Why her vow not to “add a penny to the debt” is an impossible pledge to keep
“I also will not add a penny to the debt,” Clinton said toward the beginning of her final presidential-debate performance. She made a similar pledge two more times that night
.. “She had to have misspoke. The alternative would be absurd,” Dean Baker, a liberal economist who co-founded the Center for Economic and Policy Research, said in an interview Thursday. “Clearly, she is going to add to the debt.”
.. “Whoever is president will actually be adding $9 trillion to the debt over the next 10 years unless they make changes,”
.. Aides on Thursday said she was simply talking about her “pay-as-you-go” approach to fiscal policy, which they characterized as a middle ground between the austerity budgets proposed by Republicans in Congress and the budget-busting tax cuts that Trump has championed.
.. Clinton would be on stronger footing if she had used the word “deficit” instead of “debt.” President Obama, for example, can credibly claim to have presided over a sharp reduction in the annual budget deficit even as the national debt has nearly doubled during his tenure.
Ignoring the Debt Problem
Our current debt may be manageable at a time of unprecedentedly low interest rates. But if we let our debt grow, and interest rates normalize, the interest burden alone would choke our budget and squeeze out other essential spending. There would be no room for the infrastructure programs and the defense rebuilding that today have wide support.
.. Instead, we’d be dependent on foreign investors’ acquiring most of our debt — making the government dependent on the “kindness of strangers” who may not be so kind as the I.O.U.s mount up.
.. Our health care systems can be made more efficient, with better approaches toward cost control. Since health care represents 70 percent of the growth of our major entitlement programs over the next 30 years, bending the cost curve is essential to the long-term well-being of our economy.
.. Fair and responsible reforms will take years to implement. And businesses and individuals will need time to adjust.
.. Delaying action now will make the needed changes only more painful and difficult later on, while also increasing the risk of financial crisis before the reforms are even made. That is why the real debate should begin immediately.
.. the Clinton campaign said in a statement. “Like Trump’s campaign, this speech gave us a troubling view as to what a Trump State of the Union would sound like — rambling, unfocused, full of conspiracy theories and attacks on the media, and lacking in any real answers for American families.”
.. Mr. Trump has a long history of threatening and occasionally following though on litigation, and it was possible he was simply trying to intimidate more women from coming forward. Another accuser — she would be the 11th — was scheduled to appear later Saturday at a news conference with Gloria Allred
In Maze of Trump’s Empire, Unknown Ties and $650 Million in Debt
For example, an office building on Avenue of the Americas in Manhattan, of which Mr. Trump is part owner, carries a $950 million loan. Among the lenders: the Bank of China, one of the largest banks in a country that Mr. Trump has railed against as an economic foe of the United States, and Goldman Sachs, a financial institution he has said controls Hillary Clinton
.. Mr. Trump submitted a 104-page federal financial disclosure form. It said his businesses owed at least $315 million to a relatively small group of lenders and listed ties to more than 500 limited liability companies. Though he answered the questions, the form appears to have been designed for candidates with simpler finances than his, and did not require disclosure of portions of his business activities.
.. Beyond finding that companies owned by Mr. Trump had debts of at least $650 million, The Times discovered that a substantial portion of his wealth is tied up in three passive partnerships that owe an additional $2 billion to a string of lenders
.. The form, released by the Federal Election Commission, asks that candidates list assets and debts not in precise numbers, but in ranges that top out at $50 million — appropriate for most candidates, but not for Mr. Trump.
.. In 2015, Mr. Trump borrowed $160 million from Ladder Capital, a small New York firm, using that long-term lease as collateral. On his financial disclosure form that debt is listed as valued at more than $50 million.
.. because federal law requires that presidential candidates disclose personal liabilities, not corporate debt. Mr. Trump, he said, has no personal debt.
.. At 40 Wall Street, Mr. Trump does not own even a sliver of the actual land; his long-term ground lease gives him the right to improve and manage the building. The land is owned by two limited liability companies
.. Mr. Trump’s status in these situations is indicated by the word tenant,
.. “The success of his empire depends on an ability to get credit, to get loans extended to his business entities,” he said. “And we simply don’t know a lot about his financial dealings, here or around the world.”
Time to Borrow
the federal government can borrow at incredibly low interest rates: 10-year, inflation-protected bonds yielded just 0.09 percent on Friday.
Put these two facts together — big needs for public investment, and very low interest rates — and it suggests not just that we should be borrowing to invest, but that this investment might well pay for itself even in purely fiscal terms. How so? Spending more now would mean a bigger economy later, which would mean more tax revenue. This additional revenue would probably be larger than any rise in future interest payments.
.. what matters is the comparison between the cost of servicing our debt and our ability to pay. And federal interest payments are only 1.3 percent of G.D.P., low by historical standards... If 10 years isn’t long enough for you, how about 30-year, inflation-protected bonds? They’re only yielding 0.64 percent... American greatness was in large part created by government investment or private investment shaped by public support, from the Erie Canal, to the transcontinental railroads, to the Interstate Highway System.