Trump Is Right About Our Need to Dump Debt

Yet another reason Donald Trump could dispatch Hillary Clinton in November: He grasps that Americans have changed the way they think about debt.

Last week, Clinton thought she scored a good one. “He could bankrupt America like he has bankrupted his companies,” she told a Detroit audience, referring to his four casino-debt defaults. Marco Rubio tried the same tactic, pointing out that Trump was the only candidate to have declared bankruptcy.

Yet this is an attack on regular Americans — people who vote.

Last year, 911,000 families or small businesses filed for bankruptcy. In 2009, the year after the 2008 economic crash, nearly 1.5 million did.

What about home foreclosures — a similar, but separate, type of debt default? In 2011, 3.9 million homeowners (or, rather, home borrowers) had a bank start a foreclosure — more than eight times the number in 2000. Even today, more than a million families are in foreclosure.

The biggest states for debt defaults? Florida, Nevada and Ohio — pretty important in November. Does Clinton think all these folks are bad people, like Trump?

Like it or not, racking up far more debt than you can ever repay, whether on a personal level or as a business owner, isn’t unusual in millennial America.

Trump told CNN this month he’s “the king of debt,” but Americans are debt’s peasants and serfs.

Consider:

• Americans’ credit-card debt is set to surpass $1 trillion this year, close to the record set two months before Lehman Bros. collapsed.
• Student-loan debt is at nearly $1.4 trillion — up 37 percent in five years, after inflation.
• Auto-loan debt is at $1.1 trillion today — up 38 percent in five years.

And that’s with full government encouragement: Washington has kept interest rates at record lows since 2008, to encourage people to borrow and buy.

But when it comes to debt, it’s a tale of two Americas.

The people racking up the credit-card bills aren’t rich or even middle-class. “Lenders have signed up millions of subprime consumers who previously weren’t able to get credit,” reports The Wall Street Journal.

The guy driving the shiny new pickup truck, too, isn’t flaunting his wealth. Auto lenders have lowered standards.

The upper class? They know not to borrow. Ivy League grads are paying back their debt faster than they have to, the Journal also notes, because they know that debt isn’t freedom; it keeps you from having choices.

Want to quit your annoying job to start your own company? Too bad, if the first thing you did as an adult was buy a $40,000 SUV. Want to move to a different state? Hard if your mortgage is worth more than your house.

Much of this debt is unpayable. That’s not so different from Trump’s casino debt. It’s not different, either, from much of our state and local debt.

When Trump said blithely in the same interview that he’d “make a deal” on federal-government debt if it got too high, the elites laughed at him, or gasped in mock horror.
Except: The horror is already here.

Puerto Rico, a sovereign American entity, has been in default on some of its debt all year. Both parties in Congress now openly admit that Puerto Rico will never repay all it owes.

And Congress has acknowledged that the solution lawmakers have devised — a federal board to help Puerto Rico reduce what it owes — could apply to states like Illinois and New Jersey someday, too.

Remember: Alexander Hamilton’s Treasury Department issued the country’s first national bonds to repay state debts — to prove the new nation would make good on its obligations.

But even as Trump talks about deal-making on government debt, that’s what the feds are about to do with lenders on behalf of Puerto Rico.

If Trump is going to “bankrupt” America like he bankrupted his companies, as Clinton charged, that’s not so bad.

More Americans could stand to shed some of their debt — so that people have freedom to take business risks. And the financial institutions that lent all this money could learn, as Trump’s casino lenders did, that when you lend money to people who can’t pay it back, they won’t.

This piece originally appeared in New York Post

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Photo by Spencer Platt / Getty Images

This piece originally appeared in New York Post