Trump: U.S. will never default ‘because you print the money’
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LYNDEN, WA - MAY 07: Republican presidential candidate Donald Trump gives a speech during a rally at the The Northwest Washington Fair and Event Center on May 7, 2016 in Lynden, Washington. Trump became the Republican presumptive nominee following his landslide win in Indiana on Tuesday. (Photo by Matt Mills McKnight/Getty Images)
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Story highlights
Donald Trump explained how he'd approach cutting down the national debt
And he repeated his line that he's the "king of debt"
CNN
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Donald Trump declared Monday the U.S. never has to default on debt “because you print the money,” while trying to clarify his strategy for managing the national debt.
Trump insisted that he never said the U.S. should default or attempt to renegotiate with creditors, as had been reported.
“People said I want to go and buy debt and default on debt, and I mean, these people are crazy. This is the United States government,” Trump told CNN’s Chris Cuomo on “New Day.” “First of all, you never have to default because you print the money, I hate to tell you, OK?”
The presumptive Republican presidential nominee explained he would center his approach on debt buybacks if and when interest rates go up.
“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.”
“I understand debt better than probably anybody. I know how to deal with debt very well. I love debt – but you know, debt is tricky and it’s dangerous, and you have to be careful and you have to know what you’re doing,” Trump said.
Photos: Donald Trump's rise
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President-elect Donald Trump has been in the spotlight for years. From developing real estate and producing and starring in TV shows, he became a celebrity long before winning the White House.
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Trump at age 4. He was born in 1946 to Fred and Mary Trump in New York City. His father was a real estate developer.
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Trump, left, in a family photo. He was the second-youngest of five children.
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Trump, center, stands at attention during his senior year at the New York Military Academy in 1964.
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Trump, center, wears a baseball uniform at the New York Military Academy in 1964. After he graduated from the boarding school, he went to college. He started at Fordham University before transferring and later graduating from the Wharton School, the University of Pennsylvania's business school.
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Trump stands with Alfred Eisenpreis, New York's economic development administrator, in 1976 while they look at a sketch of a new 1,400-room renovation project of the Commodore Hotel. After graduating college in 1968, Trump worked with his father on developments in Queens and Brooklyn before purchasing or building multiple properties in New York and Atlantic City, New Jersey. Those properties included Trump Tower in New York and Trump Plaza and multiple casinos in Atlantic City.
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Trump attends an event to mark the start of construction of the New York Convention Center in 1979.
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Trump wears a hard hat at the Trump Tower construction site in New York in 1980.
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Trump was married to Ivana Zelnicek Trump from 1977 to 1990, when they divorced. They had three children together: Donald Jr., Ivanka and Eric.
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The Trump family, circa 1986.
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Trump uses his personal helicopter to get around New York in 1987.
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Trump stands in the atrium of the Trump Tower.
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Trump attends the opening of his new Atlantic City casino, the Taj Mahal, in 1989.
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Trump signs his second book, "Trump: Surviving at the Top," in 1990. Trump has published at least 16 other books, including "The Art of the Deal" and "The America We Deserve."
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Trump and singer Michael Jackson pose for a photo before traveling to visit Ryan White, a young child with AIDS, in 1990.
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Trump dips his second wife, Marla Maples, after the couple married in a private ceremony in New York in December 1993. The couple divorced in 1999 and had one daughter together, Tiffany.
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Trump putts a golf ball in his New York office in 1998.
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An advertisement for the television show "The Apprentice" hangs at Trump Tower in 2004. The show launched in January of that year. In January 2008, the show returned as "Celebrity Apprentice."
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A 12-inch talking Trump doll is on display at a toy store in New York in September 2004.
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Trump attends a news conference in 2005 that announced the establishment of Trump University. From 2005 until it closed in 2010, Trump University had about 10,000 people sign up for a program that promised success in real estate. Three separate lawsuits -- two class-action suits filed in California and one filed by New York's attorney general -- argued that the program was mired in fraud and deception. Trump's camp rejected the suits' claims as "baseless." And Trump has charged that the New York case against him is politically motivated.
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Trump attends the U.S. Open tennis tournament with his third wife, Melania Knauss-Trump, and their son, Barron, in 2006. Trump and Knauss married in 2005.
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Trump wrestles with "Stone Cold" Steve Austin at WrestleMania in 2007. Trump has close ties with the WWE and its CEO, Vince McMahon.
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For "The Apprentice," Trump was honored with a star on the Hollywood Walk of Fame in January 2007.
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Trump appears on the set of "The Celebrity Apprentice" with two of his children -- Donald Jr. and Ivanka -- in 2009.
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Trump poses with Miss Universe contestants in 2011. Trump had been executive producer of the Miss Universe, Miss USA and Miss Teen USA pageants since 1996.
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In 2012, Trump announces his endorsement of Republican presidential candidate Mitt Romney.
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Trump speaks in Sarasota, Florida, after accepting the Statesman of the Year Award at the Sarasota GOP dinner in August 2012. It was shortly before the Republican National Convention in nearby Tampa.
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Trump appears on stage with singer Nick Jonas and television personality Giuliana Rancic during the 2013 Miss USA pageant.
Trump -- flanked by U.S. Sens. Marco Rubio, left, and Ted Cruz -- speaks during a CNN debate in Miami on March 10. Trump dominated the GOP primaries and emerged as the presumptive nominee in May.
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The Trump family poses for a photo in New York in April.
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Trump speaks during a campaign event in Evansville, Indiana, on April 28. After Trump won the Indiana primary, his last two competitors dropped out of the GOP race.
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Trump delivers a speech at the Republican National Convention in July, accepting the party's nomination for President. "I have had a truly great life in business," he said. "But now, my sole and exclusive mission is to go to work for our country -- to go to work for you. It's time to deliver a victory for the American people."
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Trump faces Democratic nominee Hillary Clinton in the first presidential debate, which took place in Hempstead, New York, in September.
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Trump apologizes in a video, posted to his Twitter account in October, for vulgar and sexually aggressive remarks he made a decade ago regarding women. "I said it, I was wrong and I apologize," Trump said, referring to lewd comments he made during a previously unaired taping of "Access Hollywood." Multiple Republican leaders rescinded their endorsements of Trump after the footage was released.
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Trump walks on stage with his family after he was declared the election winner on November 9. "Ours was not a campaign, but rather, an incredible and great movement," he told his supporters in New York.
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Trump is joined by his family as he is sworn in as President on January 20.
And in an interview with CNBC in March – long before Trump became the GOP’s presumptive nominee – Ryan defended his support for entitlement reform.
“I believe that if we do not prevent Medicare from going bankrupt, it will go bankrupt,” he said. “And that will be bad for everybody. We have to tackle our debt crisis. We have to tackle the drivers of our debt. And I think, I hope, that whoever our standard bearer’s going to be will acknowledge that.”
Trump, for his part, vowed during a Republican presidential debate on CBS in February that he would “not touch” entitlements, saying, “I will do everything within my power not to touch Social Security, to leave it the way it is.”
Grover Norquist, a Republican who leads the anti-tax group Americans for Tax Reform, defended Trump’s debt-reduction comments on CNN on Monday, though he warned conservatives must preserve their traditional commitment to spending cuts and reform.
Asked specifically about Trump’s remark that the U.S. will never default on its debt because it can always print more money, Norquist said: “Well, that’s just stating a fact. It’s what the United States government has been doing for quite a number of years is printing more money.”
“Is it a good thing to do? No. Is it where you want to be? No. Is it what governments do over time? He’s quite correct, that’s what they tend to do,” he said.
“(But) when somebody says this is the way governments have behaved, that’s not necessarily an argument that that’s what they ought to do – what we should do is reduce spending as well as create growth.”
Trump had kicked up a firestorm in economic and political circles when, in an interview last Friday on CNBC, the presumptive Republican nominee seemed to suggest that rather than pay its outstanding national debt in full, the country could renegotiate.
Asked if the U.S. needs to pay its debt in full or if it could negotiate a partial repayment, Trump said: “I would borrow, knowing that if the economy crashed, you could make a deal.”
During his CNBC interview, Trump had also said that interest rates should be kept low – contradicting his remarks on CNN Monday – because a rate jump could trigger a catastrophic increase the cost of borrowing.
“We’re paying a very low interest rate,” he said. “What happens if that interest rate goes up 2, 3, 4 points? We don’t have a country.”
And Trump signaled that he would be inclined to replace current Federal Reserve chair Janet Yellen, who has defended the Fed’s low rate policy, saying that while “people I know have a high regard for her,” “she’s not a Republican.”
And the real estate mogul on Monday also cited his experience buying up mortgages at discount during the 2008 financial crash, while noting that managing the national debt would be a very different task.
“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 United States 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.”
Whether through debt buyback or restructuring, neither of Trump’s debt-reduction proposals from the past week square with his party’s core approach on the issue – deep spending cuts and entitlement program reform.
The Republican Party’s official platform argues the U.S.’s looming “debt explosion” should be averted through “immediate reductions in federal spending, as a down payment on the much larger task of long-range fiscal control.”
These cuts “must be accompanied by major structural reforms,” according to the platform, and pointing to programs such as Medicare, Medicaid, and Social Security, the GOP argues that “we must restructure the twentieth century entitlement state.”
