Donald Trump Takes Victory Lap On 'Hannity' In Feud With NFL

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President Donald Trump on Wednesday said that, "in a sense", gains made by private financial markets reduce the national debt. And yet we picked up $5.2 trillion just in the stock market.

"The country - we took it over and owed over $20 trillion", Trump said in an interview on Fox News, referring to the total national debt, which has hovered near $20 trillion since early 2016. "So, they borrowed more than $10 trillion dollars, right?"

"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.

What Trump is suggesting here is that because of the gains in the stock market - which have absolutely happened - the national debt is being reduced. "We are very honored by it and very, very happy by what's happening in Wall Street".

It's not a totally insane way to look at the issue. Last week, for instance, he told Fox News that he might "wipe out" Puerto Rico's $72 billion debt-something neither he nor the federal government has the power to do. While the stock market is in the midst of a historic-but not at all unprecedented!-run, which the president regularly brags about on Twitter, it has.

Would I have linked it that way? "It [stock market gains] reflects a stronger underlying economy that will eventually help reduce the national debt through higher tax revenues but there is just no connection".

The question of whether the US has too much, too little or just enough debt is for another day.

First of all, the president is showing he understands something that Republicans often pretend not to know: The trend in the total amount of nominal government debt is not the important matter for determining whether the government's debts are sustainable.

If the US grows its debt to build bridges to nowhere, then no, it's not a wise use of money.

The debt is money that the federal government has already spent.

And in any case, Trump's comments are a far better construct for evaluating the national debt than that of the zero-sum tea partiers.

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