The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
They do say gold will crash in a liquidity crunch However, many of those holding precious metals are preparing for such an event. So they are unlikely to be forced sellers. The paper market would tank and hopefully collapse.
I wholeheartedly concur, which is why I appreciate giving an investment coach the power of decision-making. Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over 1.5 million dollars working with an investment coach for more than two years.
My CFA ’Melissa Terri Swayne’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
She claiming US can print money wo using treasury debt as collateral aka MMT. USD is GRC, If dollars are backed by nothing globally or not recycled back to US by buying treasury debt then countries will just funnel that liquidity in commodities which would causes inflation and US congress wont have the ability to double spend with no treasury issuance....
Printing money and tax the liquidity to create economic activity is like injecting her1one into body and doing detox same time to get a positive reaction is assinine. The economy and markets don't work this way
Our interest payments are $1T. This is the second biggest line item only to SS. A day will come when no one wants our bonds and we're in trouble in when that day happens
@@JohnSmith-ft4fzthey sell bonds because there is currently a demand market for the low risk financial instrument of the u.s. bond backed by the full faith and credit of the U.S. Federal government which has issued the debt in the sovereign fiat currency of the U.S. dollar. If we were still on the gold standard then we would be in a heap of trouble. Our thinking as a nation and the way our politicians talk about the debt is still in line with the thought process when we were on the gold standard.
Actually those are old numbers. In the past month, the interest on the debt was the #1 expense over Social Security, which is usually the biggest payment. This trend is only going to get worse.
I think you are way to optimistic on the debt level in 50 years being $80 trillion. $800 trillion in debt the number will be in 50 years. I think the currency will likely fail in the next 50 years.
I just watched a 1992 message by Ross Perot that said “we are sitting on a ticking timebomb” . He said “in five years this thing is coming back to bite us.” That was 32 years ago. The debt was 4 trillion.
So a hypochondriac who puts on just 5 extra pounds says that being 7 pounds overweight will cause a heart attack… because he was wrong about that, that means that being 300 pounds overweight is also not big deal?
The interviewers didn’t understand anything this lady said, because it simply makes no sense. It’s that easy. You can try to explain all you want, but debt is just debt. Why don’t we talk about how to pay it instead?
You are simply too dumb to understand a basic idea. The word "debt" is so powerful it is literally stronger than your mind. If debt works the same for the US federal government as it does for me (you say "debt is just debt"), then surely I can print my own money right? Oh no? I can't? Well then, maybe these two situations aren't at all alike and maybe debt isn't just debt.
@AVeryLargeSon. Although governments do function differently, you can’t print money out of debt. I’m sorry. If printing money was the solution, let’s just erase the debt numbers too, and forget about it. We all know that printing money will just cause more inflation. That’s not the answer to the problem.
@@fissinho If the government printed 36 trillion dollars and injected that into the economy by repaying the debt, then yeah there definitely would be inflation. We don't need to do that, though, because we don't need to pay back the debt. All the government has to do is ensure that taxable income growth (tied to the GDP) is growing at the same rate or faster than the debt growth rate. If the debt is growing faster, it can print to make up the difference. The debt is not really a discretionary issue, it is a monetary one.
It's a gross oversimplification, but I've always liked this quote from Looking Out for Number One: "Don't you think that if you had the power to steal from your neighbors and print your own money, you could at least stay solvent?"
We are broke as a nation. $35 trillion in debt combined with $2 trillion annual budget deficit. Also, the American is completely indebted. We are broke as a nation and we cannot afford any more government.
Shes fogetting Americans also pay interest on the debt and own the debt. Its exactly like a household budget. Americans gets a surplus from other Americans debt. There is no free lunch
"The United States will always be able to pay it's bills because we can just print dollars, HOWEVER there's NO guarantee of the purchasing power of those dollars". - Alan Greenspan (While he was Chairman of the Federal Reserve)
Your guest presents one side of the picture. It is well known that once the national debt goes over 90% of the GDP, as it already has, the benefit to the productive output of the country for each extra dollar of deficit is less than one dollar. So, we are just choking our own productive output.
Didn't address that the debt is actually held by people and the government has to pay interest on it. Not just a record of past deficits because the interest continues to grow.
stop paying interest. Treasury bonds = paper money, they are the same thing, just with a different name.Printing money to pay off the entire national debt = printing 1 new $100 bill to replace 2 old $50 bills = no increase in the total amount of money = 0 inflation
We haven’t had inflation for the last 94 years except for a couple brief periods? Uh, what? Have prices come down? Is there one single year between 1930 and 2024 where prices declined? Nope. There were *plenty* of years between the end of the Civil War and 1930 when prices declined… and the economy did just fine. In fact, the rate of growth in that period was even better than what’s happened after.
I have an advanced business degree. I don't agree with her viewpoint. Some of what she is saying is relevant. But, I don't agree that there is "no cost" or "side effect" of a huge national debt.
She didn't say that, she said that inflation is something to be mindful of regarding government spending. In a longer format, she would have highlighted the real restraints which are raw materials, labor and inflation. The fact that we now have a fiat currency, the debt no longer has the same implications that it did when we were on the gold standard.
@@matthewmallaber7213 how does fiat currency matter in a world of finite resources? Inflation should show its devastating effects and we’re apparently not even in one.
There are so many alleged "experts" concerning the national debt issue, I don't know what to believe. One thing's for sure, no matter what I believe, there is nothing I can do in my lifetime to influence/sway the issue of our country's debt one way or the other. To me, the extreme debt our country is experiencing is rooted in politicians' over-spending; plain and simple. And we are leaving the problem to future generations, not ours. What a terrible legacy to leave. 😞 It's safe to say I won't be buying Stephanie Kelton's book "The Deficit Myth" because of her views on the topic claiming that the national debt is a good thing.
I disdain when these shows bring on an economist and don’t ask them to bring their data with them to prove out their theory. Yes, using debt today when you have a growing population and economy is necessary to support growth. Yes we’ve run a deficit for a long period of time and it can be measured as a percentage of our GDP. We also moved off the gold standard in the 70’s to free ourselves if the issues around inflation being driven by the Vietnam war. However, the biggest drivers of inflation aren’t wages or corporate earnings. It’s Fed monetary policy, it’s government spending and taxation. Increasing our debt >33% in 4 years while wanting to cut taxes in the next 4 and no one is cutting back on spending means we start pushing more $ into the economy from both sides. The fed then steps in to control inflation and interest rates begin to push towards 8-10%, unemployment creeps back toward 8%, but could teeter towards 15% in a worst case scenario or see the fed react late to capital needs and then we see something worse than a recession, but not as bad as a depression hit. Every year the debt grows, the % of taxes raised going toward debt payments is rising. Requiring more to be borrowed. Doom isn’t guaranteed, but her argument just doesn’t hold up for why we shouldn’t be concerned over the debt.
@@BrittaProducts Both republicans and democrats act more like socialists/facists or authoritarian by increasing the size of government and overspending. I'm saddened that liberalism as a word was prostituted by the left and right.
Yea “debt” in this context is just another word for “private sector surplus”. At any given point in time the negative balance of the ledger is either in the public or private sector because the money supply is fixed at that moment in time. Would you prefer the government had more money and you had less? Because that’s what Iott’s arguing for. Read a book.
@@robaltieri745 the majorirty of americans arent benefiting of the debt. her concept only benefits the rich, banks and central banks. americans aren't holding that much of the debt. only banks and big invesotrs are holding significant amount of treasures and bnenfiting from them by either collecting interests or having their stocks boosted due to the insane amount of issuance. debt is bad. one trillion dollars a year now is spent just to maintain the debt. you can't say this is good. also there is clearly pressure on yields due to issuing more and more debt. yields are going up instead of down even though the fed has just started a cutting cycle. this is harming americans who want to buy a house or a car. it is making their mortgage and car payments unaffordable
@ That’s monetary policy, not fiscal policy. I won’t disagree with you that asset allocation has been abysmal and slanted heavily to the already rich. But that doesn’t refute her premise.
The constitution doesn’t say a thing about government in the healthcare business. This sector alone has divided America. Get out of the business and protect like you’re designed to do.
No they're not. If you can create currency for everything else, you just do it for that, and btw...where do you think that interest goes? Btw...you can "afford" anything if you are creating the currency out of thin air
@@scpatl4now Well, that's the inaccurate view that some economists have. Such as, the national debt doesn't matter. Well, it will work like this. It won't matter, until it matters.
@@scpatl4now Just because you can "[create] current out of thin air", that's the worst way to try and solve this problem. It's a much bigger issue than people realize. It's just that we are not seeing the effects of it now.
@@PoeLemic nor will we in any of our lifetimes. It's been going on for 100 years. As long as the US does not flood the private sector with too much cash and cause inflation...ain't gonna happen
@@PoeLemic It hasn't mattered once since the Federal Reserve was created. There has never been a debt crisis since the US left the gold standard. As for economists, having been one, you should look at who signs their paycheck before you believe them.
@@scpatl4now No... a private bank called the federal reserve bank prints the money. We borrow the money based on the int erest rate the federal reserve bank says. We pay this back by taxing the crap out of you and issuing bonds ... aka we borrow money from people to slump it up with taxes collected to pay back the loan borrowed from the federal reserved bank. Then we make a next budget every year and ounces t hat budget gets approved we borrow more money and make a new cycle.
@@bebdaumon3948 Tell me where it says we "borrow" from the federal reserve (which IS controlled by the government with officials appointed and confirmed), and then have to pay it back. We don't. The Fed issues currency whenever congress appropriates it. Your "taxes" pay for nothing. Their only function is to validate the currency (tax can only be paid in dollars), and to redistribute income. That your taxes are required for spending is a fallacy. Bonds are simply the governments way of providing a safe place to park money. They are not a necessity for spending. It's a very complicated system that few people really understand.
@@scpatl4now Just look on their website the federal reserve bank even states that it's a private entity. The board of governors are agents of the U.S. government that interacts with the federal reserve bank on behalf of the U.s. government. There's universities that have board of governor's. People long ago setup trusts that donated land and buildings to be used to create a university. These are called board of trustees .However, Universities that accept federal grants have to sign agreements that allows a board of governors to oversee their operations. It doesn't control the University but makes sure they follow their agreements. The same goes with the federal reserve. The board of governors make sure the federals reserve is following aht is agreed upon. oh behalf of the U.S. government. The federal reserve bank is owned by multiple banks but the roth child family has the most control over it.
@@scpatl4now Why do you think every year congress and other parties have to pass a budget? They have to approve what money to use to spend for every program that they have and how much to borrow. They borrow it from the federal reserve bank. The bank makes the t-bils which is the money aka notes and give it to the U.s. government at a cost of interest. they also issue bonds and t-bills where the public and other countries can buy it. that money gets collected by the bank and sent to the U. government to use. The government borrows money and issues bonds aka t-bills that use that to fund the programs and operate the government. that used the tax money and bonds money to pay off debt Thos bonds and t-bills get rated by companies like moody's which has been on a decline for years. This is the same system for a company. The company takes out a bank loan and issues bonds or cooperate notes They use this to finance their operations normally in this case it's to finance new constructions and machinery aka investments. The U.S. government are doing the same but they invest in things that have never given them a return which is why we have a great deficit.
If the U.S. dollar loses its' status as the reserve currency, a major devaluation of the dollar will follow. We already spend almost as much of our tax dollars on only the interest on the national debt that we spend on the military.
Ok, so I'll admit I have even less of an idea about all this than these 3 geniuses. My question is, if the US can just print endless money, then why is there any debt at all? I mean if I could print endless money in my basement, who would I be in debt to? The printer?
Feels like living on fantasy island. In the early 70s, I went to a movie for less than a $1. I think inflation is real. Federal, State, Municipal, Corporate, and Personal debt is very high. Our federal debt is now doubling every 10 years. Yes, some debt is required, e.g. infrastructure. However, our debt is excessive and eventually we will not be able to inflate our way out of it. Responsible spending and realistic budgets are needed, but this will not happen. At some point, the dollar will loose its reserve currency status, issuing more debt will be harder, and austerity will be the new reality.
She must be in denial. No one in our state or federal government wants to balance the budget. It would mean higher taxes across the board. It would mean laying off gov't workers it would mean trimming down the fat and downsizing big gov't We see it firsthand what over-printing money does and it causes inflation. Inflation is a tax as well for everyone.
Where is the data on how much assets US govt owns ? Balance sheet math tells me as long as ur assets are growing and govt equity also growing then it should be ok right ?
I've been grappling with this issue for some time. I understand what she is saying using that spending of 6.5T and only bringing in 5T in taxes, that 1.5T, the deficit, is money spent on what the govt deems appropriate (infrastructure, education, defense, etc.). In this case the govt is basically making leveraged investments, and as long as these investments are good, we should see a return on these investments that more than cover the increased future debt payments on the new debt. The key in this example is what the government is doing with that 6.5T. If we overleverage ourselves where the collective return on these investments in the form of tax revenues can't cover its expenses (federal employees, administrative expenses, and INTEREST) then as a government entity it can either not pay it or borrow more. If we are in the state of borrowing just to cover expenses (no investment), then we go down a path of endless borrowing. What investor would buy our bonds? Interest rates will skyrocket. Imagine the 10 yr treasury yielding 50%. This will add significantly to our interest expense. Also, how will businesses and individuals be able to survive when their borrowing rates that are tagged to treasuries are so high? Fortunately, we are not at that point yet, but I believe that is the nightmare that other economists refer to.
The amount of money the government spends on reimbursing that debt is increasing every year. That’s going to be less money spent on things like education, R&D, healthcare, infrastructure, etc.
That econonomist is full of crap. I can remember when coke was a NICKEL And The typical car was $2500. What is happening is people's savings are being eroded and their social security contributions are going to be pennies in the dollar when it's time to collect. Kinda like RIGHT NOW!!
Keynesian economist never ends well. Excesive public spending ends in the Federal Reserve with money printing and higher interest rates. Inflation during COVID is because the FED printed more dollars than needed to pay the Government's vaccines and spending...
What an idiot. What trained economist agree with this. The deficit does not add to our benefit. We don’t have a financial surplus - and soon we won’t be able to service the principle, and boy the interest. Many economist warn of that danger despite their politics.
If the National debt doesn't matter could Uncle Sam please send me a $50k stimulus check just too have some play money 💵 and an emergency fund. And I'll expect another $50k next year as well😅
Grownups still have this confusion over spending, debt. Watch S. Kelton's documentary "Finding the Money" It is not a theory. It is how it is. Federal Taxes collected are what makes "Money" legitimate.
Imagine trying to persuade people to the merit of deficits.... You can tell the interviewers don't even buy it. Deficit spending and money printing erodes the purchasing power of the entire monetary supply. So while it puts money into people's hands (whose?), it devalues all the money in circulation that everyone had to begin with. So what has it actually done? We are far passed the point of helping anyone by deficit spending - that window has long been behind us. There is a context where deficit spending can be helpful but that is many many trillions of dollars in the past.
Modern Monetary Theory never seems to talk about the special position the American dollar has held since WWII. That's what's lets us get away with such high (and continuous) debt. If we ever lose that status, all bets are off. What if China manages to create a monetary system equivalent to the Brenton Woods conference? What if the rest of the world refuses to buy our debt instruments? Printing money in those situations doesn't help since nobody will want to hold it. This may seem far fetched but that's exactly what the BRICS nations are trying to do. They're trying to get out from under America's financial thumb.
And Bretton woods failed because as we know from history, countries like to have a bit of self determination with their national budgets and spending. Do you think BRICS countries will honestly be any different?
One of the key points Professor Kelton neglected to mention is that looking at government debt alone is half the story. You need to look at what a country produces, which is the Gross Domestic Product (GDP) divided by the national debt a.k.a. the Debt to GDP ratio. United States Government debt accounted for 122.3 % of the country's Nominal GDP in June 2024, compared with the ratio of 123.2 % in the previous quarter. Still the U.S. has the one of the higher Debt to GDP ratios, so why is that not troublesome? Because the U.S. is one of the wealthiest countries in the world. "The total US household net worth is over $150 trillion, which is close to five times the size of the nation's debt. From that lens, the debt level may not seem as troubling. It may be one reason to explain why the nation is generally viewed by markets as a good creditor." The IMF and World Bank say that a country can have external debt sustainability "by bringing the net present value (NPV) of external public debt down to about 150 percent of a country's exports or 250 percent of a country's revenues." Japan has the largest Debt to GDP ratio of ~ 250%. In my view, being prudent about what the U.S. (Congress) is spending is a good idea. Which brings us to the the two presidential candidates Harris and Trump. Neither one of them has really nailed down how the U.S. will pay for their promises. Trump had mentioned paying for his tax cuts through growth in the economy, while Harris said she would raise taxes on wealthy and corporations. Luckily, the U.S. is a wealthy nation with the world's largest GDP, so they Harris and Trump both know that they have some wiggle room. However, it's Congress who controls the purse strings.
If debts don't matter please issue me a check for $2M so I can retire. Hell while you're at it do that for every American. Oh the savings you could create then! 😂
Have you seen the prices in 1930 vs today? To say we haven’t had inflation is a flat out lie. The prices have gone significantly since than. I house in 1930 was like $10,000 today it is like $500,000. A candy bar was a nickel today it is like $3. Gold was $20.67 an ounce today it like $2,700. A lot of inflation happened after 1971 when the debt exploded.
Debts matter. They always have, always will. This person's argument is foolish and weak. Please have the common sense not to have someone back with a lunatic theory. Otherwise, CBS please give me a line of credit for $10 million so that I can benefit the other side of the ledger. What Garbage!
@BhargavKrishnaReddy79 MMT ain't about printing money this is truly an uneducated take on how the US monetary system works. And Gov deficits aren't run like a household.
@@scpatl4now I agree ... she is out of her mind. How? She don't know the difference of good debt and bad debt. Good debt is nothing but borrowing money to make investments that gives you a return. BAD DEBT is borrowing money to burn that money.... it doesn't do anything for you. For instance... borrowing a car. You borrow money to buy a guy not to produce money but to use it to get to work. That is what we call a sunk cost. The U.S has been for many years throwing borrowed money into projects that goes nowhere for many years. We end up paying for this because they always every year increase our income taxes. They do this but increasing the rates 1% and then reducing the deductions amounts. This could total in a 2% increase or even a 5% increase without the public ever figuring it out.
Lets start with this: households are not perpetual so comparing to a govt's budget is apples-to-oranges. Our government can borrow more and can sustain a 2-3% annual deficit into perpetuity, she kinda makes this point. GDP goes up along with the debt; its important to look at both sides. At current issue is that a 6% deficit is not sustainable, and our Debt/GDP is over 100%, so some balancing of the budget would be prudent to be able to maintain fiscal flexibility in the future. My fear is that because that Debt/GDP has been slowly climbing the last few years, that investors of our debt will start to demand higher yields, and the pre-Covid low interest environment will be a thing of the past.
this lady is a real politician (SMOKE AND MIRRORS)she dosnt know how to explain it clearly she makes it sound like some one gets the intrest burden as a assette. not the case
"It doesn't work like a household budget" sounded to me exactly like "this nation needs an revolutionary uprising to restructure the system so that lawmakers can relate to the people they represent", but I have hearing issues. So, hear what you will my fellow oppressed Americans.
Well, it would work like a household budget if you could print dollars exclusively and pay all your debts with those dollars, but households can't and so there are not the same
@@scpatl4now but the U.S government doesn't print money. They borrow money from the federal reserve bank. All banks borrow some money form the federal reserve banks and borrows money from their own members that put money in their savings account. That is how bank loan out money. they pay the interest rate that the federal reserve bank declares which they keep changing which is how it effects the local banks on rates given to ordinary people like you. The government borrows money from the federal reserve bank and they issue the bonds aka t-bills for the U.S government which are sold in public. This 2 things is the countries' debt that keeps accruing every year accrues debt that they don't pay all of it. They then do this cycle every year. They borrow more money, raise taxes in various ways and pay off debts but this time our national debt 35 trillion dollars is equal to our GDP which is what we produce each year which is 35 trillion dollars. Which means our debt is out of hand and soon we will have more debt that what we take in so we won't be able to pay it off.
This woman is a nut job. So, to hundred billion we send to Ukraine is an investment for me a US citizen? We send billions out of the country… this is certainly not increasing the US wealth, or our infrastructure. The total debt is unsustainable.m.. interest payments will be a significant line item on out budget… who does that go to? One bond holder is China… now ain’t that “special.”
So nice to see Prof. Kelton making the rounds to try to explain how the deficit isn't something to worry about. People would do better to worry about why we have some many fascists in the US
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exactly... it's like giving a kid a credit card and they go on a spending spree that thinks it's good because it's free money and it helps peoples businesses... not unders understanding what a credit card is and how credit works.
LOL, yes you can destroy the value of your currency by printing money. Stephanie, we've known that for thousands of years, LMFAO! She then makes an ad hoc excuse by blaming 2021-2022 inflation and 1970s inflation on supply shocks. She already admitted that inflation is a monetary issue!
You are absolutely correct regarding inflation and the value of the currency. The COVID stimulus accounted for roughly 30% of the recent inflation as too much money was chasing after low supplies. She did say in this segment that inflation is a component to be mindful of regarding government spending. During the crash of 08 and the government gave banks and corporations trillions of stimulus, that didn't cause inflation because it all went to very few entities. Recently, inflation persisted primarily because of corporate greed.
The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
They do say gold will crash in a liquidity crunch However, many of those holding precious metals are preparing for such an event. So they are unlikely to be forced sellers. The paper market would tank and hopefully collapse.
I wholeheartedly concur, which is why I appreciate giving an investment coach the power of decision-making. Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over 1.5 million dollars working with an investment coach for more than two years.
I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advisor? I'll be happy to use some help.
My CFA ’Melissa Terri Swayne’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
I looked up her name online and found her webpage. I emailed and made an appointment to talk with her. Thanks for the tip
Is this real! Is she serious. She is out of her mind. You know it’s bad when this is their response.
She’s right and it’s not even that complicated.
💯
She is correct!!! Listen carefully
She claiming US can print money wo using treasury debt as collateral aka MMT. USD is GRC, If dollars are backed by nothing globally or not recycled back to US by buying treasury debt then countries will just funnel that liquidity in commodities which would causes inflation and US congress wont have the ability to double spend with no treasury issuance....
Printing money and tax the liquidity to create economic activity is like injecting her1one into body and doing detox same time to get a positive reaction is assinine. The economy and markets don't work this way
Our interest payments are $1T. This is the second biggest line item only to SS. A day will come when no one wants our bonds and we're in trouble in when that day happens
@TheMahayanist Then why do they?
@@JohnSmith-ft4fzthey sell bonds because there is currently a demand market for the low risk financial instrument of the u.s. bond backed by the full faith and credit of the U.S. Federal government which has issued the debt in the sovereign fiat currency of the U.S. dollar. If we were still on the gold standard then we would be in a heap of trouble. Our thinking as a nation and the way our politicians talk about the debt is still in line with the thought process when we were on the gold standard.
It is slowly happening.That is why gold is going up. They should have ask her about that and that most of your money goes to pay the interests.
Exactly! Get ready
Actually those are old numbers. In the past month, the interest on the debt was the #1 expense over Social Security, which is usually the biggest payment. This trend is only going to get worse.
Can you imagine in another 50 years our debt will be probably 80 trillion and federal minimum wage will still be $7.25.
You mean 15 years
@@DaneReidVoiceOver Probably.
I think you are way to optimistic on the debt level in 50 years being $80 trillion. $800 trillion in debt the number will be in 50 years. I think the currency will likely fail in the next 50 years.
She's obviously on the side of those who benefit the most from government overspending.
This is why Keynesians are soft-socialists/facists. THEY LOVE government overspending.
I think she is more like a politician rather than a economist.
That's keynesianism in a nutshell. Keynesians never talk about excesive government spending, it looks good in their eyes.
I just watched a 1992 message by Ross Perot that said “we are sitting on a ticking timebomb” .
He said “in five years this thing is coming back to bite us.”
That was 32 years ago.
The debt was 4 trillion.
So a hypochondriac who puts on just 5 extra pounds says that being 7 pounds overweight will cause a heart attack… because he was wrong about that, that means that being 300 pounds overweight is also not big deal?
@@GrantDWilliams82 you don't understand how analogies work, do you?
The interviewers didn’t understand anything this lady said, because it simply makes no sense. It’s that easy. You can try to explain all you want, but debt is just debt. Why don’t we talk about how to pay it instead?
You are simply too dumb to understand a basic idea. The word "debt" is so powerful it is literally stronger than your mind. If debt works the same for the US federal government as it does for me (you say "debt is just debt"), then surely I can print my own money right? Oh no? I can't? Well then, maybe these two situations aren't at all alike and maybe debt isn't just debt.
@AVeryLargeSon. Although governments do function differently, you can’t print money out of debt. I’m sorry. If printing money was the solution, let’s just erase the debt numbers too, and forget about it. We all know that printing money will just cause more inflation. That’s not the answer to the problem.
@@fissinho If the government printed 36 trillion dollars and injected that into the economy by repaying the debt, then yeah there definitely would be inflation. We don't need to do that, though, because we don't need to pay back the debt. All the government has to do is ensure that taxable income growth (tied to the GDP) is growing at the same rate or faster than the debt growth rate. If the debt is growing faster, it can print to make up the difference. The debt is not really a discretionary issue, it is a monetary one.
It's a gross oversimplification, but I've always liked this quote from Looking Out for Number One: "Don't you think that if you had the power to steal from your neighbors and print your own money, you could at least stay solvent?"
If the debt is good why not eliminate income taxes
@Dan-z Because local governments need funds to operate.
@@cheeseburger3461 The american people can no longer afford gov there are too many of them and they make too much
We are broke as a nation. $35 trillion in debt combined with $2 trillion annual budget deficit. Also, the American is completely indebted. We are broke as a nation and we cannot afford any more government.
Shes fogetting Americans also pay interest on the debt and own the debt. Its exactly like a household budget. Americans gets a surplus from other Americans debt. There is no free lunch
why does a country with a fiat currency have any debt?
"The United States will always be able to pay it's bills because we can just print dollars, HOWEVER there's NO guarantee of the purchasing power of those dollars". - Alan Greenspan (While he was Chairman of the Federal Reserve)
Your guest presents one side of the picture. It is well known that once the national debt goes over 90% of the GDP, as it already has, the benefit to the productive output of the country for each extra dollar of deficit is less than one dollar. So, we are just choking our own productive output.
Didn't address that the debt is actually held by people and the government has to pay interest on it. Not just a record of past deficits because the interest continues to grow.
why does a government with fiat currency have any debt?
stop paying interest.
Treasury bonds = paper money, they are the same thing, just with a different name.Printing money to pay off the entire national debt = printing 1 new $100 bill to replace 2 old $50 bills = no increase in the total amount of money = 0 inflation
We haven’t had inflation for the last 94 years except for a couple brief periods? Uh, what? Have prices come down? Is there one single year between 1930 and 2024 where prices declined? Nope. There were *plenty* of years between the end of the Civil War and 1930 when prices declined… and the economy did just fine. In fact, the rate of growth in that period was even better than what’s happened after.
I have an advanced business degree. I don't agree with her viewpoint. Some of what she is saying is relevant. But, I don't agree that there is "no cost" or "side effect" of a huge national debt.
She didn't say that, she said that inflation is something to be mindful of regarding government spending. In a longer format, she would have highlighted the real restraints which are raw materials, labor and inflation. The fact that we now have a fiat currency, the debt no longer has the same implications that it did when we were on the gold standard.
@@matthewmallaber7213 how does fiat currency matter in a world of finite resources? Inflation should show its devastating effects and we’re apparently not even in one.
I bet Stephanie has a rich husband. They never mention interest on the debt.
Like all debt there's a day of reckoning where you struggle to pay the minimum and your credit rating goes down 👇 and can't borrow anymore 💵 🏦 %
Yea that’s nothing like this. Haha
you don't print your own money
There are so many alleged "experts" concerning the national debt issue, I don't know what to believe. One thing's for sure, no matter what I believe, there is nothing I can do in my lifetime to influence/sway the issue of our country's debt one way or the other. To me, the extreme debt our country is experiencing is rooted in politicians' over-spending; plain and simple. And we are leaving the problem to future generations, not ours. What a terrible legacy to leave. 😞 It's safe to say I won't be buying Stephanie Kelton's book "The Deficit Myth" because of her views on the topic claiming that the national debt is a good thing.
Why would anyone want to buy USA debt/IOUs , when the very country have no intention of paying off said debt.
I disdain when these shows bring on an economist and don’t ask them to bring their data with them to prove out their theory.
Yes, using debt today when you have a growing population and economy is necessary to support growth.
Yes we’ve run a deficit for a long period of time and it can be measured as a percentage of our GDP. We also moved off the gold standard in the 70’s to free ourselves if the issues around inflation being driven by the Vietnam war.
However, the biggest drivers of inflation aren’t wages or corporate earnings. It’s Fed monetary policy, it’s government spending and taxation.
Increasing our debt >33% in 4 years while wanting to cut taxes in the next 4 and no one is cutting back on spending means we start pushing more $ into the economy from both sides. The fed then steps in to control inflation and interest rates begin to push towards 8-10%, unemployment creeps back toward 8%, but could teeter towards 15% in a worst case scenario or see the fed react late to capital needs and then we see something worse than a recession, but not as bad as a depression hit.
Every year the debt grows, the % of taxes raised going toward debt payments is rising. Requiring more to be borrowed. Doom isn’t guaranteed, but her argument just doesn’t hold up for why we shouldn’t be concerned over the debt.
why does a country with a fiat currency gave any debt?
Democrats think
1. Government can solve all problems
2. Government can just print currency
Maybe Republicans should stop giving corporations huge tax breaks
@@BrittaProducts Both republicans and democrats act more like socialists/facists or authoritarian by increasing the size of government and overspending.
I'm saddened that liberalism as a word was prostituted by the left and right.
@@BrittaProducts Do you have sources?
@@thebattlefieldgods2126 The 2017 Trump corporate tax cuts? You know, the sole piece of legislation passed under the first Trump term?
1. Who's saying that
2. The government can, in fact, print money.
Houses since 1975 from 30 000 to 2 millionn and property tax from 800 to 25000
she said the debt is savings lmfao
Yea “debt” in this context is just another word for “private sector surplus”. At any given point in time the negative balance of the ledger is either in the public or private sector because the money supply is fixed at that moment in time. Would you prefer the government had more money and you had less? Because that’s what Iott’s arguing for. Read a book.
@@robaltieri745 the majorirty of americans arent benefiting of the debt. her concept only benefits the rich, banks and central banks. americans aren't holding that much of the debt. only banks and big invesotrs are holding significant amount of treasures and bnenfiting from them by either collecting interests or having their stocks boosted due to the insane amount of issuance. debt is bad. one trillion dollars a year now is spent just to maintain the debt. you can't say this is good. also there is clearly pressure on yields due to issuing more and more debt. yields are going up instead of down even though the fed has just started a cutting cycle. this is harming americans who want to buy a house or a car. it is making their mortgage and car payments unaffordable
@ That’s monetary policy, not fiscal policy. I won’t disagree with you that asset allocation has been abysmal and slanted heavily to the already rich. But that doesn’t refute her premise.
The constitution doesn’t say a thing about government in the healthcare business. This sector alone has divided America. Get out of the business and protect like you’re designed to do.
The problem happens when the interest payments are more than we can afford to make.
No they're not. If you can create currency for everything else, you just do it for that, and btw...where do you think that interest goes? Btw...you can "afford" anything if you are creating the currency out of thin air
@@scpatl4now Well, that's the inaccurate view that some economists have. Such as, the national debt doesn't matter. Well, it will work like this. It won't matter, until it matters.
@@scpatl4now Just because you can "[create] current out of thin air", that's the worst way to try and solve this problem. It's a much bigger issue than people realize.
It's just that we are not seeing the effects of it now.
@@PoeLemic nor will we in any of our lifetimes. It's been going on for 100 years. As long as the US does not flood the private sector with too much cash and cause inflation...ain't gonna happen
@@PoeLemic It hasn't mattered once since the Federal Reserve was created. There has never been a debt crisis since the US left the gold standard. As for economists, having been one, you should look at who signs their paycheck before you believe them.
Oh my goodness!! She is so wrong!
The debt is not a problem until it becomes a problem
Don't forget to include state and local debt
Economic illiteracy. How the hell did this person get a government position.
It's like the economists in 2007 saying that we don't need manufacturing, and that we export economic ideas.
What SHE IS FAILING TO EVEN MENTION?...Is ALL that interest?... that is an addition to the debt payments?!?...
The government prints the money, interest too. Been doing it for over 100 years
@@scpatl4now No... a private bank called the federal reserve bank prints the money. We borrow the money based on the int erest rate the federal reserve bank says. We pay this back by taxing the crap out of you and issuing bonds ... aka we borrow money from people to slump it up with taxes collected to pay back the loan borrowed from the federal reserved bank. Then we make a next budget every year and ounces t hat budget gets approved we borrow more money and make a new cycle.
@@bebdaumon3948 Tell me where it says we "borrow" from the federal reserve (which IS controlled by the government with officials appointed and confirmed), and then have to pay it back. We don't. The Fed issues currency whenever congress appropriates it. Your "taxes" pay for nothing. Their only function is to validate the currency (tax can only be paid in dollars), and to redistribute income. That your taxes are required for spending is a fallacy. Bonds are simply the governments way of providing a safe place to park money. They are not a necessity for spending. It's a very complicated system that few people really understand.
@@scpatl4now Just look on their website the federal reserve bank even states that it's a private entity. The board of governors are agents of the U.S. government that interacts with the federal reserve bank on behalf of the U.s. government. There's universities that have board of governor's. People long ago setup trusts that donated land and buildings to be used to create a university. These are called board of trustees .However, Universities that accept federal grants have to sign agreements that allows a board of governors to oversee their operations. It doesn't control the University but makes sure they follow their agreements. The same goes with the federal reserve. The board of governors make sure the federals reserve is following aht is agreed upon. oh behalf of the U.S. government. The federal reserve bank is owned by multiple banks but the roth child family has the most control over it.
@@scpatl4now Why do you think every year congress and other parties have to pass a budget? They have to approve what money to use to spend for every program that they have and how much to borrow. They borrow it from the federal reserve bank. The bank makes the t-bils which is the money aka notes and give it to the U.s. government at a cost of interest. they also issue bonds and t-bills where the public and other countries can buy it. that money gets collected by the bank and sent to the U. government to use. The government borrows money and issues bonds aka t-bills that use that to fund the programs and operate the government. that used the tax money and bonds money to pay off debt Thos bonds and t-bills get rated by companies like moody's which has been on a decline for years. This is the same system for a company. The company takes out a bank loan and issues bonds or cooperate notes They use this to finance their operations normally in this case it's to finance new constructions and machinery aka investments. The U.S. government are doing the same but they invest in things that have never given them a return which is why we have a great deficit.
I feel like this conversation would be more clear if the distinction between currency issuers and currency users was made.
If the U.S. dollar loses its' status as the reserve currency, a major devaluation of the dollar will follow. We already spend almost as much of our tax dollars on only the interest on the national debt that we spend on the military.
It goes to the one percent. It don't go into my kids future.
Ok, so I'll admit I have even less of an idea about all this than these 3 geniuses.
My question is, if the US can just print endless money, then why is there any debt at all? I mean if I could print endless money in my basement, who would I be in debt to? The printer?
Feels like living on fantasy island. In the early 70s, I went to a movie for less than a $1. I think inflation is real. Federal, State, Municipal, Corporate, and Personal debt is very high. Our federal debt is now doubling every 10 years. Yes, some debt is required, e.g. infrastructure. However, our debt is excessive and eventually we will not be able to inflate our way out of it. Responsible spending and realistic budgets are needed, but this will not happen. At some point, the dollar will loose its reserve currency status, issuing more debt will be harder, and austerity will be the new reality.
why is any debt required!? the US government prints its own money
Eventually the dam will break.
the title of this video sounds like a person taking out bank loans and asking himself if he really wants to pay it off
thats some real smoke and mirror economics
She must be in denial.
No one in our state or federal government wants to balance the budget.
It would mean higher taxes across the board.
It would mean laying off gov't workers
it would mean trimming down the fat and downsizing big gov't
We see it firsthand what over-printing money does and it causes inflation.
Inflation is a tax as well for everyone.
Where is the data on how much assets US govt owns ? Balance sheet math tells me as long as ur assets are growing and govt equity also growing then it should be ok right ?
I've been grappling with this issue for some time. I understand what she is saying using that spending of 6.5T and only bringing in 5T in taxes, that 1.5T, the deficit, is money spent on what the govt deems appropriate (infrastructure, education, defense, etc.). In this case the govt is basically making leveraged investments, and as long as these investments are good, we should see a return on these investments that more than cover the increased future debt payments on the new debt. The key in this example is what the government is doing with that 6.5T. If we overleverage ourselves where the collective return on these investments in the form of tax revenues can't cover its expenses (federal employees, administrative expenses, and INTEREST) then as a government entity it can either not pay it or borrow more. If we are in the state of borrowing just to cover expenses (no investment), then we go down a path of endless borrowing. What investor would buy our bonds? Interest rates will skyrocket. Imagine the 10 yr treasury yielding 50%. This will add significantly to our interest expense. Also, how will businesses and individuals be able to survive when their borrowing rates that are tagged to treasuries are so high? Fortunately, we are not at that point yet, but I believe that is the nightmare that other economists refer to.
The amount of money the government spends on reimbursing that debt is increasing every year. That’s going to be less money spent on things like education, R&D, healthcare, infrastructure, etc.
He confused the debit and the deficit in the first 30 seconds
Raise taxes on the top 20%.
She's nuts
Keynesians in a nutshell.
That econonomist is full of crap. I can remember when coke was a NICKEL And The typical car was $2500. What is happening is people's savings are being eroded and their social security contributions are going to be pennies in the dollar when it's time to collect. Kinda like RIGHT NOW!!
For there to be any money at all in the economy, both the government and the private sector (in aggregate) always have to be in debt. Debt = money.
Keynesian economist never ends well.
Excesive public spending ends in the Federal Reserve with money printing and higher interest rates. Inflation during COVID is because the FED printed more dollars than needed to pay the Government's vaccines and spending...
ONE OF THE LARGEST CONCERNS!!!!!
It’s not good for anyone other than the top 1 percent
WHAT IS SHE TALKING ABOUT?
What an idiot. What trained economist agree with this. The deficit does not add to our benefit. We don’t have a financial surplus - and soon we won’t be able to service the principle, and boy the interest. Many economist warn of that danger despite their politics.
The debt which is going in someone account is not yours…its china and japan and other country🤣🤣
The tax payers will pay for those debts
If the National debt doesn't matter could Uncle Sam please send me a $50k stimulus check just too have some play money 💵 and an emergency fund. And I'll expect another $50k next year as well😅
It is an issue and anyone who disagrees needs a reality check.
Grownups still have this confusion over spending, debt. Watch S. Kelton's documentary "Finding the Money" It is not a theory. It is how it is. Federal Taxes collected are what makes "Money" legitimate.
Imagine trying to persuade people to the merit of deficits.... You can tell the interviewers don't even buy it. Deficit spending and money printing erodes the purchasing power of the entire monetary supply. So while it puts money into people's hands (whose?), it devalues all the money in circulation that everyone had to begin with. So what has it actually done? We are far passed the point of helping anyone by deficit spending - that window has long been behind us. There is a context where deficit spending can be helpful but that is many many trillions of dollars in the past.
Modern Monetary Theory never seems to talk about the special position the American dollar has held since WWII. That's what's lets us get away with such high (and continuous) debt. If we ever lose that status, all bets are off. What if China manages to create a monetary system equivalent to the Brenton Woods conference? What if the rest of the world refuses to buy our debt instruments? Printing money in those situations doesn't help since nobody will want to hold it. This may seem far fetched but that's exactly what the BRICS nations are trying to do. They're trying to get out from under America's financial thumb.
And Bretton woods failed because as we know from history, countries like to have a bit of self determination with their national budgets and spending. Do you think BRICS countries will honestly be any different?
Her theory is correct if usd is not a hard currency
One of the key points Professor Kelton neglected to mention is that looking at government debt alone is half the story.
You need to look at what a country produces, which is the Gross Domestic Product (GDP) divided by the national debt a.k.a. the Debt to GDP ratio. United States Government debt accounted for 122.3 % of the country's Nominal GDP in June 2024, compared with the ratio of 123.2 % in the previous quarter.
Still the U.S. has the one of the higher Debt to GDP ratios, so why is that not troublesome?
Because the U.S. is one of the wealthiest countries in the world. "The total US household net worth is over $150 trillion, which is close to five times the size of the nation's debt. From that lens, the debt level may not seem as troubling. It may be one reason to explain why the nation is generally viewed by markets as a good creditor."
The IMF and World Bank say that a country can have external debt sustainability "by bringing the net present value (NPV) of external public debt down to about 150 percent of a country's exports or 250 percent of a country's revenues." Japan has the largest Debt to GDP ratio of ~ 250%.
In my view, being prudent about what the U.S. (Congress) is spending is a good idea.
Which brings us to the the two presidential candidates Harris and Trump. Neither one of them has really nailed down how the U.S. will pay for their promises. Trump had mentioned paying for his tax cuts through growth in the economy, while Harris said she would raise taxes on wealthy and corporations.
Luckily, the U.S. is a wealthy nation with the world's largest GDP, so they Harris and Trump both know that they have some wiggle room. However, it's Congress who controls the purse strings.
It's unfortunate the anchors don't know enough about economics to challenge this quack!
It’s no debt 😂 but spending to make citizens rich
If debts don't matter please issue me a check for $2M so I can retire. Hell while you're at it do that for every American. Oh the savings you could create then! 😂
Interest Payments and Inflation. Now you tell me if she is telling the truth?
This woman is a fool.
That "woman" is way smarter than you will ever hope to be
@@scpatl4now lmao!! She's lost...I wonder what university she attended?
Gaslighting
Soon as they say MMT....
Have you seen the prices in 1930 vs today? To say we haven’t had inflation is a flat out lie. The prices have gone significantly since than. I house in 1930 was like $10,000 today it is like $500,000. A candy bar was a nickel today it is like $3. Gold was $20.67 an ounce today it like $2,700. A lot of inflation happened after 1971 when the debt exploded.
How much money you make ? 😂 How much people in 1930 make ? Don’t act stupid !
Debts matter. They always have, always will. This person's argument is foolish and weak. Please have the common sense not to have someone back with a lunatic theory. Otherwise, CBS please give me a line of credit for $10 million so that I can benefit the other side of the ledger. What Garbage!
Stephanie Kelton is correct please listen people. This is a must listen
@BhargavKrishnaReddy79 MMT ain't about printing money this is truly an uneducated take on how the US monetary system works. And Gov deficits aren't run like a household.
@BhargavKrishnaReddy79 I've read her book too and I beg to differ.
She gave a wishy washy explanation , to me debt has only 1 meaning
She is out of her mind. 😡
...and how is that exactly?
@@scpatl4now I agree ... she is out of her mind. How? She don't know the difference of good debt and bad debt. Good debt is nothing but borrowing money to make investments that gives you a return. BAD DEBT is borrowing money to burn that money.... it doesn't do anything for you. For instance... borrowing a car. You borrow money to buy a guy not to produce money but to use it to get to work. That is what we call a sunk cost. The U.S has been for many years throwing borrowed money into projects that goes nowhere for many years. We end up paying for this because they always every year increase our income taxes. They do this but increasing the rates 1% and then reducing the deductions amounts. This could total in a 2% increase or even a 5% increase without the public ever figuring it out.
Lets start with this: households are not perpetual so comparing to a govt's budget is apples-to-oranges. Our government can borrow more and can sustain a 2-3% annual deficit into perpetuity, she kinda makes this point. GDP goes up along with the debt; its important to look at both sides. At current issue is that a 6% deficit is not sustainable, and our Debt/GDP is over 100%, so some balancing of the budget would be prudent to be able to maintain fiscal flexibility in the future.
My fear is that because that Debt/GDP has been slowly climbing the last few years, that investors of our debt will start to demand higher yields, and the pre-Covid low interest environment will be a thing of the past.
this lady is a real politician (SMOKE AND MIRRORS)she dosnt know how to explain it clearly she makes it sound like some one gets the intrest burden as a assette. not the case
"It doesn't work like a household budget" sounded to me exactly like "this nation needs an revolutionary uprising to restructure the system so that lawmakers can relate to the people they represent", but I have hearing issues. So, hear what you will my fellow oppressed Americans.
Well, it would work like a household budget if you could print dollars exclusively and pay all your debts with those dollars, but households can't and so there are not the same
@@scpatl4now but the U.S government doesn't print money. They borrow money from the federal reserve bank. All banks borrow some money form the federal reserve banks and borrows money from their own members that put money in their savings account. That is how bank loan out money. they pay the interest rate that the federal reserve bank declares which they keep changing which is how it effects the local banks on rates given to ordinary people like you. The government borrows money from the federal reserve bank and they issue the bonds aka t-bills for the U.S government which are sold in public. This 2 things is the countries' debt that keeps accruing every year accrues debt that they don't pay all of it. They then do this cycle every year. They borrow more money, raise taxes in various ways and pay off debts but this time our national debt 35 trillion dollars is equal to our GDP which is what we produce each year which is 35 trillion dollars. Which means our debt is out of hand and soon we will have more debt that what we take in so we won't be able to pay it off.
Lol, tell this to the BRICS that just met in Russia
This woman is a nut job. So, to hundred billion we send to Ukraine is an investment for me a US citizen? We send billions out of the country… this is certainly not increasing the US wealth, or our infrastructure. The total debt is unsustainable.m.. interest payments will be a significant line item on out budget… who does that go to? One bond holder is China… now ain’t that “special.”
Not sure I've ever heard so much BS 'spin' in my life!
😮no way
Economists know nothing.
Brics are using thier own currency with each other
brics pay
Lol this lady thinks everything is okay 😂 America has peaked and will fail eventually
Reportimg this now? Lol
The genocide in gaza is concerning
So nice to see Prof. Kelton making the rounds to try to explain how the deficit isn't something to worry about. People would do better to worry about why we have some many fascists in the US
Thanks for sharing! Just a quick off-topic question: I have TRC20 USDT in my OKX wallet and I have the recovery phrase: [pride pole obtain together second when future mask review nature potato bulb]. What is the best way to transfer them to Binance?
😂 wow. Just wow
exactly... it's like giving a kid a credit card and they go on a spending spree that thinks it's good because it's free money and it helps peoples businesses... not unders understanding what a credit card is and how credit works.
LOL, yes you can destroy the value of your currency by printing money. Stephanie, we've known that for thousands of years, LMFAO! She then makes an ad hoc excuse by blaming 2021-2022 inflation and 1970s inflation on supply shocks. She already admitted that inflation is a monetary issue!
You are absolutely correct regarding inflation and the value of the currency. The COVID stimulus accounted for roughly 30% of the recent inflation as too much money was chasing after low supplies. She did say in this segment that inflation is a component to be mindful of regarding government spending. During the crash of 08 and the government gave banks and corporations trillions of stimulus, that didn't cause inflation because it all went to very few entities. Recently, inflation persisted primarily because of corporate greed.