In an interview Thursday on CNBC, Donald Trump broke with tired clichés about the evils of federal debt accumulation. "I am the king of debt," he said. "I love debt. I love playing with it." But he replaced fearmongering about debt with an even more alarming notion — a bankruptcy of the United States federal government that would incinerate the world economy. "I would borrow, knowing that if the economy crashed, you could make a deal," . "And if the economy was good, it was good. So therefore, you can't lose." Read more from Vox: Paul Ryan is bluffing with no cards, and Donald Trump knows it

The economy continued its sluggish recovery in April

Stephen Colbert has some ideas for how Hillary Clinton can defeat Donald Trump With his statement, Trump not only revealed a dangerous ignorance about the operation of the national monetary system and the global economic order, but also offered a brilliant case study in the profound risks of attempting to apply the logic of a private business enterprise to the task of running the United States of America.

Trump's business logic makes sense

US Republican presidential candidate Donald Trump Jewel Samad | AFP | Getty Images

Trump is a businessman, and in terms of thinking like a businessman his idea makes sense.

The interest rate that investors currently charge the United States in order to borrow money is very low. A smart business strategy under those circumstances would be to borrow a bunch of money and undertake a bunch of big investment projects that are somewhat risky but judged to possibly have a huge payoff. You now have two possible scenarios. In one scenario, the investments work out and you make a ton of money. In that case, you can easily pay back the loan and everyone wins. In another scenario, the investments don't work out and you don't make much money. In that case, you objectively can't pay back the loan. You either work out a deal with the people you owe money to in which they accept less than 100 percent of what you owe them (this is called a "haircut") or else you go to bankruptcy court and a judge will force them to accept less than 100 percent. This is how businesspeople think — especially those who work in capital-intensive industries like real estate. And for good reason. This is the right way to run a real estate company.

Applying this idea to the United States would destroy the economy

Republican presidential candidate Donald Trump addresses his supporters during a rally at the Charleston Civic Center on May 5, 2016 in Charleston, WV. Ricky Carioti | The Washington Post | Getty Images

The United States of America, however, is not a real estate development company. If a real estate company defaults on its debts and its creditors lose money, that's their problem. If a bank fails as a result, then it's the FDIC's responsibility to clean it up.

The government doesn't work like that. Right now, people and companies all around the world treat US government bonds as the least risky financial asset in the universe. If the government defaults and banks fail as a result, the government needs to clean up the mess. And if risk-free federal bonds turn out to be risky, then every other financial assetbecomes riskier. The interest rate charged on state and local government debt, on corporate debt, and on home loans will spike. Savings will evaporate, and liquidity will vanish as everyone tries to hold on to their cash until they can figure out what's going on. Every assessment of risk in the financial system is based on the idea that the least risky thing is lending money to the federal government. If that turns out to be much riskier than previously thought, then everything else becomes much riskier too. Business investment will collapse, state and local finances will be crushed, and shockwaves will emanate to a whole range of foreign countries that borrow dollars. Remember 2008, when the markets went from thinking housing debt was low-risk to thinking it was high-risk, and a global financial crisis was the result? This would be like that, but much worse — US government debt is the very foundation of low-risk investments.

Republican presidential candidate Donald Trump speaks to supporters during a campaign rally at Mid-Hudson Civic Center in Poughkeepsie, New York. Eduardo Munoz | Reuters