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In the Court of The Ochre 'Debt King' [1]
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Date: 2025-05-24
Or How DJT Believes Default Is His Ace Card. MSNBC — I believe it was on Nicolle Wallace’s “Deadline White House” — surfaced this 2016 video earlier in the week, and it’s stuck with me ever since. Because, based on my experience observing DJT for the past 45 years, it provides insight into how he’s likely thinking about what the rest of the world considers ‘insane behavior’, with respect to how his tariff scheme intersects with the US structural debt, being financed by the world’s bondholders — typically nations that have been willing to use their earned export dollars to buy the Treasury securities that finance that debt — now estimated to be an astonishing $28.8 trillion (this is before the proposed GOP budget currently making it’s way through Congress, that — as it stands exiting the House, but before the Senate picks it apart — would add between $3-4 trillion more over the next 10 years.)
“Even a naïve analysis, one that buys into some very obvious Republican budget tricks, finds that this bill, as it exists on May 21, cuts taxes and raises spending by more than $4 trillion over 10 years — but only pays for about $1.5 trillion of that.” www.nytimes.com/...
I think the key to understanding the wild inconsistency of what this administration wants to do with high and broad tariffs, not giving a fig about the debt, or interest rates, or credit ratings, claiming it all to be in the service of “on-shoring American manufacturing”, and how they're going about implementing those tariffs (or not), causing maximum uncertainty, is encapsulated by a video from 2016 that has Trump exclaiming - proudly - that he's "The King of Debt".
x YouTube Video
On questions about Debt, whether national or personal, structural or cyclical, it makes no difference to 'Big Brain' Donald Trump, and - when push comes to shove - he thinks he can do with nations what he did with the banks in his pre-Celebrity Apprentice business career - claim he can't make the payments, declare bankruptcy, and - Trump believes - have everyone come to America (meaning him) to "renegotiate" what the 'new' - affordable - debt level will be, while — as was always his experience in real life - ‘the banks’ will figure out how to write off whatever losses there are. “That’s what they always do, right?”, Trump is probably thinking. They’ll figure it out.
Domestically, those bankruptcy write-offs show up as missing tax receipts to the Treasury. That’s how Chapter 11 ‘default’ works within the United States. Ultimately, domestic business losses are borne by the American taxpayer. But how do you write off $30 trillion being held by international bondholders? Who writes it off? Even $15 trillion? What’s the collateral in such a scenario? Answer: Nothing. As a nation, you go into total financial collapse.
Insane, I know, that someone — anyone — would seriously contemplate risking the liquidity of one of the top two global economies as a negotiating tactic, with nations that used to be our allies just a few short years ago. But here we are, forced to imagine the worst, because ‘better’ is a concept getting harder to come by these days.
I’m not pretending what I’m suggesting is based on anything more than an informed hunch, but I have a bad feeling, based on decades of observing this psychopath, that there’s a certain Trumpian logic to all this, if - like Trump - you're missing that part of your brain that perceives Shame, Doubt, not to mention a sense of horror, at what the consequences are going to be for the world's taxpayers when they — through their respective governments — discover that their investment in their own futures, in the form of generations pursuing decades of underwriting America’s budget profligacy, by believing in the “full faith and credit of the United States”, are now all just worthless paper, by virtue of a fractured American congress, that can no longer fulfill it’s responsibilities to America’s voters, and allow the Government to meet it’s fiduciary obligations.
Because those voters — while an electoral majority across the nation — have been relegated to being a legislative minority in both Congress and too many state legislatures, thanks to the misrepresentational power of REDMAP-gerrymandering on a national, strategic level. Allowing the Freedom Caucus extremists to partner with, and support, whatever the Psychopath-in-chief wants. And if he wants to play ‘Debt King’ with the world, MAGA will give him the space, by preventing any attempts at Congressional action to overrule the Executive.
After all, the Freedom Caucus has always discounted the consequences of a debt default anyway. We remember that from when they caused the first downgrade of American debt during the Obama administration in 2011, over raising the debt limit that year, not long after the Financial crisis stimulus bill, and the ACA healthcare legislation had (finally) passed.
“That spring and summer, the stock market was slow to respond to the mounting debt ceiling risks at a time in which Europe was also struggling with its own sovereign debt crisis. Using the S&P 500 Index as a proxy, the index reached its 2011 peak in late April, then pulled back before rallying again in late June and early July.1 The sharp decline didn’t begin until July 27—three trading days before the weekend announcement that Congress and President Obama had reached a deficit-cutting deal. By August 8, the first trading day following Standard & Poor’s downgrade, the index had dropped nearly 16% from its July 26 closing level. Over that span, the index tumbled for eight of nine trading days before hitting a trough. (The S&P 500 Index eventually fell another 2%, sinking to a further trough reached on October 3, but the damage had already been done.)” www.cnbc.com/...
If a default condition does come to pass, I predict Governments will fall around the globe. Not a hard prediction to make, I suppose, when billions of people (Trump’s “suckers and losers”) realize they’ve been robbed of their future in savings. But it will start the clock ticking, in the form of an opportunity for the world’s autocrats to make their moves. Russian nuclear blackmail of Europe. A Chinese invasion of Taiwan. North Korea crossing the demilitarized zone. India, Pakistan, Afghanistan, Iran, and China, at each other’s throats, while a fascist Israel and autocratic Turkyii confront each other for influence in the Middle East. All become distinct flashpoints of conflict when America suddenly checks out, and takes it’s democratic institutions with it. We will have launched ourselves head first back into a 1930’s era of both financial and political instability — this time with nukes — and no FDR or Churchill, asking Americans to trust in their leadership and democratic institutions.
All this within the first year of Trump 2.0.
Leaving nukes aside, for the moment, I believe DJT is perfectly capable of rationalizing a Treasury default scenario. Right now, we have a market response to an obscene US budget proposal, that just raised the cost of American debt with the recent Moody’s credit downgrade. If it passes the Senate in any shape or form that it is coming from the House, the bond market is sure to react negatively to that once more. But if it doesn’t pass at all, or not in it’s current form, it still doesn’t matter. The tariffs will still be there, at a rate of at least 10%, and likely much higher for many countries, putting downward pressure on the American economy, while another hurdle appears in the August-October time frame: Debt ceiling legislation, when it’s projected the Government won’t have the authority to service the Debt, will become must-pass legislation. And leverage in the hands of the ‘Debt King’.
By then, the real world consequences of ‘no shipping activity across the Pacific Ocean’ today, are going to be biting, hard, in the form of higher costs and empty shelves, as the last inventory from April-May runs out across the nation. Sure, there could be unrest in US streets by then, as the economic effects of April’s ‘Liberation Day’ take hold. Yet, there’s a real possibility, based on his past experiences with Chapter 11 proceedings, that the Psychopath-in-chief will not push Congress to raise the debt ceiling.
In fact, there’s a case to be made that, in true Trumpian fashion, he could well side with the extremist, Freedom Caucus congressional faction, about 30% of the Republican caucus, to prevent the raising of the debt ceiling even by a coalition of Republican moderates and Democrats, and thereby seal the fate of the world to the psychopathy of the ochre-colored Debt King.
Just like he got away with at least 6 times in his personal business (before he became the CA 'celebrity'), I think that Trump thinks — or has surrounded himself with people who allow him to think — that he can bluff his way past tens of trillions of accumulated American debt — absurd as that sounds — held by other nations, that anchors the global financial system, and 'renegotiate' some new, lower, level of American structural debt with all the world's nations crawling, in the fantasy world of DJT, on their hands and knees to the US.
Why would he contemplate something like this? Because — in his mind — he can. He’s the frickin’ president of the United States.
The world’s nations didn’t realize their trust in America, to “don’t ever fuck with the Money” made them vulnerable? Well, that’s what ‘suckers and loser’ deserve, according to the reptilian Trump, for allowing themselves to be vulnerable to the Predators of the world, like the ‘strong men’ he admires so much, and wants to emulate. Here’s his chance. The chance of a lifetime, to leave his mark on the world “like no one could imagine he ever would”.
And since he’s got a bigger problem than the world he’s tariffed out — Americans too worried about the Debt and spending to allow Congress to pass his Big Beautiful Bill — he can, once and for all, again, “like no one has ever imagined could be done” be in a position to simply ‘cut the Debt in half’ through his ‘Debt King’ schtick, and — in his own mind — dare Congress not to pass his ‘Big, Beautiful, Bill’ to cash out all the ‘savings’ a debt default renegotiation would bring in. Just like those tariffs are going to ‘fill up the Treasury’. Or how Mexico will ‘pay for the border wall’. So it’s a shock to the system. Trump won’t care. He won’t need to care, since his base is the Congressional Freedom Caucus, and that constituency is designed to put Loyalty above Country.
It will be just like with impeachment: Hear no Evil, See no Evil, maintain ranks, and enjoy ‘owning the libs’ on Fox and OAN.
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