IMPOTUS trump, earlier today, from Davos, gave a scheduled interview on CNBC, supposedly to discuss economic policy and show off his dismal understanding of economics and basic math, in response to softball questions. It’s a long rambling rant with very poor verbal or mental skills, which is par for the course. Here are a few of the lowlights of the interview, edited to make it intelligible and annotated to provide context. We then focus on trump’s deceptive statement that he wants to bring interest rates down so that he can refinance the national debt.
The full transcript of the interview can be found at www.cnbc.com/…
Economic Policy
- Interest rates — The Fed raised too fast interest. They brought up the rate too fast, and they didn’t drop it fast enough. And you look at other countries where they actually have negative interest rates, negative in a positive way. (His favorite excuse for the ho-hum economy, said rambling style and a way to intimidate the fed chairs).
- DEBT REFINANCING — And one of the reasons I’d like to see the interest rates lowered, frankly, is because I’d like to refinance the debt and pay off the debt. (This is major level deception, he has done this before, the diary below focuses on this mythical solution).
- Taxes — We’ve cut taxes in half. And we’ve taken in more revenue substantially than we did when the taxes were high. (That’s a lie, see below).
- Tax cuts -- I mean you were paying really 41% and we brought it down to 21% (note that he is not talking about middle class taxes)
- More defense dollars plus more tax cuts — Question on how trump will finance the defense industry, raise taxes or cut spending? We’re going to actually probably lower taxes. (Even Joe Kernan was taken aback with this answer. This may be the main purpose of this interview; the 0.1% must be rejoicing).
- Social Security and Medicare cuts — At some point they will be (on the plate). That’s actually the easiest of all things (to cut), if you look, cause it’s such a big percentage.
- The consumer has never been so rich. We never had a consumer that was taking in, through-- different means, over $10,000 a family. (This is nonsensical Russia-style propaganda, to justify tax cuts for the rich and to cut Social Security and Medicare for the rest)
Trade and Tariffs
- President Xi — The relationship I have with President Xi, president for life. Okay? It’s not bad. But the relationship I have with President Xi is, you know, I think extraordinary, considering he’s for China, I’m for us. (He likes the president for life part).
- New tariff threat against Europe — I didn’t want to go with China and Europe at the same time. Now China’s done, and I met with the new head of the European Commission, who’s terrific. But I said, look, if we don’t get something, I’m going to have to take action, and the action will be a very high tariffs on their cars and other things that come into our country. (More threats, obviously Russia is exempt).
Impeachment and Ukraine
- Impeachment — It’s a hoax. It’s a total hoax. It’s a perfect conversation. (Same old, same old).
- Ukraine — they (Zelensky and his foreign minister) constantly--say there was no pressure (that is what the tweet today was all about)
- Ukraine - President Obama gave them nothing. He gave them pillows and sheets and things like that, and I gave them tank busters. WTF?
Miscellaneous
- Boeing — I am so disappointed in Boeing, it’s so big that some people say it’s more than a half a point of GDP. (He is solely concerned about the drop in the Dow stock Index)
- On Elon Musk and Tesla - I spoke to him very recently, and he’s also doing the rockets. He likes rockets. And-- he does good at rockets too, by the way. I never saw where the engines come down with no wings, no anything, and they’re landing. I said I’ve never seen that before. (Infantile babble talk).
- Elon Musk — And I was worried about him, because he’s one of our great geniuses, and we have to protect our genius. You know, we have to protect Thomas Edison and we have to protect all of these people that-- came up with originally the light bulb and-- the wheel and all of these things. (Is he a mob boss providing protection? The inventor of the wheel was not even American and does not hold any patents. And Edison is dead).
- Elon Musk — He’s going to be building a very big plant in the United States. He has to, because we help him, so he has to help us. (Mob boss talk again?)
- Davos — And we had the speech and we had lots of meetings with different leaders, including Pakistan and others. (Pakistan was the highlight of the trip?)
- Coronavirus is totally under control. It’s one person coming in from China. It’s going to be just fine. (He is clueless, time to get prepared).
That’s quite a load of lies, deceptions, propaganda, mob talk, scare talk and gibberish in one session.
Tax Revenues
No, we have not “taken in more revenue substantially than we did before.” Federal tax revenues as a percentage of GDP has fallen during the trump years, even though the economy is moving at full steam. That’s partly caused by the sharp drop in revenue from corporate taxes from $299B in FY 2016 to $204B in FY 2018.
Refinancing Federal Debt
trump wants the Fed to lower interest rates, purportedly to refinance the federal debt. He has floated this idea before but no one in the GOP wants to correct him that this is plain hogwash.
We do not know whether trump attended any classes in Wharton, but your average high school student will tell you that government debt (treasury bonds) cannot be refinanced like mortgages.
- Mortgages are “callable” debt that allows the borrower to make penalty-free early payments.
- But, debt issued by the Treasury is not callable; the government does not have the right to buy back bonds at face value any time it wants to.
- Treasuries are traded on the secondary market, and the Treasury could buy its own securities at market prices. But this wouldn’t save taxpayers any money either. Bonds with higher interest rates are priced higher (they are more valuable). So, the government could pay a premium price to buy back bonds and issue new ones at a lower interest rate and the net result will be a wash.
One thing is certain — lower interest rates will benefit trump’s businesses, which probably borrow a lot of (other people’s) money.
Here is our favorite Nobel laureate explaining this is in simple terms last September, since this canard from trump has been floating around for many months.
This is a trump tweet on the subject on 9/11 last year -
Besides Fed rate cuts, the Fed has been pumping money indirectly into the stock market since last September through purchasing agreements with banks, a form of Quantitative Easing used during recessions. This is scary.
So, either his economic policy staff is afraid to tell him the truth about refinancing government debt or they don’t care, the whole administration and the GOP is a house of lies and deceptions and they are counting on the fact that the average (conservative) American is even less informed and knowledgeable about these things. And so they will likely march onwards with more tax and interest rate cuts to benefit the Oligarchy and a few crumbs for the middle class, perhaps cut SS and Medicare benefits and count on the fact that the frogs in the pot will not notice, until the economy implodes.
This is one more example of how trump is an existential threat to this nation and to the world. We have our work cut out for this year.