The Center for a Responsible Federal Budget estimates that Republican Donald Trump and Democrat Joe Biden would each send the federal debt spiraling higher during the next several years. Yahoo Finance Senior Columnist Rick Newman joins The First Trade with Alexis Christoforous to discuss.
ALEXIS CHRISTOFOROUS: And, you know, do you think one of the reasons why stocks are rallying the way they are, Rick, is because investors are saying, you know what? Whoever lands in the White House, right after the election we're going to get another stimulus package.
RICK NEWMAN: Well, why didn't they know that yesterday? I mean, I can't explain the connection between, you know, short-term moves in the market and something Trump tweets. I mean, we've seen this before. Guys, how many times when we were-- when Trump was going through the trade war did we see this pattern where, you know, oh the talks with China are going great? We're about to have a breakthrough. There's a tweet, and then stocks go up. And then Trump complains that China is not doing what it wants, and stocks go down.
I guess investors have to react to this, but honestly I think everybody should just be focused on whatever happens after November 3. And, you know, this is-- they call this the silly season for a reason leading right up to an election because crazy stuff happens except not much actual progress gets made in Washington.
ALEXIS CHRISTOFOROUS: Yeah, sadly you are right. And I also know you wrote an article about how President Trump and Vice President Joe Biden's campaign plans are going to contribute to the national budget deficit. Connect those dots for us, Rick.
RICK NEWMAN: Yeah, there's a new report out this morning by a group of deficit hawks in Washington just basically reminding us what we already know. We have an almost unsustainable level of debt right now. It's almost 100% of GDP. Both Biden and Trump, if they get their way and get to enact their plans if one or the other gets elected, each of them would push the total national debt up by around $5 billion during the next 10 years. Biden would actually go-- the debt would go up a little bit more under Biden than under Trump.
But we have to keep in mind that this analysis is based on if the candidate actually got all the things that he wants passed through Congress, and that's unlikely to happen. Nonetheless, the debt is going up no matter what. We were just talking about the possibility of another stimulus bill, whether small, medium, or gigantic, and that's going to push the debt up.
There are a lot of people who still care about this as an issue, and a Yahoo Finance-Harris Poll survey recently found that the majority of Americans said they would be willing. They were happy with it. Not happy-- I take that back, but they would accept higher taxes if it were to pay down the national debt. So a lot of people still think this is a big problem, and they're probably right.
BRIAN SOZZI: You know, Rick, I'm not happy about higher taxes. All right, Rick Newman, thanks so much.
RICK NEWMAN: Somebody's got to pay it, man.
BRIAN SOZZI: (LAUGHING) Fair enough.
RICK NEWMAN: Bye, guys.
ALEXIS CHRISTOFOROUS: Bye. Thanks, Rick.