Trump Makes Puzzling Claim That Stock Market Gains Have Reduced The Debt

Trump Makes Puzzling Claim That Stock Market Gains Have Reduced The Debt

"So they borrowed more than $10 trillion, right?"

"The country - we took it over and owed over $20 trillion", Trump said in an interview on Fox News, referring to the total national debt, which has hovered near $20 trillion since early 2016. "Possibly picked up the whole thing in terms of the first nine months, in terms of value". "But we're very honored by it". As CNBC details, to see why this doesn't make sense, consider the relationship (or lack thereof) between the stock market and debt during the Obama administration. "And we're very, very happy with what's happening on Wall Street". But even this generous explanation relies on so many assumptions that it doesn't really help Trump-as the president continues to be reminded, the United States is not a real-estate business, and the White House is not a family office.

"For evidence that the two metrics have little to no bearing on one another, look no further than the eight years of the Obama presidency: Between 2009 and 2017, the S&P 500 returned 235 percent while the national debt soared", CNBC's Christina Wilkie writes.


Still, to a degree, the ability to service the debt has improved because of the stock market's rise. Consequently, debt is directly reduced when nations take in more money then they spend, a feat typically accomplished by raising taxes or cutting spending. No, a far more appropriate measurement would be to compare the national debt to the size of the national economy.

Twice a day, as the American flag is raised and lowered on US military bases and other installations, a bugle plays "Retreat". That the U.S.is $20 trillion in debt is only good or bad news to the extent that money is and was productively used. The U.S. intelligence community has concluded that the Kremlin attempted to influence the election.

In terms of stock market gains, Trump is accurate about the increase, although the exact figure could be up for debate.

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