National Debt - Is Government Debt a Problem?

Governments all over the world are racking up a huge amount of national debt but is government debt a problem? In this video I look at the impact the current crisis has had on the overall national debt, how large the US and UK budget deficits actually are, whether this level of debt is sustainable and why some people actually believe that the United States should begin to view its federal debt more as a public resource than a problem.
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#NationalDebt #GovernmentDebt #PensionCraft

[@Pensioncraft]

We rely on your support to be able to make these videos. To see the benefits of supporting us and becoming part of our community click here: patreon.com/pensioncraft

[@mnfchen]

There isn't a magic money tree I can shake, but I'll still consider being a patron :)

[@greengold6705]

US debt is 27 trillion dollars while GDP is only 21 trillion that comes out to 145% debt to GDP.

[@periwinklemcfee7274]

@@greengold6705 OTOH, the non-financial private sector (businesses and households) is about $27 Trillion or more. (old post I know, so, just sayin')

[@smithraymond09029]

How does this channel only have 47k subs? So much great information here. Thanks to PensionCraft for taking the time to make these presentations.

[@jackofthecoke]

KZbin algo. Naturally, clickbait and low effort videos in the spirit of "Top 10 stocks for 2020" will get recommended more often. But still. It was recommended to me by the same algo months back, so it's still out there for people to discover. It's certainly an up and coming channel that should have no problems reaching the 50k subscribers soon.

[@Pensioncraft]

Thanks so much smithraymond09029

[@sjaw100]

Like that you use very clear easily understandable charts and good sources. Thanks.

[@Pensioncraft]

I am glad it is helpful AutumnMoon58

[@brandontownsley6763]

Great video! Very engaging and informative!

[@jefersonvieira1345]

Great analysis of debt and income. I'm worried about Brazil that even passed by the first wave of coronavirus.

[@vivienlegeisha3425]

Thank you! You’ve made a complex subject easy to understand!!

[@Pensioncraft]

Thank you Vivien Le Geisha - I am glad you found it helpful.

[@darkbyte2005]

This was a very informative, colorful and clear video with diagrams and charts that were understandable and narrated to audience that most understand and wants to learn about national debt. Thank you..

[@Pensioncraft]

I am glad it was helpful. Thank you.

[@angelosenlob4328]

great video . bravo

[@Pensioncraft]

Many thanks @angelo senlob

[@andrewmarsden1970]

Great graphic at 2.00. Very imformative. Thank you.

[@Pensioncraft]

Your welcome Andrew I am glad you enjoyed it.

[@gasparottogui]

Excellent explanation! Thanks for sharing!

[@Pensioncraft]

My pleasure - I am glad you found it helpful.

[@MrFriskyWhiskey]

Now the argument for Bitcoin makes perfect sense. Hope for Japan.

[@RobCLynch]

Hmmm - makes me look at my 'Global Emerging Markets' fund uneasily. Perhaps I should reduce my exposure and wait for a drop in price? The fund is up 14% on the year However.

[@xworld250]

Hello, What is fed central bank balance sheet and us bank balance sheet?

[@Sorryishotyourdog]

this is one of your best videos. Excellent work.

[@Pensioncraft]

Thank you that is much appreciated.

[@trade2fire257]

Great explanation. Thanks.

[@Pensioncraft]

Thank you

[@NZAnimeManga]

Another great video, thanks Ramin

[@Pensioncraft]

Thank you NZAnimeManga. I am glad you found it helpful.

[@fredatlas4396]

What do you think about bogleheads simple diversified portfolio suggestions, using low cost well diversified index tracker funds

[@kevinscott9745]

Zimbabwe and weimar issues were much more than printing money. More to do with killing production. Similar to what's going on now its not the money printing its the massive issues with loss of production and distribution.

[@kynchan3332]

What happens if it does debt squared?

[@baijuthomas3716]

This was a lot of work . Thanks so much for the graphs and clear consise explanation.

[@Pensioncraft]

baiju thomas I am glad it was helpful.

[@KrunchyJD]

No MMT does NOT say defecits are a good thing. It says that the government deficit or surplus should be appropriate for the situation, and that as a currency issuer the government cannot become monetarily insolvent, although it can create inflation. It only says that in most cases with countries that are net importers that because the private sector, or in other words people wish to accumulate money or savings that generally the government should be in defecit.

[@lizziebett3654]

Excellent analysis as usual. Thank you! If EMs are more at risk of a debt crisis, then better to stay away from EM bonds🤔

[@randeep6346]

Hmmm, the risk is higher if the return reflects the risk, then its 'fair'... and up to your risk tolerance.

[@MagicNash89]

Not sure if this aged well 3 years on, inflation still persistent, although it could be attributed to energy and food prices which are imported massively - at least for Europe

[@nathanbaldwin4495]

What about debt servicing to gdp?

[@movtheministryofvlogs7805]

Brilliant video keep up the good work

[@Pensioncraft]

Thank you

[@KrunchyJD]

You are missing something with MMT. If you put too much money into non productive assets, you will also get rapid inflation. The problem with Zimbabwe is that you had productive farmers who were removed from their land and replaced by people who were much less productive and had money thrown at them. Hence rapid inflation. The government can defecit spend to the productive capacity of the economy, doing more then this creates inflation.

[@julesf7596]

Great insights as always

[@Pensioncraft]

Thank you Jule s - much appreciated

[@Rob-fx2dw]

The article is generally good but there isa failure that is in the exlanation of inflation being controlled by taxation. It ignores he fact that taxes do not remove money from the economy but merely transfer spending power to government which spends it one way or another either on retering debt (sledom done) or paying for new spending on programs. If they spend it on retiring debt that will decrease the next years costs of debt repayment but that currently sledom happens and does not seem to be MMT policy becasue they say debt is not a problem.

[@fredatlas4396]

Or in the tories case giving tax cuts for their wealthy supporters and big corporate businesses

[@andrewwalsh2755]

Former PM, Liz Truss, thought she understood, and agreed with this... that's why she has the nickname, Brains... She nearly crashed the pensions industry... and became the shortest serving PM to walk out of office.. (debt/gdp) is a bogus metric, which gives a false sense of security... When gdp falls the debt remains... and default on debt looms (printing money just causes hyper inflation)

[@timetochange724]

If the Government own the Bank of England and we own the Government, do we then pay interest on our interest that we charge ourselves. Do we own the bank of England, if so where does its profits go? Do the pensioners the get an increase for pay offing the National debt interest bonds? What are the monthly interest rate repayments.

Great research, thanks for sharing! Seems like most of the 2020's will be spent adrift in an economic life raft waiting for a ship called Recovery.

[@Pensioncraft]

I am glad you found it helpful.

[@himalkoirala4371]

Why I'm watching this video, I'm not even a student of economics!?! Great video to understand national debt and other stuff. Subscribed.

[@Pensioncraft]

Thanks for subscribing Himal Koirala. Glad it was helpful.

[@latitudepost]

Very interesting video Ramin, thank you. This is a topic that has been on my mind for some time. When I look at the debt levels in developed countries like US and UK and all the recent money printing, I find it quite hard not to think that inflation won't occur at some point down the line. But I think that would actually be a good thing. It won't be good for investors who purchased bonds at current yields but a higher level of inflation would force central banks to increase interest rates thus making money less cheap to borrow. This would bring down the level of borrowing and go some way towards finally having a grip on and reducing the total amount of national debt.

[@vengefulavenger8382]

It would impoverish the majority of the wage earning population. That usually leads to social revolution. Look at the Arab spring. Its not a good thing.

[@latitudepost]

@@vengefulavenger8382 I meant a reasonable level of inflation. Not Venezuela levels of inflation. Sorry if I wasn't very clear on that.

[@Anti-CornLawLeague]

What happens if the US follows Ron Paul's advice and abolishes the Federal Reserve? Then there would be no entity left to print Federal Reserve Notes and thus no MMT.

[@chamundeeswaranradhakrishn7438]

Excellent information sir.Debt to GDP good explanation.

[@Pensioncraft]

Thank you I am glad you enjoyed it.

[@Karma46819]

Hi Ramin, what a great video once again. I have a question for with regarding an other type of debt. I am currently 23 year old and want to look into adding margin to my portfolio. Borrowing 10 to 20 cents for every dollar invested seems reasonable to me. What is you opinion on investing with borrowed money?

[@user-go7mc4ez1d]

I imagine he'd be against it, the one huge and unique benefit of investing is that you can choose when to sell, ie when you're in profit. Using leverage creates a margin call threshold, which removes this power and makes it more akin to gambling.

[@Karma46819]

@@user-go7mc4ez1d I am very aware of the risks and do see your point of getting attests liquidated when a certain threshold is reached. But I don't see the gambling part. If I where to add 10% leverage, margin calls would appear when the stock market drops 89.9%. Since I already have equity in this account I will NOT be borrowing against, only on my monthly additions. The forced selling becomes even less of an concern. Thanks for your advice. I don't want to make hasty discussions when it comes to investing.

[@user-go7mc4ez1d]

@@Karma46819 that's a good point, leverage on indices is at less risk of a margin call, that said you'll still be paying a premium each day to hold the borrowed funds. Not much, admittedly, but it tips the scales ever so slightly against you. I would use leverage when you're very certain of a position, given both your wins and losses are magnified. But can anyone say they're certain of the stock market at present? It's completely decoupled from the economy

[@ReedProductions2903]

Should we expect Uk government taxes to rise in 2021 and maybe things like pension tax relief to disappear? a NHS Tax?

[@robwulz3493]

V.A.T to 23% ?

[@sid35gb]

Pension tax relief won’t be touched Tory donors would go nuts if they lost their 40% tax break. NHS tax everyone would support it and the government can siphoned it off and used for bungs to their rich cronies.

[@fredatlas4396]

@@robwulz3493 that would damage the economy more and less revenue for the government

[@JesterEric]

They can increase duties on EU imports. As a member of the EU the U.K. was forced to lower excise duties on products like wine as the European Court of Justice ruled that having higher duties on products produced on other EU members as compared to beer produced in the Uk was against European Law

[@KrunchyJD]

Only if it's stupid. Government debt in this case is not a problem.

[@jfuite]

How do I know if I am living in a country like Japan or Venezuela? How do I know if my county's debt will spiral out of control with everyone panicking, or everyone will just calmly stand there and look at the impressive pile?

[@Bouffant1984]

Look at who owns the sovereign debt. I. Japan a lot of Japanese citizens are the bond holders and savers, so it's dysfunctional but ok. In banana republics the reserve bank holds the debt because no one else wants to buy the toxic bonds, so the print more and more, spiralling into hyperinflation.

[@derekwhittom1639]

Debt isn’t really the issue. It has more to do with malinvestment. In the case of Japan, their economy is too focused on firms that are unprofitable. This is, to some extent the same issue in Venezuela, except Venezuala has a concentrated economy in oil, requiring imports of other goods. Zimbabwe had a similar problem.

[@jfuite]

@@derekwhittom1639 When you have lots of debt, isn't that almost by definition a result of malinvestment? If your investments were good, then you would pay off the debt! I cannot imagine how a country goes 100% of GDP into debt, not as a result of malinvestment.

[@derekwhittom1639]

@@jfuite of course not. For example, I might borrow a million dollars to throw lavish parties, or I might borrow a million dollars to start a marijuana farm. Debt is not the issue. What it is used to finance is the issue.

[@derekwhittom1639]

@@jfuite the household falacy is a real thing, but it is not so different. Most households in the west have mortgages far in excess of their annual income, and that is (generally) a good investment, because people need to live somewhere. It makes even more sense when people borrow for productive assets. Debt doesn’t matter. Cash flow matters.

[@DoshNosh1]

Thanks for the video Ramin, I wonder what your thoughts are on bitcoin as a 'digital gold' and hedge against inflation. Do you see a future for it? I've been listening to some really interesting podcasts about the topic lately, some even speculating that EM governments could be building up stores of it.

[@vengefulavenger8382]

Governments wont tolerate bitcoin. Blockchain makes government irrelevant. Government has the biggest guns, so they will win.

[@nachannachle2706]

Come back to ask that question in 10 years: that's when investors will be hangovering from their U$D milkshake binge.

[@tc9634]

He's done videos about bitcoin and gold and unless he's had an epiphany since then, the answer is no

[@valentinbrescan288]

Very insightful analysis. I am wondering why there are not many analyses comparing debt to annual government income over time. After all, governments are the borrowers, but they cannot collect and don't actually own the entire GDP. I think MMT proponents are also not considering the impact on growth of the tax rises and spending cuts needed to curb inflation. I wish I could take one of them back to Germany in 1922 :)

[@Bouffant1984]

Great video. Although I respectfully think differently with some of the points. 1) the post WWII debt wasn't just repaid through growth, it was largely inflated away too 2) post WWII we actually made things and the dollar standard was pegged to gold. Now consumer spending are huge parts of the UK and US economies. That involves someone else (china?) doing the hard work in exchange for bonds, dollars, the dollar standard, etc. That is not an equitable geopolitical relationship and we may have insufficient control over how it changes. 3) Modern Magical Twoddle isn't really modern or a theory, as you point out. The currency is always a release valve, as foreign creditor nations loose faith in western central banks ability to shrink their balance sheets and not completely take liberties.

[@customersupport9055]

WHAT DO YOU MEAN THE CURRENCY IS A RELEASE VALVE AS FOREIGN CREDITOS LOSE FAITH? COULD YA ELABORATE?

[@Bouffant1984]

@@customersupport9055 currencies/money has to be perceived to be a stable store of value. If it isn't then you can't save and you can't price things in the future. If a currency is gradually losing value and it doesn't look like the government is prepared to do anything to prevent that (in fact they may be making it worse) that just creates an incentive to get out of the currency and assets denominated in that currency. So by governments paying for everything through printing/debt & that manifesting downstream as inflation, then the government stop anyone feeling pain in the short term but they cause a lot of pain in the long term by weakening the currency. This is the biggest problem for the US as there are so many dollars outside the US that could be sent home if sold. However most UK funds etc will be long in US assets, so the dollar is intertwined with everything.

[@periwinklemcfee7274]

@@Bouffant1984 But inflation incentivizes investment. Without inflation money would stand still...I'm not sure that that is a bad thing, but a 'thing' it is.

[@Bouffant1984]

@@periwinklemcfee7274 it does but at great cost. It really gives governments room to maneuver as they please. Deflationary money such as gold or crypto would still let you invest, as investment would be savings loaned out at interest, but prices of things would get cheaper over time rather than more expensive. This happened in the gilded age in America.

[@periwinklemcfee7274]

@@Bouffant1984 I don't really 'dispute' your position, but I don't subscribe to it. Thanks though, for your reply. Cheers !

[@frederickfarias9515]

50% debt to income is small, wow, I am out of date. Japan, I understand has had little new entrepreneurship. Whereas in the past with the great tycoons it did. Debt to current assets, or equity, is technically called leverage. But governments are not enterprises. Weimar Germany did not become insolvent?

[@Pensioncraft]

Hi Frederick I'm not convinced that a lack of innovation in Japan is due to their high debt to GDP ratio. I think MMT is more appropriate for wealthy countries as I say at the end of the video. Thanks, Ramin.

[@michaelbananas461]

The logic of economists is quite literally the logic of a cocaine addict who sees their productivity rise greater than their economic and health drawbacks at first, and then spirals into more cocaine to further productivity, further increasing their economic and health drawbacks...they look at the possible effects of stopping cocaine, and realize their productivity lowers and their economic and health drawbacks increase too (in the short term) so continue doing cocaine. And we are supposed to believe this ends well?

[@danielleglorie8164]

Professor dungeon master is that you........? This isn't dungeoncraft?

[@a2comuk]

Great video - one problem though. Debt to GDP is a sick measure in itself as the GOV is roughly taxing us 20% of our income so... it should actually compare it’s debt to 20% of GDP (its income) as it does not have the rights to the entire production of the economy. So already those percentages should be much much higher. As governments are systematically spending more then they earn then this is a clear way to bankruptcy. If you are not able to pay off the debt you have now (even by printing money) then you will not be able to do it later. The problem will just get bigger and bigger so the cost of servicing the debt will get higher and higher meaning less money from GOV income will be spent on things as it will need to go to payment of interest on the loans... unless they will take us to hyperinflation or go to negative interest rates and basically transfer the cost of this on us... Not to mention that 5 years of higher unemployed means 5 years of smaller GDP not bigger. The real question is when will people wake up to this and say “stop” to this madness. Printing money never worked out well for any country in the history of times so why are people so foolish to think it will be different this time?

[@JamyOats]

I disagree. Debt to tax revenue would be a less useful metric to understand the level of debt because you might just be looking at a change in tax policy, not debt levels. You're right that the gov don't have the right to 100% of output, but gdp is the size of the pie from which the gov can basically take what they want. As for money printing, you say it has never worked. QE was used after the crisis and is largely considered successful, and did not cause inflation like most of the internet said it would. Plus, money printing just means an increase in the money supply, the money supply has to increase constantly to stay in tandem with economic activity. When there is a reduction in credit and money velocity, like there currently is, we would be facing likely DEFLATION if it wasn't for the expanded money creation keeping things in balance.

[@a2comuk]

James Oates isn’t QE just kicking the can down the road and making the problem bigger? We did not have inflation for 2 reasons: one you had globalization and that was still, largely responsible for prices not raising that fast. And 2 you had interest rates that you could still cut. Now most of the time interest rates are at zero, some negative (this is already absurd) and COVID-19 that showed us that if you depend to much on global supply chains once there is a small problem you get empty stores etc. So even the governments now are starting to come back to the idea of partial production within the country. Wonder what effect on prices this might have... I’m not expecting the world economy to end but prices are and will come up (faster then the official rates they publish) wages never did go up that much and they still will “underperform “ so to speak this is called hidden taxation and is a direct cost average Joe is paying for the “market” not crashing. Also if interest rates will go to negative territory we will be sure to see banks charging us for keeping the money in them so this will be another direct cost for you for the successful gov. policy of QE and cutting interest rates to “prevent the market from crashing “.

[@asoutoimporters8383]

Lets Hope so. Property is very expensive.

[@JesterEric]

The asset price bubble is caused by government money printing. The money is ending up in assets like property because interest rate returns are so low. The velocity of money (number of times it changes hands) is low in these assets that’s why so far inflation has not been a major problem

[@baijuthomas3716]

Thanks for explaining this simply and letting us know it's ok to have twice the debt to GDP. Everything will be fine I guess

[@Karma46819]

When comparing debt to GDP of Japan with the USA, it is important to realise that Japan is the world's largest creditor, while the USA is a Debitor. "After years and years of current account surpluses, Japan’s net international investment position is around +60% of their GDP, meaning they own a ton more foreign assets than foreigners own of their assets"

[@nachannachle2706]

Most of that 60% position is US Treasuries though, which are now very close to junk status.

[@nomoretez]

The debt doesn't matter

[@nachannachle2706]

Developed economies have MMT/Reserve currencies, Emerging Markets have Gold/Commodities reserves. All is well.

[@nachannachle2706]

@tzar 1917 You're welcome.

[@mayleetan6518]

US is not worry about the debt. They can print money as much and as often they want. The world is beholden by them. The current currency system is so unfair especially to poor countries

[@nachannachle2706]

It won't stay like this forever.

[@ellengran6814]

America has gradually become a country with feudalism, not capitalism. The question is not about MMT or Finans collaps. Its about how much the serfs, the debt-slaves, can take before they break. In US they seem to forget a society is made of humans, not money. The wealth gap in US is now larger then it was in Russia and France before the revolutions.

[@user-mv7yt8lm5b]

*PensionCraft* شكرا على الفيديو,

[@vengefulavenger8382]

Translation: thanks for the video

[@ega0117]

What do you think of pearless reads?

[@WOWHISTORY]

At $27 trillion debt, every American citizen is on the hook for over $83,000. That's EVERY man, woman, and child.

[@Pensioncraft]

Hi @WOW! HISTORY the point is that the _growth_ of that debt is going to be slower than the growth in income generated by each person in the United States and so over time the size of the debt as a percentage of national income will fall. Also at the moment the cost of servicing that debt is limited by ultra-low interest rates. Thanks, Ramin.

[@Rawdiswar]

I'm from Canada. Should I be skeptical of MMT?

[@Moonam75]

You should do a video with Peter Schiff or Mike Maloney;-)

[@scrambaba]

Excellent review! I see MMT as the last stand of “progressive” economists who have either abandoned any hope of challenging the neoliberal orthodoxy on the role of the state in the economy and in furthering the public interest, or even worse, accepted it. I remember MMT-style arguments being made by Marxist economists in the 80s.

[@billytheweasel]

Seems to me the wealthy are grabbing what they can and are assuming MMT will have to happen. There's no path out I can see. A Crash is coming and it was unnecessary. Government was captured and we've sold the rope to hang ourselves after all. The wealthy killed the goose that laid the golden eggs. History rhymes. However you say it- it's an Idiocracy.

[@lalikalalika1752]

Those who receive Universal Credit do not give credit.

[@LondonReps]

Cashteroid 😂😂😂

[@Pensioncraft]

Yes! I love the cashteroid idea which is from Rhett Allain in an article in Wired magazine. Thanks, Ramin.

[@stevo728822]

Perhaps the danger to this debt mountain isn't inflation, but deflation. 1970's double digit inflation eroded the value of the post-war UK debt burden. However with a sustained period of deflation, the interest on debt has to be serviced by taxation alone. Interest rates fall but deflation also creates a period of declining tax income. Covid-19 has eliminated a huge chunk of demand for products and services which will push the demand/supply curve towards a deflationary environment. The US inflation rate has fallen from 2.5% to just 0.1% in only 4 months. And that's in a country which has been very liberal with it's quarantine policies. Spain has had 3 months of deflation. Watch out for deflation.

[@locomoco2012]

National debt is no new news.

[@fefifofob]

Back a few decades ago, congressmen were arguing that deficits didn't matter as long as they grew slower than inflation.

[@phildurre9492]

this dept economy is madness...!

[@gerrykelly-zk6lf]

I think if we're being honest we are in a period of great economic uncertainty. The traditional economic text books no longer seem to apply. MMT and helicopter money what strange times we live. What about unfunded liabilities like pension and welfare. Your charts show spikes for wars yet the biggest spike is in the last 10 years with no world war. The US can create cash due to its world reserve status which no other country enjoys at the minute. My god though what happens if we get stagflation with increasing interest rates. I hope we can grow ourselves out of this but everything is fine right up to the point its not. I don't think the old logic applies anymore and we all need to take a closer interest in our own finances and create a diversified portfolio risk spread. I don't see any silver bullet solutions as nobody can know how this debt cycle will pan out. Hopefully in the growth solution.

[@nachannachle2706]

" [...]the biggest spike is in the last 10 years with no world war."

[@mrmustangman]

@@nachannachle2706 ....and 20 years in the middle east.

[@mrmustangman]

we will not grow ourselves out of debt......

[@gerrykelly-zk6lf]

With respect in terms of the worldwide human carnage and widespread capital destruction caused by WW1 and WW2 the recent regional conflicts in the middle East etc not even close. We have built up huge debts in peace time in an essentially booming world economy "The Best Ever" apparently. The amount of debt in the world is breath taking and what is even more worrying is that we keep growing the debt in excess of real growth in any economy. When did not worrying about debt become accepted.

[@timmybrown3836]

Global financial reset. The clues are in the words. £00000 global reset? Debt jubilee. Merry Christmas all. ❤️

[@RaghuLohe]

Can you explain it a bit?

[@Manaknanak]

Ok so what your saying Developed market = low interest rates = low bar to beat in terms of growth. If that doesn’t work then we can always print more money👍got it.

[@colonelflashman972]

If MMT is good why is the pound so low?

[@nachannachle2706]

@@cyberpunkalphamale Don't worry, "Hard Brexit" will bring team GBP down to reality.

[@caruya]

Japans dept is mostly internal.

[@bonanza06]

but Japan's external debt is still almost 97% of their GDP

[@SP-cx2qi]

Japan is also not the worlds reserve currency, unlike the US dollar. Alot of the world need dollars

[@caruya]

Why we need dollars? who decides that, it doesn't make any sense.

[@nachannachle2706]

@@caruya Nixon and the US Army decided that for you. If you want a way out, start bypassing banks and paying for services via cryptocurrencies.

[@phildurre9492]

money printing is one of the biggest crimes of our times

[@akmshahrear8327]

L longer lobar

[@James_Sovereign]

18:10 "... countries that will be particularly hard hit are the ones which depend on tourism for income, but also those that depend on commodity export ...". Australia, are you listening? No more Chinese students, no more overseas tourists, no more Iron Ore and Coal exports. We can't just prop up the hosing market this time around and convince everyone they're getting wealthier.

[@dannybb8484]

if the government can create 'money' why do they do they need need to pay interest on it? and who gets the interest paid on government debt?...sounds like we need a new and fair monetary system

[@charlesfuchs]

crypto

[@jayli7697]

They have to give value to the currency they created, interest applies value to those currency, otherwise they would have no value and just be paper, The system dictates that. The interest payment, well goes back to the system.

[@stevo728822]

The money in your bank savings account is largely invested in government debt.

[@a2comuk]

Great question - I see it as a language game if you say you printed money this will make people question why do they pay taxes and what value does it have if it’s created out of nothing... but if you say you borrowed money then people don’t understand this extra money was actually “printed” but in this case you have to pretend that it actually is a loan and pay interest on it.And yes the gov. pays interest to the beloved banks.

[@billspoon6331]

Evidently government debt isn't a problem cuz they just print more money

[@Tobacattac]

Doesn't most history books tell us that is always a bad idea?

[@caruya]

I don't understand how governments can "save" the economy? Is the current economy in some sort of sandbox, that an "outsider" can come and "fix it" Then were is the real economy if central banks and governments can't basically fail economically. I feel we live in some financial Matrix were we are brainwashed to believe in some paper money, even forced to use it. Wouldn't it be healthy to question and challenge this system?

[@mrmustangman]

....and replace it with what.??? that's the big question.....

[@alfredoleal2101]

He probably work for the bankers.debt is debt and citizen will have to pay more taxes and less services from government.he forget to mention the more than 150 trillions on unfunded layabity that the federal government own and the money is not there.wishfull thinking.

[@bmahoney1568]

Debt is increasing far faster than gdp. Your example of debt and gdp increasing at the same rate is not what is going on in the world and is a very poor and misleading example.

[@round12tko]

Government debt is not a problem for the top 6 currencies: USD, GBP, YEN, EUR,CHF, AUD, CAD

[@mrmustangman]

.....yet

[@nachannachle2706]

I wouldn't put AUD in that basket.

[@InvestingEducation]

The US tells us no but only if u r a superpower

[@arseniyonline1234555]

Sell everything and put it in protected bank accounts, then come back here to thank me when everything drops.