President Trump Said Stock Market Gains Reduced the National Debt. That’s Not How It Works

President Donald Trump argued Tuesday that gains in the stock market under his watch have helped reduce the national debt, a claim that economists said was head-scratching.

In an interview with Fox News’ Sean Hannity, Trump noted that the stock market has done well during his first year in office, then claimed that “maybe in a sense we’re reducing debt.”

“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 Fox News’ Sean Hannity in an interview on Tuesday. “Possibly picked up the whole thing in terms of the first nine months, in terms of value. 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. And we’re very, very happy with what’s happening on Wall Street.”

When pressed for clarification about the comment, a White House official told Fortune the President was simply stressing the economic gains that had been made under his Administration. “That means more money in the pocket of everyday citizens, and more circulating in our economy as a whole,” the official argued.

But any claim that stock market gains directly wipe out national debt is simply inaccurate. Like families, nations accrue debt when they spend more money than they take in. Consequently, debt is directly reduced when nations take in more money then they spend, a feat typically accomplished by raising taxes or cutting spending.

“A rise in the stock market does absolutely nothing to reduce the national debt directly,” Kenneth Rogoff, a Harvard economics professor and former chief economist at the International Monetary Fund, told Fortune. “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.”

Trump is, however, relatively accurate about the money borrowed under Obama and gains in the stock market, although his direct impact on the latter is debatable.

When Obama was inaugurated in 2009, the U.S. owed $10.6 trillion in debt, according to figures from the U.S. Treasury Department. When he left office this past January, the U.S. owed approximately $19.9 million. As of Oct. 10, the U.S. owes over $20 trillion in debt, a slight increase from January.

In terms of stock market gains, Trump is accurate about the increase, although the exact figure could be up for debate. An analysis of Bloomberg data between Nov. 8, 2016 and Oct. 11, 2017, shows that the S&P 500 market cap increased by $3.5 trillion, from $19.2 trillion to $22.7 trillion.

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