The US Debt Crisis (explained)

[@Peterl4290]

The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.

[@Mrshuster]

People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.

[@sabastinenoah]

Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.

[@bobwright-90]

A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.

[@jerrycampbell-ut9yf]

Please tell me how I can get her help because I'm new to this.

[@bobwright-90]

Her name is Annette Christine Conte can't divulge much. Most likely, the internet should have her basic info, you can research if you like

[@Riggsnic_co]

Protecting your capital is much more important than making money. Basically because if you lose your capital, making money is much harder. ''Missing the train'' vs. ''losing your money''. There are a lot of trains, but if your money is gone, it's over.

[@JacquelinePerrira]

Wall Street pitched so-called quality stocks with high profitability and low debt, as a kind of insurance against whatever the economy might throw at you. Quality stocks have underperformed the S&P500 this year, My $200k portfolio is down by approximately 20 %, any recommendations to scale up my returns on investment

[@kevinmarten]

Nobody knows anything You need to create your own process, manage risk and stick to the plan, through thick or thin While also continuously learning from mistakes and improving.

[@Jamessmith-12]

Exactly why i enjoy market decisions being guided by a pro , seeing that their entire skillset is built around going long and short at the same time both employing risk management and market experience , been using a portfolio-coach for over 2years+ and I've netted over $3million in that time frame.

[@JacquelinePerrira]

How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings

[@Jamessmith-12]

Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..

[@kortyEdna825]

More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.

[@KaurKhangura]

The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.

[@carssimplified2195]

This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.

[@Justinmeyer1000]

How can I reach this person?

[@carssimplified2195]

’Aileen Gertrude Tippy’’ is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.

[@Justinmeyer1000]

I checked Aileen up out of curiosity and i must say i am impressed by her Credentials. i emailed her already, waiting on her response.

[@piercesrail944]

I always enjoy tuning in to these data- driven videos. Quite clear and concise, they make my day when I see a new one is posted!

[@EPBResearch]

Great to hear!

[@julioalmeida4645]

Congratz for the 100k. Well deserved

[@MBarberfan4life]

We already crossed the threshold. Inflation is a tax

[@Bookworm214-y3d]

EXACTLY thats why theres no reason for inflation to ever come down...it will never come down . our debt relies on inflation getting worse and worse, if you didnt buy a house in 2021 you will never buy one

[@e1000sn]

It's funny is that you've stepped on one of the key suppositions of modern monetary theory. I really dislike how this framework has been politicized because the framework itself is descriptive, rather than prescriptive. I think it's understandable that some politicians would prefer their voters to not know about MMT because if more people knew about MMT we might be quicker to understand tax cuts (un-paired with spending cuts) as a de-facto inflationary tax transferring money from the public to the recipinets of the tax cut. Similarly, too few people understand that new taxes are an important inflation fighting tool which could be used to stabilize rates without having to rely exclusively on rate-adjustments, mass unemployment, and artificial rescessions. There's no free lunch in economics, and having good tools to understand tax and government spending policy terrifies those who woud rather their policies skate by with as little examination as possible.

[@khanch.6807]

​@@e1000sn There is free launch in economics. It's called using the sun and growing crops.

[@e1000sn]

@@khanch.6807 - The words of someone who has never tried to grow food.

[@khanch.6807]

@@e1000sn Says the guy who has no garden.

[@matthewjames1172]

the US debt isn't itself the problem--the problem is the economic distortions this debt fuels.

[@nyquil762]

Nailed it. House prices, wars etc.

[@grimaffiliations3671]

@@nyquil762 the main distortion when it comes to house prices is artificial lack of supply due to strict zoning laws not the debt

[@energyfitness5116]

@@grimaffiliations3671 And Demographics.

[@GuyIncognito764]

It's very immoral how debt got kicked up to federal level, making people who didn't take it on responsible for it. This country makes me sick sometimes.

[@BicycleFunk]

We are obligated to pay attention and make the system work for us. Join any effort to make the country MORE democratic, not less like the neofascists would like to do.

[@marcosalvarez9902]

@@BicycleFunk Who are the neofascists? The democrats that elect their presidential nominee without a vote?

[@grimaffiliations3671]

what do you mena kicked up to federal level?

[@user-jm8fj7ez8s]

@@grimaffiliations3671 During the GFC, the federal government made it clear: If you’re big enough, we will print the money to bail you out. The started a hell-ish trend where the government would take more excessive debt burdens for large private entities. The domino effect led us more or less to how politics is done today: I promise to cut taxes, but somehow also enact social welfare programs that will help you. Do not think about how I am able to lower profits will increasing expenses.

[@penguins0003]

Thank you for making these videos. I can't thank you enough. I don't participate in any markets, I just like watching and learning. Your videos help me feel comfortable enough to pursue business classes. Thank you.

[@EPBResearch]

Glad you like them!

[@MorganBrown]

Fascinating. Total debt up to 1980 had a steady floor 150% of gdp. Total debt from 2007 to present has a steady 350% floor. You didn’t really discuss the steady transition from 150% to 350% and its implications for how we got to where we are. 1982 to 2007 would appear to be the most benign period of “growth”, ignoring the tech bubble bursting. But total debt nearly tripled during that time! Thoughts?

[@Kovas18]

Greek here, this is the same thing that happened in Greece. Every EU and US government since the early 90 followed the same aversion to financial crisis and decided to keep inflating the economy and keeping kicking the can further down the line. That is mostly evident with the 2008 and 2020 financials crises where governments did not let allow actual defaults and decided to put a patch. Financial crises are devastating but a natural process that lets the economy hit a 'reset' button and start fresh.

[@grimaffiliations3671]

Because austerity leads to recession, and that leads to a collapse in tax revenue. When taxes fall, deficits grow. Budget surpluses don't get rid of the deficit, they just push the deficit from the government onto the private sector. The private sector can't sustain deficits so it eventually collapses, forcing up the deficit thanks to a combination of low tax revenues and unemployment benefits

[@nicolasbenson009]

If the dollar collapses don’t be fooled your debts doesn’t disappear, they add it back to the new currency or mode of barter. best advice get out of debt. make regular investments be debt free and financially stable

[@TinaJames222]

Safest approach i feel to go about it is to diversify investments. By spreading investments across different asset classes, like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown. its important to seek the guidance of an expert

[@Vincent-j8u]

A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $317k to $850k.

[@sharonwinson-m8g]

pls how can I reach this expert, I need someone to help me manage my portfolio

[@Vincent-j8u]

I've shuffled through investment coaches and yes, they can be positively impactful to an individual's portfolio, but do your due diligence to find a coach with grit, one that withstood the 08' crash. For me, Sophia Maurine Lanting turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.

[@T1000mileman]

Excellent presentation Eric. I began following you on SA years ago and am delighted to see you on KZbin.

[@hersdera]

The US economy cannot survive without continuous credit and debt creation. The FED will print more money and the average American will go just that much further in debt. Meanwhile, foreigners lust for the greenback. Their economies are in worse condition than the US... if that's even possible. Someone is going to be left holding the bag...

[@HectorWhitney]

Hearing from an experienced investor who has survived adversity and prevailed is always motivating. It may be frightening when your portfolio goes from green to red, but if you have invested in strong firms, you should maintain growing them and stick to your goal.

[@bernadofelix]

It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.

[@ScottKindle-bk3hx]

I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advis0r? I'll be happy to use some help.

[@bernadofelix]

Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

[@KarenLavia]

I looked up her name online and found her page. I emailed and made an appointment to talk with her. Thanks for the tip

[@maxpower5452]

Great video but idk that its ideal to be measuring things like Consumer Debt relative to GDP. It should instead be measured by net income of those consumers. Reasoning being just because GDP went up doesn't mean that peoples debt burden went down.

[@austenmoore7326]

Yeah I was thinking the same thing. Multi family housing debt to gdp is up, but that doesn’t matter if multi family housing to multi family housing down or even neutral.

[@jayworley1583]

As usual, great content, but I've never cared for any sort of comparison to GDP. GDP, over time, tends to rise without falling much or for very long before turning north again. This is especially true over the years since 2008. The bottom line is that overall HH debt is rising which is not something your presentation would suggest. Instead, it's a bait & switch. Since the end of 2020, HH debt has risen dramatically per the NY Fed. The upward slope is easily as high as it was in the 4-5 years leading up to 2008.

[@cyclingphilosopher8798]

Excellent overview! Also makes me feel much more comfortable as my debt is only about 27% of my assets.

[@HisCoconutGun]

Debt doesn't matter because the government is going to inflate away our debt. What's more important is having hard, inflation-proof assets.

[@GuyIncognito764]

Don't forget your share of federal debt that your fellow citizens dumped on you!

[@grimaffiliations3671]

@@GuyIncognito764 not how it works. People don't have a "share" of the federal debt

[@garrettw5143]

Really nice video, I certainly learned some things. I think you can improve in plot readability and taking more time to define things like multi-family or 1-4 family debt to increase accessibility of the video. Also explaining why some things are good or bad would be helpful, since most of the video is just numbers. This was my first video of yours I've seen and i plan to continue watching.

[@WildDisease72]

Climbing debt will result in what? More climbing debt!!! Winning strategy 👐

[@sebastiancioek5970]

Public debt is also private debt - who pays it back, the people by paying taxes and inflation:-)

[@BangMaster96]

Once you turn on the Money Printer, it is very addicting to keep it going and hard to turn it off. No body wants to go through hard financial times, no body wants to go broke, no body wants to work hard to actually make real income, the Government wants to print and spend Money, Businesses & People want to borrow and spend Money. It's all just borrowing from the future to spend in the present like drunken sailors. Someday, the chickens will come home to roost.

[@mantanaman1944]

Roost me bangmaster

[@forsupernovae2401]

maybe u guys dont understand debt is money

[@TruckerBod95]

​@forsupernovae2401 yes debt is an asset for banks and the money they have on deposit is the there liability.

[@colbyharrington6166]

Ever heard of unrealized losses? If banks sold their bills today, the system would go bust. The losses dwarf the GFC. Risk is higher than ever hence low end t bills rolled over 4x instead of you getting a home loan.

[@jeffmorin5867]

@@forsupernovae2401 If somebody pissed on your head you'd think it was raining...

[@dirk.no-whisky.4u]

Incredible level of research and presentation, guys! Subscribed from the very first video i came across, and have not been disappointed

[@I_Love_Figs]

Hope you do one on interest payment/maturity profile. Makes a big difference per Minsky's definition of Speculative/Ponzi finance.

[@KimberlyO.Kitchens]

We Are in Unchartered Financial Waters! every day we encounter challenges that have become the new standard. Although we previously perceived it as a crisis, we now acknowledge it as the new normal and must adapt accordingly. Given the current economic difficulties that the country is experiencing in 2024, how can we enhance our earnings during this period of adjustment? I cannot let my $680,000 savings vanish after putting in so much effort to accumulate them.

[@JohnNgomba-k3v]

Keeping some gold is usually a wise decision. You would be better off keeping away from equities for a bit or, even better, seeking advice from an expert given the current market conditions and everything that is at risk with the current economy.

[@KarenJ.Mancia]

You have a very valid point, I started investing on my own and for a long time, the market was really ripping me off. I decided to hire a CFA, even though I was skeptical at first, and I beat the market by more than 9%. I thought it was a fluke until it happened two years in a row, and so I’ve been sticking to investing via an analyst

[@heatherj-o5j]

Could you possibly recommend a CFA you've consulted with?

[@KarenJ.Mancia]

My CFA Stacy Lynn Staples 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..

[@JohnNgomba-k3v]

Thank you for saving me hours of back and forth investigation into the markets. I simply copied and pasted her full name into my browser, and her website came up first in search results. She looks flawless.

[@davehugunin770]

Solid work - Congratulations on 100K Subscribers !!

[@raymond-i2v]

Since the debt crisis could unleash carnage on the stock market leading to economic downturns. We need to be prepared for potential market volatility. how can I secure my $80K stock portfolio against declining?

[@MaryWilliamson-h2o]

It's a good idea to seek advice at the moment, unless you're an expert yourself. As someone who runs a service business and sells products on eBay, I can tell you that the economy is struggling and many people are struggling financially.

[@JacobPaula]

you are completely right, Advisors have information and paths that are not disclosed to the public.. I profited $560k in 2023 under the tutelage of my Fiduciary-counselor. Am I selling? Absolutely not.. I am going to sit back and observe how this all plays out.

[@WillFred-g7g]

pls how can I reach this expert, I need someone to help me manage my portfolio

[@JacobPaula]

'Jessica Lee Horst' is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment

[@MaryWilliamson-h2o]

Thanks, i did a quick web search and i found Jessica, i hope she responds to my mail.

[@richardracine9055]

Outstanding presentation. Thank you.

[@TheEraLad]

Love how you broke this down for us

[@Valaens]

Great video. I would love to see the same for Italy and Europe in general

[@davideyres955]

Fantastic video. Wish you could do the same analysis on the UK economy.

[@mariusfacktor3597]

8:41 "There was a huge overbuilding of multifamily apartments in the last 10-15 years" I don't think this is true. There was a massive UNDER building since the 1970s when cities made stringent land-use regulations that banned apartments. Today there is still a housing shortage in America's most important cities and apartments are badly needed as seen by record high rent prices. There is more debt because they are building more (still not even close to enough), but that will pay off over time as homes are badly needed.

[@sahhaf1234]

Yes, but the important questions are --how much interest is paid on this debt? --who are the creditors, ie, who receive the interest?

[@O-Nsquared]

Question: If there was such an overbuilding in multi-family apartment, why does it feel like housing is now so expensive and hard to obtain? Just curious because other sources seem to say we didn't build enough housing.

[@adamkral8110]

He only looked at debt and noted an increase. It was a relatively minor increase, so I’m not sure why he made it sound bad. We built more MF housing, and while inflation has increased rents for consumers, it also causes investors to hold those older low-interest loans rather than repay them. Those investors instead roll their new income into the next project to limit the amount of new high-interest loans needed.

[@junkbucket50]

8:04 what happened in 2015 to cause the student debt to spike so heavily?

[@sinforoso2000]

The government has made risk a myth the last 10 years via subsidizing the financial and housing sectors while they both engage in risky and shady practices. Yet the average american has seen their standard of living deteriorate via an increased expenditure to income ratio. The collective increase in shelter/groceries/utilities/vehicles dwarfing increases in pay. The dollar's devaluation while salaries fail to keep up is troubling.

[@CaptainCaveman1170]

Exactly, profits stay private and ever consolidated into fewer hands, while all the unpayable debts and bad bets get silently whisked away onto the public balance sheet for "us" to absorb. The Romans would blush at this level of corr...

[@stefnirk]

Great video; I'm definitely becoming a subscriber. But what is just as important is debt payment to GDP. If debt is the same level as GDP but interest rates are 50% higher, it's not the same situation. Yes, it's more complex since much of the debt has fixed low interest rates, but many businesses and public debt constantly need to refinance at newer interest rates.

[@aliiisalama]

I think these are actually positive moves. A few key points: - overall debt has moved from riskier counterparties to significantly lower credit risk counterparties. That is a very good thing. In fact, the main increase is to the Federal Government who will never default. Household debt is way down, local government debt is down, these are counterparties that do regularly default. - "debt crisis" - Debt is only problematic if you cannot make the repayments. The current debt is issued at much lower rates than 1980 (so 150% Debt-to-GDP vs 351% now) the repayment now is still lower as %age of GDP. It would be interesting to see these same trends against the repayments. More broadly, debt is moving to lower interest rate products, a good thing in terms of defaults. However, the counter argument to that is that the overall long trend in debt is up because the opposite is true of interest rates. I imagine interest rates will go back to zero, then the debt repayment issue at least goes away for a while.

[@MBarberfan4life]

I don't think interest rates are going back to zero, nowhere close, as even Powell admits. 2008-2021 was literally the anomaly, not the norm.

[@aliiisalama]

@@MBarberfan4life the downtrend since 70s is the norm. 90% of last 15 years is zero. So it is at least going back to low numbers. Fed debt repayments are too high not too. Perhaps it will get to zero, perhaps they won’t. I think better chance it gets there, especially if Trump gets in, but we’ll have to wait and see. Powell always speaks to the current situation, as he should, his ‘forecasts’ are always proven wrong in time. He cannot come out now and say we are going to zero.

[@MBarberfan4life]

@@aliiisalama it isn't just Powell. If anything the fact that there has been a downtrend for the past 40 years is a red flag. The same red flag that led people to mistakenly believe we would never get high inflation again. Those trends are slow-moving, including the decades-long increase in rates before the time period you picked.

[@jerryrichardson2799]

Thanks for another in depth video and acknowledging a lot of private debt became federal debt. I don't have much debt. I pay rent and have a new car that I got a fairly good deal on, I paid a little over $19, 000 for it. I owe less than $12,000 on it now.

[@GuyIncognito764]

You have lots of federal debt. That's how they tricked you.

[@jerryrichardson2799]

​​@@GuyIncognito764As per my original comment, I know, but I'm in my early 60s and due to become a debt in a few more years.

[@edwardjoseph8007]

One question to ask is how did the private sector deleverage? Was the debt actually paid off, or was it passed off to the federal government thru things like bailouts?

[@joshchild]

Love this content! You are almost at 100k subscribers! Way to go!

[@joshchild]

I've been around since you started the channel!

[@xiaoranmo7308]

Consider institution like mutual fund who manage people 401K is the biggest holder of US treasury and municipal bond, in the sense the money US government borrow directly from is US private sector, does it really matter how high the public debt rise? Since all the obligation, interest payment is directly receive by US private sector, like shift money from left hand to right hand. Great US debt intro by the way, keep the good work. :)

[@JC-kb2qg]

Make the same video with the shadow debt combined problem in china, it’s mind boggling!

[@aaronpeters6209]

Request ... Analysis of federal interest payments and rates relative to federal revenues. I think nothing will substantial will happen with trying to reduce federal debt until interest paid on the debt is out of control. Wondering when that will be when considering other factors - even that is a tall order - like healthcare/medicare spending, future interest rates, expected federal revenues, etc. Essentially, where could the blowup points be? As interest paid on debt is projected to be about 18-19% in 2024. Maybe even try to gauge how detrimental a longer term large scale war with the BRICS would be?

[@kolinboorom6868]

I don't understand how multifamily housing can be overbuilt, and deemed not good investments, yet many of our cities have housing shortfalls. How are both those things true?

[@GuyIncognito764]

They built the wrong stuff. People can't afford it.

[@alexlowe2054]

They both contribute to each other. The housing shortfall from low inventory during the pandemic caused both home and rent prices (those multifamily apartments) to skyrocket. Apartments could charge insane prices for rent because there was no other option. Various investment companies bought up housing because they saw the low demand and knew prices would rise. But prices rose far too fast, and way too high. The current prices are unsustainable. Even if there's a housing shortfall, the of housing affordability is at its worst situation its been in during our modern records. That's a 100 year record in unaffordability. Consumers aren't buying houses at the current prices, because they can't afford to pay today's prices. It's no longer optional. Housing prices MUST come down relative to income. People simply can't pay for today's prices. That means someone is going to be left holding the giant bag of debt everyone used to build and buy housing. Everything is linked. Corporate debt didn't *just* go into multifamily apartments. Corporations also invested heavily in real estate in many cities, by using debt. When housing prices drop just a small bit, ~10-30% of investors will end up underwater in their mortgages, without enough assets to pay for their debt. Many of those smaller investors (local AirBnB) and a few medium sized investment companies (lots of them in Atlanta) and maybe one super large company will go bankrupt. Plus, many people who lose their jobs will be forced to sell their homes. That will instantly liquidate a large amount of inventory, temporarily driving prices down very quickly. That's the housing bubble popping. Which forces rental companies to drop prices to compete. No one wants to pay more for rent than it costs to buy a home. That's what will force many companies that own multifamily homes to declare bankruptcy. They'll be unable to charge enough rent to repay the loans they used to build the apartment in the first place. Eventually, long term trends will win out, and the cost of housing will start rising again. But just like the Pandemic drove prices up insanely quickly for a short period of time, the incoming recession and wave of corporate bankruptcies will drive prices down for a short period of time. The only other possible way to solve the housing unaffordability problem is for us to have to face 70s era inflation to bring wages in line with what people can pay for homes. But that's essentially stagflation, and it's not really better than a recession. We can sustain high levels of debt for a short time, until something happens to cause prices to drop slightly, which then causes the overleveraged sectors to collapse. Silicone Valley Bank's collapse early last year is an early taste of how quickly bad debt can cause bankruptcies. This isn't going to be a decade long change in housing trends. It's going to be a very messy and brutal year or two when prices suddenly crater, before slowly creeping up again.

[@MBarberfan4life]

Cantillon effects.

[@kchal0]

This is an interesting video. I think another interesting video topic would be the flip side of this, debt is a 2 way street. It’s a liability for one party but an asset for another. Since 2/3 of the US debt is owed to Americans, id like to know how paying it back would effect people’s retirement accounts and pension funds. Part of me wonders if there were less demand for US debt if they would stop offering it but that’s another discussion. Right now it’s still seen as a safe haven, with all asset prices being benchmarked against it.

[@kalobrogers235]

I wish social security & Medicare would have been secluded and highlighted, great video.

[@nicolas393]

really enjoy these videos, ty

[@EPBResearch]

Thanks for watching!

[@asknwclips7672]

query whether state and local debt relatively lower because of federal funds substitution?

[@perusingposts2557]

On Corporate and Non-Corporate Business Classifications: "Non-Corporate" is a misnomer. Millions upon millions of Limited Liability Companies (and Partnerships) are OWNED by corporations. This is particularly true in housing, both single family and multi-family housnig (which includes mobile home parks, where the consumer owns the structure). The debt held by those corporations operating LLCs IS corporate debt, not "non-corporate" debt.

[@michaelayeni177]

Along as those calls keep printing its all good!

[@freesk8]

Wow! Great analysis! Great data! Thanks! :)

[@staspastukov5944]

I was watching a video about the Middle East, and below was a video with your screensaver. I thought that maybe this is the attitude of business, government, and students in the US towards Israel.

[@twistedbydsign99]

Wealth Tax, Cut social programs, forgo Treasury auctions and have fed directly buy at low rates from fedgov. What are they going to pick? are there other options?

[@nyquil762]

Cut social programs? The DOD is the largest single expense category.

[@edwardmitchell6581]

It makes sense that we have an housing affordability problem when muilti-family is not affordable. Is there a way UBI could be implemented without increase Federal debt? If low wage earners had a stable base income, multi-family wouldn't have to deal with as many late payments.

[@lainiwakura44]

An excellent overview. The only observation is that public debt will likely be kicked down the road for quite a long time, through inflation and easing, delaying a recession for years.

[@grimaffiliations3671]

it will be kicked down the road forever, its not supposed to be paid off. Its supposed to exist as peoples savings

[@lainiwakura44]

@@grimaffiliations3671 No debt can be kicked down the road forever. Decades is a generational duration, but is not forever.

[@grimaffiliations3671]

@@lainiwakura44 That claim relies on the idea that taxes will have to go up in the future to pay for the national debt, but that's completely wrong for two main reasons. The first one being, the debt isn't paid for by taxes, it's paid for by simply rolling over any bonds that come due. The government rolled over 120 TRILLION dollars worth of bonds in 2021 alone. That's trillion with a T. The idea that taxes could ever cover that amount in silly. They can do this forever because they control the currency our debt is denominated in.

[@AntoinePirard]

So well explained!

[@AbbeyRoad69147]

Please do a video on repayments.

[@gustavrodewald3654]

It seems paradoxical that we have hit records in the ratio of median home price to median income (7.7 now vs 6.8 prior to the "great recession"), yet we have somehow deleveraged on mortgage debt.

[@caleb7799]

I love the breakdown of the different entities.

[@danielmrtns]

So, the burning question: what’s the real-life implication of absurd federal government debt? I’d argue that we’ll never see tax revenue rise substantially to pay down that debt, while it is equally unlikely that the US federal government will cut back on social programs and military spending. Will the federal government issue debt for as long as there are investors willing to buy it? And what happens when that’s no longer the case - or, what might cause it to no longer be the case?

[@MBarberfan4life]

When investors don't buy the bonds, the Federal Reserve will buy the bonds. Which means inflation---default through inflation.

[@grimaffiliations3671]

@@MBarberfan4life the fed bought tonnes of debt after 2008, why was there no inflation or default? Japan is the king of buying back its own bonds, yet its dealing with deflation not inflaiton. You're making stuff up

[@nirvaanmeharchand5896]

Excellent work - thank you.

[@EPBResearch]

Our pleasure!

[@sudo2998]

Thanks for the great research! It looks a lot better than I imagined. So basically, if the government gets its act together, we can maybe survive this. Given that the monetary basis has been increasing, can we sustain the ability to make our payments going forward?

[@KC-ub1mt]

Awesome breakdown!

[@ZoomedOut2020]

How far can anyone trust any of the data placed in front of the public…?? That goes for either the numerators or denominators in this discussion as well….

[@nyquil762]

Nailed it

[@Mike-rp6lb]

Great presentation. That said there is a problem with your denominator, which makes things look incorrectly rosy. The portion of the GDP that produces real goods and services that build wealth and can be exported to earn a surplus and pay off debt has shrank considerably over the yeras. For example, government borrowing significantly inflates GDP, this portion of GDP obviously is not available to service debt. likewise for much of the FIRE sectors, health care, education, etc. When you look at the BLS GDP breakdown you find our GDP is divided into rough thirds. one third is productive activities, one third is overhead activities, and one third is parasitic activities. only productive activities can produce a surplus that builds wealth and can be used to service debt. So like every other time in history in the end they will print and destroy the currency value. it will either be orderly or disorderly.

[@grimaffiliations3671]

all of the gdp is good and builds wealth, whether or not it comes about through borrowing. Government deficits = private sector surpluses

[@Mike-rp6lb]

@@grimaffiliations3671 100% wrong. What would happen if every country's government believed this, they paid great wages and employ half the people to dig holes and the other half to fill them in. GDP soars around the world. Is this good and building wealth? obviously not, with no real production everyone would be impoverished and die. whether 100%, 90%, or today's approx. 30% of GDP, The degree of relative impoverishment only varies with the percent of "GDP" that isn't involved in producing an actual useful good or service that people need to live.

[@grimaffiliations3671]

@@Mike-rp6lb Deficit spending is captured by the private sector, this raises aggregate demand and fuels further growth. Without deficit spending the private sector is forced to net borrow (go into deficit) And as history will tell you, the economy doesn't survive long when the private sector goes into deficit

[@Mike-rp6lb]

@@grimaffiliations3671 This is a way of looking at the economy through accounting identities while missing the big picture. Money is not wealth, it is simply a tool to determine allocation of resources. Focusing on demand is misguided. There is always demand for needed goods and services, the problem, which creates trade deficits and a hollowed out US economy is lack of production. On paper the egg heads see nothing wrong with a hollowed out economy, but completely ruin has only be staved off by the artificial demand for US dollars globally. This is ending. Government (deficit) spending exacerbates these problem.

[@iBeo01]

The debt situation is important but I like to look at the USs credit score and I think we’re doing pretty good even with all this leverage.

[@ytqclys]

Why is there high rent inflation if apartments are overbuilt?

[@td000]

when does it break

[@leifefrancisco7316]

I don't know a lot about this subject but I don't understand how there can be too much multi family debt and a shortage of affordable housing/apartments. I guess they overbuilt luxury apartments?

[@adamesd3699]

8:04 There is something wrong with this graph. It shows student debt at zero before 2005, then rising vertically to over 3.5% of GDP within one year. This does not reflect reality. First, there was a lot of student debt before 2005. Second, it didn’t suddenly jump in 2005. It must be some government classification issue.

[@orsonbradford3457]

i don’t understand how to think about debt. it seems to be cast as a negative most of the time. But isn’t debt a zero sum phenomenon ? There is a creditor and a debtor, and the money flows between them, remaining neutral overall. It could be bad for either party if the terms and outcome of that debt are not good for them, but then the other party should do well, right? or could the relationship be bad for both somehow? Say the overall wealth consists of a bunch of beans and money tokens representing those beans. The tokens and the beans move through the economy and balances of private and government entities ebb and flow. But what impacts the total number of beans? it doesn’t seem like debt would matter at all. Maybe where it does matter is how it affects the behavior of the players causing them to increase or decrease the real wealth by being creative or destructive with those real beans (not the tokens which only have a virtual existence).

[@pristinedetailing5171]

Wow!!! My hat off to the student debt borrowers who kicked it into gear and paid off all that debt in just 4 years, remarkable!!!

[@crickett6519]

Three things you’re missing number one the federal reserve owns about on 1/3 of all mortgages so mortgage that really hasn’t gone down. Number two were running $2 trillion deficits so what is the real GDP if you go to non-government spending/. gdp is smaller percentage than in 2007

[@crickett6519]

we’re heading to a great depression not recession

[@Agatha.wayne0]

It was a very bad decision to remove the Glass-Steagall Act in the late 1990s, which led to the spectacular failure of huge banks during the financial crisis of 2007-2008. To prevent another disaster, Dodd-Frank and this statute both need to be re-established right away. What happened with SVB is only the beginning of what will happen if nothing is done to address the current situation.

[@BicycleFunk]

If the US as a whole recognizes the problem, then we should accept that a combination of higher taxes and more effective spending is require to fix the issue. That said, what would the US and world look like if we traded debts?

[@Romogi]

The main thing I learned from these graphs is that I really wish I had been born earlier so I could have been becoming an adult in the 1950s.

[@Astroman89]

National debt can be paid off if we simply pay back treasury securities with US Notes and destroy an equivalent amount of federal reserve notes. US Notes are still legal tender and are issued free of debt.

[@whatwherethere]

Who owns the debt? Debt is always someone else's asset.

[@yopyop3241]

According to the video, 17% is owned by foreign people and institutions. That leaves 83% held by American people and institutions. Also according to the video, the biggest debtor is the federal government. The biggest holders of US federal government debt are the Social Security Trust Fund and the Federal Reserve. The biggest foreign holders are close US allies like Japan and Ireland. It has been in the news lately that China has been selling off its holdings. The next biggest debtor is US businesses. The holders of that debt are wherever US businesses get business loans from. The next biggest debtor is US households, mostly via home mortgages. The holders of that debt are wherever US homeowners get home loans from. The last really big debtor is the US financial sector. The holders of that debt are wherever US investment banks get loans from. If anyone can provide additional insight into the “wherever XXXXX get loans from” details, it would be much appreciated.

[@Mr.Stud.Puffin]

Thanks Eric, always great content. Much appreciated 👍

[@SimonAndersen21]

Thanks for the great data! Although I’m not sure multi family housing is being over built now, I’d argue it was being under built for a long time. The US is short about 4.5 million housing units, and building more multi family housing is a good way to bring housing costs down by increasing the housing supply.

[@rodhonco5681]

Isn’t that something? Government can print money to sustain itself while the Private Sector chokes on those increased Taxes and Regulations. Everyone has to wonder how much longer the Public can take this beating/burden!

[@EddieChamo]

It's incorrect to say there's "Overbuilding" in multi-family homes because the US has had a severe lack of that type of housing. The reason why it's gone up is because there has been a huge push to build more of that type of housing. That's why the debt has increased.

[@templemark1010]

Which party in Nov has a better path to fixing this?

[@MBarberfan4life]

Hard to say. Nobody has done anything about since Clinton and Gingrich tackled it

[@Millerj2450]

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[@Alex_will12]

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[@Pat_laura22]

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[@DorothyWalker-l2y]

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[@Pat_laura22]

I definitely share your sentiment about these firms. Finding financial advisors like “Jessica Lee Horst” who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

[@williamsscott3303]

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[@lberhold]

We need to cut social programs/entitlements. Entitlements are 4x the outlays of the defense budget. Entitlements of that size are unsustainable.

[@JoselitoBurrito]

So basically, same as 2007 but cutting out the company saving process because it was already done printing money instead of taxing more. So the taxpayer will always lose purchasing power because of companies over leveraging. Awesome.

[@JoselitoBurrito]

But hey, at least we're not China... Over there they let the companies go bankrupt if they have terrible debt practices

[@CaptainCaveman1170]

That's right, that's why there hasn't been a recession in 15 years and counting. The bad debts now all magically end up on "our" tab without any consequences at all to the debtor. But the profits stay private of course.

[@Ayo22210]

For student debt instead of four-year universities, students should look to community colleges and get a trade or a tech skill. Tech Ed should be the focus going forward.

[@huntertomlin3909]

Crossed 35 trillion on Friday July 26th 2024

[@adeebihabibi]

I don't doubt the debt is a huge problem. I thought we were crashing a long time ago. That said, these kinds of videos don't show the entire picture. Debt is higher, but your money is worth at least half of what it was in 2007, so this isn't adjusted for inflation especially if you're comparing to GDP. Also, a lot of this debt may be at lower rates.

[@yopyop3241]

This is only part of the story. It is also critical to know the value of what was purchased with this debt. Borrowing money can be a good thing if the money is used well. I believe the general consensus is that the federal government has been riding a streak of very effective use of debt. The 2008 bailout money saved entire sectors of the US economy. Obamacare has more than paid for itself. The Biden infrastructure spending is expected to go a long way towards preventing extremely expensive catastrophes like collapsed bridges and tunnels. In contrast, the private sector was the source of the bad debt that triggered the 2008 financial crisis. In addition, tax cuts (which run up public debt to put more money in private hands) have had nothing but disappointing results since the 1990s.

[@geigertec5921]

This explains why gold is 2500 now, people getting ready.

[@kylel123]

Thank you very much. Your videos are truly amazing. Please don't stop))

[@EPBResearch]

More to come!

[@DrLusEnglish]

100T is what you will see!

[@BakoSooner]

We can't even service the interest on the national debt. But people want more social services and our government is still spending like drunken sailors. This just seems to be train wreck coming.

[@seeranos]

Your conclusion that multi-family mortgage debt is overheating comes with very little context, and i don’t believe it. Increased building of apartments is occurring where housing is in low supply. Leveraging now to meet a demand that will pay dividends long term is 101 good financial advice.

[@skygge1006]

There is also a shift in favorability of people liking multi-family homes. Not to the point that a majority of the country would choose it but a larger portion of the country would be willing to live in an urban area and thus it makes sense that more multi-family homes are built and that would create the increase in multi-family debt that he showed.

[@Reutzel507]

This has been explained every decade

[@HisCoconutGun]

Austerity is wildly unpopular so government will inevitably print money to pay this debt and we will return to inflation and maybe even get hyperinflation.

[@MBarberfan4life]

Not hyperinflation, but it will be high inflation for a long time. That's what happened during WW1 and WW2. And why wouldn't the Fed print money, when most of the population is incorrectly blaming everything and everyone else (e.g. corporate greed, Putin, etc.)?

[@Dan16673]

​@MBarberfan4life the fed has to buy the bonds if no one else will. They cannot say no

[@MBarberfan4life]

@@Dan16673 they will, and that's my point---I agree. They are supposed to have a mandate to promote stable prices. There's no point in having a supposed independent central bank if they are just going to be a credit card for Congress. That's 3rd world country crap.

[@Dan16673]

@@MBarberfan4life agree. Logic doesn't follow. Like most empires, the American one will be short lived

[@gabrielmartinez2455]

The private sector debt got bailed out by the government. Privatized profits socialized debt.

[@Dan16673]

Pretty much. Welcome to central banking

[@CalebStalder-qp4fb]

Hold up Debt increased by 23% in last 4 years. Inflation up +20% in last 4 years. Almost like those 2 are tied together

[@We_Must_Resist]

We are back to 2007, just before the crisis. We are just before a crisis. Get ready.

[@quietus13]

What do you think will be the catalyst?

[@We_Must_Resist]

@@quietus13 Between Election day November and Inauguration day January. All the pent up hostility and negativity will be released in a flood of nastiness. The new President will have to deal with the failures of the past. The Old Guard will stop trying to hold back the flood, or they will say they do not have authority to do so. Apres moi le deluge. (After me the flood).

[@MichaelChengSanJose]

So what are your unvarnished thoughts?