FOR IMMEDIATE RELEASE
News from Progress Michigan
August 19, 2016
Report: Trump’s Default Plan Could Sink MI Home Values $50K, Kill 96K Jobs
Donald Trump’s economic policies flirt with economic disaster
MICHIGAN — A new study finds that Republican Presidential nominee Donald Trump’s plan to default on the U.S. debt could cost Michiganders dearly. According to the study, released by the Center for American Progress, home values could plummet by more than $50,000 and nearly 100,000 jobs could be eliminated.
As part of his economic plan, Trump claims he can simply renegotiate U.S. debt with other countries, a proposal that was outlined by the New York Times and according to the Center for American Progress (CAP) would “essentially [be] a default” of the U.S. debt.
Defaulting on debt is not only a pillar of Trump’s presidential platform — it’s also a pattern within his business dealings. Trump has a long record of racking up debt with contractors and businesses and then simply not paying them back.
“Trump’s economic plan is simply rehashing the old myths of trickle down economics. He wants to make things good for his fellow corporate billionaires at the expense of the middle and working class. His asinine idea to default on U.S. debt, like he’s done so often with his own businesses, would cost Michigan families dearly,” said Lonnie Scott, executive director of Progress Michigan. “Trump claims he wants to run the U.S. like a business, but families across Michigan have seen the devastating consequences of that bottom-line focused mentality. From Flint to Detroit to Muskegon, communities have been dragged down and lives have been damaged. Trump’s economic nightmare would run Michigan and the rest of the country into the ground.”
According to CAP, the U.S. defaulting on its debt would be disastrous for working families “who would pay more for their credit card balances, mortgage payments, and student loans, since their interest rates are tied to the interest rate on U.S. debt.”
In terms of housing, a U.S. debt default would mean higher interest rates, making it more expensive to buy a home, which would inevitably lead to a reduced value in homes because of fewer buyers. In Michigan, that could translate into as much as a $50,280 loss in a home’s value, if interest rates were to increase by 5 percent, according to the report.
The results on Michigan’s job market under Trump’s plan would beno better, as highlighted by CAP: “Higher mortgage interest rates would devastate the construction and real estate industries. Likewise, higher auto loan interest rates would do the same to the auto industry. Businesses would find it less affordable to borrow to purchase equipment, making them less likely to expand and hire—not to mention that higher interest rates on credit cards would make consumers less inclined to purchase goods and services.”
When the dust settles after Trump’s default plan, as many as 98,700 Michigan jobs could be on the chopping block, which would put tens of thousands of families and businesses in a lurch.
“Republican economic policies that favor the wealthy and the well-connected have not been successful in Michigan and they would fare no better on a national stage,” Scott continued. “Trump’s fiscal plans for our country — just like his hateful rhetoric and temperament — are nothing short of dangerous.”