Trump's Truth

Well I've heard lots of people say
They're gonna settle down
You don't see their faces
And they don't come around
--Lynyrd Skynyrd

David Stockman observes that, despite Donald Trump's many wild pitches, his recent comments concerning US debt were right down Broadway. Were he president, Trump said that he would seek to negotiate 'discounts' on paying back the debt.

Flabbergasted, pundits associated 'discounts' with 'restructuring' (a.k.a. 'default'). Trump later said that outright default is not what he meant: "First of all you never have to default because you print the money I hate to tell you, so there is never a default."

Stockman notes that central banks led by the Fed have been doing precisely this for years: buying government debt with the click of a mouse:

"The world's central banks own more than 50% of the publicly traded US debt of $13.5 trillion, and not one single penny of it was purchased with real savings or anything which remotely resembles honest money. It was all scooped up when central banks hit the 'buy' key on their digital printing presses."

The government and Wall Street have been in on this scam from the beginning. Governments can finance profligate spending cheaply when central banks buy their paper below free market rates, and financial racketeers get rich peddling information, services, and securities that would never be in demand under sound money regimes.

Creditors, meanwhile, get paid back with inflated currency that purchases less than when 'contract' between lender and borrower was established.

Indeed, paying back the national debt with 'discounts' is already official policy and has been for decades. Like all statists, Trump wants to perpetuate the practice.