Trump’s Economic Recklessness Could Reduce House Prices By More Than $100,000
Donald Trump—the real estate mogul, reality television star, and presumptive GOP presidential nominee—has promised to do a lot of things if he is elected in November, including banning all Muslims from traveling to the U.S. and building the “Great Wall of Trump” between the U.S. and Mexico that he will somehow compel Mexico to pay for. However, during all his speeches explaining how he’ll “make America great again,” Trump has neglected to mention that his reckless economic plans could cause financial ruin for many American families, especially by reducing the value of their homes and by possibly killing more than 3 million jobs.
A cornerstone of Trump’s economic plan is his tax proposal, which doesn’t pay for its massive tax cuts for the wealthy and instead adds $9.5 trillion to the deficit over the next decade. Trump’s tax policy is not his only risky plan when it comes to the U.S. debt: Trump, the self-proclaimed “king of debt,” has already threatened to default on the national debt. Instead, Trump suggested that he could “make a deal” with American creditors to avoid paying them back fully.
While Trump’s “fortune” has allegedly survived his four bankruptcies, playing chicken with the national debt poses significantly greater risk than choosing which celebrity to fire on a fake business show. According to a new analysis by the Center for American Progress Action Fund, the Donald’s proposal to default on the national debt would be an economic catastrophe. The new risk Trump’s proposal would cause would likely increase interest rates—a result that would directly impact middle-class American’s already strapped wallets through more expensive credit card debt, mortgages, and loans. And it would also cause a massive reduction in the value of U.S. debt, most of which is held by Americans.
Though the full impact of that Trump’s recklessness could have on the jobs, wages, incomes, and wealth of Americans is impossible to quantify completely, CAP Action’s new analysis predicts a pretty dire future for middle class Americans under the “king of debt”: if interest rates increase due to Trump’s recklessness, housing prices would tumble, possibly by as much as over $100,000. Though in 2006, Trump hoped that housing prices would plummet so he could profit, declining housing prices can be devastating for working families, as the Great Recession proved. Additionally, higher interest rates undermine the country’s output, or Gross Domestic Product, which could mean the economy could lose more than 3 million jobs.
Many have said that Americans should ignore Trump’s reckless comments since he, like a true politician, is also the king of flip-flopping on other issues when politically expedient. Though his countless flip-flops make it difficult to know his true agenda, his current economic agenda strongly compliments the reckless agenda of the GOP Congress. Congressional Republicans have also repeatedly used the debt as political collateral by repeatedly threatening to push the nation into default and by vowing to oppose increases in the debt ceiling. And if Trump’s business record is any indication of his political plans, everyday Americans should be wary. Trump has refused to pay his debts before, effectively cheating hundreds of former employees, contractors, and bondholders.
BOTTOM LINE: Though it may be good for him, Donald Trump’s economic recklessness would devastate working families by devaluing their homes and possibly eliminating their jobs. Trump’s rhetoric on the debt proves that he only cares about his own wealth and is willing to risk the livelihoods of millions of Americans in order to win an election and further line his wallet. And with the need for a debt ceiling increase in 2017, a debt crisis could be one of the first consequences of a Trump Presidency.
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