The US Debt Situation Explained

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The Plain Bagel

The Plain Bagel

Күн бұрын

Пікірлер: 2 500
@ThePlainBagel
@ThePlainBagel Жыл бұрын
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@stupidminotaur9735
@stupidminotaur9735 Жыл бұрын
i fully support the usa defaulting on its debt. if its broken and you keep on putting glue/tape on it sooner or later it will break breaking it sooner than later is better.
@yogawan3805
@yogawan3805 Жыл бұрын
Why didn't u talk China already reduced it's US debts holding from 1.3 Trillions to 800 Billions and keep offloading it?
@4fingers183
@4fingers183 Жыл бұрын
31 trillion my butt, Kissinger/pentagon steals that over the weekend :P
@teddybruscie
@teddybruscie Жыл бұрын
Why do you believe a government that makes it's own money can go broke in the currency it makes? Also why do you still believe our taxes pay for government operations when Covid proved we don't tax or issue bonds to spend. If we want to spend money we do and don't raise taxes or sell bonds to do it.
@henrygustav7948
@henrygustav7948 Жыл бұрын
US National debt is nothing but an accounting record of all the dollars the US Federal govt has spent since inception, which is has yet to tax back and sits in our economy as our savings. It is not debt at all, its part of our money supply and there is no problem with it other than the distribution of those dollars. Its not something our grandchildren will have to pay back. Its not a burden on our children. The Fed govt can make any amount of payments it wants to and does not spend peoples taxes. The difference between spending and taxes is the deficit, which necessarily equals our SAVINGS.
@andrewfriedrichs9340
@andrewfriedrichs9340 Жыл бұрын
It's almost like there is a large cohort of aging people who have no issue borrowing against their children's future.
@TwentyZZ24
@TwentyZZ24 Жыл бұрын
It's much more than that... It's kind of cyclical imo with a little bit of external influence
@cisium1184
@cisium1184 Жыл бұрын
Yeah we need to get rid of the old people, because young people are great with credit. 🤣
@aleger620
@aleger620 Жыл бұрын
Nah... let's JAPAN PAY FOR IT
@garyvanremortel5218
@garyvanremortel5218 Жыл бұрын
After all, we're freely handing them a world that is already been built. They will do the same for their offspring. This is how life works.
@TheRealE.B.
@TheRealE.B. Жыл бұрын
We're borrowing against our children's futures in more ways than just our national debt. We're building unsustainable infrastructure systems that they won't be able to afford to maintain, and we're polluting the environment for them to either pay to clean up or live with the health consequences of.
@Origami84
@Origami84 Жыл бұрын
Italian here. We, too, had a period - 1980s - where our debt exploded until the markets were worried we would default. We didn't default - that's good. Our economy remained stagnant for decades, because taxes couldn't be lowered while our government could hardly afford any kind of stimulus - that's bad. Also, we are vulnerable more than ever to pressure from financial markets. And the chances of going back to a manageable debt are close to zero, which means lifelong state slavery to debt owners. So, no, you don't want to be in our situation even if "we are still not going to default". Just saying.....
@noahremnek3615
@noahremnek3615 Жыл бұрын
It is a bit different because the US can print the currency it owes its debt unlike Italy.
@kriterium123
@kriterium123 Жыл бұрын
I think you guys are still in this period tbh
@yougetaspear7799
@yougetaspear7799 Жыл бұрын
Amerikkka is spoiled...hence it's printing press goes nonstop cos the is enslaved by the $ cos world runs on it atleast and indefinitely will see till other credible baskets come to bear
@havencat9337
@havencat9337 Жыл бұрын
us will just print more $$$
@pjhardy6438
@pjhardy6438 Жыл бұрын
"Taxes couldn't be lowered" yet they were lowered, for the most wealthy People and thé biggest international compagnies how evade happily Taxes. Richard is blinded by the economic doxa. A sovereign state is not à compagny. A state could decide to tax 20% of any wealth above a certain threshold. It has been done in the past (France, 1946-1949). Abstate could also tax at an exorbitant rate above a certain pay grade : USA under eisenhower had a 97% marginal tax rate.
@The2wanderers
@The2wanderers Жыл бұрын
It never ceases to baffle me that approving borrowing is a separate process from approving the budget. The budget has implied borrowing in it, why would any sensible system not also authorize the government to borrow as specified in the budget?
@chowsquid
@chowsquid Жыл бұрын
It’s simply so they can have this fight every year. Just like china’s most favored nation status back in the 2000s. It’s non debatable but it was brought up to debate regardless.
@defenstrator4660
@defenstrator4660 Жыл бұрын
Because automatically writing yourself a blank check is not actually responsible. The whole point is to place a constraint where the people spending the money have to actually explain why it has to be borrowed rather than the country working off existing tax revenue.
@ShadowAraun
@ShadowAraun Жыл бұрын
@@defenstrator4660 so its simple, any time we have to pass a bill that increases government spending, pass a debt ceiling increase to compensate. you are already showing where the money is going, its going to this new spending venture.
@defenstrator4660
@defenstrator4660 Жыл бұрын
@@ShadowAraun Yeah, that’s missing the point. The reason the debt ceiling is there is to try and stop spending money you don’t have. Unless it is some sort of future benefit borrowing is simply stealing the money of those in the future to spend in the present. You get the stuff, they get the debt. The idea is that if you should not be able to simply borrow and tax. That there must be some fiscal responsibility to live within your means. It can be done. During the 90s both Canada and the US had balanced budgets. So why people treat it as an alien concept is beyond me,
@ShadowAraun
@ShadowAraun Жыл бұрын
@@defenstrator4660 the idea of raising the ceiling being tied to bills that increase spending is EXACTLY to limit the bills that increase spending. so we can stop spending money we don't have.
@raydizzle6767
@raydizzle6767 Жыл бұрын
Good one here Mate!
@Thebreakdownshow1
@Thebreakdownshow1 Жыл бұрын
Every time US is at its debt ceiling the they remember one song "So we put our hands up like the ceiling can't hold us "
@kicapanmanis1060
@kicapanmanis1060 Жыл бұрын
They better do it cos US is in trouble if they don't increase it.
@w1xqii
@w1xqii Жыл бұрын
@@kicapanmanis1060 increasing the dept ceiling will only cause more dept, the more dept the more the U.S. dollar will lose value. No value, everything will come to a stand still and everything will probably crash. They’re only causing more economic damage by not paying the dept.
@quippy8402
@quippy8402 Жыл бұрын
There is technically no debt crisis if the debt is dollar denominated, as the country can always print money. The real risk is foreign countries' loss of confidence in US dollar. This depends mostly on how fair and well we treat the other countries and whether they believe that we are a "stable partner" of trade. This latter part I am not so sure with what we have been hysterically doing in the past few years.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
Exactly
@JohnKerbaugh
@JohnKerbaugh Жыл бұрын
The crisis comes when you devalue the currency and destroy every dollar denominated contract, including loans.
@LuciferArc1
@LuciferArc1 Жыл бұрын
No. Thats not true. Everytime you print money, the value backing it gets divided by the increased amount of printed dollars. If your gdp does not increase to compensate for the increase of debt or printed dollars, your purchasing power goes down. Hence inflation. This idea that you can do this with no consequence is blatantly false.
@howardfriedman7077
@howardfriedman7077 Жыл бұрын
quippy: The country or, government, does not print money. The Fed does.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@LuciferArc1 you contradicted your own point. First you said the value backing dollars is divided every time you print money, then you said that is only the case if the gdp does not increase. Which is it? does it devalue every time you print, or only when theres no growth?
@Bradleyschaeffer376
@Bradleyschaeffer376 Жыл бұрын
Thanks bud for keepin us financially Educated! Regardless of how bad it gets on the economy
@GaryWinstonBrown
@GaryWinstonBrown Жыл бұрын
She's unique in the field just got to keep to her instructions and you Excel.
@AnnaKrueger809
@AnnaKrueger809 Жыл бұрын
Have seen lots of inspiring testimonies about this broker lately...I guess she must be really good…l'll definitely make out time to connect with her anyways
@mesiroy1234
@mesiroy1234 Жыл бұрын
It's not up to date it's already it's months before it should upload this
@ZephyrinSkies
@ZephyrinSkies Жыл бұрын
Ugh, spambot thread
@thetheatreorgan168
@thetheatreorgan168 Жыл бұрын
🛑🛑🛑🤖🤖🤖
@harrison6082
@harrison6082 Жыл бұрын
Well, it's nice to know that most investors and banks aren't skeptical of the US's ability to pay it back, yet. Edit: But still, maybe congress will do more damage than the size of the debt itself.
@asdf3568
@asdf3568 Жыл бұрын
Mostly because they don't have a choice. If you want a dollar denominated loan, you to buy treasuries
@jirachi-wishmaker9242
@jirachi-wishmaker9242 Жыл бұрын
US doesn't let "choices" to emerge or stay. Because it will crumble their establishment. More importantly its allies helps US to do that for easy US-Pound & US-Euro swap.
@ryans3795
@ryans3795 Жыл бұрын
The US can really do anything it needs to keep the markets ok, but can the average citizen be able to handle what the government puts them through.
@trod5902
@trod5902 Жыл бұрын
what choice do they actually have? the reality is that nobody believes the US is paying back anything, but they have to act like it. otherwise their companies will collapse along with the US and the dollar
@ChrisVink-b5b
@ChrisVink-b5b Ай бұрын
Much of this debt was added to the financial bailouts during the financial crisis earlier this century. The prevailing reasoning was that certain firms were so large relative to the economy that letting them go bankrupt and being dissolved would have caused massive unemployment and suffering. Should we consider a law or regulation that only allows firms to grow so large? Maybe there is a way to measure the size and market power of firms relative to others and the economy, and just make a law that says firms in an industry cannot be over a certain size. Maybe we do need to limit mergers. That would be a way to avoid the "too big to allow to fail" scenario. Maybe the monopoly or oligopoly rules have been too loose. I hate government bailouts of firms because these businesses have been deemed too big to allow to fail. That just informs me we as Americans, and the government leaders allowed them to get too big. I think we can allow firms to grow too large relative to their industry and allow their executives to have too much power such that when they are wreck-less, and it is deemed they need to be kept operating by government leaders, that we have actually deemed free market principals wrong.
@CouchDent
@CouchDent Жыл бұрын
The thumbnail for this is probably the best to describe the video and how he feels about the debt ceiling
@moneysins
@moneysins Жыл бұрын
US Debt - let’s see how far we can stretch our reserve currency privileges before it breaks
@NormalPerson053
@NormalPerson053 Жыл бұрын
"What happens to those nations that run out of cash either one goes commie or ones goes fash. Million dollars for a loaf of bread can't wait to bash my neighbors head print money. " Remember this song?
@badluck5647
@badluck5647 Жыл бұрын
I find it unnerving that Warren, Sanders, and AOC claim that having a reserve currency means we can spend infinitely without consequences, _and people believe them._
@moneysins
@moneysins Жыл бұрын
@@badluck5647 Hey hey hey, not every politician has the time to read history okay? Pandering to political extremism is very time consuming I’ll have you know!
@moneysins
@moneysins Жыл бұрын
@@NormalPerson053 Not necessarily, the UK lost its reserve status and have managed fine (until it decided to shoot itself in the foot). But yeah that’s a gamble best left not taken…
@rogerbartlet5720
@rogerbartlet5720 Жыл бұрын
What's happening is the USA is exporting inflation around the world. Dollars are in high demand devaluing foreign currencies and making poor people more poor. It's been having a destabilizing effect like this for years.
@shaunmoorefinance
@shaunmoorefinance Жыл бұрын
Lol just had a funny thought. Imagine getting a letter through the door saying ‘You owe us $31.4 Trillion’. 😂
@tioswift3676
@tioswift3676 Жыл бұрын
That’s pocket change
@shaunmoorefinance
@shaunmoorefinance Жыл бұрын
@@tioswift3676 Oh really! Try carrying $31.4 Trillion in loose change and get back to me 😂
@jirachi-wishmaker9242
@jirachi-wishmaker9242 Жыл бұрын
@@tioswift3676 you from Zimbabwe
@shaunmoorefinance
@shaunmoorefinance Жыл бұрын
@@jirachi-wishmaker9242 hahahaahaha
@shanefoster2132
@shanefoster2132 Жыл бұрын
Perhaps not such a bad thing. Two possible outcomes: you convince others you are successful and can make the payments (thus they are invested in your continued success) or they are unconvinced and seize your assets. Good luck. Or thirdly, debt forgiveness though that is somewhat in category 1 of convincing debt holders but now we're approaching levels of nuance involving debt and politics that I can neither articulate nor understand properly to succinctly write in a comment.
@asak
@asak Жыл бұрын
One small, but important correction, @9:00: Instead of "Even with a massive debt load, the cost of maintaining this debt is actually lower than it's been in the past", it should be "...is actually *relatively* lower than...", right?
@RobertBeedle
@RobertBeedle 7 ай бұрын
Correct.
@tren-y2m
@tren-y2m 5 ай бұрын
Good catch! It slipped my mind too
@Colnefix
@Colnefix Жыл бұрын
I didn't see an animated video of Plain Baggle since 5-Minute history lessons, I love this
@adamfattal9602
@adamfattal9602 Жыл бұрын
Your name is longer than my biography. Legendary
@ACE-700
@ACE-700 Жыл бұрын
If u know mandarin it’s pretty funny
@lilytea3
@lilytea3 Жыл бұрын
0:06: 📉 The US government is at its debt ceiling and may default on its debt, causing severe consequences for the economy. 3:43: 📊 The US government has been accumulating federal debt since 2001, with an average annual inflation-adjusted pace of 5.7 percent, leading to the need for frequent debt ceiling hikes. 6:41: 💰 The United States has a larger economy and more industry diversification, giving it more access to capital and lower reliance on crucial imports compared to other countries. 9:31: 📈 Despite a massive debt load, the US government has been able to borrow at low rates, suggesting market confidence in America's solvency. 12:34: 💰 The government should prioritize managing the debt balance before interest payments to avoid a debt crisis, as seen in Greece and Sri Lanka. Recap by Tammy AI
@SpunckyJew6969
@SpunckyJew6969 2 күн бұрын
Go away
@lukewarm6369
@lukewarm6369 10 ай бұрын
11 months passed a little over 34.2 trillion dollars now
@V3G4N01
@V3G4N01 6 ай бұрын
34,9 trillion $ right now
@morbid747
@morbid747 4 ай бұрын
36 trillion by the end of this year and annual interests would hit 1 trillion per year.
@deftknight7418
@deftknight7418 2 ай бұрын
It's almost like nobody cares about how much debt we have...
@Vladimir_Gluten
@Vladimir_Gluten 2 ай бұрын
How does it increase this quickly. Damn
@deftknight7418
@deftknight7418 2 ай бұрын
@@Vladimir_Gluten Mis-management, bad policies, horrible future-proofing, loss of jobs... The list is so insanely long. In total, the biggest factor here is excessive spending. The biggest contributor to that is the loss of jobs in the American market. We don't make almost anything anymore. This means the U.S. literally cannot sell more than we buy in goods from other countries. Instead of fixing this horrendous mess, however, we just keep printing money. This kinda, sorta, barely works to prevent the U.S. from going bankrupt but also means that the U.S. citizens and other countries that trade in USD are being affected by the inflation that this causes. (AKA, this is the part of the equation that makes it so nobody can afford groceries.) This "strategy" means we aren't paying the debt, just pushing it off at the cost of destroying the actual value of our currency. In other words, if a handful of countries decided that they wanted all their money today and not for us to pay it off like a loan, the U.S. and all that live inside it, would now be subject to who knows what because there is zero historical precedence for a super power with this much debt collapsing, and collapsing with as much weight as the U.S. currently carries. *Starts sweating profusely* I'm not freaking out, you're freaking out! All jokes aside, it's a real mess and nobody agrees on why it's happening. This is a combination of what I've heard and some small personal insights from my collage economics class. Maybe this is helpful to you.
@toddwerther188
@toddwerther188 Жыл бұрын
I'm going to call myself 'the person who is fiscally conservative' in the relationship while spending as much or more than my spouse
@jonnyd9351
@jonnyd9351 Жыл бұрын
Nice twisting of words
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@jonnyd9351 ?
@Redmanticore
@Redmanticore Жыл бұрын
just a reminder that neither party cares absolutely nothing about debt when they are in charge. so, it will rise. will that ever matter to the one who has the biggest GDP and biggest military? probably not. but then again, they are being awfully sweaty about china and encircling them for really no good reason.
@toddwerther188
@toddwerther188 Жыл бұрын
@@Redmanticore I agree, my point is one party lies and says tells their voters a story which sadly many of their voters believe. There's a reason fox lies and misinforms their viewers.
@TheNamesFarquaad
@TheNamesFarquaad Жыл бұрын
@@jonnyd9351 explain
@CreepahKillahRSA
@CreepahKillahRSA Жыл бұрын
I’m so glad our politicians who don’t have to live with the consequences of the debt have decided to keep raising it even when we are in expansions.
@lewis123417
@lewis123417 Жыл бұрын
Its because people can't stomach the idea of having to deal with spending cuts and a slow down of quantative easing
@thedavidj1996
@thedavidj1996 Жыл бұрын
But what are the consequences? Economists do not agree on when the tipping point is or if there even is one. The US has sovereign currency that isn’t beholden to the price of a good (ie a Fiat currency) or another government (Euro). Running a surplus takes money out of the economy through taxation. Government spending stimulates economic activity, either by adding to the capital stock (roads etc), wages (government employees) or direct transfers (tax credits, assistance programs, social security, etc). Running a deficit ensures that more money is distributed. Inflation can be controlled by both interest rates and through taxation. Your retirement plan, social security administration, banks, and long term investors use bonds as an investment tool. If the government didn’t issue treasury bonds then you wouldn’t have access to a long term and safe investment. You’d be reliant on real estate, stock prices, or business investment as your only means of investment.
@Hyperpandas
@Hyperpandas Жыл бұрын
As they should. The debt ceiling is about paying debts that have already been incurred, mostly through obligations that have already been approved by Congress. Reducing government spending during economic expansion is a budget conversation.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
what are the consequences of the debt? A functioning government? Growth?
@w花b
@w花b Жыл бұрын
​@@grimaffiliations3671 everyone can ask to be paid at the same time 😈
@kicapanmanis1060
@kicapanmanis1060 Жыл бұрын
I can't remember the book at the top of my head but read a book that studied debt and defaults of countries across history and found very little correlation between debt-to-GDP ratio and defaults. Which itself doesn't mean more debt = good but a country having high debt to its GDP doesn't mean it will more likely default on them. How the debt is managed and serviced is more important than the actual amount of debt.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
Yeah, russia had a low debt to gdp ratio in the late 90's and still defaulted, meanwhile japans' debt is twice the size of it's entire economy and it's fine. What determines whether or not you default is whether or not your debt is in your own currency. If it is, you're fine
@howardbaxter2514
@howardbaxter2514 Жыл бұрын
@@grimaffiliations3671 yeah, but the problem is, you become reliant upon said situation and if and when that changes you are now saddled with a mountain of debt. The US is lucky right now that the world at large is favorable towards us and sees us as a good trading partner. But that can very easily change, especially with China looking at large.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@howardbaxter2514 But the nature of sovereign debt means you can conduct fiscal policy however you see fit regardless of any changes in trading patterns. Because a nation that borrows in it's own currency does not need domestic of foreign investors in order to spend or control their interest rates. The world could stop being favorable to the US, and it could lose it's reserve currency status and it would still be able to operate the same way. After all, plenty of non reserve currency nations operate this way today
@chowsquid
@chowsquid Жыл бұрын
The US wouldn’t be affected on current debt/bonds. That’s the problem for the debt holder….suckers!!!😂😂 But it would affect future US borrowing…😢 Btw, US also a holder of current US debt.
@jlowe8059
@jlowe8059 Жыл бұрын
@@howardbaxter2514 It can change, but not very easily. It would be very hard for anyone to replicate US value to the world, as you have to be actually physically capable of doing so, and no one is close yet. US military, specifically Navy plays a large role in this and its not likely to change to near future.
@abhisheksathe123
@abhisheksathe123 Жыл бұрын
We will take extraordinary measures to stay within debt limit -Ends up raising the debt ceiling again
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
the debt ceiling makes no sense
@anton3437
@anton3437 Жыл бұрын
@@grimaffiliations3671 There is technically always a debt crisis with fiat currencies as every single printed dollar has interest on it and it is basically a loan of dollar + interest. Problem is at the point of taking the loan/printing currency, funds for that interest do not exist so we could never pay our loan back completely. This is why deficit spending is crucial.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@anton3437 every printed dollar doesn't have interest, the fed just sells bonds equivalent to the difference between spending and taxes, and those bonds are the ones with interest. But the fed only does that to control interest rates, they could deficit spend without selling bonds if they wanted to
@Redmanticore
@Redmanticore Жыл бұрын
@@grimaffiliations3671 dissolve fed dissolve dollar
@roxymax8917
@roxymax8917 Жыл бұрын
Waiting for dedolarisation
@TrapGod_JackofAllTrades
@TrapGod_JackofAllTrades Жыл бұрын
I'm not gonna lie. I was expecting the usual "sound the alarm we are all gonna die", but I was pleasantly surprised to see the opposite. Thank you for your work
@johnathin0061892
@johnathin0061892 Жыл бұрын
Eventually, this will economically destroy America. It is no joke. Math doesn't lie, politicians do.
@josephpeeler5434
@josephpeeler5434 Жыл бұрын
We are in big trouble. The debt service cost is exploding. It will be $700 billion by early 2024. That is close to what the federal govt spends on the military.
@MrPaxio
@MrPaxio Жыл бұрын
anime and lgbtq always wants to keep you on edge
@TrapGod_JackofAllTrades
@TrapGod_JackofAllTrades 3 ай бұрын
@@MrPaxio lool what?
@Meandbroafter2
@Meandbroafter2 3 ай бұрын
Only 31 trillion debt Those were the days
@Т1000-м1и
@Т1000-м1и Жыл бұрын
USA: we have special empire priviledges that are used like a normal part of life and it doesn't ever go wrong at all
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
they don't have empire privileges, they just have monetary sovereignty like a bunch of other nations
@SpunckyJew6969
@SpunckyJew6969 2 күн бұрын
Correct
@ИммануилСоломонов
@ИммануилСоломонов Жыл бұрын
would be great to see the analysis of the Chinese state debt. Great video! Thank you!
@RoobieRhoo
@RoobieRhoo Жыл бұрын
If you notice the chart at 1:52, our debt remained very stable at around $3 trillion from the period after WWII until 1982. During this period, we taxed corporations and the wealthy at a very high rate with significant deductions and loopholes for investing back into our economy. Our middle class was at its peak at around 65% of the population, we had labor unions, the stock market rallied, we fought a war in Korea and Vietnam, and put mankind on the moon. Beginning with Reaganomics around 1982, we offered large tax cuts to corporations and the wealthy, and our debt grew almost every year since. Since then, our middle class shrank, wages no longer kept pace with productivity (stagnated), our mother's entered the workforce to keep up, our savings went negative, and our personal consumer debt grew (in part funding China's growth). At the same time our production went abroad, and the wealth gap has increased. The majority of our national debt today is owned by Americans with only $6 trillion owed to other countries, including a little over $1 trillion each to China and Japan. Much of our debt is in private and public retirement accounts, social security and Medicare, state and local governments, and our financial system to include the Federal Reserve and support for the dollar as a global reserve currency. Our debt is a measure of our economic wealth and power.
@rttrttyan
@rttrttyan Жыл бұрын
Bottom up works and top down doesn’t? It’s almost like literally everyone knows this but everyone that can make changes are benefiting from the current system so they refuse to make any changes.
@RoobieRhoo
@RoobieRhoo Жыл бұрын
@@rttrttyan I believe you're right about people benefitting from top down lobbying and campaign contributions. In my view, it's not so much top down doesn't work. It does. Milton Freidman's "greed is good" laisses faire (Reagan) economics simply goes to where the returns are as a matter of self interest. People keep more of their money to spend it as they see fit. Like big tech rather than rural brick and mortar rural small businesses - once the backbone of the US economy and our consuming middle class nuclear family. The government spends bottom up where financial returns do not matter as much. Infrastructure, for example, is less about financial return to the government and more about returns in economic growth, the public good, and creating jobs. We avoided the near certain recession (I think the inverted yield curve was more about lower inflation expectations than a recession indicator). I argue the Obama's "supply side" recovery from the 2008 financial crisis was (politically) sluggish (for a 1 term president) because returns were found in emerging markets abroad and fracking in the US - generally speaking. Both benefitted from a zero interest rate policy. The post lockdown recovery was more rapid because US consumers had stimulus money to support opening of shuttered US businesses.
@rttrttyan
@rttrttyan Жыл бұрын
@@RoobieRhoo 1 term president? Also any recovery from the financial crisis that Obama did, Trump wiped away with his 1 term.
@RoobieRhoo
@RoobieRhoo Жыл бұрын
@@rttrttyan I'm sorry for not being clear. I was paraphrasing Mitch McConnell who promised to make Obama, "a 1 term president." I think this was part of the motivation for not providing sufficient stimulus to main street in order to ruin his presidency. Meanwhile a lot of people were out of work, lost their homes, and could not retire. This actually began the populist movements in America, including the Occupy Wall Street, Tea Party, and MAGA. It took nearly 5 years for unemployment to come down to around 5% when the Fed began to tighten the money supply in 2013. By the time Trump took office the unemployment rate had fallen to around 4.5%. Trump and his supporters were so proud of "his" economy. In fact, it was primarily driven, and necessarily overblown (quantitative easing), by the Fed during Obama's term just to get inflation grudgingly up to 2%. This was painful trickle down economics in action.
@markbell5929
@markbell5929 Жыл бұрын
Hey Richard… would you consider doing a segment on Stephanie Kelton’s book (The Deficit Myth)? I find her argument quite compelling. Cheers
@JeanValjean875
@JeanValjean875 Жыл бұрын
Would this be a bad time to point out that if Bush Jr had just continued Clinton's budget policies, the US national debt would be completely paid off by this point? It seems like a bad time.
@lemmingsgopop
@lemmingsgopop Жыл бұрын
People also forgot that the one law that actually got passed through the Trump presidency was a $T tax cut to millionaires and billionaires.
@rogerbartlet5720
@rogerbartlet5720 Жыл бұрын
Nothing was/is stopping them.
@Fedgery007
@Fedgery007 Жыл бұрын
That’s irrelevant unless you can go back in time.
@SamAronow
@SamAronow Жыл бұрын
You wouldn't want the US to be entirely debt-free though, as that would also dry up the government's credit. Budget surpluses (which are problematic in their own way, but that's a different conversation) would have created an incentive to offer more Treasury bonds.
@luisfilipe2023
@luisfilipe2023 Жыл бұрын
That’s incredibly misleading. The 1990s were a completely different time before 911 2008 and the pandemic.
@archstanton3931
@archstanton3931 Жыл бұрын
"Who is going to pay for all these government bailouts? That's out children, our poor, poor children." - The Onion, 2009 (pundit ratings plummeted in the first half, skyrocketed in the second)
@willinton06
@willinton06 Жыл бұрын
And I happen to own multiple post office boxes
@keithw4920
@keithw4920 Жыл бұрын
Not just the children in the USA. The rest of the world and their children pays too.
@fedordatnov1320
@fedordatnov1320 Жыл бұрын
what children? We have the lowest marriage rates and births rates, and it's keep declining
@rogerbartlet5720
@rogerbartlet5720 Жыл бұрын
having children will be too expensive and people will avoid having them. The tax slaves the government is expecting just won't be there.
@WordDefinition
@WordDefinition Жыл бұрын
A lot of billionaires and millionaires are being made everyday but none are contributing to the debt ceiling. Imagine being a millionaire but your country’s debt is in 31T 😂 fake rich i may say
@leads823
@leads823 Жыл бұрын
The reality is that the Congress could vote to remove the debt ceiling completely like many other counties have done. In doing that, they would also have to agree to let go of that as a bargaining chip. If it’s gone, no one can use it as ammunition or hostage taking. That is more the issue. Getting them to agree to loss of control they feel from having a debt ceiling.
@rockmusicman21
@rockmusicman21 Жыл бұрын
Don't forget about the insane amounts of debts that the decades long war on terror brought us. Before that we had almost no debt. I know there are many factors but that's a huge one.
@newt4949
@newt4949 Жыл бұрын
“War on false terror” to be exact, we didn’t belong there
@Droidman1231
@Droidman1231 Жыл бұрын
It's a shame we spend 9.7% of the budget in interest payments. 9.7% of the huge federal budget so much money they could do so much good.
@MyVanir
@MyVanir Жыл бұрын
Yeah, why should that debt be repair.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
why? Theres no opportunity cost to interest payments
@midimusicforever
@midimusicforever Жыл бұрын
Alarmists gonna alarm. Good thing we have Richard to keep things nuanced!
@elarmino6590
@elarmino6590 Жыл бұрын
The problem with continuing to raise the debt ceiling is that one day they are going to go up and ask for so much that they are going to make an argentine, in other words, from one day to the next all confidence in the US public debt is lost and creditors are not going to lend (default)
@EdMan102292
@EdMan102292 Жыл бұрын
I mean only if dept as a percentage of GDP is increasing. If the debt is increasing more slowly than the economy is growing then we could hit debt ceilings while literally owing less and less debt.
@elarmino6590
@elarmino6590 Жыл бұрын
@@EdMan102292 right now, tomorrow exists
@DecemberNames
@DecemberNames Жыл бұрын
Thank you for another great video mate. I enjoyed every second. Please keep it coming.
@duskrider1724
@duskrider1724 Жыл бұрын
I really appreciate that your content model isn't panic for clicks.
@overcaffeinatedengineering
@overcaffeinatedengineering Жыл бұрын
Love these videos. Loving this editing too.
@nickm1727
@nickm1727 Жыл бұрын
One could argue that the only reason Japan has not defaulted is because of their US debt collateral. Therefore, if the US debt comes into question, Japan will certainly default.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
That's not true at all, it's because they have monetary sovereignty. All their debt is in their own currency, just like the US
@howardfriedman7077
@howardfriedman7077 Жыл бұрын
If the U.S. defaults, it would cause world-wide economic panic.
@noahjones9833
@noahjones9833 Жыл бұрын
@@grimaffiliations3671 true but like howard says, if we default, almost everyone defaults
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@noahjones9833 No, Japan would not default. Heck they've already retired half of their national debt
@Redmanticore
@Redmanticore Жыл бұрын
@@noahjones9833 sure, but we have alternatives, like russia and china. world wont end if America fumbles. it just gets a new management.
@MegaLokopo
@MegaLokopo Жыл бұрын
It should be pointed out that things we all agree we need are not the things that are super expensive and causing problems.
@EdMan102292
@EdMan102292 Жыл бұрын
The vast vast majority of government spending is for healthcare and social security. Then the military.
@MegaLokopo
@MegaLokopo Жыл бұрын
@@EdMan102292 Yep. Things like infrastructure cost almost nothing compared to those three.
@arthas640
@arthas640 Жыл бұрын
@@EdMan102292 That's one fact that endlessly pisses me off about people who complain about things like US healthcare and welfare. We already spend 1/3 of our budget on social security and unemployment and around 1/4 on healthcare. The military spending is higher than most countries at around 15% but that's in large part due to the fact that the rest of the world depends on the US for security. As the war in Ukraine has proven Europe hasn't been spending their fair share and relied on America to pick up their tab for the last couple decades and that's just one area the US safeguards. Even then the US military spending isnt high enough to solve all or even most of our problems; most experts say a country should spend around 2% of their GDP on defense and the US spends a little over 3% so even if they got it down to that 2% level it would only free up around 5% of the budget. That isnt a silver bullet either, most military spending goes right back into the economy in the form of infrastructure, R&D, and public works and further gets some of the costs recouped by selling equipment to other countries. The US also sends a lot of aid in the form of "military equipment", even humanitarian aid is taken out of that military spending since things like food aid is often in the form of MREs and the US military conducts things like rescue operations and disaster relief (just look at the disaster in Haiti).
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
nothing is causing problems. The US debt is perfectly sustainable, because the fed has ironclad control of our interest rates. They will always make sure inters payments are below the growth of the economy
@MegaLokopo
@MegaLokopo Жыл бұрын
@@grimaffiliations3671 That isn't always going to be enough to avoid issues. If that was the case the government would have gotten rid of the debt ceiling permanently long ago.
@caryandrae9952
@caryandrae9952 Жыл бұрын
the sole reason why US can sustain such a high debt is simply because of reserve currency status. However, with more countries breaking away from the dollars for their trade and reserves, that will be less demands for dollars which will slowly degrade the reserve status. While many countries would not want to immediately crash the dollars since it will also put them in a bind. So what many countries are doing now is mainly to remove the dollar risk and weaponized against them while at the same time they slowly unload dollar bonds so as not to shock the system too much.
@maxchen7229
@maxchen7229 Жыл бұрын
The question is simple, how can you keep use more money than your income? Any country, any company any organization? Any family can do this forever?
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
no, just governments who borrow in their own currency
@soullesspancake7405
@soullesspancake7405 Жыл бұрын
Before 2008 crisis, the market believed that the housing market would never crash.....
@leonelgaldinomonteiro4783
@leonelgaldinomonteiro4783 Жыл бұрын
Nothing is forever
@jcam5
@jcam5 Жыл бұрын
Is the US borrowing from the Iron Bank from Braavos? I remember in GOT that Tywin said the crown has borrowed so much, he wouldn't even give a specific amount.
@ALEXFVHS
@ALEXFVHS Жыл бұрын
Im kinda confused as to what it means for government to be a holder of its own debt. Is it equivalent of me having creditcard debt but instead of owing that money to the bank, i owe it to myself? If that's the case, in what sense is that really debt then?
@chewyspedoodle5499
@chewyspedoodle5499 Жыл бұрын
I’m not an economist but someone in another comment here kinda answered you. They said the problem is not the debt at all befause we own the currency. The problem is other countries’ belief in our currency. If we push our privilege too far and another world currency is established, we’re screwed.
@alal039
@alal039 10 ай бұрын
7:45 The high demand for the dollar is due to the "petro dollar" and no other reason.
@Murmilone
@Murmilone Жыл бұрын
The most interesting part on 10:11 is how the numbers change from right to left.
@carltonthesponge
@carltonthesponge Жыл бұрын
would love to see a video about Argentina's debt crisis as well!!
@Rx330lexuslover
@Rx330lexuslover Жыл бұрын
Fuck Argentina
@roberts.9299
@roberts.9299 Жыл бұрын
Imagine Richard playing fallout and considering the intricacies of wasteland economics... Video request here.
@Loislikes
@Loislikes 8 ай бұрын
You mean, other than offing a merchant and taking all his stuff?
@roberts.9299
@roberts.9299 8 ай бұрын
@@Loislikes If you off all the merchants, who's going to buy all your loot? Merchants are the only npcs that make it to the end in every game.
@Loislikes
@Loislikes 8 ай бұрын
@@roberts.9299 Not every merchant. Just the ones with good loot. 😂
@thevoidlookspretty7079
@thevoidlookspretty7079 Жыл бұрын
If the government defaults before late December, Then that will make it the 4th once in a lifetime event I’ll have lived through before I turn 21.
@Mark-pb8kj
@Mark-pb8kj Жыл бұрын
You're living through the Great Reset. You ain't seen nothing yet.
@djinn666
@djinn666 10 ай бұрын
I think it'd be interesting to hear this analysis again with updated information from this year.
@john_djr
@john_djr Жыл бұрын
The debt isn't the problem. It's a symptom of the actual problem which is government spending.
@mephistoss238
@mephistoss238 Жыл бұрын
While it may not be an issue right now, I just can't comprehend how this problem will be addressed without a debt crisis in the future.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
it wont be an issue in the future either
@howardbaxter2514
@howardbaxter2514 Жыл бұрын
@@grimaffiliations3671 see, I’m calling absolute bullshit on that. It will be an issue in the future if we don’t take steps to mitigate it. You say the US will be fine, but what happens when our allies and the world decides to not invest in us? What happens when the international laws we hold dearly break down, and the debt collectors of other foreign entities come calling? Such a notion baffles me, especially when history tells us otherwise. We are likely one series of unfortunate events from all of this going out the window.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@howardbaxter2514 We'll be fine when the world decides not to invest in us, because foreign investment does not determine our ability to conduct fiscal policy as we see fit. That's the beauty of sovereign debt, you cannot default on debt denominated in your own currency
@mephistoss238
@mephistoss238 Жыл бұрын
@@grimaffiliations3671 the debt to GDP increased from 30% to 120% in the last 40 years. Debt servicing will soon be the biggest subject of government spending, above social security, and military. This isn't a sustainable path
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@mephistoss238 It is sustainable, debt to gdp ratio is not what determines your vulnerability to default. Russia's debt to gdp ratio was low when they defaulted in the late 90's, meanwhile Japan's debt has gone up as high as 250% and yet they've never come close to default. Whats the difference? One had sovereign debt, and the other had debt denominated in foreign currencies. That is the key to assessing your potential for default, how much of your debt is in someone else's currency. If anything is unsustainable, it's a balanced budget. Because the private sector relies on government deficits to stay afloat. If the government balances its budget, it would be pushing the deficit onto the private sector, thus causing a recession. Every recession in US history has occurred after a period of deficit reduction
@stlouisix3
@stlouisix3 Жыл бұрын
A much-needed video
@edgarrodriguez8973
@edgarrodriguez8973 Жыл бұрын
Super informative and didactic as usual, you are such a great lecturer. Any thought about becoming a professor?
@dznuts123
@dznuts123 Жыл бұрын
The “largest” economy that is dominated by the service industry. That sure is reassuring. But the Hopi um is much appreciated.
@itcomesinwavves
@itcomesinwavves Жыл бұрын
Maybe it's just because I'm young, but this all seems NEEDLESSLY complicated. Too many variables and stats to something that's too simple. Thinking about it as a common citizen, if I don't repay my debts, people come 'A-knockin'. Assets get repossessed, wages garnished, etc. When citizens don't pay the fed, it's a problem. But when the government don't pay.. ?? Why is there little to no reparcussions for governments? They mismanage their money but the people of that country are penalized for it?
@Cat-bg2ge
@Cat-bg2ge 3 ай бұрын
Hey, if 30 + trillion isn't a crisis 😂
@RighteousUncle
@RighteousUncle 5 ай бұрын
Silly me expecting this guy to explain why US overprinting more than their GDP every year is good, but all other countries doing the same is catastrophic...
@JohnDoe-zu7vg
@JohnDoe-zu7vg 5 ай бұрын
Did you find a good video explaining it ? I don't understand it at all
@bargdaffy1535
@bargdaffy1535 Жыл бұрын
And Treasury Bonds are payed out in a Currency that the Bond Issuer (US Government) has a monopoly on the creation of.
@tomte47
@tomte47 Жыл бұрын
The average maturity of the debt is about 5 years so current interest payments still mostly reflect the previous super low rates. Right now expiring debt is being refinanced at 4-5% interest rate, if current rates stay for a few years interest on just the current debt will be around 1.5 Trillion. About Twice what is being spent on defense ! The U.S was running a Trillion dollar deficit during "the good times" before COVID when it should have been paying down the debt. Now it is at 1.5 Trillion, recession is knocking on the door and there is nothing left to fight it with.
@kaisuski
@kaisuski Жыл бұрын
Dedollarization? Loss of the petrodollar? Loss of the reserve currency status?
@sopota6469
@sopota6469 Жыл бұрын
Corporate taxes 9% vs Individual Income taxes 54%. Can you guess what happened around the 80s when debt started to climb? The loopholes made things worse over the years.
@ajamessssss
@ajamessssss Жыл бұрын
Exactly
@Andrei-ph5yv
@Andrei-ph5yv 24 күн бұрын
$36.2 Trillion right now, we’re doomed.
@FictionHubZA
@FictionHubZA Жыл бұрын
The idea of the world's largest economy failing to pay its debt is pretty mind blowing.
@jayhay1237
@jayhay1237 Жыл бұрын
Not if you read history!
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
it won't fail to pay it's debt tho, they will raise the ceiling. This is just political games from the republicans
@FictionHubZA
@FictionHubZA Жыл бұрын
@@grimaffiliations3671 Are they going to keep doing this until America owes 100 trillion?
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@FictionHubZA They can stop adding to the debt whenever they want, selling bonds are not necessary to finance government spending. But they don't want to get rid of the treasury market. The national debt could just as easily be called the national savings account
@SandwichKing-lj4ej
@SandwichKing-lj4ej 10 ай бұрын
Funny watching this around a year later and debt from 31.5 trillion in this video to around 34.5 trillion now.
@oscarcastro9316
@oscarcastro9316 Жыл бұрын
Weird how the government is allowed to accumulate an excessive of debts and no debt collectors come calling.
@UmTheMuse
@UmTheMuse Жыл бұрын
Debt collectors come calling when you fail to make your payments. It's up to the underwriters to decide whether to loan to you in the first place. Anyway, at this point, I'd still trust the federal government to pay its debt more than I would trust any corporation or even state government.
@21Alansi
@21Alansi Жыл бұрын
Keep them coming sir. I love your videos. A trained professional educating the public, it doesn't get any better.
@joelgritter5492
@joelgritter5492 Жыл бұрын
I just came here to say that this video's thumbnail with you peeking out from a sea of bonds is hilarious. Thanks for the laugh
@MXP250
@MXP250 10 ай бұрын
It’s approximately one year later and the debt is now 34.5 trillion.
@EricK-bw2mj
@EricK-bw2mj 4 ай бұрын
31.4 trillion...... a year and half later its now 35. Absolute insanity
@martinpalm5
@martinpalm5 3 ай бұрын
35.7 now
@thekrustychub5038
@thekrustychub5038 Жыл бұрын
Who wants the US Debt to decrease... 🙋‍♀️🙋‍♀️🙋‍♀️🙋‍♀️🙋‍♀️🙋‍♀️ Who will vote for a candidate that increases taxes and decreases social programs... ...
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
That is why it is foolish to aim to cut the US debt. The private sector relies on government deficits
@calebfrieler4033
@calebfrieler4033 10 ай бұрын
Or they could maybe start holding some of these government agencies accountable for having taxpayer dollars just disappear. The DoD hasn’t passed an IRS audit is 20 years and there is something like 3.1 trillion dollars that they just have no idea where it went. That is 3.1 trillion taxpayer dollars just disappearing into thin air that could be used to stimulate the economy or pay off debt. The DoD is also only one agency, there are plenty more with probably just as high amounts and money like that stacks up FAST.
@mirzaeyahia1673
@mirzaeyahia1673 Жыл бұрын
It’s indeed quite educative lecture with unbiased elements n logic.
@Steven_Bo1
@Steven_Bo1 Жыл бұрын
Putting a bunch of descriptive nonsensical words together doesn’t mean you’re smart
@yamuiemata
@yamuiemata Жыл бұрын
Would be interesting if you'd made a video on the aftermath scenario of a U.S debt default...we all know it's gonna happen one day
@JoBo301
@JoBo301 Жыл бұрын
Absolutely - when Argentina defaulted 20 years ago it had little impact on the world economy. But if America defaulted the impact could have a domino effect on other highly indebted countries (Japan, Italy, Spain, Greece) and so maybe the Euro Zone could also become contaminated??
@yamuiemata
@yamuiemata Жыл бұрын
@@JoBo301 Argentina is not the same as having the world's reserve currency like U.S
@JoBo301
@JoBo301 Жыл бұрын
@@yamuiemata and that's why I said it had little impact
@thejfactor1
@thejfactor1 Жыл бұрын
The US won’t ever default. It will make its citizens suffer through hyperinflation and a currency reset.
@kicapanmanis1060
@kicapanmanis1060 Жыл бұрын
Depends on your definition of one day. 200 years from now I can see it. Near term very unlikely. Possible but unlikely.
@moneysins
@moneysins Жыл бұрын
Imagine the US dipping into default because of politicians playing chicken, haha… ha… ha…
@Policyparagon
@Policyparagon Жыл бұрын
Republicans. Call them out.
@Toonrick12
@Toonrick12 Жыл бұрын
That's actually illegal. The Fourth article of the 14th amendment makes it illegal for the US to default on its own debt. Edit: Oops, wrong section.
@Jose04537
@Jose04537 Жыл бұрын
@@Policyparagon The government HAVE to reduce spending and raise taxes. You can't continue kicking the can down the road.
@OzixiThrill
@OzixiThrill Жыл бұрын
@@Policyparagon Nah. This bullshit is present and common with the entire political sphere in the US.
@ValueInvestor212
@ValueInvestor212 Жыл бұрын
@@Policyparagon We are going to default eventually through not paying, or inflation, better to do it honestly and get it over with. We need massive cuts to government
@abdelrahmangamalmahdy
@abdelrahmangamalmahdy 6 ай бұрын
I think it's a bubble, it's clearly shown by the unexplainable investor confidence. The debt to GDP will keep growing, US will start to print more money to support GDP during crises. As the USD becomes less of a reserve currency worldwide and interest rates decrease, investors will slowly opt away leaving the US government in need for money which will make them print more and more leading to a total collapse of the currency. This will take 5-15 years to play out!
@casienwhey
@casienwhey Жыл бұрын
We go through the same debt ceiling limit nonsense every few years. It's just political theatre and should not be taken seriously.
@hadenwesley6548
@hadenwesley6548 Жыл бұрын
An important thing to also remember: for USA to remain the main global reserve currency, everyone needs access to USD...which means, on average, there must be more dollars flowing out of the country than in the country. This incredible economic power comes with a terrible cost of being mathematically unsustainable by its very nature. I'm not too worried yet...but there is NO sign of spending decrease on the horizon on anything from war to debt forgiveness---it's all like cost has no meaning here
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
the US would be able to operate that way even if it were not the reserve currency
@howardbaxter2514
@howardbaxter2514 Жыл бұрын
@@grimaffiliations3671 except such a burden gets put on the average American through stuff like inflation. What happens when there is an internal revolt within our own country? Investors will begin to bail, and we will be saddled with the debt. You have to have a major hubris to overlook these issues. I understand the issue isn’t as dire as it seems, but to brush it off as a nonissue is beyond foolishness.
@Gavanater7
@Gavanater7 Жыл бұрын
US debt is a strange thing and acts so different from other countries because it's the world reserve currency and has so much pull in the world geopolitical and economically and no one can really hurt it
@jt1559
@jt1559 Жыл бұрын
For now. There are a lot of countries that want to see this change. Checkout BRICS (Brazil, Russia, India, China and South Africa) who are a real threat to US dollar continuing long-term as the world reserve currecy.
@papabear90
@papabear90 Жыл бұрын
Each year the US influence over the world becomes more and more oversized in comparison to its size. Each year the US is getting more belligerent. I can't see the world allowing this to go on in years to come.
@kevinscott9745
@kevinscott9745 Жыл бұрын
Most sovereign currency act the same Regardless of being a reserve currency as long as they have resources
@askeladd60
@askeladd60 Жыл бұрын
There is nothing strange about it. The only difference between the US and countries like Argentina or Greece is simply that the US credit limit is much higher. But there is a credit limit make no mistake about it
@kicapanmanis1060
@kicapanmanis1060 Жыл бұрын
Well yea that's the reason. Economy is built on trust (obvious yea but something people really underestimate). It's the same reason the pound is so powerful. People like it and trust it, so it is.
@jlee4039
@jlee4039 Жыл бұрын
Great video! Would you be interested in doing a video on the “petrodollar” phenomenon? It’s hard for me to differentiate between propaganda and facts regarding this issue…
@jonnyd9351
@jonnyd9351 Жыл бұрын
@dd why?
@bluntape9897
@bluntape9897 Жыл бұрын
This video, in a nutshell: Presents bad news - "while this sounds worrying, here's some context" - presents some even worse aspect of the US economy - "while this sounds worrying, here's some context"- presents some even worse aspect of the US economy - "while this sounds worrying, here's some context"...
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
While that sounds worrying, here's some context. US debt is denominated exclusively in US dollars, and since you can't default on your own currency, there isn't now nor will there ever be a debt crisis
@bluntape9897
@bluntape9897 Жыл бұрын
@@grimaffiliations3671 As long as the US can function in a vacuum, isolated from international trade, I am not worried. Otherwise, I am. Imagine that we are trade partners in the currency only you have control over. Sooner or later, after you print enough of it, I will look elsewhere for a trade partner.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@bluntape9897 We're not trade partners in one currency tho, the buying nation uses their currency to buy the currency of the selling nation
@bluntape9897
@bluntape9897 Жыл бұрын
@@grimaffiliations3671 so the petrodollar is a myth?
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@bluntape9897 it's not a myth, it's just that the special status of the US dollar isn't why its able to operate the way it does. It can operate that way because it has monetary sovereignty, it issues a non convertible fiat currency and has all of it's debt in it's own currency. You cannot default on your own currency
@markmoses4646
@markmoses4646 Жыл бұрын
Selling bonds is not a funding operation! The spending happens first. Federal taxes are not a funding tool. Every dollar spent is a new dollar. Japan has a debt to GDP twice that of the U.S. Economists have been whining about the deficit/debt since at least the 80's. So what has happened? Has the sky fallen?
@SW-fk3rb
@SW-fk3rb Жыл бұрын
Keep in mind a lot of the cost of servicing debt goes to pensions and citizens- the public holds some 24T of that government debt!
@JeredtheShy
@JeredtheShy Жыл бұрын
We whistle past the graveyard of our Social Security outlays. Funny how even high schoolers were talking about that 20 years ago and now it's the third rail of discussion. I sure would like to see a contraction in our military spending, at least. But naw. No can do.
@ultimaIXultima
@ultimaIXultima Жыл бұрын
@@JeredtheShy Military spending is totally in-line with other country's military spending. Sure, we spend a bit more, but not by any significant margin. The fact that the general american public holds the vast amount of our national debt means that the situation is not nearly as dire as other countries. Hence why the bond prices are stable despite the increase in debt load.
@askeladd60
@askeladd60 Жыл бұрын
so what? The US getting to a point it won't be able to service its debt, meaning millions that were counting on that money from the government to finance their retirement will have to make do without it.
@wnsjimbo2863
@wnsjimbo2863 Жыл бұрын
​@@ultimaIXultimafalse No other democratic country spend that much
@steverose234
@steverose234 Жыл бұрын
The Dirty Little Secret is ... They NEVER Had ANY INTENTIONS of Paying Off The DEBT .....
@TomDestry
@TomDestry Жыл бұрын
The problem with the US government's attitude to debt isn't that a crisis or collapse or default is looming, it's that they have come to rely on being protected by transient features of the economy. * We can keep borrowing more because GDP goes up (until it doesn't) * The dollar being the world's reserve currency depresses inflation (The pound used to have this position, look at the UK now) * The markets don't see a problem yet (but once they do, the spiral will have started and it will be too late to prepare) These are bad habits that need to be addressed before, not after things start going badly.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
The fed has ironclad control of our interest rates, so they will always make sure interest payments fall below the growth of our economy. I wouldn't say our reserve currency status has any bearing on inflation. What do you mean look at the UK now? You make it seem like they defaulted and are currently dealing with hyper inflation. They're fine
@EdGeyy
@EdGeyy Жыл бұрын
There's an advert on this video which is offering a scheme exactly like those you have warned us of in the past. "You may doubt my strategy.. so lets take this one individual case where it's been successful as an example"......
@zink8841
@zink8841 Жыл бұрын
I mean we all know they will just raise it. We go through this every time. Media makes us scared and they just raise it and they make it look like they saved the day
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
republicans should be ashamed of themselves for playing these games
@BobBob73271
@BobBob73271 Жыл бұрын
I ate a plain bagel for breakfast today
@email5023
@email5023 Жыл бұрын
🥯
@summerbreeze5115
@summerbreeze5115 6 ай бұрын
Take this rock 🪨
@BK-dy8jk
@BK-dy8jk Жыл бұрын
Come on!! Many wealthy corporations (Amazon, GE, Exxon, etc.) don’t pay a dime in taxes and need to pay their fair share. When I make over 160,000 I no longer have to pay anymore into Social Security so raise that to 200,000 and I’ll start paying more. Being a text accountant I know the system is rigged against the middle and low income workers. The loopholes need to need to be closed. I should not be paying less taxes than my secretary. The greed never ends!
@GPTAsk
@GPTAsk Жыл бұрын
The US debt situation is quite alarming, with the federal government reaching its debt ceiling of 31.46 trillion US dollars. While the government has been using extraordinary measures to prevent a total shutdown, if the situation is not resolved by July to September, the US could default on its debt, which would be catastrophic for the economy. The political discourse seems to be causing the issue rather than fiscal demise, as the debt ceiling can be hiked at any time. However, the fact that the government keeps needing to push this debt ceiling higher and higher is a real problem. The US is far from a Greece or Sri Lanka-like outcome, even with a massive debt pile. The funding for government costs comes primarily from taxes, with the single largest source being individual income tax. Whenever the government spends more than it earns in a given year, it needs to borrow the difference through the issuance or sale of Treasury bonds. Total debt isn't a good gauge of a country's solvency, as the size of a country matters, too, which is why economists often look more toward a country's debt to GDP when gauging a country's debt burden. Unfortunately, this measure isn't doing well either, with the US at 124, which is the highest level it's been since the end of the Second World War. While the US has seen a jump in debt every time it experienced a severe economic shock, it's crucial to note that a growing debt balance may not be all that concerning if a country's size is keeping pace regarding its economic output. The US debt situation is concerning. The US has been spending more than it earns every year since 2001, and this trend isn't sustainable. While the debt ceiling can be hiked at any time, political discourse seems to be causing the issue, which is a significant concern. It's crucial to note that the US is still far from a Greece or Sri Lanka-like outcome, even with a massive debt pile. However, the US's debt to GDP measure is currently the highest level it's been since the end of the Second World War, which is alarming. It's essential to monitor this situation closely as a country's size matters too, and the US's economic output must keep pace with its growing debt balance.
@SangoProductions213
@SangoProductions213 Жыл бұрын
Every single person can think of at least one thing which they think the government shouldn't be spending money on. And yet, the spending goes on and on.
@howardbaxter2514
@howardbaxter2514 Жыл бұрын
Something I really want to look into and break down, is how much of the spending is actual, unadulterated waste. Depending on how substantial said waste/corruption spending is, we may not have to cut back from our big time programs as much as we initially expect. Remember, little things add up quickly, and it is those little things that are likely hurting us the most.
@SangoProductions213
@SangoProductions213 Жыл бұрын
@@howardbaxter2514 Exactly. Problem being that politicians get better jobs once they stop being politicians, if they expand the amount of waste. And guess who's regulating the regulators.
@porkch0mp538
@porkch0mp538 Жыл бұрын
I wish I knew which topics were inherently politicized when I was younger. Maybe some good professors mentioned it but I always got the average to below avg profs due to registering late. Took me until being an adult a few years before I noticed this happens every year like american idol.
@BanksOwnUs
@BanksOwnUs 10 ай бұрын
haha 31.4Trillion, its 34.3 now 3T in 11 months, can anyone say UN-SUS-TAIN-ABLE.
@EndingSimple
@EndingSimple Жыл бұрын
You've just explained why the debt problem will not be addressed anytime soon.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
we don't have a debt problem. Debt only becomes a problem if you lose control of your interest rates, and that can't happen to a nation with all it''s debt in it's own currency
@arthas640
@arthas640 Жыл бұрын
Pretty easy explanation: politicians dont care about anything past the next election, most of them wont be alive or in office to see most of the effects of their actions, and one of the few things uniting both parties is their desire to spend money like a teenager who just won the lottery. Sadly our choices for each presidential election are "do we elected a Republican and see them lose us tax revenue effectivley 'spending' money on corproations or do we elect a Democrat who will throw mountains of cash at different corporations and raise taxes?"
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
@@arthas640 Democrats don't throw money on corporations, they throw money on things that help every day Americans like medicaid expansion, medicare negotiated drug prices, child tax credits, paid family leave that sort of thing
@arthas640
@arthas640 Жыл бұрын
@@grimaffiliations3671 They overpay for medications the same as the insurance companies, much the same happens with things like a lot of the money that went towards COVID. The infrastructure program isn't much different, most of the money goes towards government contracts which are carried out via a public bid structure. They decide what kind of work they want done then accept bids from companies on those projects. This is normally competitive model used in the private sector as well but with government projects they're bloated and inefficient, often by design. For example they require a minimum wage to be paid based off the job, which sounds nice but it's often higher than the going rate for that job. Where I live for example they require you to pay 25-50% above the going rate which is already fairly high for many jobs. They also require you to often use specific materials from specific suppliers like only using GE electrical materials and they often over pay for them. I worked on a school remodel where they spent $1200 per light fixture from a single company who charged that much because they were the only one you could buy it from and there were identical lights selling for around $150 at the time and it was the same for some electronics in class rooms where they spent over $1000 for a normal HDMI cable you could find at Best Buy for under $100. They also will often call it an "open bid" but set up qualifiers that make it difficult or impossible to get much competition so they can give contracts to contractors they prefer at inflated rates (for example where I live construction unions based in the big cities are some of the largest campaign donors and big city projects are often earmarked for unions who dont do much work outside the big cities). They dont even always pay that great with those set wges since there are often loopholes that only a few companies can exploit that allow them to pay below that amount (for example big businesses can get a certification that allows them to pay apprentices a fraction of that set wage, barely above the states minimum wage but it's so expensive to get certified few companies can afford to do it and carry out enough government contracting to make it worthwhile and union companies automatically qualify for the loop hole). Part of that infrastructure program as well as the COMPETE act also involve the government giving out tens of billions to private companies for R&D. I dont have much insight into that though since that's not the kind of government contracting I've done personally but they're mainly fortune 500 companies that you'd expect to have their own lobbyists. I vote democrat since they're the best alternative (Trump and his ilk are many hings but "less corrupt" isnt one of them) but look into campaign donors to the party and much like the GOP you'll find a laundry list of government contractors, companies that regularly get bailouts and grants, and the hyper wealthy. Biden for example got most of his money from Wall Street types in the financial industry, the same kind of people that caused the crash in 2008 and got massive bailouts that often ended up lining the pockets of the executives, the same companies who benefited from deregulation like Clinton repealing the Glass Steagal act or deregulation done by Bush and Reagan before and after Clinton.
@MaxM227
@MaxM227 Жыл бұрын
@@grimaffiliations3671 What happens when The BRIC alliance pushes to upheave U.S.D as the national reserve currency? Can’t print out the money anymore
@xdonnix
@xdonnix Жыл бұрын
The last decade of QE from ECB, FED, BOJ etc. has suppressed long rates. Using long rates as a gauge to long term risk (9:30) does not make sense under the current conditions.
@talwaar007
@talwaar007 3 ай бұрын
The simple point is this: the debt to gdp ration is rising. The US cannot forever just keep printing more money - no really that strategy only works while you have new markets to exploit and you can hold on to your existing markets. When other nations industrialise, break free from your control, seek deals with other major nations and when other nations figure out a mechanism of payment that doesn't require your national currency - at that point the cracks in the dam you are noticing now will spread at a lightening pace. When? Highly unlikely this decade. Best GUESS - mid to late next decade.
@vincentmiller420
@vincentmiller420 Жыл бұрын
For the love of all things, they should never allow a default to ever happen under any circumstances ever! That would be very very very very very very very absolutely horrifically bad.
@kevinfernandez9999
@kevinfernandez9999 Жыл бұрын
Government: oopsie 😅
@vincentmiller420
@vincentmiller420 Жыл бұрын
@@kevinfernandez9999 zero doubt yo
@giovannifrrri5495
@giovannifrrri5495 Ай бұрын
OVER 36 NOW 😂😂😂😂😂😂😂😂😂😂😂
@NikolaStamenkovic6
@NikolaStamenkovic6 Ай бұрын
In just a year and some months. 😮
@giovannifrrri5495
@giovannifrrri5495 Ай бұрын
@@NikolaStamenkovic6 exponential growth 📈 😆
@ultimateloser3411
@ultimateloser3411 Жыл бұрын
Feds be like: If we inflate the dollar so much, our debt would be pretty much approach zero.
@grimaffiliations3671
@grimaffiliations3671 Жыл бұрын
the US has actually responded to the covid inflation better than pretty much everyone else
@howardbaxter2514
@howardbaxter2514 Жыл бұрын
@@grimaffiliations3671 oh really? Is that why my grocery bill and gas bills are going up? Is that why we have massive levels of inflations that are destroying the middle class? You are fucking moron dude.
@stever197037
@stever197037 Жыл бұрын
When the Pentagon says it doesn't know where trillions of dollars went every decade. It would seem that they are responsible for the budget not being balanced. Also responsible for all of the national debt.
@Frootyloops629
@Frootyloops629 Жыл бұрын
Can we start shorting the dollar and subsequent stocks on the Nas
@normtrooper4392
@normtrooper4392 Жыл бұрын
A country is not a person. Debt works differently for a country than a single person. They cannot spend forever but they definitely can steer the ship away from the worst outcome
@askeladd60
@askeladd60 Жыл бұрын
at this point the only two outcomes available for the US are horrendous, either they default on the US debt or they have to endure at least an entire decade of double-digit inflation.
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