The American economy overall is in okay shape, (then-Goldman Sachs president Gary) Cohn told Trump (during the transition), but it was ready to experience a growth explosion if certain actions were taken. To achieve this, the economy needed tax reform and the removal of the shackles of overregulation.
Cohn knew this was what Trump wanted to hear. Then the New York City Democrat told the president-elect something he did not want to hear. We’re a trade-based economy, he said. Free, fair and open trade was essential. Trump had campaigned against international trade deals.
Second, the United States is an immigration center to the world. “We’ve got to continue to have open borders,” Cohn said. The employment picture was so favorable that the United States would run out of workers soon. So immigration had to continue. “We have many jobs in this country that Americans won’t do.”
Next, Cohn repeated what everyone was saying: Interest rates were going to go up over the foreseeable future.
I agree, Trump said. “We should just go borrow a lot of money right now, hold it, and then sell it and make money.”
Cohn was astounded at Trump’s lack of basic understanding. He tried to explain. If you as the federal government borrow money through issuing bonds, you are increasing the U.S. deficit.
What do you mean? Trump asked. Just run the presses -- print money.
You don’t get to do it that way, Cohn said. We have huge deficits and they matter.
---
(Later in the same meeting between President-elect Trump and Goldman Sachs president Gary Cohn, who would eventually join Trump’s White House as Director of the National Economic Council:)
Trump returned to printing money. “We’ll just borrow,” he said, enamored with the idea of heading the federal government, which had the best credit rating in the world, so they could borrow at the lowest interest rate.
Cohn didn’t mention a report that had come out during the campaign which said the Trump Organization’s business credit score was a 19 out of 100, below the national average by 30 points, and that it could have difficulty borrowing money.
You can’t just print money, Cohn said.
“Why not? Why not?”
Congress had a debt ceiling which set a cap on how much money the federal government could borrow, and it was legally binding. It was clear that Trump did not understand the way the U.S. government debt cycle balance sheet worked.
-- Bob Woodward, Fear: Trump in the White House











