Should the U.S. Government Balance Its Budget?

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You've probably heard a politician say, "If a household can balance their budget, then the federal government should, too!" But it turns out to be a bit more complicated than that...
sources:
www.investopedia.com/articles...
www.usa.gov/budget
datalab.usaspending.gov/ameri...
www.nytimes.com/2020/04/15/bu...
www.investopedia.com/articles...
advocacy.sba.gov/2019/01/30/s...
www.investopedia.com/insights....
www.thebalance.com/us-deficit...
www.statista.com/statistics/2...
knowledge.wharton.upenn.edu/a...
www.ft.com/content/0940e381-6...
www.thebalance.com/austerity-...
www.nytimes.com/2020/08/21/bu...
Two Cents was created by Katie Graham, Andrew Matthews, Philip Olson CFP® and Julia Lorenz-Olson and is brought to you by PBS Digital Studios. We love dropping some knowledge on all things personal finance and helping you make better money decisions.
Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson, AFC®
Directors: Katie Graham & Andrew Matthews
Written by: Andrew Matthews
Executive Producer: Amanda Fox
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Edited & Animated by: Andrew Matthews
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[@MrApontjos]

It's easier than most people believe, just do beans and rice, rice and beans

[@calliejay8246]

They should really live like no one else so they can live and give like no one else

[@jorgesalazar818]

Only if they're sick and tired, of being sick and tired.

[@FlyingDwarfman]

Bulk produce is several times cheaper than most people choose to believe -- especially compared to their processed, pre-packaged alternatives. (all prices approximate and in USD) Cheapest 16 oz package of hotdogs: ~$1 Cheapest hamburger patties: ~$10 for 5lb package 1lb bulk low-prestige, durable, easy-to-ship, hard-to-spoil produce (eg: carrots, sweet potatoes): ~$0.30-0.50 1lb bulk low-prestige, but high quality fruit (extra cost-reduction points if local; eg: apples in Washington State): $0.50-$1

[@juniorgod321]

The should put the cat on EBay and the dog on Craigslist!

[@darkdeminsion]

Love the dave Ramsey reference!

[@Helpful_Corn]

"We haven't seen a meaningful increase in inflation." Speaking too soon, I see.

[@joeb1522]

They are definitely biased and have an agenda.

[@lukerider479]

I found it interesting that they made 2017 tax cuts seem like a bad thing but didn’t mention the increased tax income and best economy in my lifetime. I also don’t think they mention the statistics when they say “most economist” because they are leaning toward a certain bias instead of just providing both sides

[@joeb1522]

@@lukerider479 I agree with you. They also didn't mention the 2017 tax reform law gave an incentive to move intellectual property to the US (FDII) and an incentive to move business to the US (by the lower corporate tax rate). Most companies didn't move business to the US as they were worried about the stability of the US tax system (and they made the correct decision as Democrats are proposing to increase the corporate rate now). They also didn't mention the US law increased taxes substantially on multinationals by taxing worldwide income. They are very biased.

[@renegade9777]

​@@lukerider479 increased tax revenue? It barely changed from 3.32 trillion USD in 2017 to 3.33 trillion USD in 2018 and 3.46 trillion USD in 2019 and grew, sounds like you're the one who doesn't like stats. Best economy more like Obama's economy which he inherited, and even then, the markets took a slump at the end of 2018.

[@lukerider479]

@@renegade9777 so you are countering my tax growth argument by providing statics that show increasing tax growth? Got it. I love the classic inherited the previous administrations economy argument. Under Trump as I said the economy was the best of my lifetime. Lowest inflation, low gas prices, lowest unemployment, highest incomes per capita, no wars, incredible job growth and a fantastic stock market. Even if you want to some how give all the credit to someone else I don’t care it was great and he didn’t stop the train of success. You seem like an angry liberal considering the point of my post was to point out the videos producers are one sided in their presentation which is undeniable regardless of your opinions.

[@Je.rone_]

Wait does the average American have a balanced budget🤔

[@katv3116]

Hey! Good to see you popping up on all of my favorite finance channels

[@richard1113]

Average? Maybe not. Personally, I have a surplus.

[@pizzamagee6220]

Mine isn't. I save and invest way to much.

[@davidlewis6728]

is the average American in 20 trillion dollars of debt?

[@juniorgod321]

I do! The trick is to not get married and have any kids!

[@carolea7158]

The government needs a 2nd job to make ends meet.

[@cryptomike4758]

Like starting war somewhere

[@the80386]

@@cryptomike4758 don't encourage them, or they'll do it again! no more wars please smh

[@vincentortega4284]

That means higher taxes for the taxpayer; do you think the government is going to do any physical work or anything.

[@TKUA11]

They do. It’s called printing money, it’s a way to tax people without actually making them pay money

[@cypriano8763]

The gov need to expand its sources of revenue. You know like nationalizing oil, transportation, forestry, etc. All key sectors of the economy should be public corporations! Eh how bout that. It's not an expenditure problem it's a revenue problem. And also, increase the tax rate on the wealthy back to 1950s levels!

[@luisfilipe2023]

“We haven’t seen a meaningful increase in inflation” oh boy how things change quick

[@greg5892]

Yeah but that isn’t the result of keynesian st8mukus. That’s because if the thing the kenseyan stimulus is in response to.

[@totalolage]

What fraction of politicians is realistically going to think on a scale longer than their term? It's like having a guest over and getting them to plan out your expenses for the month.

[@alex2143]

And that's the problem. Governments should have long term vision, but people don't get elected for long term vision.

[@kl-tj4nx]

@@alex2143 damn. That’s sad but true. It’s not about serving the public to a lot of politicians. Very few are in it for the right reasons (serving the public)

[@BTrain-is8ch]

@@kl-tj4nx The public is the reason it works that way. The public doesn't have the maturity to want long term vision.

[@Invizive]

@@BTrain-is8ch nobody has the ability to manage on such scale with long term goals while keeping everyone engaged - it's impossible.

[@BTrain-is8ch]

@@Invizive Large multi-national companies are managed at that scale and their outlook is longer than the next two, four, or six years because they generally intend to exist longer than that. The government's ability to do the same is impacted by tens of millions of Karen type voters that have the impulse control of a five year old and want what they want now. It's not impossible. It's just political suicide because of the electorate.

[@DrBeauHightower]

In the long run we're all dead is let's let our great grandkids figure it out. It's the same abandonment of responsibility attitude we've taken towards climate change.

[@electronpusher604]

It's rich that a Federally funded broadcaster is making/sponsoring videos which attempt to justify the Federal Government's recklessness.

[@aoht06]

Lol you missed the entire point of the video. It was pretty clearly explained why worrying about the national debt because “what about our great grandkids” is pointless. As long as all of the US debt continues to be denominated in USD which the fed can create on its own, there’s no need to be concerned about the national debt.

[@DrBeauHightower]

@@electronpusher604 EXACTLY

[@electronpusher604]

@@aoht06 Have you ever heard of inflation?

[@aoht06]

@@electronpusher604 Yup. Once you realize how inflation works you’ll realize why it isn’t exactly directly correlated to the national debt

[@thomaswilis4682]

I feel like they could have talked about the dollar’s special position as the world’s reserve currency and how it relates to the US’ ability to “borrow” without consequences

[@marcoalejandro1407]

Yeah or how long we can keep that up when China keeps growing by the day while we bicker amongst each other blind to the dragon rising from the cave

[@Zb_Calisthenic]

This is the answer.

[@DevoutSkeptic]

@@marcoalejandro1407 Because China needs us to buy their shit.

[@AS-vz3zn]

@@marcoalejandro1407 lol you are clearly delusional. The Chinese will end up consuming what they produce themselves.

[@exponentialcomplexity3051]

@@DevoutSkeptic China exports to the entire globe. US sanctions will certainly not be welcome but it will be very very difficult for US to actually convince others to do the same. China is already the largest economy in PPP terms and they are rising fast. It's scary and US needs to get it's shit together quickly

[@burper-oe6tm]

It’s really amazing how with every argument for one side, you would immediately counter it remaining very unbiased

[@osmosisjones4912]

All we're destroying unblocked down for something that only affects Keynes generation. Who argued to scr😫 US our generation over . maybe we shut stop with the lock downs and consider covid Karma . and spit in Keynes faces telling him in the long Ru were all dead anyway

[@TwoCentsPBS]

We try our best. We do have opinions, and don't hide that, but it's still important to educate on the popular sides of a debate.

[@stringX90]

I don't feel like the counter argument was thoroughly represented here.

[@electronpusher604]

@@TwoCentsPBS Don't you think you should mention in the video that you are funded by Government debt(Via PBS)? That's a massive conflict of interest! You were very biased against the Austrian Economic model. You didn't explain the business cycle or supply side economics at all!

[@electronpusher604]

@@stringX90 Agreed. It's the general PBS/NPR style where they speak very clearly and concisely which makes you think they're being very reasonable. I've definitely seen much worse but they did not represent the opposition well.

[@sminthian]

Can you guys do a video on this whole Gamestop thing?

[@imcarlosjr4898]

💯

[@megamanx466]

I've not *read-it* ,but it seems like some "Redditors" influenced stock traders on there probably so they could raise the price to sell high. I could be wrong though. 😅

[@D1KHEAD808]

A few big fish seen a way to make a quick sure buck a bunch of smaller fish said nah don’t think so.

[@jaketyler7088]

GME has all the headlines. There are already numerous videos and articles that cover the topic. Graham Stephan uploaded a pretty decent video today.

[@TwoCentsPBS]

In the meme-era of 2021, it'll be forgotten by the time the episode goes to air! But it might be a fun lesson in the perils of short-selling, and how internet memes and trends can be weaponized -- even against Wall Street!

[@swampcrawlerls1267]

I read the title and laughed a little bit.

[@calebr7199]

I read the title and laughed a lot

[@vicepresidentmikepence889]

Now that we have a Democrat as president, Republicans will magically be concerned about the debt, even though the debt exploded, under trump

[@Epoch11]

Republicans were okay with a tax cut during an economic boom which drove the deficit up really high but now during the crisis they're worried about helping out regular Americans who are struggling now the deficit is a huge problem miraculously

[@jrg305]

@@vicepresidentmikepence889 most republicans don't buy that Biden actually won without cheating, and they refused to hear any court cases instead throwing them out on technicalities. it is also obvious they called the protests on January 6 during which a handful of people died "an insurrection" when more people died during black lives matter protests last summer and more businesses were trashed, and pelosi and kamala are on tape encouraging violent behavior in more clearly identifiable terms than trump was accused of (if you actually watched the speech live, which ended after the destruction was caused, another point missed by left wing trash media). There also is, on tape, people identifying antifa dressed as Trump people on Jan 6, but your left wing propaganda media chose to not show that or any of the 10 hour live hearings on election fraud broadcast on NTD (a source of conservative news, founded by Chinese americans who are anti China). . I'd suggest balancing your left wing mainstream media propaganda with a few sources on the right. Most conservative people do that already.

[@yuweizhang209]

@@jrg305 Most cases were NOT lost on technicalities. A few were dismissed due to a lack of standing, but those aren't technicalities. Standing is important because only those that are directly affected can file suit. For example, the Texas v Pennsylvania suit is completely ridiculous because Texas is not directly affected by the Pennsylvania election and that's by design of the constitution where each state are free to conduct elections as they see fit (which is also rich given how it's TEXAS and everyone knows how much they love other states interfering with their state policies). From what I've seen, the lawyers failed to demonstrate they had standing due to the lack of relevant evidence which indicated they had standing in the first place. In fact, quite a few cases were thrown out due to unreliable or irrelevant evidence in addition to lack of legal standing. A few suits were also thrown out for being filed too late. This is kind of a technicality I guess? But there was sufficient time prior to the election to file suit if they wanted, and you can't just ask to change the law every time your preferred candidate lost or there would be madness every election cycle. Also from what I can tell, the ones thrown out for being filed too late also had a host of other issues wrong with it. Do lemme know if there's any suit in particular you believe was egregiously thrown out so I can take a look. Some of these suits are actually pretty amusing if you read them.

[@carlosdj81]

Here is the complete quote for context: "In the long run, we are all dead. Economists set themselves too easy, too useless a task if, in tempestuous seasons, they can only tell us that when the storm is long past the ocean is flat again."

[@emmanuelhenry3979]

ITS SO UNFAIR ON HOW THINGS HAS TURNED OUT TO BE DUE TO THE RECENT WORLD PANDEMIC THINGS HAS BEEN SO DIFFICULT WE SEE COMPLAINS HERE AND THEIR ON SOCIAL MEDIA FROM DIFFERENT PEOPLE IN DIFFERENT COUNTRIES ALL AROUND THE WORLD THE GOVERNMENT HAS LESS OR NO TIME FOR THEIR PEOPLE I THINK WE'LL SHOULD TRY TO ENGAGE IN DIFFERENT THINGS TO MAKE MONEY AND STOP HOPING ON THE ECONOMY

[@jamesfranco8609]

Yes ! For real It is very important to have different streams of income and a diversified portfolio as for me I have already invested in crypto which is very profitable and easy to gain

[@kaylenobed2702]

Exactly I'm also happy to start investing too than to have my money sleeping in bank

[@philipfranco3709]

Stocks are good but we have to make the right plans

[@lyrastromman191]

Yes Stocks are good but they are alot of businesses more convenient than stocks

[@georginaaspas2264]

That’s the fact well I only invested in stocks and will love to know a better investment too

[@matiasl.ceballos3346]

Here in Argentina we were printing money and giving it to people for decades now...and here we are. Sooo, be carefull.

[@davidsflooringco]

Shut up, your making too much sense. We Americans don't like logic or reality we only like positive thinking and fairytales.🙂

[@fedorrussel3810]

You're right; thing is, we argentinians don't have a healthy currency or economy. As long as the US keeps their economic productivity as it is... Investors would still trust and value us treasury bonds/ currency

[@onrean]

The video needs to say, the printing money hasn't made an effect YET.

[@miachm]

@@fedorrussel3810 the thing is, you have to pay the interests for the debt. So your spending is increasing faster with the time.

[@throwawayaccount9090]

Yea good thing America isn’t Argentina

[@samcohen3647]

This topic has interested me for so long. Thank you for making a video on it!

[@TwoCentsPBS]

US too, thanks!

[@gabrielchaimowicz329]

Really nice when you guys talk about economics instead of finance! Im not even from the us, but the content is universal

[@dynamichunter843]

Economics is just large scale personal finance

[@Iffy50]

Where do you live? If you are part of the EU it's not universal because you have the ECB and we have the Fed. If you have a common central bank for many countries you have fewer options. Hence the crisis in Greece. If Greece had it's own central bank it could just print money to solve its woes. The result would have probably been the loss in value of their currency vs other countries, but at least that increases exports and tourism.

[@gabrielchaimowicz329]

@@Iffy50 I'm Brazilian! Our coin is just ours, don't worry 😁😆

[@Iffy50]

@@gabrielchaimowicz329 Your country is beautiful. Is the majority of the country safe if you get away from Rio?

[@gabrielchaimowicz329]

@@Iffy50 not at all hahaha rio really is especially horrible, but it can be quite unsafe wherever you go... And with the current government everything is worsening 😪 it indeed is beautiful, though

[@TripleZesty]

US should absolutely not run large surpluses. People want to invest in the US. It’s a safe bet. Run deficits to pay for infrastructure and research, and the deficits pay for themselves. We only need to keep the debt payment lower than GDP growth. Trying to balance the budget is just throwing money away, which means throwing away citizen wellbeing.

[@FelipeKana1]

Never had to deal with inflation, do you?

[@TripleZesty]

@@FelipeKana1 Much less likely in US than in smaller countries. I agree that runaway inflation is just about the worst thing that can happen to a country, on par with genocide/natural disaster. But we aren't running the same kind of risk as Argentina because we're the US. The money won't dry up. Mind you I'm not saying we just spend aimlessly with impunity. I'm not pushing MMT. I just think the current paradigm is pretty much sustainable.

[@Iffy50]

@@bp24964s All he suggested is keeping the debt/GDP ratio constant. *IF* we did that we would be fine. Our ratio has been going up, and fast. That's the problem.

[@TripleZesty]

@@Iffy50 Yeah let me just let the air out of this discussion a bit and say that despite my being pretty aggressive right now because of the recession. I also think it's clear we'll need entitlement reform at some point in the 2020s. There are a few other areas of the budget we can trim down without hurting too many people, but you won't fix the overall problem until you take a look at the entitlements. Still, we have some time to work that out.

[@DanaYi13]

Massive congrats on 500k! Been watching for a while and have learned a lot!

[@noahpeterman2059]

I love the QA sections at the end of each video, but can you give a brief reminder as to what the previous video was about?

[@sawderf741]

I think focussing on reducing waste will do more than cutting spending. By passing right to repair laws we could use our stuff longer than we can now meaning we spend less on things like computers, cars, refridgeraiters, tractors, and phones in the long run.

[@victoriasanchez8249]

Isn't that the whole reason why we invest so heavily on our military??? So we wouldn't worry about balancing or paying back debt????🤔

[@feynstein1004]

That's an interesting way of looking at it. You don't have to worry about debt if your creditors are all dea...........I mean, liberated

[@arnbrandy]

I really liked the explanation and utterly loved the Q&A finale 😂

[@vicgamesvt9682]

A deficit tax which politicians have to pay everytime theres a budget defecit and cutting millitary spending could probaly help get a budget that's in surplus.

[@Invizive]

Bees ask wasps to regulate the access to the honey pot.

[@vicgamesvt9682]

@@Invizive yeah only a handful of politicians would actually agree to this 😂.

[@Thessalin]

Ross Perot has entered the chat. Ross Perot: Can I finish? Can I finish?

[@chrisyella7238]

Investing in crypto now should be in every wise individuals list, in some months time you'll be ecstatic with the decision you made today.

[@nwoduvictor3712]

@@chrisyella7238 Most intelligent words I've heard.

[@joshwinter7172]

Crypto is the new gold

[@tommarcos7010]

That won't bother you if you trade with a professional like Mr Frank Robin

[@nwoduvictor9104]

I heard that his strategies are really good

[@erickbonilla2495]

I am from Guatemala. And I love your videos, even if you explain data/process from the USA (which is obvious why) however, still aid me to have a healthy and appropriate perspective on how the money works, despite the fact where you live, apply the same mindsets of how to manage the money and the good habits we all should have to avoid being in debt. All your videos are very useful. I am surprised at how can you explain and illustrate topics that are hard to explain. Keep sharing these wonderful videos!

[@TritoneTrickster]

Massive congratulations on the 500K subs! Couldn't be more deserving. I'm looking forward to more videos already!

[@Naanofurbusiness]

Ok. It’s official this is my new favorite KZbin channel. I love how you simplify things. I have a bachelors in finance and I still find myself learning stuff from you. And I LOVE you taking the time to answer our questions.

[@Naanofurbusiness]

@Two Cents I do!

[@dianajin3861]

Kudos to the artists who work for TwoCents! Ty for addressing this subject, I learned a lot of new things.

[@thelastpioneer2824]

"we haven't had a major inflation", 6 months later gas is $4 a gallon and the biggest inflation rate since 1979.

[@octaneblue6]

Gas was $4 a gallon when Bush was president.

[@JonathanSorunke]

Woah woah woah, whatcha mean balance the budget?! What are you trying to do, kill the party?! Keep that money printer going! Brrrrrrr

[@kimp7575]

Thank you for posting about topics that aren’t educationally brought to light. Cheers!

[@skylar141]

Best channel! You have both taught me so much!♥️

[@MinecraftManiac300]

Two Cents is one of my favorite KZbin channels!!

[@vicgamesvt9682]

Honestly the U.S could do so much if they just cut their millitary spending by 45% and their millitary spending would still be more than Chinas. Note: peoples salary in the millitary only accounts for 23% of the defense budget so people wont have to be layed of or get a salary cut under a 45% budget cut, as for the companys who sell to the U.S government they may also want to lower their companys spending quite a bit but they could still make 100's of billions even with a 45% budget cut. Back on the topic of army peoples salary as much as I would support the world demilitarized I wouldnt mind if they cut weapon spending by x% to increase salarys and benefits for exisitng and past veterans.

[@tinydough8746]

Exactly. Who the hell needs $934 billion dollars (Budget for 2020 alone) just for the military??? Wtf is the US defending against anyway? Why can’t they all just talk it out like how they teach everyone in school.

[@Invizive]

Proposing this is a political suicide even before the idea is formally considered. The establishment gets a share of these fat stacks.

[@TheTurdballs420]

You’ve obviously never looked at the government budget and it shows. Military spending is a tiny fraction of the problem. 80% of the problem is entitlement programs. If we stop enabling parasitism THAT would do “so much”

[@Invizive]

@@TheTurdballs420 if we stop trusting a small number of people with any forcible distribution of wealth that is

[@vicgamesvt9682]

@@TheTurdballs420 I have looked at the budget before and yes social security is the most expensive thing in the budget but millitary spending still takes up 1/2 of the discretionary spending or about 1/5 of the whole budget and the U.S has defense spending more than the following 10 countries combined.

[@quinterocruz]

It's super awesome that you guys are answering questions at the end of video is now. They're so helpful and funny. 😉

[@Hands0ap]

Really like what you guys are doing - keep at it!

[@Anne-ev5fp]

Most of the cares act DID NOT go to “the American people,” it went to CORPORATIONS. Come on guys. You know that.

[@5qw1rl]

Republicans would've shut it down if corporations weren't protected

[@Anne-ev5fp]

@@5qw1rl yup, too true. And they’ve gotten even more psycho with the new house republicans this congress.

[@matthewk6522]

The fed does NOT directly lend money to the federal government, it purchases treasury securities from investors while the treasury issues new securities which investors purchase. This is an important distinction because it ties how much the federal government can borrow to public confidence in the US economy, rather than it just being able to print however much money it wants.

[@tharindukottegoda989]

Yeah but effectively its no different. The main reason we do this investor thing is to control interest rates.

[@benaaronmusic]

Love these videos! Congrats on 500k subscribers.

[@davidsflooringco]

THIS VIDEO MAKES COMPLETE SENSE...IF WE CANT PAY OUR DEBT NOW ,IT WILL BE EASIER LATER ON TO PAY OFF OUR DEBT WHEN ITS BIGGER...YES PERFECT SENSE, LIKE ADDING WATER TO A POOL IN ORDER TO DRAIN IT.

[@NyalBurns]

6:51 Well this aged well. Didn’t it?

[@Swolejohll]

Aged like milk

[@sirsweet3022]

6:59 7% inflation now. It's not even on your scale, Ma'am.

[@gregorewart5946]

Congratulations on the 500k Really invested*hah* in your channel, youve taught me alot even if I'm across the Atlantic from Scotland! :) I also love to dance.

[@TwoCentsPBS]

Love to you in Scotland!

[@falxie_]

I really appreciate how impartial you were or at least attempted to be with this video

[@McSmacks]

I love all your vids. Wanted your to know that you guys are freaking adorable. Her with her beauty and sensibility, him with those eyes and that stache. You guys do good work. All the best to both of you.

[@davidmilhouscarter8198]

I'm pretty sure the "average" American household doesn't have a budget.

[@chrisb508]

Congrats on making 500,000 subscribers. Love your videos. :-)

[@chrisb508]

@Advita Arora Oops. Thanks.

[@Shaquille0624]

So glad you are back.

[@jigonro]

Please, tell me how the printing of new dollars affects countries with large USD reserves.

[@lordunhold5381]

In a couple years they will lose a bunch of its worth

[@andresuazo6129]

You guys should have interviewed Stephanie Kelton for this video.

[@andresuazo6129]

@Two Cents Bitcoin? No, I mean in reference to the “deficit myth” and many of the other MMT economists.

[@AlecMuller]

@@andresuazo6129 , he's a scammer. People create accounts that look like the video authors and then comment on other people's comments to try to trick them. I've seen videos that have the same comment posted hundreds of times by the same scammer. KZbin sucks at stopping these people.

[@andresuazo6129]

@@AlecMuller ah, makes sense now because that was totally irrelevant.

[@brrberrymerry]

I love this channel so much guys ♥️ thanks so much for existing 💐❄️

[@ryanmart5434]

Thanks for answering my question from the last video, super helpful!

[@ajx9747]

Americas net international investment position went from -3 trillion in 2009 to -14 trillion in 2020.I bet this wont be a problem in the long run... Dollar is going down and current account deficit blowing up.

[@ReuelRamos]

5:46 THANKS GOD THEY SAID IT! I was already having a heart attack when they mentioned at 0:50 that government works like a household for managing money! As money is fiat currency nowadays, it can be printed, distributed, collected through taxes and literally burned to get out of circulation. The USA is in a special place when it comes to it: it backs other countries currencies, so it can print money without too much worries.

[@xanderx2523]

1930's economist: in the long run we're all dead! 2010s youth: yeah thanks for kicking that can to us...

[@JaMarThomasJTDATBOI30]

Thank you so much for this video. I highly appreciate it.

[@PigGoesMooProductions]

this has aged well lol

[@allprolemontonz8448]

"we haven't seen meaningful inflation" um housing, health care, tuition, rent.

[@mikespark72]

the inflation that economists are talking about isnt the same thing as the inflation that you and I feel. Their inflation is some made up BS that means nothing, our inflation hits us right in the pocket book and its way more then 2% a year. At least it sure feels like it! And our wages are far from taking care of that fact.

[@garaj1]

Does that actually count though? All of those things are outpacing inflation rather than being a result of inflation itself

[@wolfpackflt670]

That's not inflation, that's price gouging from GREED.

[@wolfpackflt670]

That's not inflation, that's price gouging from GREED.

[@clarkevander]

The keyword there is "meaningful" The prices are inflating, yes, but are they meaningful?

[@alo1417]

Congrats on the subscribers! You guys rock!

[@dainjahrus]

fantastic video, and love the addition of the Q&A at the end, really cool :)

[@dainjahrus]

@Two Cents that'd be cool, bitcoin is terrifying. As a non-US resident (yay, Canada), i love any/all topics that you guys have that are more international and less nitty gritty on the US system (though this was still really interesting). you guys are great :) keep it up

[@rafascd12]

This money printing is not a good Idea. Reseach for: The Cantillon Effect: Because of Inflation, We’re Financing the Financiers

[@ninjanerdstudent6937]

I just want corporations to learn to budget and stop getting bailed out.

[@lordunhold5381]

Just let them die

[@tavepresley5115]

Exactly!

[@mineshpatel5677]

Thanks guys. Another great video

[@FerGalicia]

great video! congrats on 500k+ subs!

[@noahrichardson6941]

I think it’s important to know what the so called austerity people mean by crowding out investment a crucial concept that was just mentioned and not explained. The theory is that if a growing debt gets large and investors lose even some faith in the ability to pay back debt they will only loan money at a higher rate driving up interest rates in the economy. Higher interest rates lead to economic stagnation. Even if that doesn’t happen, the government takes a large amount of the total capital and the interest rate for private business goes up

[@KimMaverick]

I would love to see a video on Modern Monetary Theory. I’ve read a lot about it but I always feel like I understand things better with your animations.

[@roshanbhaskhar2997]

The video was awesome as always :)

[@cheejian1985]

Thought your video usually focusing US related matters ,but i always learned something from your videos ! From Malaysia

[@FelipeKana1]

"Hey, nothing bad happened so far by increasing debt" That's really a bad argument, specially times we talk so much about sustainability and not having near sighted minds. "Hey look, we can keep cutting the trees and burning fossil fuel, nothing bad ever happened... YET". Second: yes, things have gone bad, in several places using those ideas AND in the US. Inflation? No? That doesn't exists? Four decades ago people could afford their rent from their jobs, as it was supposed to be. Now even working couples need to find roommates to make-do. The slow growth of inflation is stifling lives too, even if the economy looks ok (since everyone now has to work much more and hence "produce" much more). Edit: corrected a few autocorrect typos

[@tiagow95]

Since the 80s, inflation has been at ~3% which is totally fine (the aim is to be slightly below 2%), so this was not the reason buying power is lower today. So what is the reason? Since de 70-80s the minimal wage has stagnated while productivity kept increasing. The minimal wage simply didn't follow inflation so today people are effectively paid less than they once were. In the meanwhile, US wealth concentration has skyrocketed and most new wealth produced goes to the asolute top. images.app.goo.gl/WTBENzDeUvkAwYoE7 images.app.goo.gl/9dsDXFWtm8156z8C8 en.m.wikipedia.org/wiki/Wealth_inequality_in_the_United_States

[@soccerplayer2277]

@@tiagow95 You are very very right but also that measure of inflation that you have quoted probably doesn't consider housing. The most important purchase there is. The biggest problem is, what happens when interest payments exceeds growth in gdp. What ALL of the countries need to get a handle on is reducing economic stimulus during booms even if the citizens hate them for it. Trump's first 3 years they should have been putting a dent in the debt not splurging and contributing trillions more, it gives more room for fiscal stimulus when you need it which is now.

[@DGaryGrady]

@@soccerplayer2277 For what it's worth, all commonly used measures of consumer price inflation including housing costs as a major component. The single most common measure is probably CPI-U, which is explained in detail here: www.bls.gov/cpi/questions-and-answers.htm (see for example the response to question 10).

[@soccerplayer2277]

@@DGaryGrady Sorry to be clear I was referring to real estate. CPI considers the cost to maintain homes and rent, not the prices of the assets themselves. In fact, real estate prices are often negatively correlated to inflation because of the fed's change in policy on interest rates. Also, I don't know how well proportioned that CPI measure is, does it really capture rent effectively? Rent is down 25% where I am and inflation is still ~1%.

[@BTrain-is8ch]

A ton has happened in the US over 40 years. Go look at the typical size of a rental/home in the 80s compared to now. Go look at the change in real estate interest rates in the 80s compared to now. Go look at the proliferation of women in the workplace/dual income households in the 80s compared to now. I'd say the availability of cheap debt/people's increasing comfort with a debt financed lifestyle and the stratifying effect of dual income households has way more to do with what you're talking about than the minimum wage.

[@katerinaschenke819]

Would love a video on how senate and congress set their own salaries. It seems strange to me that they vote on their own raises and salaries.

[@megamanx466]

Whole-heartedly agree! 😑

[@Iffy50]

Don't worry, their salary is peanuts. The real money is made after.... speaking engagements, work as lobbyists, connecting people with people in government to pass laws beneficial to businesses.

[@megamanx466]

@@Iffy50 That's true, but their salaries could be used for other things. If you cut out all the rest of what you mentioned, making the Senators less influenced by corporations, then I wouldn't mind if we paid them a bit more! 😅

[@Iffy50]

@@megamanx466 I would pay them 3 times what they make if we could get rid of lobbyists. Lets say that there are 1,000 people(House+Senate+random others) and they all make $150,000/year. That is only $15 million. That sounds like a lot, but it's only 5 cents a year per citizen.

[@megamanx466]

@@Iffy50 Yes good point. When politicians listen to the money more than the people, that's never a good thing. 😒

[@Marthastewart209.]

Another great video! informative and straight forward, great job

[@DarrylJohnsonII]

Whoever chose the music-nice choices, it really works 👍👍👍👏👏👏

[@Taicho116]

This video aged like milk HAHAHA

[@911aaron]

Yes. After they give me more money to balance mine.

[@gabriellugo9662]

Great video. I half thought it was going to touch on Modern Monetary Theory. You folks do amazing work. Thank you!

[@guhreenskittles]

Congrats on 500k!!

[@CG_Hali]

Imagine the US 'household' spending most of their salary on a home security system while the people in the house go hungry and grow sick but one member is super rich and doesn't share any of the goodies. That's one good way to envision things in a way people understand.

[@Iffy50]

I agree that people will understand that, but household budget and national budget are very different. It's mathematically impossible for a country to pay off its debt. Also, if you have your own central bank you have a never ending credit card if you choose to use it. We've voted several times to increase our maximum debt in the last few years. Our national debt is 100% of GDP, but many countries have much higher debt to GDP ratio. Japan is around 250%.

[@marcoalejandro1407]

Most of the US government goes towards federal programs like social security, Medicare and Medicaid, what the actual fuck are you talking about? Oh and that big military industrial complex you’re alluding to, both sides of the aisle get payed for it

[@shakysliders1689]

2019 Federal Revenue - $3.5T 2019 Defense Spending - $0.69T If you mean 20% when you say most, you are correct. It's high, but it's no where near most.

[@Iffy50]

​@@shakysliders1689 "If you mean 20% when you say most, you are correct. It's high, but it's no where near most." What do you mean by it's nowhere near most? Do you mean defense budget relative to federal revenue? Can you name some countries that spend more than 20% of their federal revenue on defense? I'm not calling you a liar, I'm just trying to get the facts.

[@shakysliders1689]

@@Iffy50 Original comment said "most of their salary" went to home security inferring that the US spends most of its money on defense. Most, in that sense, would be 51%. The defense budget was 20% which is no where near most of the whole federal budget.

[@wussmode]

Good video, but give me a break. Inflation under control? Housing going up 20% per year or more because of easy money speculation. What about the inflated stock market? These are inflated bubbles for assets, but they aren't taken into consideration for inflation. Craziness.

[@TheEpiCool]

That’s not the inflation they’re talking about...

[@DGaryGrady]

For much of the past 30 years I kept track of inflation as a part of my work. The usual measures of Inflation, as computed both by the Bureau of Labor Statistics and by independent researchers working for investment houses, banks, etc, are based on a basket of goods and services that includes housing costs, utilities, food, energy, etc., which doesn't seem crazy to me. It is certainly true that housing costs have risen somewhat faster than other things, but it hasn't run 20% per year except for brief period in limited areas. In fact, housing inflation has averaged only a little more than overall inflation.Here's a history of U.S. housing prices going back to the 1960s: www.in2013dollars.com/Housing/price-inflation. Common sense should make it clear that housing costs can't rise too fast before they exceed what people can possibly pay. Note also that part of the price increase comes from the fact that newer houses tend to be a lot larger (an average increase of 1000 square feet and double the space per person since 1973). For more on this see this 2014 piece from the conservative American Enterprise Institute: www.aei.org/carpe-diem/todays-new-homes-are-1000-square-feet-larger-than-in-1973-and-the-living-space-per-person-has-doubled-over-last-40-years/ The trend has largely continued since then. The interest rates on long-term corporate and government bonds are determined by supply and demand. Currently interest rates for both are historically very low, which reflects two things: (1) investors are expecting low inflation, and (2) investors have confidence that they'll get paid back; that is, they have faith in the long-term prospects for the U.S. economy. They could be wrong about one or the other, but then again, they might be right, and they have more riding on it that we KZbin commenters do. (Edited to add links and to try to improve the wording.)

[@wussmode]

@@TheEpiCool oh yeah they're talking about the continually adjusted franken-numbers for inflation the government puts out. Apologies.

[@stevenlerner5515]

i love all your content and you are amazing. thanks for all the education. and def do a gamestonk video :P

[@VulcanOnWheels]

Congratulations on getting to 500K subscribers!

[@mentonerodominicano]

Philip looks great on a fitted shirt. Embrace your size, boys!

[@mentonerodominicano]

@Two Cents yes!

[@justinle998]

Haha “in theory” after the part of keynes

[@gabsrendon7920]

I love your videos, congratulations on the new baby!

[@francosci4514]

Great thanks 2cents and PBS.

[@ericmeyer1373]

Been saying it for years, America needs to switch to Hayek style economics. Keynes just makes the problem worse long term.

[@davidlewis6728]

as someone who advocates for the Austrian school of economic thought, Keynes actually wanted us to go back and forth between gaining and spending. we are stuck at spending money. i hate Keynesian economics, and i know the government will NEVER change it's mind unless it goes to mercantilism or socialism, but technically they aren't properly following Keynes' directions.

[@Devinfrbs]

You haven't noticed inflation? Shopped for groceries lately? bought a house? financial assets?

[@brentsievers3293]

Best channel on youtube smacking down the deficit hawks

[@colin1818]

You seemed to have missed the other half of the conversation. LOL. But you don't seem to be interested in smacking down the people that don't take austerity measures during the good times.

[@frickinfrick8488]

When I learned about this in uni it made politics so much more frustrating because all the political parties seem to bank on appealing to a commonsense understanding of budgets from voters rather than what actually works. In my country one of our political parties banks exclusively on a “returning to surplus” message and everyone seems to think that’s an expansionary policy when it is exactly the opposite. It sends so much mixed signals. I appreciate you explaining finance and economics in such an accessible way, I wish a lot of what you talk about was part of school education because it’s so important.

[@davidcarcamo5010]

If you see this, I was here

[@francosci4514]

We see you, u are eternal.

[@notlebronjamesco7850]

I am blind so goodbye

[@manujohn99]

Ohh reallyyyyy

[@ozalme]

Future video Idea: Analysis and breakdown of Reddit (r/wallstreetbets) vs the short sellers, particularly GME and AMC Love the content you produce, keep it up!

[@MixMeMcGee]

Fantastic summary of these macro ideas. Especially based on what patterns have *actually* born out in the last 50 years.

[@sor3999]

The first question was really good. I've always wondered that myself. Glad it was asked and answered.

[@JaredV34]

This video aged horribly. Back to austerity!

[@muratbuyuktepe6340]

Why worry about cryptocurrency quotes if there is FBC14 algorithm?

[@samanthacliford3061]

Do you trade alone

[@JRRALLS]

"Haven't seen a meaningful increase in inflation..." That aged like milk.

[@DanCooper404]

No high inflation? This aged well.

[@222Gmarco]

They should rectify about the part where they said that the warnings of print more money wouldn't come in inflation. A year later of this video (2022) we know that the enormous quantity of money that the Fed printed in 2020 and 2021 was catastrophic for the worth of money and the people's savings and incomes.

[@gabemtv]

"In the long run we are all dead" is one of the most inspirational things I have heard in a long time. Live your life at the fullest, you never know when bad stuff like death, suffering, and emotional hardships can happen.

[@shortstories155]

Informative video.

[@CSGATI]

If we have more money than everyone else why in hell do we need to borrow? Cut spending. Non-sustainable.