President Trump just made a rather interesting, borderline-odd claim.
I realize that Mr. Trump making outrageous claims is nothing especially newsworthy.
But this one is such an original thought that it warrants our attention.
The president said that the recent stock market gains offset the national debt:
As you know, the last eight years, [the federal government] borrowed more than it did in the whole history of our country… 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.
Many fear that America’s $20.4 trillion debt crisis is more worrisome than ever.
So is Trump’s claim a trick… or a treat?
Here’s what you need to know now.
Gambling in a Dangerous Game
President Trump’s claim has all the solidity of a financing plan from an Atlantic City casino.
At the current point in the cycle, with unemployment close to 4%, the U.S. budget should be in surplus.
In reality, however, the budget deficit for the year to September 2017 was $666 billion.
And Trump’s own tax plan is expected to blow out the deficit by an additional $1.5 trillion over the next 10 years.
And simply cheerleading about all the additional growth we’re going to get won’t help. For the last two quarters, we have been at the 3% growth President Trump promised. Yet the deficit is some $200 billion higher than originally projected.
So on the debt side, that $20 trillion in debt Lou mentioned above is projected to grow by close to $1 trillion a year — every year to infinity.
That figure will get worse with the baby boomers now retiring in droves since Social Security and Medicare run ever-increasing deficits. Not to mention the next economic downturn, which — with present policies — will blow the deficit out to $2 trillion a year.
In other words, the national debt isn’t something we should easily dismiss. Ignoring it certainly won’t solve the problem. And the stock market won’t either…