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The National Debt is NOT Impacted by the Stock Market

By: Michael Millington

In order to clarify the relationship between the national debt and the stock market, we have created this post just in case anyone had any questions. The national debt is created by national spending. When the government spends money it creates what is known as a deficit. The deficit can only be affected by government spending increasing or decreasing, or with any planned fluctuations in taxes paid by the American people. Generally speaking, when taxes increase, the national debt decreases.

What does this have to do with the stock market? In recent interviews with the press, Donald Trump has stated that the stock market has made a significant leap in growth during his time in office. He then alluded to the fact that the positive uptick in the stock market influences the nation’s overall debt situation.

Unfortunately, it does not.

As mentioned earlier, the national debt only has two main items that can impact it. Seeing as how the stock market is linked to private wealth and not to national spending, its impact would only be mildly relatable at best.

However, to state that the stock market increase has anything to do with the national debt directly would be wrong.