Trump Has No Idea How the Debt Works

Donald Trump did an interview with Sean Hannity the other night. Okay, not really an interview. It was more like a fawning reception as Hannity sat at the foot of the pope. But much like the pope, what Trump had to say was almost entirely nonsensical. Like the bizarre claims he made about the stock market and the federal debt.

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“The country – we took it over and owed over $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, right? And yet, we picked up $5.2 trillion just in the stock market,” Trump told Sean Hannity. “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.”

Yes, the man is that clueless about the debt and how it operates. Remember, this is the same guy who suggested multiple times during the campaign that he could just renegotiate the terms of the bonds and would eliminate the entire federal debt in 8 years, not understanding that this would be the same thing as defaulting on the debt and would cause a massive worldwide economic collapse. He did that in business over and over again, leaving his creditors holding tens of billions of dollars in losses, but you can’t do that as a nation without doing enormous damage to the country.

And now he actually seems to think that “increasing values” in the stock market somehow brings down the federal debt. It doesn’t, of course, unless he wants to tax all those increased values at 100%. But in reality, the capital gains tax is only 15%. Also in reality, Trump’s budget proposals are only going to increase the federal debt at a higher rate than before through higher military spending and lower revenue due to the tax cuts he wants. So not only is he not lowering the debt, he’s raising it at a higher rate than before.

Also bear in mind that when he was running for office, he declared repeatedly that the stock market was overvalued, that it was a bubble that was about to burst because stock prices were just too high. But now they’re even higher and he suddenly thinks it’s a wonderful thing and he should get all the credit for it. He is both utterly clueless and an inveterate liar.

Rex Tillerson was right.

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