Day 266: Trump Has No Clue How the National Debt or Economy Works

Speaking to one of his favorite bootlickers, Sean Hannity, Donald Trump explained that the uptick in the stock market offsets the rise in national debt.

“As you know, the last eight years, [the federal government] borrowed more than it did in the whole history of our country,” Trump said. “So they borrowed more than $10 trillion, right? And yet we picked up $5.2 trillion just in the stock market. Possibly picked up the whole thing in terms of the first nine months, in terms of value.”

“So you could say, in one sense, we’re really increasing values. And maybe in a sense we’re reducing debt. But we’re very honored by it,” Trump said.

Actually, no. There’s absolutely no reduction in the national debt based on stock market movement since there’s a massive difference between government debt and private sector valuations.

The national debt, which he correctly states is $20 trillion, is the result of the government spending more than it takes in. To cut the debt, Congress has to spend less or raise taxes. That would free up cash to pay down what the U.S. owes.

“The stock market’s gains have virtually nothing to do with the size of the national debt, which continues to rise because government spending far exceeds government receipts,” political economist Greg Valliere told CNNMoney.

“A higher stock market encourages consumers and companies to spend more, which helps the overall economy,” said Valliere of Horizon Investments. “But it’s absurd to contend that the national debt has fallen because of this.”

Additionally, under his bizarre (and incorrect) argument, Trump’s criticisms of Barack Obama raising the national debt would be without merit. The Dow Jones tripled from its low point in 2009 through the November election. To put that in perspective, since November 2016, the Dow has gained about 25 percent. So if Trump gets credit for “increasing values” to “reduc[e] debt,” it would stand to reason that Obama would get even more credit, right?

Business Insider further ripped Trump’s earlier argument that the growth seen under him is unprecedented by looking at an other index: the S&P 500.

Now we’re here to test the mettle of Trump’s argument that the stock market has rarely surged this much following an election.

As it turns out, you only have to go back to — (drum roll) — the period after the 2012 election to find a comparable period of stock market strength. That’s right, the S&P 500 climbed 19.2% between Barack Obama’s reelection and October 11, 2013 — almost exactly the same as the move we’ve seen since Trump took office.

Really dropping the mic they added:

After all, there was already a 7–1/2-year-long bull period when Trump won the 2016 election.

The national debt and value added to the economy are very, very separate measurements. Perhaps the person in the Oval Office should learn the difference.

266 days in, 1196 to go

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