An excerpt from Bob Woodward’s new book shows us once again how utterly clueless Donald Trump is about economics and how public debt works. This details a conversation he had with Gary Cohn, his chief economic adviser, who told him that the Federal Reserve Board was likely to raise interest rates over the first couple years of his administration. Trump’s response:
“We should just go borrow a lot of money, hold it, and then sell it to make money.” This suggestion, and “lack of basic understanding” about how federal debt works apparently sent chills up the spine of Cohn, who explained that borrowing more money would in fact increase the deficit and add to the debt, something that would, in theory, be counterproductive for a delusional president who had pledged to completely eliminate the federal debt. But President “I’m, like, really smart” wasn’t finished:The president-elect offered a solution.
“Just run the presses—print money,” Trump said, according to Woodward.
Cohn suggested that would be detrimental to the fiscal and economic health of the U.S., since printing vast amounts of money is thought to lead to inflation. . . . Cohn also pointed to the federal debt ceiling, a statutory limit to the amount of debt the federal government can have outstanding. Even approaching the debt ceiling can be harmful to the stock market and U.S. economic growth.
But according to Woodward, Cohn’s message did not seem to connect.
That is, of course, a monumentally stupid idea that could only be proposed by someone who knows nothing whatsoever about economics. But the real danger is not that Trump is ignorant, it’s that he thinks he’s the opposite. He thinks he’s practically omniscient and that his “gut instinct” is infallible. There is nothing so dangerous as someone who thinks they understand something when they don’t, especially when combined with massive arrogance and a kneejerk rejection of expertise and those who have it.