Donald Trump may be the presumptive Republican presidential candidate, but he has already crowned himself king — of debt.
“I am the king of debt. I love debt,” Trump said in an interview with Wolf Blitzer.
Trump was talking about strategically borrowing money without any intention of paying it back fully, using bankruptcy to force creditors to accept discounted payments on debt, and “using the laws” in unspecified ways to reduce debt without paying it. He was describing these actions in the context of Puerto Rico’s current debt crisis.
“Many of the top people, people in my category,” he said, “use the laws. I know more about debt than practically anybody. I love debt. I also love reducing debt. And I know how to do it better than anybody. I will tell you, Puerto Rico has too much debt. So you can’t just restructure it, you have to use the laws, you have to cut the debt way down and get back to business, because they can’t survive with the kind of debt they have.”
Reminded by Blitzer that Puerto Rico doesn’t have access to chapter 9 bankruptcy laws as the states do, Trump responded, “As a very successful person, I would buy companies, throw them into a chapter, bankrupt it, negotiate. I would do great deals.” He didn’t respond specifically on the subject of bankruptcy laws or Puerto Rico’s access to them when pressed, but reiterated the need to reduce the debt rather than trying to pay it.
Blitzer asked, “If you were president of the United States, what would you do to help the people of Puerto Rico?
“The problem we have,” Trump responded, “is we have $19 trillion in debt and we have a comp — you know, we have a country that’s in such trouble. So we have $19 trillion, going up, as you know, to $21 trillion in a very short period of time because of the horrible omnibus budget. And I think, really, they have to solve the problem.”
Blitzer pressed Trump on the question, asking, “Should the U.S. bail out Puerto Rico?”
Trump answered, “No, I don’t believe they should. I don’t believe they should. And I think, frankly, Puerto Rico is better if they don’t, because they’ll cut the bonds, they’ll cut them way down.” At this point, Trump began talking about ways to reduce debt, as described above.
That’s not the only time Trump has referred to himself as “the king of debt.” The Washington Post’s Wonkblog reported that Trump said much the same thing on CNBC. “I am the king of debt. I love debt. I love playing with it,” Trump said in that interview. In that case, he implied that he was willing to renegotiate U.S. government debt.
“Do you believe that we, in terms of the United States, need to pay a hundred cents on the dollar, or do you think that there’s actually ways that we can renegotiate that debt?” CNBC’s Andrew Ross Sorkin asked.
“Yeah, I think — look, I have borrowed, knowing that you can pay back with discounts. And I have done very well,” Trump said.
“The comments were striking,” the Wonkblog wrote, “because, historically, U.S. government debt has been treated as sacrosanct, the safest investment in the world, and a pillar of global financial stability.”
Some of Puerto Rico’s debts are guaranteed by the territory’s constitution, which says that such debts will be paid first. Puerto Rico has defaulted on some of these debts already. Governor Alejandro Garcia Padilla said that the debt can’t be paid “without cutting essential services,” and described the choice not to pay the debt as “a painful decision.” Puerto Rico has already taken austerity measures, closing schools and cutting emergency services.