@Luís Andrade I was thinking more in the line of what data to be used, which methods etc. I don't know whether they look at budgets or results, whether it is centralized or dispersed, how often it is calculated etc
Most of the debts are held by domestic organisations or people. The problem is the interest. Japanese companies high profits oversea and feed the interest. For U.S., most of the debts are also held by domestic organisations and people. But the interest is paid by the federal reserve if the government has no ability to pay. U.S. didn't bankrupt because the dominant position of dollar.
*No 1: Don't Only Hope On Government's Responds On security Matter's And Economy growth.* *No 2: As An Individual You Should Be Safeguarded And Also Look For Different Self Business And Trade Not Only Waiting on Betterment of Stock market activities.* *No 3: Most Important Always Save The Little You Can And Think Of What To Do With It When It Become Good For Capital.* *It's 100% Good To Have Different Ways To Gain Income* *Because Government Have Failed us In Aspect Of Security, Economics Activities And Other Trading Systems*
The issue is less with how much he's spending and more what he's spending it on. There's a difference between spending $30,000 on a new car versus spending $30,000 on life saving medical bills.
I mean, in a sense yes, but both enable you to continue to make money. Cost benefit analysis works the same way with either expense. Just that while the car can lead to a return on investment (if you don’t already have one), a medical procedure will keep you from dying (or the roundabout way to say it would be that it would allow you to continue making money, rather than just dying lol).
I agree that there's a difference between how much is being spent and what it is being spent on. That is a valid point. I disagree, however, because I think for the most part the government shouldn't be doing either of those things. I do think that there is an argument to be made for the government to assist in extreme cases. My opinion is that offering "free" healthcare to everyone is a mistake because it does spike debt. Instead, I think the government should advocate for more affordable healthcare, but not by paying for it themselves. Just like with education, when government subsidizes something the price of that something will skyrocket.
@@fernandomaluenda4226 If you sincerely cared about the debt and cost/benefit you would cut the defence budget first, not free healthcare. Free healthcare keeps people fit and healthy and able to work. Defence is necessary to provide a secure environment but the US spends far, far beyond what is necessary simply to secure itself and its trade access.
@@tomx641 I don't want you to think that I don't believe affordable healthcare is important. I do sincerely care about the national debt. I think our opinions differ in what the responsibility of government is. I don't believe that it is the job of the government to offer free healthcare to all citizens. This way of thinking applies to other aspects of government, but healthcare is a hot topic this days. I do, however, believe that it is the role of government to defend its citizens from foreign threats. I would argue that today is a particularly bad time to cut the defense budget. I say this because of how hostile China has been in the China sea. If there was no urgent threat I'd probably be fine with temporarily cutting the defense budget. If you don't mind me asking, what other areas would you be willing to cut? I think this creates an interesting debate, because we obviously have different perspectives. Defense and healthcare are clearly huge chunks of the budget. Would you personally be willing to compromise by cutting both defense and healthcare budgets? If not, what else would need to be cut other than defense in order to achieve a compromise?
Deficit is the amount that spending exceeds income. The Federal Governments spending is divided up in two different categories, discretionary budget (they negotiate every year) and mandatory spending (previously enacted laws that enforces spending, can only be changed by passing a change to that law). Examples of mandatory spending are Medicare, Medicaid and Social Security. Examples of discretionary spending are the military, education and sallaries to federal employees.
@@GeneralBlackNorway THE PROBLEM with that, is the implication that "spending" has increased, based SOLELY on the Deficit or Debt. You CAN leave "spending" (the federal budget) EXACTLY where it is and increase the deficit or debt with a recession. (that was the stupid misdirection used to claim the Obama administration was a HUGE "spender". That is what is known as a "Lie".
Institute a wealth tax and equalize capital gains with income taxes. Uncap payroll taxes so that Social Security retirees aren’t struggling and can spend more money in the economy. Reduce military spending.
A wealth tax is a horrible idea. There is a reason why 12 OECD countries had wealth taxes in the 90's, while only 3 do so today: it simply doesn't work. There are a lot of more effective ways of tackling income inequality, like inheritance tax, capital gains tax, or just an increase in income tax for the super-rich.
@@fairlanemuscle It would be ill advised to claim that we could get out of this mess by simply ‘taxing the rich.’ A contractionary policy of reducing spending and raising taxes across the board (affecting all income earners) could prove success paralleling Canada’s debt reduction in the 90’s
We do not have the money, they have the superpowers support them We are poor countries we are not united together. Leave religious and racial differences aside and look at the children do not have the right to live a decent life we are dying we do not have financial support please help us we are dying we are killing we are only bleeding because We want our rights. Israel has murdered us. I am Palestinian. I feel deeply saddened in my heart. Please share our Palestinian cause, Bashir for the Israeli crime video, or support us with a post. We are dying. Their support is for them. When we hit one missile, the thousand come to us and there is no media focus on it. Please support us through social media. They have support. From the superpowers, we are poor, not monotheistic. Please share our story, even if with a letter from a word. We are bleeding and no one sees the true scenes. Have you seen Israel's devastating response? We are dying
@W̶I̶Z̶C̶O̶O̶シ Spending in defense is helping people. Think MARK THINK, if the chinese russians or who knows invade and destroy everything whats there to help people lifes?
@@askreddit2431 more spending in defenses is just not going to lower the deficit. Plus, More spending in defense just to help people; well, yeah helping one people killing others. This is a vicious cycle where the more we do this, the higher the national debt could become. The gop’s tax cuts strategies are also ineffective in mitigating national debt the United States had. We do need different investments other than focusing on defenses. Think about it, buddy.
@@askreddit2431 What do you mean? is it also too late to give tax cuts to wealthy corporations or spend about $800 billion on the military (which is bigger then the 10 next biggest spenders combined including Russia and China)? in fact a single payer system would be far less bureaucratic and less expensive according to the university of Massachusetts and even the libertarian koch brothers. and such a policy would benefit small business greatly and the economy as a whole. Don't give me this "iTs tOo lAte" almost any policy can be implemented it just takes the political will.
Regardless of where you stand on politics, non productive government spending, debt and inflation are all ways of taking wealth from the people into the hands of government and corporate elites. At the end of the day, it's the average tax payer who's going to shoulder all burdens
@Jacob Adams "a bit of inflation" is the norm when you don't have over spending in the trillions. No one is suggesting paying the dept back immediately (it's frankly impossible), but not only endlessly deferring it but also increasing it means only that the wealth that people currently have will lose its value.
@Luís Andrade Federal taxes take money out of the economy destroying dollars. They DON'T go to fund anything at all. Zero, zilch nada, nothing burger, 0. Its the other way around, that is literally the only thing federal taxes are NOT FOR. The US Govt issues the US dollar whenever it spends by crediting bank accounts. It does not need to tax you or I or anything else in order to be able to spend. You clearly have not done your homework.
@Luís Andrade Does a movie theatre need to collect tickets before it sells those tickets to movie goers? It makes total sense if you bother to listen and yes the fed govt is strict on fighting tax evasion. Look at what happened to the confederacy, tax evasion, hyperinflation, dead currency. 🤩🤩🤩
@Luís Andrade You do know that a movie theatre does not collect movie tickets then sell them right? That they need to sell those tickets before anyone out there can have tickets for that movie theatre to collect back? When you are the issuer of something, you don't collect it back to be able to issue it again. Same goes for Disney dollars, supermarket coupons, subway credits, chucky cheese coins. They need to be issued out into the world before they can be collected back. What happens when a movie theatre collects back the thing that it issues? What happens to a supermarket store coupon? The national debt is the amount of outstanding treasury bonds, treasury bonds which are bought with US dollars, US dollars which originate from Federal govt spending. The US Federal govt pays that debt every single year quite easily and without fail by simply crediting a checking account and debiting a savings account. The US Govt is monetarily sovereign, it does not work like a household or a business or like a city/state. It does not need revenue, what it does need is for people to need its dollars and that is what taxes do. Make people need dollars, taxes create unemployment, in order for the federal govt to bring private real resources into public use. Fed govt then pays the unemployed to do work, providing for a military, justice system and all else that we deem necessary for a Govt. The money left behind in the economy from Govt spending is used for markets to support the entire economy and so Govt taxation creates the markets and unemployment.
@RoastWorthy because republican’s raise debts so much but agrue for not spending when there is a Democrat president in the White House!!!! Hypocrites basically
@RoastWorthy they still ended up passing a 1.9T tax break for top1% and he did increase military budget a little but because of 2018 elections he didn’t get to pass anything major
@RoastWorthy well 58% Americans lives paychecks to paychecks so that spending didn’t help them at all and it was for high income earners people with less than 400k didn’t get any benefits and the right claims it don’t matter cuz rich will creat jobs but that’s not it when they ain’t pay fair wages and exploit everything no?
Trump actually tried but failed to reduce the trade deficit, through the "trade war" with China. The result was an actual $7 billion loss in consumer's welfare. He tried to impose taxes on imported goods, which made prices of imported goods increase. Consequence: many US firms also import goods, so domestic prices also increased. Trump's intention was to protect dying industries which clearly didn't work and made everything worse-off. Why is Biden's presidency worried about it again? Well, remember the stimulus package. It increases the trade deficit a lot. This debt has to be paid for? How do you think it's gonna happen? With more exports and less imports. How do you do that? You do a real depreciation of the US currency
No. First most empires are positioned as one power holding authority over other nations. Basically most people living in the Roman Empire did not consider themselves Roman. Most Americans by contrast do consider themselves American. So comparing America to an ancient empire is a bad analogy. The signs of a declining empire tend to be civil wars and attempts to break away from the larger authority. Despite what a minority of loud people might say very few Americans would seriously consider trying to establish there own country. Rome fell because they fought dozens of civil wars within a short period of time. Even then the extent to which they "fell" is highly debated. America has serious problems but we are not on the verge of collapse.
Time to invest, absolutely. And when times get better we implement some taxes. This whole idea that we can’t do anything when we’ve been moaning and complaining about the debt in the US for at least 20 years is just maddening.
Always crucial: show the government debt as a percentage of government revenue, not unrelated matters like national GDP. National GDP includes many things that aren't taxable, like the fictional revenue of house ownership (the "income" you get from living in your own house). The acceptable level of taxation varies from country to country, meaning that you can not compare government spending as a percentage of GDP if you want to compare different countries. The US federal government's income in 2019 was 3.4 trillion. The federal debt was 23 trillion. So the debt to income ratio of the US federal government was 676%. By comparison, the Greek national government's ratio in 2019 was 415%. Objectively, the US federal debt far outstrips Greece's national debt. For many countries, you could also look at the cost of servicing the debt as a percentage of total spending. However, that cost can change dramatically. Especially for the US, the danger is quite real that "the dollar's extraordinary privilege" will continue to diminish. So I don't think that that is quite as useful, but it does hit home with people when you tell them that the UK spends more on servicing its debt than on its military (around 50 billion), and the US spent more on servicing the federal debt (around 380 billion) than on all federal welfare spending in 2019.
@@lorenzofalorni3961 Lol I meant they shouldn’t be held as a perfect model when it comes to monetary policy. I wasn’t trying to say the literal gold standard if that’s what it came off like
@Luís Andrade TLDR were just pointing out an argument. if you watched the entire video, it is clear that they weren't defending it or any other posture, just showing what's going on and what both parties have to say
While that’s true, they’re a case study in large national debt not necessarily leading to proportional inflation. There are many reasons Japan’s economic growth has stalled, but the yen has stayed roughly in line with the dollar for a long time now.
this level of debt is getting out of control. The potential cost of getting the debt under control is what......not enough growth. The potential cost of not getting the debt under control is....the economy crashing and money becoming worthless. You be the judge, whats the smart play here.
the funny part is that the US way of managing national debt was supposed to stop the government from over spending. french politicians pushed the US system in 1971 or sometime close. the result is now a 350k eur debt for every french person alive. however, the definitive difference between France and the US is that everyone on earth is paying for the consequences caused by US national debt.
@@henrygustav7948 No but saying there is no causation between excessive money printing and inflation is like saying the earth is shaped as a donut. And yes on a basic level they do borrow money but do it by issuing state bonds etc.
@@mikkelhansen3714 1. define excessive 2. Money printing causes ZERO inflation. Saying money printing causes inflation is the epitome of misunderstanding of how our economic system works. Money has to be spent drawing on real resources to have ANY chance at being inflationary first of all. 3. No the US Federal govt does not borrow US dollars from anyone. US treasury bonds are issued in order to drain out banking reserves from the financial system in order to drive up interest rates and to give holders of US dollars an interest earning asset. In order for China purchase a treasury bond for example, the federal reserve will debit China's reserve account and credit their securities account. This is akin to moving money from your checking to your savings. It is not borrowing at all.
@@henrygustav7948 1. Too much:) (Different people have different opinions on whats too much, in economic theory you can see the difference between monetarism and keynesianism). 2. Just because there isnt a trend does not mean the two things arent linked, you can draw so many examples from the real world from excessive moneyprinting leading to extreme levels of inflation like argentina, the weimar republic, zimbabwe and so on (by itself it doesnt cause inflation you are correct) 3. Im just saying it in basic terms - afterall it’s still national debt:)
investments are the best way to climb back out of this mess. why have zero debt and a collapsed infrastructure? But tighten the belt on pointless/useless spending is always a must.
"The UK office is funnier than the US office. I don't make the rules." This, in a video that included an American football graphic, the U.S. national debt represented by a graphic of a piggy bank, and the Federal Reserve printing money via an office laser printer. The U.S. office is pretty damn funny as it stands. Also, kudos to TLDR for *not* resorting to showing that hoary national debt clock.
Tbh people already glaze over when a number gors above a billion. They average person isnt intelligent enough to handle scientific notations.....dispite learning it in school !
@@MrBizteck There's a great video by Tom Scott showing the striking difference between a million dollars and a billion. He uses a GPS and walks the distance of a million dollar bills put together. Then to show a billion dollars' distance, he drives on a fast highway around Nottingham for over an hour. He'd be on the road for, nearing, 146 days non-stop to match the US debt.
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A sustainable economy is not going to be one that has its foundation in unsustainable spending. Of course, internationally, no one is going to let the U.S. default because of the ramifications such an event would have on the global economy.
Yeah we are the worlds capital of spending. And China will not get their since most of their people will be old in a few years and it isn’t even a first world country (To be a first world country You need to have a good population that makes a lot of money per individual and China only has a lot of money due to quantity of taxable people not many people that are rich).
Got to love politics. Basically, no one really knows what to expect and they just take that as an argument like any other news depending on what works best for them.
Exactly, just like it takes a while, often more than a couple of years, for some economic policies to take effect. So when the economy is doing well the party in power will take credit, even though it's just as likely that the previous administration's policies were just coming into fruition, or slam the government when there's an economic downturn, when it was the fault of the previous administration. Kind of like when the Conservatives took power in 2010, and it was either the Chancellor or Treasury Minister, I can't remember which, left his replacement a note that said, the treasury has no money, none, good luck. So when the economy isn't great in 2010 and 2011, is that the Conservatives fault or Labour?
At least Democrats are consistent. Like this video explains, Republicans just use debt as an argument when they want to win elections and then do nothing about it when they're elected. Oh, they also use it as an excuse to give tax cuts to their donors and rich mates despite that making debt even worse
@@calebayton9073 That reminds me of how Merkel's government seemed to do well in reducing unemployment when really it was Schröder's much-hated massive job and social reforms coming into fruition.
@@scifino1 the unfortunate nature of economics is it's the science of human (economic) behaviour, and experimenting on humans is generally frowned upon so it's nigh on impossible to test any theories. No one really understands it, and it's ambiguity is an easy target for politicians to twist to suit their agenda
7:43 This is not the definition of inflation. When something inflates, it does not rise, it expands. Rising prices is one of the symptoms of inflation, but it is not the definition. It's the expansion of the amount of money in circulation.
I don´t think that´s the definition. Inflation in 2020 in the US was 1.25% according to a quick google search. But the money supply increased way more than that.
@@jibrilly Rising prices is the definition of inflation. "It's the expansion of the amount of money in circulation." That's called "monetary expansion".
the ''leftist'' Paul krugman: Pro free-market, anti rent control. anti farm subsidies, pro sweatshops(not really right-wing, but definitely not left wing), and of course, anti minimum wage increase.
Ok, I agree with Biden, but when you say, "Biden and other Economists" it sounds like you're saying that Biden is an Economist, and he isn't. I get that you're contrasting those Economists with the ones who disagree with Biden, but to make that clear you should say, "Other Economists, and the Biden Adminstration".
Borrowing money to invest is what caused the 1929 crash. Laws were passed to make it illegal, but not for the federal government. A crash due to private over-leveraging was pretty horrific, but over-leveraging of the controller of the default world’s currency could be much worse.
Good episode - please expand with how Modern Monetary Theory shows that places like the UK/Canada/US/Japan/Australia etc. don't need to worry about the $$$ of debt, but the risk of high inflation.
@Luís Andrade I guess whether it’s an accurate theory or a disproven pseudoscience depends on where you went to school. They’ve been teaching this stuff for a long time and I’m a bit surprised that suddenly everybody is an expert and has an opinion about it, even though most of them have never heard anyone but politicians speak on the matter.
We do not have the money, they have the superpowers support them We are poor countries we are not united together. Leave religious and racial differences aside and look at the children do not have the right to live a decent life we are dying we do not have financial support please help us we are dying we are killing we are only bleeding because We want our rights. Israel has murdered us. I am Palestinian. I feel deeply saddened in my heart. Please share our Palestinian cause, Bashir for the Israeli crime video, or support us with a post. We are dying. Their support is for them. When we hit one missile, the thousand come to us and there is no media focus on it. Please support us through social media. They have support. From the superpowers, we are poor, not monotheistic. Please share our story, even if with a letter from a word. We are bleeding and no one sees the true scenes. Have you seen Israel's devastating response? We are dying
@Luís Andrade just because you say its a scam does not make it so. I can also say Milton Friedman is the biggest scam artist in the history of economics responsible for policy which has led to the deaths of millions thru austerity. MMT doesn't give the Govt any more power than it already has. The Govt already has the power to manipulate the economy and has had it for thousands of years. Where do you think money comes from? It's hilarious that you have no clue about a subject and call it a scam.
America has the need to print in the region of 12.5 trillion dollars this year alone . The debt has been ballooning for years and no administration has been able to reduce it , this should tell you it's out of control .
I don’t think people realise how much a trillion or even a billion really is. This is completely unsustainable and can’t be fixed. People will always live in poverty from the mess that was created by their ancestors. All debt should be cancelled, that’s the only way I can see this ever working
Wonder where they are investing that debt in to anticipate all those return. At the end of the day, the debt is repaid by either increased tax or issuing new debt. The latter wont work if the interest rates start going up.
Increasing tax doesnt mean increasing the tax 'rate' if the ecomony grows then the tax intake grows too. Its like my business. I took a loan of 50k Now my Dept went up 300% ! But it allowed me to expand and my business grew by 1000% therefore the dept repaymens as a % of my business actually REDUCED !! and the chances of my place going bust is infinitely higher than the USA. Now dont get me wrong ... these numbers are scary Im not going to pretend Im gappy with that many zeros... but at least this time it seems to be planned instead of the last lots ... just give rich ppl tax breaks and hope they spend it ........
Japans national debt is multiple times what ours is. And they seem fine. Also every time we have paid down the national debt, it’s caused either a economic depression or a great recesssion. It’s because all the debt is is a record of how much money the goverment has put into the economy. Pay the debt down and you take money out of the private sector and cause a depression.
I remember the debt being around $17 Trillion 10 years ago. If the debt goes up by 1 Trillion a year, what will America look like in 200 years? Will the debt be a problem then?
So were the handful of presidents before him, yet they didn’t raise the deficit nearly as much as Reagan. Also, the Cold War was already cooling down when Reagan took office, but he started spending obscene amounts on the military anyway, which just raised tensions. We didn’t “get the USSR dismantled,” its collapse was inevitable after hardline communists staged a coup against Gorbachov, we had nothing to do with that.
The answer to the debt question is no, it is not OK. Some numbers. US population is about 330M. $1Bn is about $3 per person. $1Tr is about $3,000 per person. $26Tr is $78,000 per person. Not everyone pays taxes. Only 53% pay Federal taxes, The debt spread among taxpayers is significantly higher at around $150,000 per taxpayer.
It should be, it baffles me how they're immune to such a ludicrous amount of debt when most other countries are and practically every country owns a lot of their debt
To lower US debt, they should change big numbers into what they should be named. Their 27 trillion is what most people would call 27 billion and that already sounds so much better.
Gathering more debt might not be bad if you use it for future investment (as long as you don't keep repeating it and never pay back any debt) or put it in the hands of the people during a crisis, since this ends up in the economy better than with corporate bailouts, however increasing debt for something like tax cuts and Trumps bail out (that went mostly to large companies) or war/military is not a good thing.
We should be 'tightening our belt' with the military, increasing spending in healthcare, education, and infrastructure.. Then, we use taxation to ease any inflation risk by taking some money back out of circulation....
You guys kind of missed it on this video. Dems tend to favor spending, GOP favors tax cuts and neither party really cares about the deficit other than to attack the other side. It just seems like the GOP cares more about the debt because they’ve been out of power recently, but when in power the debt tends to go up a lot from tax cuts.
let's do a thought experiment: Bob works for a company Alpha, said company creates a product M for $2. Bob earns $2 as well and needs it to pay for product M. Of course you'd have a lot more people and companies and what not in the world, end of the day, you have a loop of products/services being made and people buying them as well as being paid for the work they do to provide such good or service. So you now have say $2 circulating in the system. Now, we have this idea of constant inflation, prices augment. Say M now costs $3, bob only has $2 but lets say that by some miracle (minimum wage augmentation or just regular augmentations from the company) happen, so now he earns $3. Great, now you need $3 in the system for it to run. Isn't there a problem there in the first place? Thing is, a lot of the economy is simulated and studied on simple models like that, although maybe a bit more advanced, the main idea is here and there's hardly anyway to simulate the entire universe and its intricacies. In a sense that's one way to explain why no one really knows what to expect, there's just too many variables to make a system accurate. On the other hand, you can also see that as an example to why the debt will always be something, and also why if based of the GDP it can lower like after WW2. Just to say, we shouldn't ignore it, but there's also a lot of unknown and misplaced ideas considering a lot of that comes from human made rules.
@Luís Andrade Except that's not necessarily wrong. Both are just 2 different models of the economy and the fact a lot of economist choose one over the other doesn't make it any more right, it might just be because it's more simple for their application case without needing 10000 parameters, or it can also be because the result is an advantage to their believes (yay politics). The economy as it is right now is anything but a perfect science, all models make simplification one way or another and that makes them right in some cases but not all.
Lower taxes regularly lead to higher tax yields And brings additional liberty to the people . Spending money on equity depresses the economy, raises spending and has no long term pay off.
People often say that the debt lands on their grandkids, etc., but that isn't true. Why? Because they also pass it on forever and ever. I know this is overly simple, but I've read that as long as economic growth exceeds the debt as a percentage of GDP, the growth will fund it. Plus, all of that spending goes into the economy. And Big Chief below is absolutely right.
@@joelkirkwood8224 when productivity rises but demand falls down then produced goods feel a fall in prices. Now falling prices means over a longer period of time it will be wrecked. Deflation is a central bank's worst nightmare m
@@joelkirkwood8224 another part of Japan's deflationary pressures is consumer confidence and underconsumption. People expect deflation, and deflation shows up as a result.
@@joelkirkwood8224 If you have debt the only thing that can pay it is with more debt. 40 in existence and 60 in printed borrowed money + 2 in interest means that you can only pay back your debt + interest if the money supply decreases or if someone is willing to borrow more.
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If you are holding cash, you have 100% risk of loosing money yearly due to inflation. If you are holding stock/forex for 2.5+ years, there is a 100% chance you won't loose money.
Do people realize how much money it is? It's like owing 27 million people 1 million dollars. Or 27000 people 1 billion. Or owing almost everyone (270 million) in the USA 100000 dollars.
Themselves. They fund the projects to build highways, repair bridges etc, that gets a load of people employed either directly or indirectly producing the raw materials or providing expertise. They all pay taxes, the businesses pay taxes, by the time all is said and done it shouldn't cost the government very much at all and will keep the economy ticking over.
@@fiddley it wouldn't cost the government a penny if they contracted a private company, at least relative to public works. Never forget that the New York City government spent $2 Million just to build a public bathroom in a park. The private sector is much more efficient overall. Plus, this is a Keynesian argument based on measuring the worth of a programme by the jobs it creates. This isn't economically sound. The value of a program is decided by the demand, not the number of jobs created. The efficiency of the private sector is based on the scarcity of resources, something a government doesn't need to worry about. So often, the government overspends a huge amount on a project that could be done for a fraction of the price in the private sector.
@@jibrilly Its true that government is not super cost efficient. I've seen $300 screwdrivers in the army. Lol However I wouldn't trust infrastructure to the corner cutting private market.
7:42 That's not the real definition of inflation, that's just an effect of inflation. The old definition of inflation was "an increase in supply of mony in circulation", and an effect of this is an increase in prices of things. Example: You have $1, currently the total supply of money in circulation is $1, so you control 100% of the money. And if you want to buy something, they want to sell it for 100% of the money which right now is $1, so you can buy this. But if inflation happens, and anther dollar is added to circulation there are now $2 in circulation, but you only have $1 which is now only worth 50% of the money. And if you want to buy the same thing, what they're selling is the same, so they still want 100% of money, but this is now $2, which you don't have. So you're buying power has gone down even though you have the same amount of money, and the price of things has gone up, even though it's the same item. basic inflation is an increase in supply of something, increase in supply of air in a balloon. You do not inflate when your hight increases, and the economy doesn't inflate when prices increase, those are just effects of inflation.
Current Account = Savings + (Taxes - Government spending) - Investment If there's a trade deficit, the current account will be negative. So how does the equation balance itself? With high savings. There's too much investment and spending and very little savings in the US. Second argument is that many people want to buy US assets, creating outflows of money from the US. According to this, as long as the dollar is strong and people want to buy US assets, a trade deficit is not of worry!
The sum of all money in the world is zero. Therefore a national debt of zero means that all debt to have money is on consumers or on entrepreneurs, if there isn't a huge amount of foreign assets.
Neither party is particularly interested in reducing debt levels. Democrats may invest in more social programs, but when the Republicans are in power they simply cut taxes, which has basically the same effect. All this argument about the debt level is political theatre. If anyone really cared, they'd DO something about it instead of simply talking about it and doing the opposite.
No one knows. The politician who is most persuasive wins. The intelligent public is an important part of this equation. In the end, we need a functional democracy to make sure bad leaders can be replaced.
Sounds like the Democrats heard of modern monetary theory which is the idea that if a country has a monopoly on its own currency it can print as much as it wants which has worked before but when you do it you’re playing with fire it’s can go amazing well or as I’ve heard people say can cause a worse economic collapse than the Great Depression so to any politicians who read this I wish you good luck because you’re playing with either the fall of the United States economy or the birth of a new economic age
Well thats true, so when goverment is spending money it always depends on what. If you spend money on cooperations helping them buy back stocks like in 2017 that inflates their prices.
Doesn't matter how much a government borrows. It's how they use that money that matters. National treasure is business. As long as you make more money out of the money you use, you can borrow quadrillions every year without a worry.
Budget surpluses are accounting dreams. You have to go back over 70 years to find the last time the national debt dropped, which was under Truman. Clinton came close, but the national debt still grew during his 2 terms.
Yeah, the poor as well. 1. The rich taste like overly expensive food that only exists to be expensive. 2. 'eat the rich' sounds amazing 3. The poor can't even eat a poisonous potato without the help of daddy government.
The President doesn't control spending, *Congress* does, specifically the House of Representatives. So, when you blame Ronald Reagan for bloating the deficit, most of the blame should go on Tip O'Neill, Democratic Speaker of the House. In fairness, Reagan had to sign every spending bill for it to go into law, so any situation in which there isn't bipartisan blame for any particular change is virtually non-existent. As for Sovereign default, you can't default on a currency you can print. Arguably the last time the U.S. had a sovereign default possibility was when Nixon took the U.S. off Bretton Woods, the last vestige of the Gold Standard.
The debt hit over 28 trillion more than 2 months ago. Your 26.7 trillion number is from august last year.
Newer data is often less accurate and isn't as peer reviewed as older data
I remember it was about 20 trillions before the pandemic.
@Luís Andrade Could be how the numbers are calculated and estimated
@Luís Andrade I was thinking more in the line of what data to be used, which methods etc. I don't know whether they look at budgets or results, whether it is centralized or dispersed, how often it is calculated etc
So the difference between ...... *FUCKING BIG* in August and *FUCKING BIGGER* in February?
John Anderson: "Mr. Reagen, lowering taxes, growing our millitary, and shrinking the debt is not all possible at once."
Sure it is. Reduce welfare spending.
@@fairlanemuscle cause you know its better to spend money fighting wars then it is to help the American people at home.
@@speedy01247tHaT'S sOcIalIsM
@@fairlanemuscle I know America just wants to murder people, but aren’t we supposed to idk help America first?
Oh it is!
Can you please do a video on how Japan’s debt works, how it’s able to print money, and how it’s able to avoid inflation?
Most of the debts are held by domestic organisations or people. The problem is the interest. Japanese companies high profits oversea and feed the interest. For U.S., most of the debts are also held by domestic organisations and people. But the interest is paid by the federal reserve if the government has no ability to pay. U.S. didn't bankrupt because the dominant position of dollar.
japan almost has deflation, which is a lot worse than inflation, they print a lot of money to moderate the deflation
Yes please!
0% growth
Didn’t they also freeze property prices? In the UK and US a lot of this inflation goes into property.
Damn... I thought my math test results were bad until I saw the title of this video. Holy, I have never seen so many zeros in my life.
Look up Avogadro's Number...6.023 X 10 to the 23rd power ! Even more Zeros! 😜
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Just want to point out: The St Louis FED’s Data arm is called FRED shown in the video. Always loved that
The issue is less with how much he's spending and more what he's spending it on. There's a difference between spending $30,000 on a new car versus spending $30,000 on life saving medical bills.
I mean, in a sense yes, but both enable you to continue to make money. Cost benefit analysis works the same way with either expense. Just that while the car can lead to a return on investment (if you don’t already have one), a medical procedure will keep you from dying (or the roundabout way to say it would be that it would allow you to continue making money, rather than just dying lol).
One is an investment to increase profits, while the other is an investment to prevent a reduction in profits.
I agree that there's a difference between how much is being spent and what it is being spent on. That is a valid point. I disagree, however, because I think for the most part the government shouldn't be doing either of those things. I do think that there is an argument to be made for the government to assist in extreme cases. My opinion is that offering "free" healthcare to everyone is a mistake because it does spike debt. Instead, I think the government should advocate for more affordable healthcare, but not by paying for it themselves. Just like with education, when government subsidizes something the price of that something will skyrocket.
@@fernandomaluenda4226 If you sincerely cared about the debt and cost/benefit you would cut the defence budget first, not free healthcare. Free healthcare keeps people fit and healthy and able to work. Defence is necessary to provide a secure environment but the US spends far, far beyond what is necessary simply to secure itself and its trade access.
@@tomx641 I don't want you to think that I don't believe affordable healthcare is important. I do sincerely care about the national debt. I think our opinions differ in what the responsibility of government is. I don't believe that it is the job of the government to offer free healthcare to all citizens. This way of thinking applies to other aspects of government, but healthcare is a hot topic this days. I do, however, believe that it is the role of government to defend its citizens from foreign threats. I would argue that today is a particularly bad time to cut the defense budget. I say this because of how hostile China has been in the China sea. If there was no urgent threat I'd probably be fine with temporarily cutting the defense budget.
If you don't mind me asking, what other areas would you be willing to cut? I think this creates an interesting debate, because we obviously have different perspectives. Defense and healthcare are clearly huge chunks of the budget. Would you personally be willing to compromise by cutting both defense and healthcare budgets? If not, what else would need to be cut other than defense in order to achieve a compromise?
"Deficit" DOES NOT EQUAL "Spending"
"Federal Budget" = "Spending".
Deficit is the amount that spending exceeds income. The Federal Governments spending is divided up in two different categories, discretionary budget (they negotiate every year) and mandatory spending (previously enacted laws that enforces spending, can only be changed by passing a change to that law). Examples of mandatory spending are Medicare, Medicaid and Social Security. Examples of discretionary spending are the military, education and sallaries to federal employees.
@@GeneralBlackNorway THE PROBLEM with that, is the implication that "spending" has increased, based SOLELY on the Deficit or Debt. You CAN leave "spending" (the federal budget) EXACTLY where it is and increase the deficit or debt with a recession. (that was the stupid misdirection used to claim the Obama administration was a HUGE "spender". That is what is known as a "Lie".
@@DrewHeyen ""Deficit" DOES NOT EQUAL "Spending""
I don't think they said those two are equal.
@@seneca983 IF you talk about "spending" and you provide the "deficit" as a measurement of it, then that is PRECISELY what you are doing.
@@DrewHeyen "and you provide the "deficit" as a measurement of it"
I don't think this video did that.
Institute a wealth tax and equalize capital gains with income taxes. Uncap payroll taxes so that Social Security retirees aren’t struggling and can spend more money in the economy. Reduce military spending.
So basically, treat the successful as your personal piggy bank.
Ya, let's see how long that's successful
A wealth tax is a horrible idea. There is a reason why 12 OECD countries had wealth taxes in the 90's, while only 3 do so today: it simply doesn't work. There are a lot of more effective ways of tackling income inequality, like inheritance tax, capital gains tax, or just an increase in income tax for the super-rich.
@@fairlanemuscle It would be ill advised to claim that we could get out of this mess by simply ‘taxing the rich.’ A contractionary policy of reducing spending and raising taxes across the board (affecting all income earners) could prove success paralleling Canada’s debt reduction in the 90’s
@@jarjarbinks6018 isn’t that just austerity lol
@@TheRealPingu I mean it’s worked before ig
lol I love how the title originally said $27 quadrillion
@Luís Andrade
It hurts my brain how that works lol.
We do not have the money, they have the superpowers support them We are poor countries we are not united together. Leave religious and racial differences aside and look at the children do not have the right to live a decent life we are dying we do not have financial support please help us we are dying we are killing we are only bleeding because We want our rights. Israel has murdered us. I am Palestinian. I feel deeply saddened in my heart. Please share our Palestinian cause, Bashir for the Israeli crime video, or support us with a post. We are dying. Their support is for them. When we hit one missile, the thousand come to us and there is no media focus on it. Please support us through social media. They have support. From the superpowers, we are poor, not monotheistic. Please share our story, even if with a letter from a word. We are bleeding and no one sees the true scenes. Have you seen Israel's devastating response? We are dying
@@withmariam8217 dont spam
Give it just a few more years
Oh god imagine if it actually gets to 27 quadrillion
How about we raise taxes and cut military spending? No, you actually want to cut taxes and raise military spending instead?
@W̶I̶Z̶C̶O̶O̶シ Spending in defense is helping people. Think MARK THINK, if the chinese russians or who knows invade and destroy everything whats there to help people lifes?
@@askreddit2431 more spending in defenses is just not going to lower the deficit. Plus, More spending in defense just to help people; well, yeah helping one people killing others. This is a vicious cycle where the more we do this, the higher the national debt could become. The gop’s tax cuts strategies are also ineffective in mitigating national debt the United States had. We do need different investments other than focusing on defenses. Think about it, buddy.
@@askreddit2431
with that logic why isn't their universal healthcare in America or universal collage?
@@maxmcg1621 because its too late to do it.
@@askreddit2431 What do you mean? is it also too late to give tax cuts to wealthy corporations or spend about $800 billion on the military (which is bigger then the 10 next biggest spenders combined including Russia and China)? in fact a single payer system would be far less bureaucratic and less expensive according to the university of Massachusetts and even the libertarian koch brothers. and such a policy would benefit small business greatly and the economy as a whole. Don't give me this "iTs tOo lAte" almost any policy can be implemented it just takes the political will.
Regardless of where you stand on politics, non productive government spending, debt and inflation are all ways of taking wealth from the people into the hands of government and corporate elites. At the end of the day, it's the average tax payer who's going to shoulder all burdens
@Jacob Adams of course it does, where do you think all the Money the federal government needs is coming from?
@Jacob Adams "a bit of inflation" is the norm when you don't have over spending in the trillions.
No one is suggesting paying the dept back immediately (it's frankly impossible), but not only endlessly deferring it but also increasing it means only that the wealth that people currently have will lose its value.
@Luís Andrade Federal taxes take money out of the economy destroying dollars. They DON'T go to fund anything at all. Zero, zilch nada, nothing burger, 0. Its the other way around, that is literally the only thing federal taxes are NOT FOR. The US Govt issues the US dollar whenever it spends by crediting bank accounts. It does not need to tax you or I or anything else in order to be able to spend. You clearly have not done your homework.
@Luís Andrade Does a movie theatre need to collect tickets before it sells those tickets to movie goers? It makes total sense if you bother to listen and yes the fed govt is strict on fighting tax evasion. Look at what happened to the confederacy, tax evasion, hyperinflation, dead currency. 🤩🤩🤩
@Luís Andrade You do know that a movie theatre does not collect movie tickets then sell them right? That they need to sell those tickets before anyone out there can have tickets for that movie theatre to collect back?
When you are the issuer of something, you don't collect it back to be able to issue it again. Same goes for Disney dollars, supermarket coupons, subway credits, chucky cheese coins. They need to be issued out into the world before they can be collected back.
What happens when a movie theatre collects back the thing that it issues? What happens to a supermarket store coupon?
The national debt is the amount of outstanding treasury bonds, treasury bonds which are bought with US dollars, US dollars which originate from Federal govt spending. The US Federal govt pays that debt every single year quite easily and without fail by simply crediting a checking account and debiting a savings account. The US Govt is monetarily sovereign, it does not work like a household or a business or like a city/state. It does not need revenue, what it does need is for people to need its dollars and that is what taxes do. Make people need dollars, taxes create unemployment, in order for the federal govt to bring private real resources into public use. Fed govt then pays the unemployed to do work, providing for a military, justice system and all else that we deem necessary for a Govt. The money left behind in the economy from Govt spending is used for markets to support the entire economy and so Govt taxation creates the markets and unemployment.
Suddenly now it's a problem again. I wonder what changed
@RoastWorthy because republican’s raise debts so much but agrue for not spending when there is a Democrat president in the White House!!!! Hypocrites basically
@RoastWorthy they still ended up passing a 1.9T tax break for top1% and he did increase military budget a little but because of 2018 elections he didn’t get to pass anything major
@RoastWorthy well 58% Americans lives paychecks to paychecks so that spending didn’t help them at all and it was for high income earners people with less than 400k didn’t get any benefits and the right claims it don’t matter cuz rich will creat jobs but that’s not it when they ain’t pay fair wages and exploit everything no?
Yeah the budget never gets brought up when we cut trillions in taxes for wealthy people
Trump actually tried but failed to reduce the trade deficit, through the "trade war" with China. The result was an actual $7 billion loss in consumer's welfare. He tried to impose taxes on imported goods, which made prices of imported goods increase. Consequence: many US firms also import goods, so domestic prices also increased. Trump's intention was to protect dying industries which clearly didn't work and made everything worse-off.
Why is Biden's presidency worried about it again? Well, remember the stimulus package. It increases the trade deficit a lot. This debt has to be paid for? How do you think it's gonna happen? With more exports and less imports. How do you do that? You do a real depreciation of the US currency
Notification 27 quadrillion debt
Me : This will be roller coaster. SELL ALL THE STOCKS
I feel like this is last chapter of every Empire in history. Nothing lasts forever
No. First most empires are positioned as one power holding authority over other nations. Basically most people living in the Roman Empire did not consider themselves Roman. Most Americans by contrast do consider themselves American. So comparing America to an ancient empire is a bad analogy.
The signs of a declining empire tend to be civil wars and attempts to break away from the larger authority. Despite what a minority of loud people might say very few Americans would seriously consider trying to establish there own country. Rome fell because they fought dozens of civil wars within a short period of time. Even then the extent to which they "fell" is highly debated.
America has serious problems but we are not on the verge of collapse.
Time to invest, absolutely. And when times get better we implement some taxes. This whole idea that we can’t do anything when we’ve been moaning and complaining about the debt in the US for at least 20 years is just maddening.
I hate that, the right loves to complain about the debt, but god forbid if we raise taxes to deal with the debt.
Always crucial: show the government debt as a percentage of government revenue, not unrelated matters like national GDP. National GDP includes many things that aren't taxable, like the fictional revenue of house ownership (the "income" you get from living in your own house). The acceptable level of taxation varies from country to country, meaning that you can not compare government spending as a percentage of GDP if you want to compare different countries.
The US federal government's income in 2019 was 3.4 trillion. The federal debt was 23 trillion. So the debt to income ratio of the US federal government was 676%. By comparison, the Greek national government's ratio in 2019 was 415%. Objectively, the US federal debt far outstrips Greece's national debt.
For many countries, you could also look at the cost of servicing the debt as a percentage of total spending. However, that cost can change dramatically. Especially for the US, the danger is quite real that "the dollar's extraordinary privilege" will continue to diminish. So I don't think that that is quite as useful, but it does hit home with people when you tell them that the UK spends more on servicing its debt than on its military (around 50 billion), and the US spent more on servicing the federal debt (around 380 billion) than on all federal welfare spending in 2019.
I don’t think japan should be held as a gold standard when it comes to monetary policy
There isn't enough gold in the world to reform a gold standard, if we did that gold would become pretty much worthless
@@lorenzofalorni3961 Lol I meant they shouldn’t be held as a perfect model when it comes to monetary policy. I wasn’t trying to say the literal gold standard if that’s what it came off like
@Luís Andrade TLDR were just pointing out an argument. if you watched the entire video, it is clear that they weren't defending it or any other posture, just showing what's going on and what both parties have to say
While that’s true, they’re a case study in large national debt not necessarily leading to proportional inflation. There are many reasons Japan’s economic growth has stalled, but the yen has stayed roughly in line with the dollar for a long time now.
Only viable assets like food, fuels., technological equipment.
Will be more useful than gold.
What do you do with gold.
Very little I suspect..
this level of debt is getting out of control. The potential cost of getting the debt under control is what......not enough growth. The potential cost of not getting the debt under control is....the economy crashing and money becoming worthless. You be the judge, whats the smart play here.
0:58 Missed opportunity to have both kinds of football.
the funny part is that the US way of managing national debt was supposed to stop the government from over spending.
french politicians pushed the US system in 1971 or sometime close. the result is now a 350k eur debt for every french person alive.
however, the definitive difference between France and the US is that everyone on earth is paying for the consequences caused by US national debt.
Crying economists: No you can’t borrow more money without inflation
USA government: Haha printer go brrrr
Lol USA Govt doesn't borrow money and printing money does not automatically cause inflation.
Dollars are global. Share that pain, monopolize that power baby.
@@henrygustav7948 No but saying there is no causation between excessive money printing and inflation is like saying the earth is shaped as a donut. And yes on a basic level they do borrow money but do it by issuing state bonds etc.
@@mikkelhansen3714 1. define excessive
2. Money printing causes ZERO inflation. Saying money printing causes inflation is the epitome of misunderstanding of how our economic system works. Money has to be spent drawing on real resources to have ANY chance at being inflationary first of all.
3. No the US Federal govt does not borrow US dollars from anyone. US treasury bonds are issued in order to drain out banking reserves from the financial system in order to drive up interest rates and to give holders of US dollars an interest earning asset. In order for China purchase a treasury bond for example, the federal reserve will debit China's reserve account and credit their securities account. This is akin to moving money from your checking to your savings. It is not borrowing at all.
@@henrygustav7948 1. Too much:) (Different people have different opinions on whats too much, in economic theory you can see the difference between monetarism and keynesianism). 2. Just because there isnt a trend does not mean the two things arent linked, you can draw so many examples from the real world from excessive moneyprinting leading to extreme levels of inflation like argentina, the weimar republic, zimbabwe and so on (by itself it doesnt cause inflation you are correct) 3. Im just saying it in basic terms - afterall it’s still national debt:)
investments are the best way to climb back out of this mess. why have zero debt and a collapsed infrastructure? But tighten the belt on pointless/useless spending is always a must.
"The UK office is funnier than the US office. I don't make the rules."
This, in a video that included an American football graphic, the U.S. national debt represented by a graphic of a piggy bank, and the Federal Reserve printing money via an office laser printer. The U.S. office is pretty damn funny as it stands. Also, kudos to TLDR for *not* resorting to showing that hoary national debt clock.
If you think that's bad what till you see their "corporate" debt...even their "consumer" debt is eye-watering...
We should start using scientific notation for debt. 2.7x10^13
eh, maybe when it becomes x10^14 in a couple of weeks.
Tbh people already glaze over when a number gors above a billion.
They average person isnt intelligent enough to handle scientific notations.....dispite learning it in school !
@MrBiztech isn’t*, some people aren’t intelligent enough to remember proper grammar.
@@MrBizteck There's a great video by Tom Scott showing the striking difference between a million dollars and a billion. He uses a GPS and walks the distance of a million dollar bills put together. Then to show a billion dollars' distance, he drives on a fast highway around Nottingham for over an hour. He'd be on the road for, nearing, 146 days non-stop to match the US debt.
Yes, it is an issue. Debt destroys economic growth, our interest payment before covid spending was 360 billion, imagine how much we’ll spend in 2023
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A sustainable economy is not going to be one that has its foundation in unsustainable spending. Of course, internationally, no one is going to let the U.S. default because of the ramifications such an event would have on the global economy.
US cannot default on it'sdebts since it is a currency issuer, unless it willfully caps there spending.
Yeah we are the worlds capital of spending. And China will not get their since most of their people will be old in a few years and it isn’t even a first world country (To be a first world country You need to have a good population that makes a lot of money per individual and China only has a lot of money due to quantity of taxable people not many people that are rich).
@@supergamergrill7734 They just changed their 2 child policy to 3
@@mikkelhansen3714 Soo..
@@supergamergrill7734 so they get more babies:)
Got to love politics.
Basically, no one really knows what to expect and they just take that as an argument like any other news depending on what works best for them.
Exactly, just like it takes a while, often more than a couple of years, for some economic policies to take effect. So when the economy is doing well the party in power will take credit, even though it's just as likely that the previous administration's policies were just coming into fruition, or slam the government when there's an economic downturn, when it was the fault of the previous administration. Kind of like when the Conservatives took power in 2010, and it was either the Chancellor or Treasury Minister, I can't remember which, left his replacement a note that said, the treasury has no money, none, good luck. So when the economy isn't great in 2010 and 2011, is that the Conservatives fault or Labour?
At least Democrats are consistent. Like this video explains, Republicans just use debt as an argument when they want to win elections and then do nothing about it when they're elected. Oh, they also use it as an excuse to give tax cuts to their donors and rich mates despite that making debt even worse
@@calebayton9073 That reminds me of how Merkel's government seemed to do well in reducing unemployment when really it was Schröder's much-hated massive job and social reforms coming into fruition.
@@scifino1 the unfortunate nature of economics is it's the science of human (economic) behaviour, and experimenting on humans is generally frowned upon so it's nigh on impossible to test any theories. No one really understands it, and it's ambiguity is an easy target for politicians to twist to suit their agenda
@@calebayton9073 The private sector drives eht economy. Politicians just produce a few cherries on the cake.
7:43
This is not the definition of inflation. When something inflates, it does not rise, it expands. Rising prices is one of the symptoms of inflation, but it is not the definition. It's the expansion of the amount of money in circulation.
I don´t think that´s the definition. Inflation in 2020 in the US was 1.25% according to a quick google search. But the money supply increased way more than that.
@@azur0x going by simple English, one can determine that it isn't the definition of inflation. Inflation is when something expands, not rises.
@@jibrilly
It's English, I wouldn't be surprised if the convention isn't as you say because English is anything but logical.
@@jibrilly Rising prices is the definition of inflation.
"It's the expansion of the amount of money in circulation."
That's called "monetary expansion".
You used Paul Krugman, who is famous for being left-wing and pro-debt/spending, to claim that economists don’t know if excessive debt is bad.
But to be fair it is pretty hard to find one best solution even for economists
...isn't that the point? He's quoting the pro-debt guys and just saying what they are saying to justify the spending.
the ''leftist'' Paul krugman:
Pro free-market, anti rent control. anti farm subsidies, pro sweatshops(not really right-wing, but definitely not left wing), and of course, anti minimum wage increase.
@@selahanany5645 He works at Princeton. Enough said. PU is so far left they can see Russia from their house. I live one town over.
It’s not an issue. We don’t owe the federal reserve a thing
Ok, I agree with Biden, but when you say, "Biden and other Economists" it sounds like you're saying that Biden is an Economist, and he isn't. I get that you're contrasting those Economists with the ones who disagree with Biden, but to make that clear you should say, "Other Economists, and the Biden Adminstration".
Borrowing money to invest is what caused the 1929 crash. Laws were passed to make it illegal, but not for the federal government. A crash due to private over-leveraging was pretty horrific, but over-leveraging of the controller of the default world’s currency could be much worse.
Good episode - please expand with how Modern Monetary Theory shows that places like the UK/Canada/US/Japan/Australia etc. don't need to worry about the $$$ of debt, but the risk of high inflation.
@Luís Andrade I guess whether it’s an accurate theory or a disproven pseudoscience depends on where you went to school. They’ve been teaching this stuff for a long time and I’m a bit surprised that suddenly everybody is an expert and has an opinion about it, even though most of them have never heard anyone but politicians speak on the matter.
We do not have the money, they have the superpowers support them We are poor countries we are not united together. Leave religious and racial differences aside and look at the children do not have the right to live a decent life we are dying we do not have financial support please help us we are dying we are killing we are only bleeding because We want our rights. Israel has murdered us. I am Palestinian. I feel deeply saddened in my heart. Please share our Palestinian cause, Bashir for the Israeli crime video, or support us with a post. We are dying. Their support is for them. When we hit one missile, the thousand come to us and there is no media focus on it. Please support us through social media. They have support. From the superpowers, we are poor, not monotheistic. Please share our story, even if with a letter from a word. We are bleeding and no one sees the true scenes. Have you seen Israel's devastating response? We are dying
@Luís Andrade Disproven by who? Modern monetary theory has never had any of it's main points disproven by anyone in its 25 years of research +
@Luís Andrade just because you say its a scam does not make it so. I can also say Milton Friedman is the biggest scam artist in the history of economics responsible for policy which has led to the deaths of millions thru austerity.
MMT doesn't give the Govt any more power than it already has. The Govt already has the power to manipulate the economy and has had it for thousands of years. Where do you think money comes from? It's hilarious that you have no clue about a subject and call it a scam.
@@henrygustav7948 you clearly have zero understanding of austerity or Milton Friedman, do better.
7:55 as a Zimbabwean I am deeply insulted that our spot as the go to inflation example has been taken from us
1:38 For better or for WORSE. Not worst.
Heres an update 28.9 trillón now and most likely gonna grow more
America has the need to print in the region of 12.5 trillion dollars this year alone .
The debt has been ballooning for years and no administration has been able to reduce it , this should tell you it's out of control .
I don’t think people realise how much a trillion or even a billion really is.
This is completely unsustainable and can’t be fixed. People will always live in poverty from the mess that was created by their ancestors.
All debt should be cancelled, that’s the only way I can see this ever working
Wonder where they are investing that debt in to anticipate all those return. At the end of the day, the debt is repaid by either increased tax or issuing new debt. The latter wont work if the interest rates start going up.
true
Increasing tax doesnt mean increasing the tax 'rate' if the ecomony grows then the tax intake grows too.
Its like my business. I took a loan of 50k
Now my Dept went up 300% ! But it allowed me to expand and my business grew by 1000% therefore the dept repaymens as a % of my business actually REDUCED !!
and the chances of my place going bust is infinitely higher than the USA.
Now dont get me wrong ... these numbers are scary Im not going to pretend Im gappy with that many zeros... but at least this time it seems to be planned instead of the last lots ... just give rich ppl tax breaks and hope they spend it ........
@@MrBizteck The economy is growing trough debt. With what money are people going to buy your goods?
The crocodile tears over the deficit are particularly annoying because of the GOP tax cuts on the wealthy.
Is it really necessary to heavily emphasize the end of every sentence?
You don't have to push out all the air in your belly when there's a dot.
Japans national debt is multiple times what ours is. And they seem fine. Also every time we have paid down the national debt, it’s caused either a economic depression or a great recesssion. It’s because all the debt is is a record of how much money the goverment has put into the economy. Pay the debt down and you take money out of the private sector and cause a depression.
Huge Spending and Debt has to be backed up by huger return and growth
Remember when John McCain talked about 10 trillion national debt in 2008, as if 10 trillion was high?
They're probably going to "inflate the debt away." IE, print so much money that the debt payment becomes trivial as a percent of the budget.
Considering inflation is the primary driver of wage increase and inflation and wages have been stagnant for 50 years....
I remember the debt being around $17 Trillion 10 years ago. If the debt goes up by 1 Trillion a year, what will America look like in 200 years? Will the debt be a problem then?
In all fairness to Reagan, he was also fighting a war...the Cold War (and we won, after we got the USSR dismantled)
So were the handful of presidents before him, yet they didn’t raise the deficit nearly as much as Reagan.
Also, the Cold War was already cooling down when Reagan took office, but he started spending obscene amounts on the military anyway, which just raised tensions. We didn’t “get the USSR dismantled,” its collapse was inevitable after hardline communists staged a coup against Gorbachov, we had nothing to do with that.
@@larana2 also leadership was increasingly incompetent
The answer to the debt question is no, it is not OK. Some numbers. US population is about 330M. $1Bn is about $3 per person. $1Tr is about $3,000 per person. $26Tr is $78,000 per person. Not everyone pays taxes. Only 53% pay Federal taxes, The debt spread among taxpayers is significantly higher at around $150,000 per taxpayer.
The news makes more sense when spoken in British
It should be, it baffles me how they're immune to such a ludicrous amount of debt when most other countries are and practically every country owns a lot of their debt
Noticed you left trump out if the list of republicans increasing the debt
Exactly, he blew it up. 7 trillion in four years!!! Nothing to show!
To lower US debt, they should change big numbers into what they should be named. Their 27 trillion is what most people would call 27 billion and that already sounds so much better.
Gathering more debt might not be bad if you use it for future investment (as long as you don't keep repeating it and never pay back any debt) or put it in the hands of the people during a crisis, since this ends up in the economy better than with corporate bailouts, however increasing debt for something like tax cuts and Trumps bail out (that went mostly to large companies) or war/military is not a good thing.
It ended up in the stock market, housing and capital goods. The poorest became poorer and the richest richer from exactly that policy.
We should be 'tightening our belt' with the military, increasing spending in healthcare, education, and infrastructure..
Then, we use taxation to ease any inflation risk by taking some money back out of circulation....
You guys kind of missed it on this video. Dems tend to favor spending, GOP favors tax cuts and neither party really cares about the deficit other than to attack the other side. It just seems like the GOP cares more about the debt because they’ve been out of power recently, but when in power the debt tends to go up a lot from tax cuts.
i learned a ton from this video, thank you so much!
Are you a Banker?
@@droldsw31 nope i’m just an informed citizen who, as it turns out, is not very informed on this issue and is learning new things!
No biggie for the US, just get them printers running!!
The US needs to be more worried about China de-stabilising the USD.
Not to mention Russia de-stabilizing the fabric of society through misinformation.
@@TheEvertw More worried about China everyone knows about Russia thats an old threat
@@the_expidition427 China did not cause the jan 6 insurrection. Russian mis-information and election collusion did.
let's do a thought experiment:
Bob works for a company Alpha, said company creates a product M for $2. Bob earns $2 as well and needs it to pay for product M. Of course you'd have a lot more people and companies and what not in the world, end of the day, you have a loop of products/services being made and people buying them as well as being paid for the work they do to provide such good or service.
So you now have say $2 circulating in the system. Now, we have this idea of constant inflation, prices augment. Say M now costs $3, bob only has $2 but lets say that by some miracle (minimum wage augmentation or just regular augmentations from the company) happen, so now he earns $3. Great, now you need $3 in the system for it to run.
Isn't there a problem there in the first place?
Thing is, a lot of the economy is simulated and studied on simple models like that, although maybe a bit more advanced, the main idea is here and there's hardly anyway to simulate the entire universe and its intricacies.
In a sense that's one way to explain why no one really knows what to expect, there's just too many variables to make a system accurate.
On the other hand, you can also see that as an example to why the debt will always be something, and also why if based of the GDP it can lower like after WW2.
Just to say, we shouldn't ignore it, but there's also a lot of unknown and misplaced ideas considering a lot of that comes from human made rules.
@Luís Andrade Except that's not necessarily wrong. Both are just 2 different models of the economy and the fact a lot of economist choose one over the other doesn't make it any more right, it might just be because it's more simple for their application case without needing 10000 parameters, or it can also be because the result is an advantage to their believes (yay politics). The economy as it is right now is anything but a perfect science, all models make simplification one way or another and that makes them right in some cases but not all.
Thanks to the MMT and similar ideas Both parties think its okay to spend recklessly when they enter Office.
No they did before, which is what mmt is describing.
Loved the video, keep up the great work!
I love your content!
We have reached the vertical part of the log, buy commodities and get that printed money!
ok reagan
Lower taxes regularly lead to higher tax yields And brings additional liberty to the people . Spending money on equity depresses the economy, raises spending and has no long term pay off.
People often say that the debt lands on their grandkids, etc., but that isn't true. Why? Because they also pass it on forever and ever. I know this is overly simple, but I've read that as long as economic growth exceeds the debt as a percentage of GDP, the growth will fund it. Plus, all of that spending goes into the economy. And Big Chief below is absolutely right.
Japan 🗾 had an issue with a economic deflation.(negative inflation). Its only option was inflation.
Legit question, how does that work? Money becomes more valuable than less? How is that an issue?
@@joelkirkwood8224 when productivity rises but demand falls down then produced goods feel a fall in prices. Now falling prices means over a longer period of time it will be wrecked. Deflation is a central bank's worst nightmare m
@@joelkirkwood8224 another part of Japan's deflationary pressures is consumer confidence and underconsumption. People expect deflation, and deflation shows up as a result.
@@joelkirkwood8224 If you have debt the only thing that can pay it is with more debt.
40 in existence and 60 in printed borrowed money + 2 in interest means that you can only pay back your debt + interest if the money supply decreases or if someone is willing to borrow more.
reagan also presided over a world war.....we just don't call it that
Thanks for this amazing information !! If you don't find a means of multiplying money, you will wake up one day to realise that the money you thought you had, has finished. Investment is key, I pray that anyone who reads this will be successful in life .
I agree with you. Investment is the key to sustaining your financial longevity. And not just any investment but an investment with guaranteed return.
To me there's no risk compared to having your money in the bank
If you are holding cash, you have 100% risk of loosing money yearly due to inflation.
If you are holding stock/forex for 2.5+ years, there is a 100% chance you won't loose money.
So where is the risk?
Wow, she's really awesome and good, that's exactly what I need now
Do people realize how much money it is? It's like owing 27 million people 1 million dollars. Or 27000 people 1 billion. Or owing almost everyone (270 million) in the USA 100000 dollars.
I think investing is a good strategy but what specifically are they investing in?
Themselves. They fund the projects to build highways, repair bridges etc, that gets a load of people employed either directly or indirectly producing the raw materials or providing expertise. They all pay taxes, the businesses pay taxes, by the time all is said and done it shouldn't cost the government very much at all and will keep the economy ticking over.
@@fiddley it wouldn't cost the government a penny if they contracted a private company, at least relative to public works. Never forget that the New York City government spent $2 Million just to build a public bathroom in a park. The private sector is much more efficient overall. Plus, this is a Keynesian argument based on measuring the worth of a programme by the jobs it creates. This isn't economically sound. The value of a program is decided by the demand, not the number of jobs created. The efficiency of the private sector is based on the scarcity of resources, something a government doesn't need to worry about. So often, the government overspends a huge amount on a project that could be done for a fraction of the price in the private sector.
@@jibrilly Its true that government is not super cost efficient. I've seen $300 screwdrivers in the army. Lol
However I wouldn't trust infrastructure to the corner cutting private market.
It is all about politics. We increase revenues and decrease expenses.This is how you balance the budget. Spending money on wars is unnecessary.
7:42 That's not the real definition of inflation, that's just an effect of inflation. The old definition of inflation was "an increase in supply of mony in circulation", and an effect of this is an increase in prices of things.
Example:
You have $1, currently the total supply of money in circulation is $1, so you control 100% of the money. And if you want to buy something, they want to sell it for 100% of the money which right now is $1, so you can buy this.
But if inflation happens, and anther dollar is added to circulation there are now $2 in circulation, but you only have $1 which is now only worth 50% of the money. And if you want to buy the same thing, what they're selling is the same, so they still want 100% of money, but this is now $2, which you don't have.
So you're buying power has gone down even though you have the same amount of money, and the price of things has gone up, even though it's the same item.
basic inflation is an increase in supply of something, increase in supply of air in a balloon. You do not inflate when your hight increases, and the economy doesn't inflate when prices increase, those are just effects of inflation.
Actually inflation seems to be more towards demand pull and cost push. Printing more money causes demand pull inflation
Current Account = Savings + (Taxes - Government spending) - Investment
If there's a trade deficit, the current account will be negative. So how does the equation balance itself? With high savings. There's too much investment and spending and very little savings in the US.
Second argument is that many people want to buy US assets, creating outflows of money from the US. According to this, as long as the dollar is strong and people want to buy US assets, a trade deficit is not of worry!
Economies can have a _little_ inflation
Inflation makes it easier to pay off debt.
@@TheEvertw ah yes fuck your savings acount we want money and we need it now.
@@TimTomTem Go ahead, save yourselves into recession.
as a treat
Under the current state of monetary policy the national debt can't never go to 0
The sum of all money in the world is zero.
Therefore a national debt of zero means that all debt to have money is on consumers or on entrepreneurs, if there isn't a huge amount of foreign assets.
Debt won't matter when hyper inflation starts so I wouldn't worry
$100 loaf of bread? I can see it
Yeh not gonna happen
Problem with arguing it's an investment is assuming the spending will pay off.
Japan isn’t a great example, considering it has had no real wage growth and no real growth in economic output in a few decades at this point.
Neither party is particularly interested in reducing debt levels.
Democrats may invest in more social programs, but when the Republicans are in power they simply cut taxes, which has basically the same effect.
All this argument about the debt level is political theatre. If anyone really cared, they'd DO something about it instead of simply talking about it and doing the opposite.
I say tightening the belt sounds nice, and keeping it tight even better.
Great video!
Dude talk about the current conflict of Israel and Palestine
No one knows. The politician who is most persuasive wins. The intelligent public is an important part of this equation. In the end, we need a functional democracy to make sure bad leaders can be replaced.
Sounds like the Democrats heard of modern monetary theory which is the idea that if a country has a monopoly on its own currency it can print as much as it wants which has worked before but when you do it you’re playing with fire it’s can go amazing well or as I’ve heard people say can cause a worse economic collapse than the Great Depression so to any politicians who read this I wish you good luck because you’re playing with either the fall of the United States economy or the birth of a new economic age
We have had massive inflation since 2008. It's been in real estate and the stock market. Those with assets have become richer and those without poorer
Well thats true, so when goverment is spending money it always depends on what. If you spend money on cooperations helping them buy back stocks like in 2017 that inflates their prices.
To be fair: Ronald Reagan was fighting the cold war.
To be fair: Ronald Reagan was escalating the cold war.
Doesn't matter how much a government borrows. It's how they use that money that matters.
National treasure is business. As long as you make more money out of the money you use, you can borrow quadrillions every year without a worry.
Democrats may be carefree, but they’re the ones more often with budget surpluses.
Budget surpluses are accounting dreams. You have to go back over 70 years to find the last time the national debt dropped, which was under Truman. Clinton came close, but the national debt still grew during his 2 terms.
Even though I grew up in America as a black man and had to deal with racism which afected me everyday I pray for my country
It may be time to eat the rich.
Yeah, the poor as well.
1. The rich taste like overly expensive food that only exists to be expensive.
2. 'eat the rich' sounds amazing
3. The poor can't even eat a poisonous potato without the help of daddy government.
The question should not be is it an issue. The question should be how do you solve this issue.
Your accent is cute.
8:00 A completely different situation they printed money to pay wartime reparations.
Biden is so smart America has huge dept let’s spend a ton of money we don’t have
The President doesn't control spending, *Congress* does, specifically the House of Representatives. So, when you blame Ronald Reagan for bloating the deficit, most of the blame should go on Tip O'Neill, Democratic Speaker of the House. In fairness, Reagan had to sign every spending bill for it to go into law, so any situation in which there isn't bipartisan blame for any particular change is virtually non-existent.
As for Sovereign default, you can't default on a currency you can print. Arguably the last time the U.S. had a sovereign default possibility was when Nixon took the U.S. off Bretton Woods, the last vestige of the Gold Standard.
1st
It says "investment spending" but it feels like money laundering
3rd
The debt has increased since this video.