Category: Unpresidential

Donald Trump on His Tax Rate: ‘It’s None of Your Business’

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Once again thumbing his nose at a time-honored tradition, Donald J. Trump said Friday that he does not believe voters have a right to see his tax returns, and he insisted it was “none of your business” when pressed on what tax rate he pays.

The remarks from Mr. Trump signal that he has little intention of disclosing verifiable details of his income or what fuels his wealth, a matter of endless speculation for a candidate who boasts of being a billionaire many times over despite his past brushes with bankruptcy and increasing reliance on celebrity-oriented income and licensing deals that use his name.

While not required to release their tax returns, all the major party presidential nominees have done so for roughly the past four decades, including President Richard M. Nixon, who released them despite undergoing an Internal Revenue Service audit. Mr. Trump has cited continuing I.R.S. audits of his taxes in refusing to release his returns.

When Mr. Trump was asked on ABC’s “Good Morning America” whether he thought voters had a right to see his returns, he replied, “I don’t think they do.”

Mr. Trump added of his taxes: “It’s under routine audit. When the audit ends, I’m going to present them. That should be before the election. I hope it’s before the election.”

But when asked by the interviewer, George Stephanopoulos, what effective tax rate he pays, Mr. Trump said, “It’s none of your business.” He added, “You’ll see it when I release, but I fight very hard to pay as little tax as possible.”

The release of tax returns bedeviled Republicans during the 2012 presidential election, when Mitt Romney delayed releasing his until September. His effective tax rate, which was below 20 percent, was used by President Obama’s team to lampoon him as a wealthy corporate raider who was out for himself and who could not understand how regular people lived. Mr. Trump has said that Mr. Romney erred in waiting so long to release his taxes and should have done so sooner.

For many years, Mr. Trump’s wealth has been a moving target, subject to much estimation, debate and even litigation.

Last summer, when Mr. Trump filed the personal financial disclosures required of presidential candidates, his campaign released a statement saying that he was worth more than “TEN BILLION DOLLARS,” capitalizing the outsize figure. When the 92-page document became public, the disclosures by Mr. Trump indicated that he had at least $1.4 billion in assets, including his real estate developments and golf clubs.

Fortune recently pegged his worth at $3.72 billion. Forbes calculated it at $4.5 billion, as of September 2015.

Mr. Trump disputed both numbers, just as he objected to an estimate a decade earlier when Timothy L. O’Brien, a reporter for The New York Times, wrote a book that placed the businessman’s net worth at $150 million to $250 million, based on three confidential sources. During a well-publicized episode, he sued Mr. O’Brien for defamation, but Mr. Trump ultimately failed to prove his case.

While his tax returns would not show Mr. Trump’s net worth, they would show investment income and where those investments are held, liens and the scope and type of his charitable contributions.

Kenneth A. Gross, a lawyer with Skadden who deals regularly with tax issues, suggested that the contents of Mr. Trump’s tax returns were certainly of public interest because they would provide insight into his finances that his previously disclosed financial documents do not.

“Obviously it could raise issues about deductions, reporting of income, all sorts of things that we worry about when we file our tax returns,” Mr. Gross said. “There’s obviously something of interest because it’s being audited. It would be, I think, important to see what’s in these returns before he becomes the nominee of the Republican Party.”

But Mr. Trump was adamant in his interview on Friday that “people will learn nothing” from his returns, noting how he had released his financial disclosure statement.

“I put in financials, 100 pages worth of financials, that show that I built a company that’s worth more than $10 billion,” Mr. Trump said. “It shows cash. It shows cash flows. It shows everything. You learn very little from tax returns, but nevertheless, when the audit is complete, I will release. I have no problem with it.” He added that he has no offshore accounts.

As the issue of Mr. Trump’s returns bubbled up over the past week, Democrats treaded relatively lightly on the matter, particularly since Hillary Clinton faces pressure to release transcripts of her paid speeches to Wall Street banks like Goldman Sachs. But on Wednesday Mrs. Clinton seized on Mr. Trump’s reluctance to release his returns.

“So you’ve got to ask yourself, ‘Why doesn’t he want to release them?’ ” Mrs. Clinton said on Wednesday. “Yeah, well, we’re going to find out.”

She and Bill Clinton have released their tax returns going back to 1977, when he first entered political life.

The I.R.S. will not confirm if a person is being audited or discuss their returns, but Eric Smith, a spokesman for the agency, said taxpayers are free to publicize their own financial documents at any time.

“Nothing prevents individuals from sharing their own tax information,” Mr. Smith said.

In a letter on his campaign website, Mr. Trump’s tax counsels wrote in March that his returns have been under “continuous examination” by the I.R.S. since 2002 because he has a big business. The audits from those returns from 2002 to 2008 have been completed, they wrote, but lingering questions about those returns remain, an apparent explanation as to why he will not release years no longer under “examination.”

The public interest group Common Cause put out a statement calling on Mr. Trump to release the tax returns, pointing out that he released returns from the early 2000s that were under audit to gambling commissions in New Jersey and Pennsylvania.

Mr. Trump has given different explanations for why he will not release his taxes over the years. In 2011, when he contemplated running for president, Mr. Trump said he would release his tax returns when President Obama released his birth certificate. Mr. Obama made the birth certificate public in April 2011, and Mr. Trump announced a few weeks later that he would not run for president.

Last year, Mr. Trump said he was still considering whether to release the returns, but he made no mention of the audits until this year.

Tax experts remain divided on the wisdom of Mr. Trump’s releasing his returns, with some arguing that it would be malpractice to advise a client to make such information public during an audit and others saying that he should have nothing to hide.

Robert J. Kovacev, a tax lawyer with Steptoe & Johnson who previously worked at the Department of Justice, said the scrutiny that Mr. Trump’s returns would face could add years to the audit because the I.R.S. would be pressured to examine details that critics of Mr. Trump seized upon. That could impose additional costs on Mr. Trump and disrupt his negotiations with the agency.

“If you put it out in public, it’s almost like you’re crowdsourcing the audit,” Mr. Kovacev said.

While Mr. Trump has said acknowledged that he strives to pay as little tax as possible, Mr. Kovacev suggested that his returns could have information about offshore holdings or legal tax maneuvers that his accountants use that make his income appear lower or show losses.

Some tax specialists see no legitimate reason for Mr. Trump to hold back. “When you file your return with the I.R.S. or any taxation authority you are filing your returns under penalty of perjury that what you are filing is true and correct,” said Laurie B. Kazenoff, a former I.R.S. tax lawyer now with the firm Meltzer Lippe. “You should be standing by what you filed regardless of any audit.”

(h/t New York Times)

Reality

While there is no legal requirement for a presidential candidate to release their tax returns, there is 40 years of unbroken precedent.

Despite telling conservative radio host Hugh Hewitt in February 2015, Trump could absolutely release those returns now – even in the middle of an audit.

The IRS has corrected this false claim: “Federal privacy rules prohibit the IRS from discussing individual tax matters. Nothing prevents individuals from sharing their own tax information.”

While an audit could result in a change (or two) to his returns, it does not change what Trump filed, signing “Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete.” In other words, no matter how what happens as a result of the audit, what Trump submitted, he did so claiming that it was true at the time. If the IRS makes an adjustment (which happens, even with the best prepared returns), it shouldn’t substantially change the nature of the returns. And if the IRS makes no adjustment, then there was no harm, no foul, in releasing those returns. Trump could release those returns at any time.

Media

A White Nationalist is Among Donald Trump’s Pledged Delegates in California

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White supremacist William Johnson

A Los Angeles attorney who advocates for the creation of a “white ethno-state” is on an official list of Donald Trump’s Republican convention delegates published Monday night by state election officials.

William Johnson, a self-described white separatist who is the chairman of the American Freedom Party, is among the delegates pledged to the presumptive Republican presidential nominee published by the California Secretary of State’s office.

The American Freedom Party is a group whose stated aim is “to represent the political interests of White Americans” and preserve “the customs and heritage of the European American people.” The party advocates deporting “all non-white immigrants and U.S. citizens, including anyone with any ascertainable trace of Negro blood” and believes that “diversity is white genocide.” In 1989 Johnson published a book entitled Amendment to the Constitution: Averting the Decline and Fall of America that laid out his plans for these racial deportations and called for the repeal of the 14th and 15th amendments. The book garnered him significant notoriety and he even appeared on many talk shows to discuss it.

In a statement issued late Tuesday, Trump’s campaign said Johnson’s inclusion on the published list of delegates was an error.

“Upon careful review of computer records, the inclusion of a potential delegate that had previously been rejected and removed from the campaign’s list in February 2016 was discovered,” Tim Clark, Trump’s California campaign director, said in the statement. “This was immediately corrected and a final list, which does not include this individual, was submitted for certification.”

But state officials said the billionaire may not have any way to formally cut him from the list. Sam Mahood, a spokesman for the Secretary of State’s office, said California election code deals with selection and certification of delegates, but not their removal.

“They submitted a delegate list to our office yesterday, which was the deadline,” Mahood said. “They attempted to submit a revised list today, which we informed them we would not be accepting because it’s past the deadline.”

In practice, Johnson could simply not attend the Republican National Convention, where he would be replaced by an alternate delegate.

A spokeswoman for Trump’s campaign did not immediately respond to requests for additional comment.

In California, Republican voters seeking to become convention delegates apply directly to their candidates’ campaigns, which then sort through the submissions and select their slate of delegates. These names are later submitted to the Secretary of State’s office.

“Donald Trump is the candidate that will Make America Hate Again,” Mark Paustenbach, national press secretary for the Democratic National Committee, said in a statement.

“Trump’s racist, xenophobic candidacy continues to fuel a resurgence of white nationalism in the United States, and to elevate a man like this shows that Trump has neither the temperament nor judgment to serve as president.”

In an interview with The Times, Johnson said he received an email from the Trump campaign on Tuesday afternoon confirming that his name “was erroneously listed as a potential delegate.”

Johnson said he had advocated for Trump in recent months, setting up robo-calls supporting the candidate in seven different states, but not California. Johnson said he also created a “crisis hotline to be able to handle people who have been traumatized or vandalized supporting Trump.”

Johnson, who unsuccessfully ran for a judgeship in Los Angeles County in 2008, did not mince words when asked by a reporter to explain his politics.

“I would like a separate white ethno-state…. I think diversity and multiculturalism is a failure, and I think it’s going to destroy civilization,” he said.

The Southern Poverty Law Center describes the American Freedom Party as an organization founded by “racist Southern California skinheads that aims to deport immigrants and return the United States to white rule.” Joanna Mendelson, an investigative researcher with the California branch of the Anti-Defamation League, said groups like the American Freedom Party highlight a tonal shift in the white supremacist movement, away from brash displays of violence and toward a subtler approach.

“What these individuals do is they kind of use pseudo-intellectual racism to articulate their views, and they attach themselves to national topics, be it immigration or the elections currently, and insert themselves into the conversation,” she previously told the Los Angeles Times. Johnson was one of the keynote speakers at Camp Comradery last year, a national gathering of white separatists in Bakersfield, according to Mendelson and the American Freedom Party’s website.

Trump, who has often been criticized for his controversial statements about Mexicans and a call to deny Muslims access to the country, ran into trouble earlier in his campaign when he was slow to disavow an endorsement from David Duke, the former grand wizard of the Ku Klux Klan.

Trump’s other California delegates include more established figures like House Majority Leader Kevin McCarthy of Bakersfield, Rep. Darrell Issa (R-Vista) and Harmeet K. Dhillon, vice chair of the state’s Republican Party.

With Ohio Gov. John Kasich and Texas Sen. Ted Cruz dropping out of the race, California’s June 7 primary will serve as little more than a coronation for Trump.

Brian Levin, director of Cal State San Bernardino’s Center for the Study of Hate and Extremism, said Johnson is well-known in extremist circles, and his appearance among Trump’s delegates highlights the way this year’s election cycle has served to legitimize voices that were previously considered fringe.

“This white nationalist is someone that any respectable, mainstream candidate should leave skid marks running from,” Levin said.

(h/t Los Angeles Times)

Update

The white nationalist William Johnson has resigned as a delegate for the Trump campaign.

They don’t need the baggage that came along with my signing up as a delegate.

Reality

Trump is playing this off as a simple mistake, and point out the fact that William Johnson was removed from a list a few months ago holy shit what was William Johnson even doing on a list to be a potential delegate in the first fucking place!?

From campaign spokesperson Hope Hicks:

Yesterday the Trump campaign submitted its list of California delegates to be certified by the Secretary of State of California. A database error led to the inclusion of a potential delegate that had been rejected and removed from the campaign’s list in February 2016.

As you can see it was all a database error that holy shit what was William Johnson even doing on a list to be a potential delegate in the first fucking place!?

As it turned out the Trump’s explanation was a total fabrication because the Trump campaign was personally corresponding with William Johnson a day before the story broke.

william-johnson-campaign-email

And even though he tried to resign as a delegate, due to California delegate rules William Johnson will remain as a delegate for Trump.

In the end this is not surprising at all as Trump has had a history of white supremacy. Some examples include:

If Trump had reviewed our Supporters list, he would have found William Johnson under the list of hate group leaders.

Links

William Johnson’s Delegate Pledge Form

Trump Tries to Backtrack His Defaulting on Debt Comments

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Donald Trump declared Monday the U.S. never has to default on debt “because you print the money,” while trying to clarify his strategy for managing the national debt.

Trump insisted that he never said the U.S. should default or attempt to renegotiate with creditors, as had been reported. Trump told CNN’s Chris Cuomo on “New Day”:

People said I want to go and buy debt and default on debt, and I mean, these people are crazy. This is the United States government. First of all, you never have to default because you print the money, I hate to tell you, OK?

The presumptive Republican presidential nominee explained he would center his approach on debt buybacks if and when interest rates go up.

I said if we can buy back government debt at a discount, in other words, if interest rates go up and we can buy bonds back at a discount — if we are liquid enough as a country, we should do that. In other words, we can buy back debt at a discount.

He also repeated his claim that he is “the king of debt.”

I understand debt better than probably anybody. I know how to deal with debt very well. I love debt — but you know, debt is tricky and it’s dangerous, and you have to be careful and you have to know what you’re doing.

(h/t CNN)

Reality

Trump lied. In an interview with CNBC on 5/6/16 that we cataloged here along with video, Trump was asked if the U.S. needs to pay its debt in full or if it could negotiate a partial repayment, Trump said:

I would borrow, knowing that if the economy crashed, you could make a deal.

Also during his CNBC interview, Trump had said that interest rates should be kept low — contradicting his remarks on CNN Monday — because a rate jump could trigger a catastrophic increase the cost of borrowing.

We’re paying a very low interest rate. What happens if that interest rate goes up 2, 3, 4 points? We don’t have a country.

Furthermore, whether through debt buyback or restructuring, neither of Trump’s debt-reduction proposals from the past week square with his party’s core approach on the issue — deep spending cuts and entitlement program reform.

The Republican Party’s official platform argues the U.S.’s looming “debt explosion” should be averted through “immediate reductions in federal spending, as a down payment on the much larger task of long-range fiscal control.”

These cuts “must be accompanied by major structural reforms,” according to the platform, and pointing to programs such as Medicare, Medicaid, and Social Security, the GOP argues that “we must restructure the twentieth century entitlement state.”

Media

Links

http://video.cnbc.com/gallery/?video=3000515269

http://www.politico.com/story/2016/05/trump-debt-bankruptcy-wall-street-222976

New York Times article that Trump claimed misrepresented him. They didn’t.

Trump is Going to Trial This Year in Trump University Fraud Case

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Trump University logo

A federal judge in San Diego set the stage on Friday for what could be one of the strangest presidential transitions in history: He ordered that Donald Trump must go to trial starting Nov. 28 in a civil case in which he is accused of defrauding students who attended Trump University.

“No doubt this will be a challenge … we’re in unchartered waters,” said Daniel Petrocelli, Trump’s lead lawyer in the case, when asked later how his client — if elected in November — would be able to balance preparing to take over the presidency with taking the witness stand in a trial that could run almost until the eve of the following January’s inauguration.

But Petrocelli said Trump was fully prepared to testify and would even attend “most, if not all” of the trial in order to vindicate himself. “His preference would be to be here for the entirety of the trial,” Petrocelli said. “He believes this case is unwarranted and he wants to defend himself fully.”

The ruling today by U.S. Judge Gonzalo Curiel, during a pretrial conference on the six-year-old lawsuit, actually represented a small victory for Trump. The lawyers for the plaintiffs, arguing that “justice delayed is justice denied,” had asked for a trial to start as early as this summer — immediately after the Republican convention in Cleveland. “There are people who are still paying off their debts for the money they paid to Trump University,” said Jason Forge, a lead lawyer for the plaintiffs suing Trump.

Petrocelli, for his part, pushed back, contending that a trial over Trump University would end up becoming a media spectacle that would amount to an “unwarranted intrusion” on the November elections. He had asked that Curiel put the whole matter off until next February, after the inauguration, arguing that Trump, if elected, would be working “around the clock” during the transition to form a Cabinet. He acknowledged to Curiel that he was “fully aware” that a President Trump would not be able to postpone the case indefinitely, consistent with the Supreme Court’s unanimous ruling that President Bill Clinton was not immune to a civil suit by Paula Jones, alleging sexual harassment.

Curiel decided to split the difference: In an effort to “accommodate” Trump’s political campaign, he agreed to put the trial off until after the election — but scheduled it right afterward, rather than “waiting for [a] President Trump to begin his first term,” thereby “placing him a situation where, as a sitting president, he is taking up time as leader of the free world” to sit through trial. (Anticipating difficulty in finding unbiased jurors, the judge said he may want to start jury selection even earlier than Nov. 28.)

But Trump may still find his legal troubles impinging on his campaign; he is facing a separate trial in New York state courts in a civil fraud suit, also stemming from the ill-fated Trump University, brought by New York Attorney General Eric Schneiderman. (No trial date has been set on that case yet, but a spokesman for Schneiderman told Yahoo News that his office believes it could begin as early as this fall.)

The hearing today is the latest development in a case that has already erupted as a campaign issue and has threatened to shine a spotlight on Trump’s business practices — including his penchant for making hyperbolic claims to consumers — at the very moment he is trying to persuade voters he can deliver on his campaign pledges to end illegal immigration, destroy the Islamic State and balance the federal budget without touching entitlements like Social Security and Medicare.

The core case revolves around the operations of a school Trump launched in 2005 with a promotional YouTube video and ads that proclaimed, “I can turn anyone into a successful real estate investor, including you,” “Are you My Next Apprentice?” and “Learn from my handpicked experts how you can profit from the largest real estate liquidation in history.”

In fact, Trump University was never an accredited educational institution, and he was later forced by state attorneys general to change its name to the “Trump Entrepreneurial Initiative.” The plaintiffs, former students at Trump University, allege that Trump used “misleading, fraudulent and predatory practices,” conning them into maxing out their credit cards and in some cases paying more than $35,000 in fees for seminars and “mentoring” by Trump’s “handpicked” real estate experts. The lawsuit against the school, which is no longer in business, alleges that the seminars were little more than an “infomercial” and that the Trump mentors offered “no practical advice” and “mostly disappeared.”

One key issue in the case has been Trump’s boasts that the “courses” and “mentoring” would be conducted by the “best of the best” — real estate experts he personally chose. During a deposition last December, Forge hammered away at Trump on the issue, showing the businessman a photo lineup and playing videos of some of the instructors and asking him if he could identify any of them. Trump could not, at first saying it was “too many years” ago for him to recognize them and then finally admitting he didn’t actually know any of them. “I looked at résumés and things, but I didn’t pick the speakers,” Trump said at one point.

Trump’s lawyers have adamantly denied the charges and insisted that most students who took the courses were satisfied. On the campaign trial, Trump has vowed to never settle the case, claiming it was brought by a “sleazebag law firm” — a reference to Forge’s firm, Robbins Geller — and confidently predicted, “I will win the case at the end.” He has even criticized Judge Curiel, claiming he was biased against him because of his Hispanic origin. “If I didn’t have a hostile judge in California, this case would have ended years ago,” he said during a campaign rally in Arkansas last Feb. 26. (Trump had even suggested he might move for Curiel’s recusal, based on his Hispanic origin, but Petrocelli told reporters today he had no plans to file such a motion.)

The case has already eaten up Trump’s time on the campaign trail, forcing him to sit for two contentious last December and January in which he was grilled by Forge, prompting him to complaint at one point about “harassment” by the lawyer and to shoot back at another point, “Let’s just go to court and get this case — I’m dying to go to court in this case.”

It looks like he might be getting his wish.

(h/t Yahoo News)

Reality

As we investigated before, Trump University was a massive scam.

What will be interesting to note is how right-wing media will cover Donald Trump on trial for fraud compared to the Hillary Clinton email investigation. No need to imagine, here is the Wall Street Journal saying Donald is being set up while Hillary is a criminal.

Donald Trump Hits Back at ‘Goofy’ Elizabeth Warren

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Twitter

Donald Trump took to Twitter Friday evening to pile criticism on Massachusetts Sen. Elizabeth Warren, who earlier in the week had condemned the presumptive GOP nominee as a racist.

Trump began Friday, “I hope corrupt Hillary Clinton chooses goofy Elizabeth Warren as her running mate. I will defeat them both.”

He continued: “Let’s properly check goofy Elizabeth Warren’s records to see if she is Native American. I say she’s a fraud!”

Next, he tweeted, “Goofy Elizabeth Warren, Hillary Clinton’s flunky, has a career that is totally based on a lie. She is not Native American.”

Trump was referring to a controversy surrounding Warren that emerged during her successful 2012 Senate bid over her past claims about having Native American ancestry. At the time, her Republican challenger, Scott Brown, demanded she provide documented proof, but Warren said her heritage had been passed down in words, not on paper.
Friday’s tweet storm isn’t the first time Trump has responded to Warren in this fashion.

Asked in March about attacks the Massachusetts senator had made on him, Trump responded, “Who’s that, the Indian?”

Earlier in the week, Warren went on a Twitter tirade against the Manhattan billionaire, saying he had “built his campaign on racism, sexism and xenophobia.”

And shortly after Trump’s latest salvo Friday night, she fired back some shots of her own.
“‘Goofy,’ @realDonaldTrump? For a guy with ‘the best words’ that’s a pretty lame nickname. Weak!” Warren tweeted.

(h/t CNN)

Reality

Instead of responding to Senator Warren’s argument that he is running a racist, sexist, and xenophobic campaign, Donald Trump responded with misogynist bullying. This is a logical fallacy known as ad hominem, or attack the attacker. It is used when a person has no real defense so instead they resort to name calling.

Donald Trump Just Threatened to Cause an Unprecedented Global Financial Crisis

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In an interview on CNBC, Donald Trump broke with tired clichés about the evils of federal debt accumulation. “I am the king of debt,” he said. “I love debt. I love playing with it.”

But he replaced fearmongering about debt with an even more alarming notion — a bankruptcy of the United States federal government that would incinerate the world economy.

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

With his statement, Trump not only revealed a dangerous ignorance about the operation of the national monetary system and the global economic order, but also offered a brilliant case study in the profound risks of attempting to apply the logic of a private business enterprise to the task of running the United States of America.

Trump’s business logic makes sense

Trump is a businessman, and in terms of thinking like a businessman his idea makes sense.

The interest rate that investors currently charge the United States in order to borrow money is very low. A smart business strategy under those circumstances would be to borrow a bunch of money and undertake a bunch of big investment projects that are somewhat risky but judged to possibly have a huge payoff.

You now have two possible scenarios.

In one scenario, the investments work out and you make a ton of money. In that case, you can easily pay back the loan and everyone wins.

In another scenario, the investments don’t work out and you don’t make much money. In that case, you objectively can’t pay back the loan. You either work out a deal with the people you owe money to in which they accept less than 100 percent of what you owe them (this is called a “haircut”) or else you go to bankruptcy court and a judge will force them to accept less than 100 percent.

This is how businesspeople think — especially those who work in capital-intensive industries like real estate. And for good reason. This is the right way to run a real estate company.

Applying this idea to the United States would destroy the economy

The United States of America, however, is not a real estate development company. If a real estate company defaults on its debts and its creditors lose money, that’s their problem. If a bank fails as a result, then it’s the FDIC’s responsibility to clean it up.
The government doesn’t work like that. Right now, people and companies all around the world treat US government bonds as the least risky financial asset in the universe. If the government defaults and banks fail as a result, the government needs to clean up the mess. And if risk-free federal bonds turn out to be risky, then every other financial assetbecomes riskier. The interest rate charged on state and local government debt, on corporate debt, and on home loans will spike. Savings will evaporate, and liquidity will vanish as everyone tries to hold on to their cash until they can figure out what’s going on.

Every assessment of risk in the financial system is based on the idea that the least risky thing is lending money to the federal government. If that turns out to be much riskier than previously thought, then everything else becomes much riskier too. Business investment will collapse, state and local finances will be crushed, and shockwaves will emanate to a whole range of foreign countries that borrow dollars.

Remember 2008, when the markets went from thinking housing debt was low-risk to thinking it was high-risk, and a global financial crisis was the result? This would be like that, but much worse — US government debt is the very foundation of low-risk investments.

What’s especially troubling about Trump’s proposal is that there is genuinely no conceivable circumstance under which this kind of default would be necessary. The debt of the federal government consists entirely of obligations to pay US dollars to various individuals and institutions. US dollars are, conveniently, something the US government can create instantly and in infinite quantities at any time.

Of course, it might be undesirable to finance debts by printing money rather than raising taxes or cutting spending. In particular, that kind of money printing could lead to inflation, and even though inflation is very low right now there’s no guarantee that it will always be low.

But a little bit of inflation is always going to be strictly preferable to destroying the whole American economy, especially because a debt default would cause a crash in the value of the dollar and spark inflation anyway.

Trump doesn’t know what he’s talking about

This is the second time this week that Trump has revealed a profound ignorance of an issue related to government debts.

The early instance in which he kept proposing that Puerto Rico declare bankruptcy even though doing so is illegal was on a question that’s very important to Puerto Ricans but not so important to everyone else. It is, however, important to pay attention to how presidential candidates approach issues across the board — and what we saw with Puerto Rico is that Trump approached the issue by simplistically applying business logic without bothering to check whether it applies to the actual situation.

Now in the CNBC interview he’s done the exact same thing on a matter of more consequence —not the debts of Puerto Rico but the debts of the United States of America. It’s understandable that a real estate developer might assume that what works in real estate would work in economic policy, but it’s not true. And Trump hasn’t bothered to check or ask anyone about it.

(h/t CNBC)

Reality

What Donald Trump is proposing to pay off the national debt (which is money that we are obligated to pay creditors and for services) is to borrow large sums of money at a lower rate. In other words robbing Peter to pay Paul.  Should the economy be healthy then we can pay back that borrowed money no problem. However should the economy crash, and the United States is unable to meet the legal obligation of debt repayment (‘defaulting‘) then Trump proposed to renegotiate that new debt at a lower rate.

While Trump did not say the word ‘default’ he explained the exact definition of the word default in his proposal.

This raised eyebrows by suggesting an unorthodox approach towards cutting the national debt… not paying it then renegotiate terms. Such a renegotiation risks creating financial turmoil because U.S. Treasuries are considered the safest assets on the planet and a major benchmark for valuing other securities. Calling into question their safety could cause borrowing rates to rise and create confusion in the markets.

Confusion in the markets is a very bad thing. Wall Street and businesses need to know what the rules are in order to subvert play them.

Media

http://video.cnbc.com/gallery/?video=3000515269

Donald Trump Flip-Flops on Campaign Self-Funding

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Facing a prospective tab of more than $1 billion to finance a general-election run for the White House, Donald Trump reversed course Wednesday and said he would actively raise money to ensure his campaign has the resources to compete with Hillary Clinton’s fundraising juggernaut.

His campaign also is beginning to work with the Republican National Committee to set up a joint fundraising committee after his last two rivals—Texas Sen. Ted Cruz and Ohio Gov. John Kasich—dropped out in the wake of Trump’s resounding Indiana win on Tuesday.

“I’ll be putting up money, but won’t be completely self-funding,” the presumptive Republican nominee said in an interview Wednesday. Trump, who had largely self-financed his successful primary run, added that he would create a “world-class finance organization.” The campaign will tap his expansive personal Rolodex and a new base of supporters who aren’t on party rolls, two Trump advisers said.

The new plan represents yet another flip-flop for Trump, who has for months portrayed his Republican opponents as “puppets” for relying on super PACs and taking contributions from wealthy donors that he said came with strings attached.

Mr. Trump’s creation of a joint fundraising committee comes eight months behind that of his likely general-election foe, Clinton. She and the Democratic National Committee reached an agreement last August to create the Hillary Victory Fund, which raised more than $60 million through the end of March. Of that, about $13 million has been transferred to Mrs. Clinton’s campaign, while nearly $6 million has gone to the DNC.

The former secretary of state raised more than $213 million for her campaign through the end of April, on top of more than $67 million raised by her allied super PACs.

(h/t Fox News)

Reality

With the many other flip-flops since becoming the Republican party’s nominee, he’s rejected almost every stance that his supporters loved which separated him from the other candidates.

Media

Artist Who Drew Donald Trump With Small Penis Claims She Was Assaulted By Trump Fan

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The Los Angeles artist who painted a viral portrait of a nude Donald Trump says someone gave her the typical Trump supporter treatment: Punching her in the face.

Illma Gore posted two photos of her bruised face on Instagram Monday, and said an apparent Trump-loving stranger attacked her several days ago.

“Today I was punched in the face by a man who got out of his car and yelled, ‘Trump 2016!’ in Los Angeles, just days after I returned home from London just down the road from my house,” Gore wrote.

“I am sad that this is the state of our America right now. I am sad that Trump, and many of his supporters, don’t find words enough to express their opinions – they need walls, waterboarding and punches.”

She tagged Donald Trump and urged him: “Make America Decent Again!”

Gore filed a police report, which she sent to the Daily News. The report says the attacker fled in a car right after the punch, and that Gore was not seriously injured. Gore told the News the aggressor was with “a group of guys in the car.”

The LAPD did not immediately comment on her case.

Reality

The artist Illma Gore received death threats and fled the country for a time. Shortly upon returning she was assaulted by an alleged Trump supporter.

Donald Trump has previously condoned violence against those who disagree with him.

Media

Trump Accuses Cruz’s Father of Helping JFK’s Assassin

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Donald Trump alleged that Ted Cruz’s father, Rafael Cruz, was with John F. Kennedy’s assassin shortly before he murdered the president. Trump claimed that Rafael Cruz was pictured with Lee Harvey Oswald handing out pro-Fidel Castro pamphlets in New Orleans in 1963.

His father was with Lee Harvey Oswald prior to Oswald’s being — you know, shot. I mean, the whole thing is ridiculous. What is this, right prior to his being shot, and nobody even brings it up. They don’t even talk about that. That was reported, and nobody talks about it. But I think it’s horrible. It’s absolutely horrible.

As the anchor mentioned the photo that allegedly included Cruz, Trump continued:

I mean, what was he doing — what was he doing with Lee Harvey Oswald shortly before the death? Before the shooting? It’s horrible.

(h/t Politico)

Reality

Donald Trump’s source is the pro-Trump supermarket tabloid newspaper The National Enquirer. That’s right… this paper:

National Enquirer, "Ted Cruz Father Linked to JFK Assassination!"

The Miami Herald debunked this claim rather well:

Gus Russo, an author and journalist who has written extensively about the JFK assassination and Oswald, is dubious. Russo told [the reporter] in an interview that Oswald, who was living in New Orleans in 1963, was not connected to the Cuban community there and would not have had a Cuban supporter helping him. “He was the ultimate loner,” said Russo. Another man seen in the video handing out leaflets had been hired by Oswald to do so at an unemployment office, according to the Warren Commission. Rafael Cruz also lived in New Orleans, but it was later in the 1960s. As for the photo “evidence,” Russo said, “It’s very subjective. It’s not proof. It’s just an opinion. To charge something this big, you’d better have better proof than that ‘it looks like him.’”

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Trump Says Cruz’s Father Shouldn’t Be ‘Allowed’ To Say Mean Things About Him

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Donald Trump hit back hard Tuesday at Ted Cruz’s father after he made an appeal to “every member of the body of Christ” to vote for his son, and not the “wicked” – calling the comments “disgraceful” and “horrible.”

The Examiner reported that Rafael Cruz had been meeting for days with Indiana pastors, many of whom have since endorsed the Texas senator.

Speaking with the head of the American Family Association of Indiana, the elder Cruz had warned of the “wicked electing the wicked” and urged fellow Christians to come out to vote.

I implore, I exhort every member of the body of Christ to vote according to the word of God, and vote for the candidate that stands on the word of God and on the Constitution of the United States of America. And I am convinced that man is my son, Ted Cruz. The alternative could be the destruction of America.

But Trump unleashed on the Cuban-born Rafael Cruz, a pastor, after he made his religious appeal to Indiana and other voters to support his son in the Republican presidential nominating contest. Indiana is voting Tuesday.

I think it’s a disgrace that he’s allowed to do it. I think it’s a disgrace that he’s allowed to say it … You look at so many of the ministers that are backing me, and they’re backing me more so than they’re backing Cruz, and I’m winning the evangelical vote. It’s disgraceful that his father can go out and do that. And just — and so many people are angry about it. And the evangelicals are angry about it, the way he does that. But I think it’s horrible. I think it’s absolutely horrible that a man can go and do that, what he’s saying there.

In a sharp turn, the Republican presidential front-runner then abruptly invoked a tabloid story about Rafael Cruz’s supposed connection to John F. Kennedy assassin Lee Harvey Oswald.

(h/t Fox News)

Reality

Trump has made the statement before that people shouldn’t be “allowed” to say negative things about him and that he would like to limit the freedom for people who disagree with him through litigation.

Also by claiming that Pastor Rafael Cruz shouldn’t preach about supporting a candidate (who happens to be his son) is the definition of a double-standard in the purest sense. Trump has had support from so many pastors who have used their position as a church leader to publicly preach about voting for Donald Trump that a new word was coined, “Trumpvangelicals“. These include Mike Murdock, Paula White, Robert Jeffress, and Joel Osteen, join the list of Kenneth Copeland, and 40 others who met with Trump at Trump Tower in September 2015.

There is also Rev. Franklin Graham, son of Billy Graham, publicly supported Trump, supported his stance on rejecting the Iran deal, and supported Trump’s plan to ban Muslims from entering America.

At Trump’s Cleveland rally, Pastor Darrell Scott of New Spirit Revival Center Ministries performed a sermon to introduce Trump to the stage. Pastor Scott called Trump humble, blamed “liberal media for brainwashing” you for thinking Trump could possibly be an out-and-out racist, and directed people to vote for Donald Trump.

Jerry Falwell Jr. publicly endorses Donald Trump, compares him to King David, and produced radio advertisements evoking Bible passages:

“Donald Trump lives a life of loving and helping others as Jesus has taught in the great commandment.”

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