Apparently so. NYT reports:
One day after assuring Americans he is not running for president “to make things unstable for the country,” the presumptive Republican nominee, Donald J. Trump, said in a television interview Thursday that he might seek to reduce the national debt by persuading creditors to accept something less than full payment.As with many Trump policy statements, there is a hint of radical libertarian policy thinking here, that is until you look beneath the surface.
Asked whether the United States needed to pay its debts in full, or whether he could negotiate a partial repayment, Mr. Trump told the cable network CNBC, “I would borrow, knowing that if the economy crashed, you could make a deal.”
He added, “And if the economy was good, it was good. So, therefore, you can’t lose.”
Such remarks by a major presidential candidate have no modern precedent. The United States government is able to borrow money at very low interest rates because Treasury securities are regarded as a safe investment, and any cracks in investor confidence have a long history of costing American taxpayers a lot of money.
The important economist and libertarian, Murray Rothbard, was in favor of repudiating the national debt, never mind just reducing payments.
I propose, then, a seemingly drastic but actually far less destructive way of paying off the public debt at a single blow: outright debt repudiation. Consider this question: why should the poor, battered citizens of Russia or Poland or the other ex-Communist countries be bound by the debts contracted by their former Communist masters? In the Communist situation, the injustice is clear: that citizens struggling for freedom and for a free-market economy should be taxed to pay for debts contracted by the monstrous former ruling class. But this injustice only differs by degree from "normal" public debt. For, conversely, why should the Communist government of the Soviet Union have been bound by debts contracted by the Czarist government they hated and overthrew? And why should we, struggling American citizens of today, be bound by debts created by a past ruling elite who contracted these debts at our expense? One of the cogent arguments against paying blacks "reparations" for past slavery is that we, the living, were not slaveholders. Similarly, we the living did not contract for either the past or the present debts incurred by the politicians and bureaucrats in Washington.Rothbard's proposal was to repudiate current government debt, not take on new debt and stiff creditors if things head south with the economy. The latter is Trump's plan.
Although largely forgotten by historians and by the public, repudiation of public debt is a solid part of the American tradition. The first wave of repudiation of state debt came during the 1840s, after the panics of 1837 and 1839. Those panics were the consequence of a massive inflationary boom fueled by the Whig-run Second Bank of the United States. Riding the wave of inflationary credit, numerous state governments, largely those run by the Whigs, floated an enormous amount of debt, most of which went into wasteful public works (euphemistically called "internal improvements"), and into the creation of inflationary banks. Outstanding public debt by state governments rose from $26 million to $170 million during the decade of the 1830s. Most of these securities were financed by British and Dutch investors.
The mainstream media, who are focusing on Trump's comment, fail to understand what Trump was really up to in making that statement. The NYT headline, for example, blasts, Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less.
This is not the real essence of Trump's statement. He is not saying, I am going to reduce the current national debt by getting creditors to accept less.
A more accurate headline would be: Trump Recognizes His Major Spending Plans Will Result in His Taking on Much More Debt, But He Is Not Concerned Because If Things Don't Go Right He Will Negotiate Payment Reductions on the Debt.
What Trump was making obvious is that his spending plans will require a huge jump in the deficit and his comment was laying ground-work for those who will object to massive debt increases.
This is what he was really saying (translating the Trump speak)
"My spending plans are huge. It will require a massive increase in US debt outstanding. But don't worry. My brilliant spending plans will get the economy going, and make the additional debt easy to pay off, If for some reason the economy stays down, it won't matter. Don't worry. Given my brilliant negotiating skills, I will get Treasury security holders to take pennies on the dollar."
What Trump is really saying is that, if he becomes president, he will be the most reckless spender in presidential history.
Krugman nails it:
Making America great again by running it like a failing Atlantic City casino ...— Paul Krugman (@paulkrugman) May 6, 2016
In other words, Trump is even too much of a crazed Keynesian for Krugman. That should tell you a lot!