonds, that won’t happen because you know in theory the market doesn’t go down so that you default on debt, and that’s what happens.”