Elections

'King of debt' Donald Trump: 'Now is the time to borrow'

We need to fix our country: Donald Trump
VIDEO5:5505:55
We need to fix our country: Donald Trump

The U.S. is nearly $20 trillion in debt, a number that has almost doubled under President Barack Obama. If Donald Trump is elected president, the nation's massive pile of IOUs will keep on growing and then some.

Already the self-proclaimed "king of debt" — a declaration the Republican nominee made on CNBC in May — Trump promised Thursday to use the low-interest environment as a means to rebuild the national infrastructure.

"This is a time to borrow and borrow long term," he told CNBC during a discussion on how he would finance the many projects he wants to undertake, such as rebuilding airports and bridges and upgrading the military.

Absent from Trump's myriad criticisms of Obama has been anything about debt. The president entered office with the U.S. owing the world $10.6 trillion, and that has swelled to $19.4 trillion, according to the Treasury Department.

While the debt load has gone from 87 percent to 104 percent compared to gross domestic product during the Obama administration, it has remained largely manageable thanks to rock-bottom interest rates courtesy of the Fed.

By way of comparison, the U.S. paid $383 billion in interest on that debt in 2009; in 2015 that number grew to $402 billion, just a 5 percent increase despite an 83 percent surge in total debt, Treasury figures show.

During that time, the Fed had kept its interest rate target anchored near zero, a policy that began during the 2008 financial crisis and didn't move during the recovery until the central bank hiked a quarter-point in December.

Donald Trump
Eric Thayer | Reuters

Trump sees the climate as a ripe time for the U.S. to take advantage of almost-free money. He wants to use it to rebuild American infrastructure, including airports that "are like third-world countries." (The Port Authority of New York and New Jersey, which runs New York metro-area facilities, did not immediately respond to a request for comment.)

"Normally you would say you want to reduce your debt, and I like to reduce debt as much as anybody," he said. "The problem is, you have a military problem, you have an infrastructure problem — a tremendous infrastructure problem — and you have other problems. The asset is your rates are so low."

During his "king of debt" discussion, Trump said he likely would replace current Fed Chair Janet Yellen, whose term runs to 2018, a year after Trump would take office.

However, judging by his pro-debt comments, he would be likely to appoint someone just as dovish when it comes to rates.

"What's going to happen when the rates eventually go up and you can't borrow, you absolutely can't borrow, because it's too expensive?" he said. "It would destroy our balance sheet, totally destroy the balance sheet."

Trump also hit back against an analysis from Moody's Analytics, which said his plans would cause a "lengthy recession," run up $11 trillion in debt and cost 3.5 million jobs.

In addition to taking advantage of the opportune interest rate climate, Trump's economic plan calls for slashing income and business taxes. Moody's economist Mark Zandi, who has supported Hillary Clinton for president, has said her plan would make the economy "stronger" than Trump's proposals.

"It's a ridiculous statement," Trump said. "My plan's going to lead to growth. We're going to have the jobs not her. ... I think they were looking at an old plan."