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

Elias Hubbard
October 12, 2017

If you weren't one of the 1,000 people invited to hear President Donald Trump speak in Harrisburg, there will be a chance to see the commander-in-chief in an interview with Sean Hannity.

"I'm so proud of the $5.2 trillion dollars of increase in the stock market", Trump said, referring to the bull market that began as the economy pulled out of the Great Recession during the months after President Obama took office. "So they borrowed more than $10 trillion, right?"

While it's true that USA stock market indexes have risen markedly during Trump's time in office, the current gains are part of a bull market that began in the spring of 2009, when the country began to recover from the Great Recession and the collapse of the housing market.

"So you could say, in one sense, we're really increasing values". 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.

In fact, the national debt has actually continued to increase under Trump, and hit $20 trillion for the first time in September.

CNBC pointed out that the stock market and the national debt have nothing to do with each other, "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". No commensurate spending cuts have been proposed. If the US funds expansions of education or infrastructure that allows for better and more economic activity, then it's money not just well spent, but as Trump would say, in a sense reducing debt.

Trump and Hannity are set to discuss topics like tax cuts and immigration. And no, that stock market rally did not reduce or offset the national debt either.

As for that stock market rally, the Standard and Poor's 500 is up almost 20% since his election - an impressive rally.

Other reports by Click Lancashire

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