President Donald Trump had an interview with Sean Hannity tonight. They touched on an array of issues tonight but let’s focus on Trump’s debt argument. I’ve been very concerned lately that after 8 years of warning about the threat of our every building debt the GOP, now in a position to do something, won’t do anything about it. The GOP loves to wax on passionately about fiscal responsibility when we are in the minority. However, whenever we take the reigns we always seem to suddenly be ok with deficit spending. This insanity is usually based off some mythical dynamic scoring that somehow will wipe the slate clean. It’s like the underwear gnomes from South Park. How to pay off the debt. 1) We increase deficit spending 2) ??? 3) no more national debt. If you think I’m joking look at the talking point from every member of Congress.
This is the typical GOP BS we always get when it comes to economic growth spurred by tax cuts. However, now that Trump is in the White House we have an entirely new level of crazy we intend to take this conversation. When talking about the debt, President Donald Trump had this to say about the national debt and the recent stock market boom….
I don’t even know how to understand this line of reasoning? When Trump thinks of the national debt does he think we are talking about household debt? This could make sense. If that was the case then the stock market would help with that because if people have more money they could pay off their debt. However, most stock market instruments are held by people who may have some debt but most have a positive net worth. The problem with most household debt is that it is held by families who have a negative net worth.
Let’s assume the President does know the national debt is the level the US government has borrowed. How does the stock market appreciation help with national debt? I guess you could argue with the market going up some people would cash out and pay capital gains tax and therefore more money would flow into the public treasury to help pay off the debt. If that were the case though the President should argue tax revenues are up. The problem is, I don’t think they are. They are high but there doesn’t seem to be any evidence that the stock market bump has done anything to help raise tax revenue. Mostly because all these market gains are on paper and have yet to be realized.
I’m not sure what Trump’s argument is here but whatever the argument is it is clealry wrong.