During his latest interview with Fox News’ Sean Hannity, President Trump went on a confused rant about the economy, at one point falsely suggesting that stock market gains are helping pay down the national debt.
“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.
“Now, if you look at the stock market, that’s one element, but then we have many other elements. The country — we took it over, it owed $20 trillion, as you know, the last eight years they borrowed more than it did in the whole history of our country, so they borrowed more than $10 trillion — and yet, we picked up $5.2 trillion in the stock market, possibly picked up the whole things in terms of the first nine months in terms of value.”
“So, you could say in one sense we are really increasing values, and maybe in a sense we are reducing debt,” Trump added, before Hannity quickly moved on to another topic.
But it just doesn’t work like that. 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.
“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.
The national debt is a tough topic for Trump these days. Though candidate Trump repeatedly promised to pay down the national debt before the end of his term, it has actually expanded under his watch. And the tax cuts for corporations and the ultra wealthy he’s currently pushing would only make the debt bigger.
As Reuters explains:
The Republican tax plan unveiled last week calls for as much as $6 trillion in tax cuts that would sharply reduce federal revenues. No commensurate spending cuts have been proposed. So, on their own, the tax cuts being sought by Trump would hugely expand the deficit and add to the debt.
Trump’s comments to Hannity were not the first time he’s revealed deep confusion about how the economy works. While he was pushing Obamacare repeal over the summer, Trump did an interview where he indicated he thinks it’s possible to purchase health insurance for $12 annually. During an interview last week, Trump unexpectedly claimed he wants to eliminate Puerto Rico’s $72 billion debt, saying “we’re going to work something out.” But in an indication that the president may not have understood what he was saying, White House budget director Mick Mulvaney quickly walked back Trump’s comments, telling CNN the next morning that “I wouldn’t take it word for word with that.”
Mulvaney has also walked back Trump’s campaign promises about eliminating the national debt. Asked during a TV interview in April about Trump’s promise to eliminate it by the end of his second term, Mulvaney replied, “It’s fairly safe to assume that was hyperbole.”