Why the US is always hitting a "debt ceiling"

[@Vox]

There is one, slightly fantastical way the US could avoid hitting the debt ceiling: by minting a $1 trillion coin. Vox Senior Correspondent Dylan Matthews explains: bit.ly/30yauQ3

[@ThitutUhthalye]

Thank you for providing with such a high quality content with free access.

[@scpatl4now]

@@ThitutUhthalye Too bad this isn't one of the quality content videos. It gets most of it completely wrong

[@henrygustav7948]

Its not really fantastical when you consider the fact that the debt limit itself is a gimmick. One good accounting gimmick deserves another, forget the 1 trillion coin, we need a 100 trillion cointo forever eliminate the thing.

[@mdrzn]

0:35 "They pay a bit more" it's DOUBLE the amount???

[@dloresch4]

@@henrygustav7948 yeah, because simply adding or subtracting zeros across the balance sheet has worked fabulousness for: weimar Germany, Zimbabwe, Venezuela, ect

[@The_Horizon]

its like constantly hitting the snooze button

[@thecrippledpancake9455]

America must never wake up and get out of bed. That would be catastrophic.

[@kirchoff4733]

No it's not.

[@AverageUsernames]

@@thecrippledpancake9455 Welcome to the american dream, because you have to asleep to feel it.

[@dickgoblin]

No, it is most certainly not.

[@karimaogden3875]

@@AverageUsernames Wise words from the late comedian George Carlin!

[@nebuchadne33ar]

If you have a debt ceiling and each time you reach it you raise the ceiling instead of figuring out ways to cut spending or increase revenue, is that a debt ceiling? Or is it some imaginary object that wastes time and money in discussions in congress

[@vegardbless5699]

It’s a way congress can blame the president, nothing more

[@Sparticulous]

@@vegardbless5699 blame the president for the spending congress sets.

[@Lyf4rMusic]

Exactly !! If there's no analysis of the federal spending and sort of permanent Cost Reduction measures on a regular basis that needed to be done, what's even worth having a limit ? It's like putting yourself on a strict diet and telling yourself I only drink 2 cans of coke in a week and when u reach it u just keep extending the limit to 4,6, 10 etc WITHOUT any realization that what's even the point of the diet in the first place ?

[@WJWeber]

The debt ceiling is basically the government running out of money. When we do we need more money or just cut substantially. So we sell bonds. This raises the debt we owe. Say a 30yr bond at 2% for 1000. So for the next 30 years you get 20 and at the end the original 1000. So these are loans. Now the key is when taking on debt let’s you make more money than before. Many variables. Debt is extremely common across all society in one way or another.

[@enjerth78]

If they retool their spending/taxation policies when they approach the debt ceiling rather than raising the debt ceiling, that would be accountability. As it is, accountability is just a facade to pretend they're not actually following a hyperbolic trajectory. Government shouldn't have access to unlimited funds, as it's the custodian of the unit of trade that belongs to the people. When they spend unearned (not taken revenue through taxation, in this case) it syphons value from the market, creating inflation. It's like a magic trick puzzle, a square filled out with odd shapes, where you can rearrange to the pieces differently to make the square and have a piece left over that has no place to go. Just skimming an unnoticed amount from the edges. Only it becomes noticeable when inflation becomes significant. The piece taken out is so large you can notice the square is smaller than it's frame. The sum of value you hold is reduced in proportion to how much the government spends on credit. And now they can't stop inflation unless the government commits to balanced budgets and paying down the debt. Paying market rate interest on $29 trillion in debt would chain the government down, so to keep up the ruse of accountability, the Fed has to keep rates at basically 0%. We have no tool to stop inflation now except to stop government.

[@nicolasbenson009]

It's a bit annoying and unfortunate. When i was born, the national debt was $2,150 per person. Now it's over $100,000 per person. And I'm not even that old. It's truly alarming and best advice get out of debt, make regular investments and be debt free and financially stable.

[@sharonwinson-m8g]

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

[@tatianastarcic]

No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my Financial advisor are working on a 7 figure ballpark goal, tho this could take till Q3 2024.

[@Vincent-j8u]

This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? I'm in dire need of proper portfolio allocation

[@tatianastarcic]

“ Melissa Terri Swayne is the coach that guides me, She has years of financial market experience, you can use something else but for me her strategy works hence my result. She provides entry and exit point for the securities I focus on.

[@TinaJames222]

I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.

[@FinancialShinanigan]

Don't cross this line! Okay you crossed it but don't cross THIS line! You did it again but don't cross THIS line! * and repeat *

[@oldaccount9261]

America, The Proscinator

[@furiouslemmings5207]

Its basically like late 1930s appeasement

[@Lyf4rMusic]

by now, it's just seems like it's a formality !

[@harry5326]

Appeasement

[@horatiokim7141]

That's a threshold point where U.S Federal Reserve can begin printing out $ a Trillion dollars out of thin air. In fact, the USA printed out around $7 Trillions out of thin air in the past two years to help pay for multi-Trillion dollars Stimulus Checks.

[@Brownyman]

"By the time it becomes a real problem I'll be dead" is humanity's greatest problem of all.

[@saikatbag3961]

@Alaska Pirates Don't confuse me. Some Americans say they were the best generation and you are saying they are not.

[@saikatbag3961]

Actually i also think like that.

[@openlink9958]

@Alaska Pirates nope, 40% of all US dollars were created on 2020, this problem is ours

[@yetekt8025]

@Alaska Pirates aside from the fact most of the heavy inflation has been happening now

[@ZacksRockingLifestyle]

@@saikatbag3961 the “greatest generation” was the one that gave birth to the Baby Boomers…

[@felixf4378]

The debt ceiling is a perfect representation of our government. Just kick the can down the road and make a big deal out of it but fix nothing.

[@laylafisher1983]

@ ý 6t 6@ ytlpkiuyyrrewqqakgdwmbcz-z . KZbin,,

[@analcommando1124]

In this situation what does the can represent? Why it a problem? Tell me, when was the last you looked at yields on government bonds? Tell me, have you bothered to look at the coupon rates on the bonds the government is issuing right now? Tell me, do you understand what I'm talking about?

[@llc1976]

Exactly

[@cancanjaker1620]

A reflection of the American's attitude to life too. If an issue comes up, pretend that it doesn't exist hoping that the issue will go away if you ignore it long enough. Americans believe that is the mature way of handling complex situation.

[@YodaSkywalker]

​@@analcommando1124ur reply reminds me of a meme

[@salmay4266]

I swear the more i know about the US the more I'm weirded out, it's like the US is in a whole other planet of its own

[@dinamosflams]

Yes, It's called "The Past" world. Most States had to be reformulated in the 20th century, most of the reformulated ones did It more than once, because of world Wars, decolonization, foreign ocupation and the fall of the soviet union. The US, on the other hand, has the same State structure since the civil war and basicly never changed and barely upgraded their constitution from their birth.

[@neeneko]

Well, something to keep in mind is that all the 1st, 2nd, and even 3rd world nations that transitioned to democratic republic system over the last two centuries had the US to learn from and thus implemented systems that took weaknesses in the US one into account., while the US has turned 'we will not learn from others' into an identity.

[@MrCTruck]

Yeah a backwards planet where the rich run out with all the cash after raising taxes on the middle class until they aren't the middle class anymore. We're pretty much at the end here

[@alexs1640]

The biggest issue and a lot of people would say strength, is that each state is essentially its own country. Creates a lot of weird areas. I recently learned child marriage wasn't illegal in some states. It didn't happen (probably) but it wasn't outlawed either. When you have essentially 50 governments in 1, weird things happen.

[@youkofoxy]

Have you seen Japan?

[@ANNAZ1NG]

Remember kids: Owe the bank $1000 dollars and YOU have a problem. Owe the bank $10000000000000000000 and THE BANK has a problem. Works like a charm :D

[@immigrantgaming420epic]

omw to get a $1000000000000000 loan

[@gonun69]

@@immigrantgaming420epic Hey I'm feeling a bit lazy today, can you get me such a loan too if you're already at the bank?

[@stachowi]

Too big to fail

[@unforeseencircumstances]

are you quoting Bill Hwang?

[@ANNAZ1NG]

@@unforeseencircumstances i think so

[@Skybar23]

Imagine how much money the US would of saved over the 20 years it wasted in Iraq/Afganistan

[@tsaints852]

I would say $4 trillion in today's dollars. However, that is an estimated guess.

[@jerome0929]

Thank Bush and his Friends, but hey now all of them are billionaires

[@josealbertoriveradonan2761]

The money for the democrats socialist bill

[@StockyDude]

@@tsaints852 Close. It’s between 5.5T and 7T. If you want to include the medical bills and disability payouts to wounded vets that are expected to continue until they pass away (plus survivor benefits for their families), as well as the aid we continue to send to Iraq, then 7T is a good estimate.

[@Zawadraem]

Yea we probably won't even have a discussion on this " debt " issue if bush and his democrat friends didn't want to be genocide commiting war criminals .

[@Samppwli]

I like how one of the analyst just said "this would work with functioning congress"

[@MissS1989]

It's so true tho, and embarrassing for America.

[@thebravegallade731]

and it HAD, untill 2011.

[@alastairhewitt380]

We desperately need a new system of government

[@Healthandwealth9422]

Key word functioning

[@JatPhenshllem]

I laughed at how much sad truth it implied

[@arheo9702]

this was a really good video because i fully did not understand how the national debt worked untill this

[@dathguy556]

they don't explain it well for the American context. Read super imperialism by Michael Hudson.

[@Lyf4rMusic]

@@dathguy556 well, I'm not American but I understood it well. I guess the basic version of the US Debt.

[@peterisawesomeplease]

Yea for the length of the video it did a great job. So much more could be said with a longer video but for a balanced and informative look in 8 minutes I don't think you could do a better job. I think a longer video would want to explain government holding its own debt, the role of inflation/fed, returns on investment, and the size of household and cooperate debt. But yea not worth going into those without a 20 minute video.

[@Parapresdokian]

@Vox Q and A

[@thrisbt1]

people, please seek as many different sources of information with as detailed explanations of factual processes as possible. then try to figure out if those sources are trying to serve certain interests that may explain their specific take on the issues. the more comprehensive the knowledge you obtain, the closer to the whole truth you get.

[@dunglaovoitao]

The real issue, just like the video has concluded, is the increasingly dysfunctional US government. Another economic recession will eventually come, and the US can still recover as it did so many times in the past. But the polarization in the US politics is a turmoil which can lead to a total downfall.

[@Notevenmad955]

It will come but might as well be the last as the government already established that recklessness gets bailed out in the name of infinite growth. More than 40% of the dollars currently in circulation were printed for Covid relief. The next crysis might as well create a venezuela level currency crysis with the added terror that the world economy will collapse since the dollar is so universally used.

[@waynehanley72]

Slight correction: The US has a dysfunctional political system. Our non-political civil servants (the government) are generally pretty good and are victims of the ineptitude of politics of Congress.

[@filmgirlLisa]

@@Notevenmad955 I don't have a well formed opinion on this and am still learning, but are you saying you think it shouldn't have printed the money or that there was another path you think the government should've taken? Just wondering.

[@thenaturalhuman9568]

It will not be just another recession

[@Laxton07]

@@filmgirlLisa the idea is that if the US regulated its financial sector better and threw the book at entities abusing the derivative markets then maybe we wouldn't be in the situation we're in now. I recommend watching a movie called "Inside Job" (2010) for details on what I'm talking about. It's pretty enlightening.

[@hhydar883]

USA *every year* : "Oh we are about to touch debt ceiling" Denmark: "Lemme draw the line once and for all"

[@haeveen8255]

China : My time has come! To become the World superpower. 😈

[@MaydayKeeper]

@@haeveen8255 Japan: Nope

[@haeveen8255]

@@MaydayKeeper . Pay your debt first Homie.😈 Remember your Debt is higher (GDP Nominal - Debt) Than the US.

[@deshandouglas136]

Bank 🏦

[@plumebrise4801]

@@haeveen8255 98% of Japan's Debt is Public ,78% for the USA ,it means that 28% of the US GDP is External debt ,while for Japan ,it's only 5.4% of their GDP that is External Debt .

[@Thebreakdownshow1]

Because the ceiling can't hold us. - Macklemore

[@duncansiror5033]

I used to love that song

[@Thebreakdownshow1]

@@duncansiror5033 every now than I use it as my hype music before shooting a video.

[@UntitledLess]

Was this Macklemore’s real intention?

[@Thebreakdownshow1]

@Elian Silven what is your country?

[@Akumar2121]

Lol

[@FindTheFun]

I love how literally no one knows how our global financial system works anymore. That definitely won't ever become a problem.

[@TiagoOrange]

Oh it definitely will become a problem. Maybe not for not but eventually it will. And when that day comes, god help everyone

[@AB-zc5ff]

Already is a problem

[@Frostie323]

Less tax revenue, more spending, more countries using different currencies and less US debt being purchased. It will 100% become a problem.

[@lewis123417]

Most people don't know much about anything, that's irrelevant.

[@FindTheFun]

@@lewis123417 Another pearl of wisdom from the KZbin comment sections.

[@tremondial]

Germany doesn't have a debt ceiling, but it does have a "debt brake", which was introduced into the German Constition in 2009 and has been very controversial ever since. It says that states and the federal gov must not take on more new national debt than 0.35% of nominal GDP each year. There are exceptions for natural desasters and economic crises. It can however be circumvented by the national gov, by using nationalised companies and banks like the "KfW", as these do not fall under the debt brake.

[@rainy4217]

It seems that you are very familiar with this aspect, do you often watch z'zheng

[@roadrunner6224]

@@rainy4217 nah he is just german

[@oliverm1255]

tbh if germany is doing it it is probably a good idea

[@rainy4217]

@@roadrunner6224 How do you know he is german

[@roadrunner6224]

@@rainy4217 Jonas is a very popular name in Germany. I think it's more likely that a german Jonas is watching a Vox video, than an american Jonas knowing anything about the ins and outs of the german debt brake.

[@benkoskinen3871]

This is basically Goodhart’s Law: when a measure becomes a target, it cease to be a good measure.

[@futurecorpse8253]

Kindly elaborate, good sir.

[@wyntyrmute]

No, it's nothing like that.

[@1.4142]

This is like postponing the deadline for a homework assignment.

[@WAMTAT]

maybe if the U.S. stopped spending so much on the military this wouldn't be an issue.

[@tremondial]

But then it would lose a lot of its influence in the world, which would be more economically damaging. Its not bad, economically speaking, to be the world's main hegemonic power.

[@shrayesraman5192]

That is such a small portion of the debt though. 600 billion vs 28 trillion

[@adrianconete1864]

Or maybe it should tax more big corporations and very rich people, and less the poor and middle class.

[@bradley8575]

Well the US only spends 650 Billion dollars on the Military out of our 21 Trillion Dollar GDP Economy.

[@GunplayIsntGameplay]

@@tremondial Yeah adding sanctions to countries because of their relations with other country's is definitely economically damaging.

[@djcfb2889]

Debt is not a problems as long as people keep believing that you're able to pay back that debt. So the important thing is to maintain the confidence and give people the impression that everything is under control.

[@izoyt]

so basically faking it? that sure went well in 2008..

[@functhefucc5798]

Worked pretty well in germany in 2008- Merkel said "your bank accounts are safe", when in reality- they probably weren`t. So nobody took out their money, and - they were safe. Psychology, I guess.

[@unclepatrick2]

Then it a good thing that the last guy elected , campaigned to balance the budget and lower our debt . He was elected with a GOP majority in both houses of Congress so he must have done it,rght? What? Not only did every budget that he signed have at least One Trillon in deficient spending but he signed three debt ceiling raises. Now the same people who did that , are suddenly worried about our debt and spending. Why were they quite or even voted for those budgets for the last 4 years ? Why were they not trying to stop those Debt Ceiling raises like they are now?

[@HiHello-dj8if]

It is inefficient spending.

[@braincell4536]

@@zUJ7EjVD or you know. Raise taxes on the rich and whenever they sell their stocks

[@Aznprada]

It's amazing how many people don't understand this. This should be basic training in schools but its not.

[@thespooner3906]

it should be and so should basic life skills such as how to manage a bank account, how to do your taxes how to invest etc..

[@opineapple554]

Too busy teach CRT and pushing socio-political agendas

[@soggmeisterlasagnagarfield]

We went from no education to a failing education. And we haven’t passed the latter.

[@paulrendon7570]

Not sure about other states but this is covered in California (all students required to take an economics and US government class)

[@codguy12]

@@thespooner3906 managing a bank account is easy and it is part of college. Don't tell me you don't economic subject as a minor subject in your college days?

[@ratkutti]

A country has this currency, which replaced Gold and made itself the backbone of global trade. Also this country has the biggest stick to beat others, in proportional voting rights to oppose any international decisions, sanction powers by controlling global trade currency, controls over loans from World Bank.. Prints money they make up and they determine what's it's value is..... And I'm supposed to worry this country hitting a so called debt ceiling? 🤔

[@ratkutti]

Also no accountability on what their official and unofficial private military spends where and what.... How they can fund all the invasions... We're supposed to worry about all this?

[@San_Deep2501]

This guy is spitting facts

[@braincell4536]

@@ratkutti well thats what happens to being the sole global superpower. Besides China trying to set up its on trade network in Asia and Africa by giving out loans

[@peacheroseee]

factsss

[@Joseph-ub5wh]

The dollar is on the verge of no longer being the global currency. Many investors have been eyeing china's digital yuan over the last few years. If china over takes the us as the global economy then the yuan becomes the global backed currency. It's not bad when you look at currencies the dollar isn't even in the top 5 most valued. The Euro and sterling pound still get more in other countries than the dollar and neither are a global backbone currency.

[@MaximilianFischer497]

It's deeply concerning that the national debt has skyrocketed from over $3,150 per person at my birth to over $90,000 today. This alarming trend underscores the importance of financial responsibility. Prioritize debt reduction, consistent investing, and achieving financial independence.

[@RowanBryson]

The availability of opportunities in the market doesn’t mean you should go in blindly. To understand the potential factors that contribute to your financial growth, I'll advise you to seek the help of a professional

[@MarshalWagner457]

I agree. I have about $1m in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, having a portfolio-advisor for investing is genius!

[@TicheDebb0]

This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? I'm in dire need of proper portfolio allocation

[@MarshalWagner457]

“Diana Casteel Lynch” is the coach that guides me, She has years of financial market experience, you can use something else but for me her strategy works hence my result. She provides entry and exit point for the securities I focus on.

[@vince9080h]

I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.

[@kimyoung8414]

Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.

[@johnlennon232]

Very true! I've been able to scale from $50K to $189k in this red season because my Financial Advisor figured out Defensive strategies which help portfolios be less vulnerable to market downturns

[@kimyoung8414]

@@johnlennon232 How can I reach this adviser of yours? because I'm seeking for a more effective investment approach?

[@johnlennon232]

@@kimyoung8414 HEATHER ANN CHRISTENSEN is the coach that guides, you probably might've come across her before I found her through a Newsweek report, she's quite known in her field, look-her up

[@kimyoung8414]

@@johnlennon232 I just Googled her name and her website came up right away. It looks interesting so far. I'm going to book a call with her and let you know how it goes. Thanks

[@Chineseconcrete]

THIS IS A SCAM. THE PEOPLE ABOVE ARE NOT REAL.

[@patrikstreng6834]

Because the current financial system is a debt based system. When money is created through loans, the amount of interest payments required also increase. The banks however only give you the principal without interest, meaning the interest payments have to be paid off from existing money. Once debt increases, interest payments increase, and therefore debt needs to be created to cover future interest payments.

[@haikalhadzik7744]

and not because US keep printing money at their own will?

[@patrikstreng6834]

@@haikalhadzik7744 They don't "print" money at their own will necessarily. The Fed creates money through buying bonds from commercial banks. Now why do they do this? When you've financed so much through debt, you need to take on more debt to pay off earlier debt. The Fed knows all too well that the interest rates HAVE to be raised at some point, and when they do, a lot of investors and banks will default. The same thing is happening in the Europe with the Euro and ECB.

[@patrikstreng6834]

@Trevor Hecht Quite right, you don't. But, when paying off a loan, the principal payment ceases to exist and the interest rates go as profits to the bank. So, if we all started paying off our loans without an increase in the money supply, people would start to default simply because the money for the interest payments are harder to earn. At least this is my understanding of it.

[@Naveen-tq7cg]

@@patrikstreng6834 great explanation!

[@maximvs3834]

Post scarcity is the solution

[@Thehackerguy2000]

Since we ain’t in Afghanistan anymore, can we cut some of the pentagon and military spending?

[@barbariandude]

HOW DARE YOU! How will poor Jimmy Taiclet maintain his backup private jet AND his 4th yacht at the same time?!? You're forcing him into impossible decisions here!

[@LibertarianGamer-ff5tg]

Defense spending is 734 billion. While social security and Medicare is 1 trillion plus each. The entire defense spending bill could be cut and still end up with 2 trillion plus spending deficit.

[@jimpad5608]

@@LibertarianGamer-ff5tg - SSA is self funded and has purchased USA bonds with the surplus over the years to compensate for when the income decreases. Plus SSA can simply raise additional revenue and be fully funded for centuries. SSA is NOT part of the federal budget like war toys are.

[@LibertarianGamer-ff5tg]

@@jimpad5608 S.S goverment website states it paid by payroll tax along with bonds. "Not exactly self funded". Because the worker pays for it. It will become even more of an issue down the road with boomes retiring and birth rates continue t decline with future generations. Lessening the gap of the worker and retired. That is the issue with the left. Tax everything into oblivion and believing it will go well. The worker should not have to work harder because goverment constantly spends out of the taxpayer expense. SS and Medicare/medicaid is part of the general budget. Hence the massive deficit, the country has currently.

[@timberwolfe1645]

We have...haven't you seen the number of MERCENARIES corporations that have stepped in. Oh!! And are you telling us to ignore our allies who are facing against China?!? Yeah, no

[@tonysilke]

Since the debt crisis could unleash carnage on the stock market leading to economic downturns. We need to be prepared for potential market volatility. how can I secure my $600K stock portfolio against declining?

[@Nernst96]

Concentrate on two main objectives. First, keep yourself safe by knowing when to sell stocks in order to limit losses and maximize gains. Second, get ready to benefit from market changes. I advise consulting a coach or other professional for advice.

[@PhilipDunk]

That makes sense. I’ve been using a financial market expert for two years now and I own a six-figure diversified portfolio from investing in stocks. I want to diversify more this year, though.

[@JefferyDuns]

Being heavily liquid, I'd rather not reinvent the wheel. Since this strategy works for you, how can I contact your advisor?

[@PhilipDunk]

'Sharon Ann Meny' is the licensed advisor I use. Just research the name. You’d find necessary details to work with to set up an appointment.

[@JefferyDuns]

Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.

[@jamesregli4754]

I’m mildly frustrated that no one mentioned that the USA’s debt is own in US dollars they can literally just print into existence. The question really isn’t can the US pay off it’s debts, its how much new money can be made without the faith in the dollars value being lost.

[@tianchenjiang759]

It would take only one day for that confidence to be lost. So the chickens choose to enjoy today happily.

[@sharann3482]

The thing is the US doesn’t have to pay back its debt. Countries just grow their productivity, so your debts shrink in relation to your GDP into nothingness. But you still pay interest rates with new debts. The more the Central Bank holds it, the less import are the interest rates as the Central Bank pays its profits back to the country’s treasury. As long as you have productivity (wealth), your currency is backed.

[@texaswunderkind]

@@sharann3482 Warren Buffett spoke at my university. He surprised me a little bit when speaking about the national debt. He said the debt doesn't matter as long as the economy has expanded enough to pay the bonds when the debt is due. The U.S. economy historically has grown at just over 3% a year. Using the Rule of 72, that meant is doubles every 24 years. If I were given a choice, I'd rather pay my debt 24 years later after my income has doubled. Especially when interest rates are near historic lows like they are now.

[@nadie8093]

@@texaswunderkind the issue is that keeping rates artificially low is costly for the economy and will make it more inefficient in the long run. If your interest rate is lower than inflation, especulation becomes a massive issue, like we have seen in the housing market or in the stock market for companies like Rivian. Rising inflation caused by this cheap money will eventually force the goverment to either raise rates, or see real wages and support plummet. And when rates go back up, it will become difficult for lenders (such as the goverment) to pay back their loans.

[@inveniamviam4691]

I’m an economist (work with commodities in NYC). This is one of the most frustrating topics to explain because of all the misinformation out there and because of how complicated the system is. Normally the media doesn’t do a good job at helping either. But thank you Vox for providing a clear and nicely simplified video. I’m going to share this in the future.

[@therealcool1144]

No you're not

[@RichardJohnson-rm2sft]

America is currently plagued by the hydra-headed evil duo of inflation and recession. The worst part about this recession is that consumers are racking up credit card debt. In April alone, credit card debt went up 20% while rates have doubled in a year. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse has indeed begun..

[@AveryBrooks-kn2vb]

Collapse is generous 1st time in our history with a full generation that wasn't taught financial literacy, civics, Google fixes their problems if their parents don't do it for them. Reckoning for participation trophies is incoming.

[@KarenNolan_eliz]

@@AveryBrooks-kn2vb The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.

[@Studyolusholajames]

@@KarenNolan_eliz Hi Mate, please how can i reach this CFA of yours?

[@KarenNolan_eliz]

@@Studyolusholajames I personally work with 'INGRID CECILIA RAAD'' she covers things like investing, insurance, making sure retirement is well funded, going over tax benefits, ways to have a volatility buffer for investment risk. many things like that. Just take a look at her full name on the internet. She is well known so it shouldn't be hard to find her.

[@Studyolusholajames]

@@KarenNolan_eliz She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.

[@A_Shihtzu]

Ned-“You know you get a bill at the end of the month, how are you going to pay for all this stuff?” Cookie- “I’ll just put it on the card!”

[@upwut]

Wow, a wild Ned's Declassified reference!

[@joeykeenan2079]

I’m so happy I got this reference! 😂

[@Lyf4rMusic]

The great debt taking country and how addicted they are to it :)

[@mdrzn]

0:35 "They pay a bit more" and show a graph where Tesla pay DOUBLE what Microsoft pays.

[@dickgoblin]

What?

[@mdrzn]

@@dickgoblin What what? Click the timestamp and tell me if 5.3 is "a bit more" than 2.5

[@dickgoblin]

@@mdrzn yeah that's more than double.

[@TheBooban]

@@dickgoblin more than

[@rkan2]

I guess Tesla has been really lucky with it's investors for not having to take on that much debt. They still have plenty of debt of course.

[@jackknifed_juggernaut]

Looks like decades of spending trillions of dollars on futile wars and not taxing billionaires has consequences

[@josh3471]

Taxing the rich isn’t as beneficial as it seems. Although they make a lot of money they put a lot of it into off shore bank accounts to where they can’t get taxed for that money and the government can’t even tax them like they have that money because they can only base the tax on money stored within the US.

[@Sn0wjunk1e]

@@josh3471 then they could just invade the tax havens and then it would be us soil.

[@harukrentz435]

@@MaydayKeeper you have any idea how much wealth possesed by that 1% group?

[@soggmeisterlasagnagarfield]

For example, Trump has off shore accounts in Putin controlled banks in Russia. So technically he’s stealing the nation’s money legally.

[@josh3471]

Guys there is at least 36 Trillion in off shore bank accounts. That’s the 1% alright but the USA can’t touch that money nor can the government tax them like they have that money.

[@K4R3N]

"This Time is Different" is a great book on the topic

[@fionafiona1146]

Germany (along with the European contracts) has a 60% GDP 3% annual increase limit that has been always kept (because %GDP is difficult to stabilize in ressesions) but would be more resilient to inflation.

[@Minifutzi_o.O]

I rather think that (global) inflation is a bigger threat to Germany bcz of it's export economy

[@20Maxi20]

Germany has a debt limit (called “Schuldenbremse”)

[@Elucidator-]

It has not been 'always kept': at several times in the past 10 years, Brussels has given a pass on the 3% requirement and set a higher boundary, for example 4%. Although I will add this was connected to the present economical circumstances of said member state(s). Note that the 3% requirement was only cast into law after the Greek Debt Crisis started. It is a relatively recent invention.

[@seneca983]

The Stability and Growth Pact indeed limits the debt to 60% of GDP (and deficits to 3% of GDP) for Eurozone countries. However, this isn't really a hard limit like a limit set by a country's own legislature which immediately has a force of law. Breaching the Stability and Growth Pact limits in practice just means you will be monitored by the EU Commission and maybe sanctioned if you're not doing enough. In fact, most Eurozone countries are in the breach of the limit. The US debt limit immediately prevents the Treasury from issuing new bonds if it is reached which is a much more radical consequence.

[@fionafiona1146]

@@20Maxi20 That's an household comment not extending to all institutions

[@bluolds]

Congratulations to 10M subs

[@Tustin2121]

I’ll be honest, I was distracted much of the video trying to figure out in what game I’d heard that ping sound before. I’ve finally figured it out: Tanker Truck Simulator 2011 and Garbage Truck Simulator 2011. Which makes sense if it’s a stock sound effect, because both those games were basically a horrible conglomeration of low quality stock assets.

[@Bonzi_Buddy]

Garbage Truck Simulator is appropriate for Vox.

[@RichTapestry]

@@Bonzi_Buddy Thanks Bonzi Boomer

[@bangbangninergang7573]

So it's kind of the equivalent of me living off my credit card and just asking for a credit increase every time I top out?

[@smokinace926]

It depends. If you are buying things with your credit card that can earn you a profit that is greater than your interest payments, then borrowing that money and increasing the credit limit actually makes financial sense. This is basically what America is doing in a nutshell. As long as we make a profit, then we won’t stop.

[@bangbangninergang7573]

@@smokinace926 good point

[@mokooh3280]

@@smokinace926 When the government make more currency than it has gold to back up it devalues the dollar, that's why inflation is prevalent. The debt we keep rising means we sell off more of the US to foreigners (bonds) and eventually become their servants. Your economy statements are those of illusion

[@BLUEBoyPlayzPH]

3:51 BRO that record scratch spooked me, i was just listening while studying LOL

[@gilpo]

0:45 I can’t imagine what Portugal’s debt must be like for them to be cut off the map

[@dynamitedmt666]

It isn't even gray like the ones without information which makes it even weirder! It's a BBB rating since 2019 btw ;)

[@pedrobarao4558]

Yeah it must be the worst of all. It even made my country sink to the ocean

[@afonsocampos166]

@@pedrobarao4558 😂😂

[@TheBooban]

@@pedrobarao4558 its debt is under water

[@YourLocalMairaaboo]

Don't worry! They probably just lumped us in with spain by mistake.

[@diegomontoya8889]

I think the biggest problem, which was briefly discussed in this video, is that when the economy is good, we never pay down debt... We continue to borrow more. We could reduce spending and payoff debt. Even people who aren't rich do this everyday in America. They make budgetary decisions for their families. These aren't easy decisions, but they have long term benefits.

[@rainy4217]

Yes, modern American politics is like this, and there are also 6 to 7 nians who come to the United States.

[@yohji4309]

household debt != government debt

[@jrus690]

The decisions are not 'easy', oh do not make me laugh, the decision is very easy. If you want to have a million dollars in the bank with not debt that is very easy. In the case of the federal government it would mean a budget spending freeze and gradually we would go into surplus. Once the debt is paid we can cut the taxes but that would also mean that we figured out whether we want healthcare paid directly or taxpayer payed and/or have far less military surplus. The big budget consumers of fed dollars is healthcare for the poor/elderly and the military.

[@JesseBusman1996]

Unfortunately politicians are incentivized to care more about their next election than about the long term

[@MartinPoulter]

Bill Clinton did exactly this: he presided over a flourishing economy, ran a surplus, and paid down the debt. Then G W Bush came along and started two wars that cost trillions.

[@jayski9410]

The debt ceiling was an attempt to force fiscal discipline similarly to the way a gold standard used to force monetary discipline. When the government couldn't live with the gold standard, it gradually got rid of it. So eventually the debt ceiling will disappear too. But that doesn't mean "problem solved". Because remember at some point the market won't want your debt anymore. That's already happening. That's why the government has to buy its own bonds. This also happens in the monetary realm too. At some point, the market or your citizens won't hold or accept your currency. The only true solution is fiscal and monetary prudence, but our political system has no way to hold the officials at the top responsible. I mean look at the current debate about whether we should spend $3.5 trillion or 1.9 trillion on the "human infrastructure" bill. It's all money we don't have!

[@petersack5074]

For Focus, and perspective : It would take 1 million days, or approximately 2,740 years, to spend a trillion dollars at a rate of 1 million dollars per day.

[@fleebertreatise1063]

It’s actually money we do have. If it can be borrowed, and used to some purpose in the economy, then it certainly exists.

[@benkula]

This is one of the most informative videos I’ve ever watched. Amazing job Vox!

[@redrum86]

They might as well just raise the debt ceiling to infinity.

[@donaldkinsey5245]

It's absolutely asinine to say "We Don't Know" if having all this debt is a problem. How many economies collapsed under the weight of their debt? How many thrived?

[@Shadowman820]

One big reason is because they spend too much on defense and lowered taxes too much , especially for the rich .

[@yashar-el]

If the U.S. cut their military expenditures by 50% that would surely help.

[@kirchoff4733]

That would mean less influence in a world already run by autocrats.

[@mutav2166]

@roasted pancakes It's now 30 trillions.

[@splattrick2432]

Best explanation I've seen! Thank you Vox!

[@abrahamlincoln8037]

Congrats on 10 Million!

[@heavymetalrox268]

So many questions left unanswered for me: Why keep a debt ceiling at all when you know you might risk defaulting? Why didn't USA start off with an insanely high ceiling in the first place? Who decides a country's credit rating?

[@Fauzanarief-n7i]

Basically debt limit is like nuclear bomb for opposition party

[@ShadowGaming-xw8zj]

The debt ceiling and defaulting have nothing to do with each other defaulting just means you didn’t pay your debt

[@DevDev-dm3st]

It seems that the debt ceiling is an easy way to raise ones country credit. Afterall, every body knows that it eventually has to fall, but by having a debt ceiling, it will slow down making it a more desirable place to invest in. The problem is that they only raise the ceiling debt when needed, not actually trying to lower the spending or increase taxes. Its easier to just raise it again.

[@fajarcahyono3693]

$34 Trillion USD in debt and still can't feed the poor, biggest irony of United States

[@oterenceo]

At the level of debt, it would be wise to keep interest rates as low as possible. The politicians better get their act together.

[@Julianna.Domina]

The US needs to just get rid of the debt ceiling. It's not even in the constitution, and it didn't exist until the late 19/early 20th century iirc

[@AChungusAmongUs]

Our economy is a balancing act. The rate of inflation has to be kept above the interest rate, but not too high or else people will notice the adverse effect this scheme has on them. It's an indirect form of taxation. The effective value of the debt decreases every year as inflation increases. But so does the value of your paycheck and bank account. Deficit spending makes the economic metrics look good, but it's ultimately a trap. You have to keep increasing deficit spending in order to sustain those good metrics. Spending is supposed to be cut during periods of growth, but politicians are rarely willing to be responsible for bringing down the growth numbers. Metrics aren't everything, but they're the most visible thing. And as usual, the taxpayers are left with the bill.

[@peterisawesomeplease]

Well there are tradeoffs there. The Federal reserve controls interest rates. And they have been keeping interest rates very low. That of course in the long run can spark inflation. Inflation though is also good if you are in debt. As it lowers the effective amount you have to pay back. The ultimate long term problem with this approach is inefficient investment and spending. For example people mining gold just to have it sit in a vault. Which is clearly less efficient than say building a school or a factory. Too little inflation has its own problems too though. Like people not taking enough risk. Or people choosing not to build and buy things but rather do nothing even if its against their best interest.

[@analcommando1124]

Wrong. Coupon rates (interest rates) stay the same for the entire term of that bond. For example a 10 year bond issued, let's say 5 years ago when interest rates were very low, is going to keep the same interest rate until maturity regardless of what happens to interest rates in the future.

[@nadie8093]

@@Julianna.Domina becaise the us didnt use such massive amounts of debt back then, and the federal goverment was never intended to get that big.

[@robzonefire]

Good thing CGP Grey already taught me this lol

[@championofwits4621]

Which video ?

[@ocadioan]

@@championofwits4621 The debt limit explained, by CGP Grey

[@rushikeshsisode1533]

Congrats for 10 million subs 👏

[@hikari_no_yume]

There's a pretty big thing you're omitting to mention here: the US government (like almost any government) does not have to resort to debt if its tax income isn't enough for its desired spending. It can simply “print money”: create new US dollars just for that spending. There's various reasons they don't want to do this too much, but given the US government's debts are in US dollars, the US will never be truly unable to pay its debts unless it wants to be.

[@rjfaber1991]

If they did do that however, inflation would cause the balance of tax income to expenditure to stay the same (unless there are significant austerity measures to accompany the money printing), and so the fundamental issue would remain, and it's only the currently outstanding debt that would vanquish, with the unpleasant side effect that every investor outside of the US government itself is going to refuse to loan the US government any money in US dollars anymore, and insist the loans are for a quantity in Euros, Yen, Swiss Francs or any other currency instead.

[@hikari_no_yume]

​@@rjfaber1991 If too much is printed, too quickly, then yeah you'll have an inflation problem eventually. I doubt the US will ever have problems with getting people to buy US dollar-denominated debts though. It's the currency that oil is sold in.

[@rjfaber1991]

@@hikari_no_yume It is at the moment, yes, but all of that stands or falls with the reputation of the US Dollar as a reliable, stable currency backed by a more-or-less fiscally responsible government. The moment the US starts printing money en masse to eradicate its debts would also be the moment at which oil starts being sold in another currency.

[@Inquiring]

@@rjfaber1991 Exactly. Therefore, the original comment presents a moot point at the end.

[@tacosmexicanstyle7846]

@@rjfaber1991 the limit on borrowing would be tied to real resources and employment. They say in the video that the government doesn’t borrow huge amounts unless it’s in recession, which is precisely when employment is low. The government can print money to provide funds as long as it has productive places to spend that money ie. when resources are not being fully utilised. As long as there are the resources available to do a project that contributes to gdp, there won’t be a hyper inflationary effect. This is why the US govt printed trillions last year and nothing world ending happened to USD. Also the US government would not print money to eradicate all its debts at once. It doesn’t need to.

[@lu881]

Would LOVE if you guys tackle MMT next. Which basically says that a country that has a sovereign currency, and thus issues debt in that currency, is unlikely to default in its debt, as it is able to create more money, to pay that debt off. Would love if you guys explained this in simpler terms.

[@benmorgan1718]

Yes. This video completely fails to acknowledge that the U.S will never be unable to pay back its "debt". Imo, this is a poor showing from vox

[@pedroaugustosteinhaus1304]

Yes. There is a country that does this, Argentina.

[@ChumX100]

Printing money to pay your debts, what could go wrong?

[@pistolen87]

Problem arises when the country needs to import stuff that can't be produced locally, since their currency isn't worth much to other countries.

[@jeffersonclippership2588]

@@benmorgan1718 I think that part is implied when you're talking about a country whose currency is the world's reserve currency, that's the center of global finance, and has the world's strongest military

[@MoreBestEverFoodReviewShow]

Such an agenda here. Why not explain the risk of having never ending mounting debt? Or why not discuss all the wasted government spending. We don’t need to be spending this much.

[@Sudupe16]

6:45 That graph shows the debt temporarily decreasing by a lot, I don't know if that'll ever happen.

[@verticalfracture]

Clinton left Bush with a federal budget surplus it took Republicans a year to go back to massive deficits.

[@henrygustav7948]

1817-1821 debt paid down & budget in surplus (depression began 1819) 1823-1836 debt paid down & budget in surplus (depression began in 1837) 1852-1857 debt paid down & budget in surplus (depression began in 1857) 1867-1873 debt paid down & budget in surplus (depression began in 1873) 1880-1893 debt paid down & budget in surplus (depression began in 1893) 1920-1930 debt paid down and budget in surplus (depression began in 1929 1998-2001 debt paid down and budget in surplus (recession 2001 2008)

[@213kidangel]

I don’t think it has ever happened in history- but empires collapsing do!

[@shrayesraman5192]

All we need is the interest rates to go back up. But that something that will cause a recession which is what none of the short term politicians would risk doing

[@213kidangel]

@@shrayesraman5192 money printing is only half the problem- most of our money goes to policing the world and bailing out corporations - the more money they print and tax the same amount of waste will happen (or more)

[@PeterdaPanda]

Debt ceiling is like the political version of the playground game "Stop Hitting Yourself".

[@bigmike1850]

The US is not in debt. The US GOV is in debt. If they can’t pay their debts maybe they should be evicted?

[@astrofxmining1393]

Great stuff and nice video. I watch several youtube videos on how to trade in the stock market but haven't made any headstart because they are either talking some gibberish or sharing their story of how they made it and I do not want to make mistakes by taking risks in my own hands.

[@joygiver9347]

I have been watching some videos on forex trading investment and I was thinking about investing, but still don't know where to start and how to start.

[@hughrey5765]

@@joygiver9347 You're right but any Investment without a proper understanding is suicidal.

[@mulizimustapha4406]

@Funmi Tejeey Yeah Investing in crypto currency is so lucrative.

[@jameswinter6902]

often times we just look for what to invest in and usually encounter these problem. It's either the money is too huge for what I want to invest or it could require more than expected

[@morenahlatshwaya]

Most people don't invest due to ignorance and discouragement from family or friends.

[@baronvonval5353]

*I don’t know who need to hear this but stop relying on the government and savings. Invest some of your money if you want financial freedom*

[@marcocasario1249]

The best investment one can do right now is investing on forex trading though stock are good but ever since I swapped to forex, I've seen do much difference

[@queenvc7393]

Stock are Good Too

[@lilianmacarthur5465]

I actually started trading investing in Bitcoin before lockdown, now I made a lot of profit more than I expected

[@prakritibhusal7356]

I heard that his strategies are really good

[@stanlyscheider4767]

Yeah, my first Investment with Expert Charles Schwab has earned me profit of over $24,320 US dollars and ever since then he has been delivering

[@jacklinton5370]

20% of US federal spending goes towards defence. It spends more than the top 10 countries combined . It’s pretty clear where cuts can be made.

[@letstalkwithwarren3028]

I’m watching this at 31 trillion

[@mt8956]

Cut programs and just keep the ones we can pay with taxes and not bonds. Cut the military spending by 50%

[@Pat_KraPao]

They are NEVER going to cut military spending.

[@tech_report_0868]

China wants to have a word with you

[@bradley8575]

You realize that we have Massive Economy or GDP of 21 Trillion US dollars and how much e spend on our military only 650 Billion Dollars.

[@kirchoff4733]

Cut programs? No. These programs have a sense.

[@tech_report_0868]

@@bradley8575 705 to be exact , thats only 10% of budget. You spend more on healthcare , 1.4 trillion.

[@rickichase3438]

Stop doing wasteful spending....

[@LucaBl]

While it's true that germany doesn't have a debt ceiling per se, but rather a "debt brake" (Schuldenbremse). It doesn't limit total debt, but it limits yearly new debt for the country (0,35% of the GDP) and allows NO new debt for states. But exceptions can be made for "critical events" just like corona, nature catastrophies and financial crashes. This has led to reducing national debt from about 80% of the GDP in 2010 to just under 60% in 2019. But because of Corona it was back up to about 70% and was projected to be about 75% this year. Just thought i had to add this, because you said there is no debt ceiling in other countries, but i feel like this is in some ways even stricter than just a debt ceiling, but at the same time a lot better, since it's pretty much impossible for a default to happen with such laws. Although some parties are in favor of removing the debt brake, i'm pretty sure it will be in place for another couple years.

[@billyjunks]

Debt brake sounds like a good law

[@jimpad5608]

Basically a flexible spending cap. The USA could do that but it would drastically limit its ability to attack defenseless nations to expand the American egos.

[@DrSwoose]

The US is just doing its best to build credit, don’t judge!

[@feydeway]

the graphics on this are so concise. i love the editing. you guys should make an updated version of this video each FY, even if it’s just a silent one and only graphs. 😂 so much more enjoyable to consume this kind of information.

[@tomascl82]

That debt ceiling is like all of those new year wishes that never became reality

[@internetazzhole7592]

Working hard is worthless Just be Rich.

[@davidedwards6162]

This entire video is fundamentally wrong. The Federal government as the issuer of the currency can always meet any obligation denominated in US dollars, which is all of our obligations (we don't make obligations denominated in yen or euros). In other words, there is zero chance that we could not pay off our so-called debt. What we call Federal "debt" in this country is actually just dollars being saved in the form of US treasuries in securities accounts held at the Fed. When the US governments "pays off debt" (which is does every day as various treasury securities come due) we simply debit those security accounts and credit reserve accounts. It is the functional equivalent of a bank moving money from your savings account to your checking account. As a result, the US government could pay back all of its so-called debt today, simply by moving everyone's money from their securities accounts to their reserve accounts. No taxes would need to be raised, no new debt taken on, nothing really would need to happen. Of course, you would upset the holders of those securities, because their money would no longer be earning interest, but they would be free to take that money out and buy stock or land or big screen TVs if they wanted to. The reason we can do this is that Nixon took us off the gold standard. Prior to 1971, dollars held in reserve accounts were directly convertible to gold (at least by foreign banks, Roosevelt took us off the gold standard for domestic holders of currency), in which case we needed to worry about how much money was being held in reserve accounts at the Fed. Under those circumstances, moving everyone's money from securities accounts to reserve accounts would be a risky move, because everyone could demand gold in return for those reserves, and we have a fixed amount of gold. With Nixon's action, that constraint was permanently lifted. The funny thing is that when the Nixon Administration was considering this move to take us off the gold standard, the Treasury came forward with a list of legal changes that should accompany that move, because the elimination of the gold standard would have a profound effect on fiscal and money policy. One change they recommended was the elimination of the requirement that the Federal government issue Treasury securities in the same amount as the fiscal deficit each year (otherwise known as issuing debt). In other words, the Treasury was pointing out that the US government no longer needed to issue debt since there is no need to worry about the amount of money sitting in reserve accounts at the Fed, as explained above. Think about that for a minute. This whole concern about Federal debt is effectively non-existent. It is a legacy of policies in place when we were on the gold standard. We just didn't update our laws to reflect the change in our monetary system. The Nixon White House refused to propose those changes to Congress - including the elimination of the debt ceiling requirement - because they feared it was too complicated and politically volatile. So now we stuck with "debt clocks", debt ceilings, and other irrelevant concerns that seriously distract us from the real economic challenges we face. The Federal government is not like a household or a business that needs to collect money (by taxing or borrowing) before it can spend it. It is actually the opposite: the Federal government has to spend money before it can tax or borrow it, simply as a point of logic and operational reality. Sorry to go on about this, but as a former OMB official under the Reagan and Bush Administration I can't help but inject myself into this conversation when I see folks using this false heuristic. It has really created some deep divisions in our political environment that are actually quite avoidable.

[@khoirulanam9141]

The biggest problem is when the money isn't yours, you don't care how much something costs.

[@ashishxx]

This video didn't mention a basic thing. US cannot default on US dollar-denominated bonds coz it prints the said currency. The "debt ceiling" is a made-up internal constraint. Besides, a sovereign debt is not like a household debt. You need deficit spending to assign value to the new goods and services an economy produces in a year.

[@TCJones]

The more you print, the more your currency looses its value, and the higher interest rates have to be, to get people to hold it and use it, so its all well and good saying print more, but by doing so, you devalue what you have, and buying stuff from china gets more expensive.

[@tacosmexicanstyle7846]

@@TCJones Not exactly. If the printed money is invested into the economy it will produce growth through creating more jobs, and those workers will then have income to spend and the effect multiplies out. This strategy works when there’s high unemployment, which is why large borrowing is recommended in recessions but not at other times. The result is that the growth balances out the additional printed money, so debt to GDP doesn’t go through the roof. The money has to be invested in areas that will actually produce growth, though. Devaluing the currency is not a serious concern, actually it could be beneficial to keep more USD in the domestic markets and encourage exports. The USD is the world’s reserve currency already. The US printed more money in three months last year than it did for 200 years after independence, nothing world ending happened to the USD.

[@bobbender5858]

This video was excellent!, Thank you!!!

[@Alex-lg1yh]

watching in 2024 and it just hit 35Trilion.

[@Zeverinsen]

"We could change the tax system" Ah yes, a logical solution... Too bad that's impossible!

[@jiminlargo]

we could cut the pay of all elected officials and limit their time in office..........

[@analcommando1124]

@@jiminlargo That would account for 0.0000001% of the budget. Big deal. How about we make billionaires actually pay tax?

[@eggmannghi1515]

wao, the video illustration is so gooddd!!!

[@jeffreymarshall4572]

We shouldn’t need a debt ceiling. We should be able to trust the government will regularly balance a budget.

[@lostandlonely2112]

This is sarcasm, isn't it?

[@nbibby]

Nice idea but not possible global financial systems are dependent on governments issuing bonds. I’m not saying this right or wrong but it just is how it is. For better or worse we are completely dependent on credit/debt existing.

[@nicorath2]

Warren Buffett once said "I could end the deficit in 5 minutes, you just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election."

[@jeffreymarshall4572]

@@nbibby There are plenty of investment vehicles besides US bonds. There will be a tipping point in the not so distant future where investors won’t touch them due to the high probability of default. In fact, the major entity buying them since the GFC has been the Fed. The Fed should unload their $9 trillion balance sheet onto the private sector - but rates would skyrocket and the US would immediately be insolvent.

[@tacosmexicanstyle7846]

@@jeffreymarshall4572 why would the US default? It issues the currency that the bonds are denominated in, it cannot default. Bonds could become unattractive to investors (well, they already are yet people still buy them), but the government can’t default on them.

[@lukaskaufmann8586]

5:24 That is not correct, at least 1 more country has a debt ceiling, the Czech Republic and it is at 55% of GDP and we are approaching it rapidly.

[@Sun_or_Lions]

it's "debt brake" simillar to germany not a debt ceiling :-)

[@robpaulson6568]

For America,world only means America.

[@lukaskaufmann8586]

@@Sun_or_Lions True, but they are not that far apart for the scope of this video.

[@HelloWorld-pc3ku]

US just keeps get away with it by rasing the debt ceiling, all i can say is US is lucky to be the world reserve currency, hope CBDC or some other country dethrone the US world reserve currecny status.

[@KarinaMilan4]

The Market have been suffering over the past month, with all the three indexes recording losses in recent weeks. My $400,000 portfolio is down by approximately 20%, any recommendations to scale up my returns before retirement will be highly appreciated.

[@SylviaJoe6]

Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.

[@MichaelAD222]

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

[@AlexandraGray-t4]

How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.

[@MichaelAD222]

Svetlana Sarkisian Chowdhury is my advisor, You can easily look her up, she has years of financial market experience.

[@GeorgeCook2]

Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé

[@testing6753]

If all of our leaders actually looked out for the country, it wouldn't be this bad

[@Maverick_42]

Common sense: Let's stop over spending US: Lets borrow more

[@sultanalnaqbi1975]

It’s not that easy

[@ElyasBinYahya]

So, the debt ceiling is a self-inflicted “ticking time bomb”. 🙄

[@Abram-Delgado]

Yes.

[@jonathandsouza7592]

Goverment Debt = Public sector profits. Its not the debt clock its a public sector savings clock.

[@FuzzzehOG]

Just to clarify, it was downgraded by the S&P only. Noone else. It had 0 effect on the economy

[@diablo55]

I like at the end they say “we could just repeal it…” We don’t have time for rational solutions!

[@rj45swag]

So one is getting a return of 2% on a bond and inflation rate is around 3.8 %, how is that an investment 🤔?

[@onlinesuccess8151]

one word .. crypto !

[@MartinPoulter]

It's better return than just keeping the cash, and has less risk than most other forms of investment, so for some investors it's ideal.

[@iamisobe]

Steps to solve this problem in order of most important 1. Tax the wealthy appropriately

[@therealcool1144]

Credit rating for monetary sovereign countries are useless. Those governments will always have the money to pay the bonds.

[@M69392]

No, countries have defaulted in the past. It depends on a number of things including central banks and exchange rates.

[@therealcool1144]

@@M69392 US and Russia did, but it was a political choice. They didn't have to.

[@M69392]

I doubt Argentina always had a choice (9 times)

[@BrokenMedic]

“The us come close to hitting it , but it’s then raised.” Maybe we should ask why we keep raising it.

[@esp4yu]

Problem is where is the money going ... ? Yes, You are right Military Defense - More than 57% (greater than 780 Billion in 2020). Since 1776 America spends 225 years at War (94%) and only 21 years in Peace (6%). They have 800 military bases overseas (during Peace time), 11 Aircraft Carriers ... and the goes on.

[@MynameIsnotforsell]

I love how the majority of debt is owned to ourselves.

[@thecrippledpancake9455]

It’s kind of like minimum wage where most countries have it increased automatically and America has to do it manually.

[@advancedomega]

Minimum wage is a type of price floor. Unfortunately, ANY price floor, including minimum wage hurts the entire economy, including the poorest people, the same people that expected to be helped by minimum wage. This is not my opinion. This is basic economic. Supply-demand basic. Expectation: low wages will jump once a (higher) minimum wage is set. Reality: minimum wage means the disappearance of the lowest level job. Some companies can't afford to pay that minimum wage, they will close their business. Some companies can afford to replace their low-wage workers with machines, so they fired those workers. Some companies can afford to move to another place where there is no minimum wage or the minimum wage is lower, so they move. Hence, not only the business lost money, the workers lost their jobs too. Lost-lost. But why so many states and countries got this awful law? Because politics. "Higher minimum wage means your wage gonna go up, up and up baby!" scream those politicians to the masses. And big business love high minimum wage. They can afford automation and many other tricks. Small business will be squeezed by the minimum wage, while the big business laughing when all the small business customers come to them.

[@RichTapestry]

@@advancedomega How does that work in relation to global labour markets and outsourcing? (It doesn't!) Neoclassical economics like that are long debunked, and they only perhaps seemed true for a while because labour could be outsourced to poorer countries around the world, as globalization and containezisation allowed for free international trade. That made it seem sensible or perhaps natural to let wage growth stagnate. Poor countries had equally poor workers, but as their countries developed and grew, they introduced minimum wages and wage increase as productivity rose. Now, we're near the eventuality where there will be no undeveloped countries with people left to work in sweatshops. The assumptions made by economists in the 1950s are now being spectacularly proven wrong as it turns out. Eventually wages will have to rise again in the West, along with it becoming "more economic" to reverse the outsourcing and manufacture domestically again. You said "basic" economics. It might be more true to instead say "discredited", "reductive" or "dangerously wrong". These are the folks who built their theories on the assumption that we can have infinite growth and the that Earth's natural resources are 'externalities' that don't need to be factored into economics. What a load of guff! and I'd like to demand that you supply less of it!

[@advancedomega]

@@RichTapestry "I don't know why people think the $2.35 job they don't have is better than the $2 job they have." -- Milton Friedman

[@advancedomega]

​@@RichTapestry "Poor countries had equally poor workers, but as their countries developed and grew, they introduced minimum wages and wage increase as productivity rose. Now, we're near the eventuality where there will be no undeveloped countries with people left to work in sweatshops." -> The productivity rose in spite of minimum wage, not because of. -> BTW, sweatshops is what started the economy, especially the manufacturing/industrial sector. Yes it is awful, but it is still better than no job, and it is the first stepping stone to create a better economy. Unless you replace sweatshops with NOTHING thx to the minimum wage law. "You said "basic" economics. It might be more true to instead say "discredited", "reductive" or "dangerously wrong". " -> You maybe never like it, but when a commodity become rarer, its price still increase. On the other hand, when it become abundant, the price still decrease. -> That is the basic of supply and demand. This concept is why minimum wage ruin everyone EXCEPT the big business. " I'd like to demand that you supply less of it!" -> And I have to politely decline ü

[@RichTapestry]

@@advancedomega Just because you or Milton says it, doesn't make it so. Economies existed before sweatshops. I'm sure you know this. Humanity has the technical means to make many commodities abundant, but they are instead kept artificially scarce for the benefit of a few, or due to inefficient market mechanisms. That doesn't make them actually scarce! Have you tried applying your pet theories to something like diamonds, or planned obsolescence? Diamonds are abundant, but they can be priced as if they are scarce because a monopoly on the supply is tolerated. Demand for phones can be artificially drummed up by making them run slower with subsequent software updates. So 'Supply' or 'Demand' seems less like some natural force, like gravity, and more like the feeble abstract concepts they are. They are amorphous and can be easily manipulated. Whilst useful for thought experiments, the words are roughly meaningless in any economic theory drawn up after computers were a thing. Economics is not a hard science, stop pretending that it is. Your approach is entirely ideological. So was Milton's. Minimum wages is dope. Institute a maximum wage as a multiplier of the lowest. Thanks for reading.

[@kierand9410]

Stunningly clear articulation of the issue at hand. Well down to the design team. Subbed!

[@TheSpatulaCity]

Maybe we need to suspend congress' pay every time we approach the limit, like a pay motivation to keep things in balance. It would be like turning on a ceiling fan that pushes back against us hitting that debt ceiling and cause pain if we hit it.

[@seangoldman6833]

The problem is most members of congress get most of their funds from outside their job. Look at Joe Manchin since he's been in the news so much lately. He makes roughly $185,000 in salary from his job but roughly $1.1 million a year from the family coal company. Ever wonder why he always votes against anything that promotes green energy or could limit fossil fuels? The incentive structure of our leaders right now is not leading to outcomes that is good for America as a whole, only their own enrichment.

[@jorgetam42]

Tax the rich

[@nadie8093]

Or the goverment will just raise the ceiling in advance and by a higher margin, laeding to basivaly the same result

[@lktan224]

Spent almost a trillion on defence , funding wars and funding Zelensky as demanded.

[@Jagermonsta]

makes me wonder - if money means nothing, which is what this system effectively demonstrates, why can't we help those in need more than we do?

[@RichTapestry]

Precisely! The answer is that it would take money away from who it's already going to 👀 (the super-rich)

[@etienne-carmelbongo5210]

@@RichTapestry you meant the super-thieves