As Trump continues visits to “Winter White House,” US defaults on national debts

By Jesse Goodwin, Staff Writer

Earlier today, President Donald Trump announced that for the first time since the Nixon presidency, the U.S. would default on its debt.

The president made his announcement from his Mar-a-Lago estate in Palm Beach, colloquially known as the “Winter White House.”

According to an analysis from Politico, Trump’s frequent weekend visits to Mar-a-Lago cost about $3 million each. Meanwhile, the Washington Post reported, the President has proposed budget cuts to many social and research programs “that, in some cases, cost the government only a few million dollars each year.”

It is not yet clear why the U.S. government defaulted, or what will happen next, but Trump noted in his address that the weekly Mar-a-Lago visits had incurred “tremendous expenses” and “huge losses.”

“As I’ve said before, I’m the king of debt,” Trump said, referencing a remark he made last year during a CNBC interview.

“The economy is a mess, big-league, and there’s nobody better to fix it than me,” he remarked, referencing his multiple business bankruptcies.

In the aforementioned CNBC interview, Trump suggested that his debt plan would involve increasing the national deficit, perhaps an even more radical proposal than a default.

“I would borrow knowing that if the economy crashed you could make a deal,” he said. “And if the economy was good, it was good. So, therefore, you can’t lose.”

“We owe so much money,” he added. “Nobody talks about it. Nobody talks about it until the bubble pops and the bubble could pop. And it could pop and it could be ugly.”

Because of the default, the U.S. government will stop paying interest on Treasury bills, notes and bonds, according to The Balance. Consequently, the value of treasury bonds on the secondary market could decrease sharply and they could be sold at sharp discounts.

Additionally, the federal government can no longer sell treasuries in its auctions, and is therefore unable to borrow money to pay its bills.

Furthermore, other countries will no longer consider U.S. debt the safest in the world. Most investors look at U.S. treasuries as if they are guaranteed by the federal government, but after the default, debt ratings agencies will likely lower the U.S. credit rating.

The default will also raise the cost of doing business. Businesses could pay higher interest rates on loans and bonds to compete with the higher interest rates of U.S. treasuries.

Interest rates could also rise, contributing to inflation. Stock prices will fall as investors abandon the U.S. for other countries’ stocks and gold, potentially leading to another recession.

In a separate interview on CBS This Morning, he suggested that he would offer to pay U.S. creditors less than what they are owed after a potential default, a practice known as “haircutting.”

“You go back and say, hey guess what, the economy just crashed. I’m going to give you back half,” Trump told Norah O’Donnell.

Janet Yellen, chairman of the Federal Reserve, testified to Congress that this would have “very severe” consequences.

“U.S. Treasury securities are the safest and most liquid benchmark security in the global financial system,” Yellen said.

“They play a critical role in financial markets, and the consequences of such a default, while they’re uncertain, I think there could be no doubt that it would be long-run harmful to the U.S. interests and, at a minimum, result in much higher borrowing costs for American households and businesses.”

Trump’s reckless spending and lack of financial planning has put the U.S. economy in grave danger. Now, the American people must reap the consequences.

(This article, of course, is satire, but given Trump’s financial recklessness, the U.S. may really be headed for another recession).

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