Why The U.S. CAN'T Sustain This Gap

[@MarakMocam]

More fun: Years ago I tore open the GDP. Do you have any idea how much of it is based upon the commoditization and trading of private debt? It's part of our GDP in a variety of points (and is counted more than once in some categories). In other words, inflation that forces people and businesses to borrow more actually increases that GDP and keeps it ahead of where it should actually be.

[@SelfProclaimedEmperor]

Even debt generated a profit, thus boosts GDP

[@aluisious]

You say that like you discovered something but it's common sense. What did you think the financial sector even did?

[@MarakMocam]

@@aluisious "common sense" - no its not so common, not even among the college grads. The fact is that it is a huge portion of our GDP - much larger than people think. There are a series of codes making up the categories of the GDP. Under each of them is another series of codes, etc. What I did was dug deep and found that not only was the GDP fluffed big by the debt but also that it was double and triple counted at times in different areas. It's a fluffed up lie yet it is referenced as fact ALL THE TIME. with "GDP" and "GDP to Debt ratio" and ... - yet when OUR GDP is fake, then so are all the results from it.

[@MrChair1969]

@@MarakMocam isnt this done by the other countries too? Like china, japan, russia, germany, india, etc.

[@RebelTvShka]

As a rural town citizen, yes a lot of people do "know" this but they don't know the depth it goes.

[@ernststravoblofeld]

Higher taxes historically help the economy, since rather than pay the taxes the corporations pay their workers more and invest in research, both of which are business expense write-offs. A simple look at history shows this. The time of greatest taxation in US history was the time of the most working class prosperity, and also the cradle of the aerospace and computer industries. It was a time of unprecedented technological innovation on the most basic level. It works, and it only requires that the rich are forced to let someone else have a piece of the pie. They don't even have to actually pay the taxes, just spend some of that money on things that benefit society.

[@redenginner]

Too bad we moved to the Austrian school of economics model of nearly unrestricted economic looting by our wealthiest citizens.

[@AgentExeider]

You need to consider the working class at the time, there was alot of people who were self employed, or entrepreneurial enterprises, so having the ultra rich be forced to let someone else have a piece of pie, meant that the likely hood of that piece of pie going to someone who will in turn start a business, employ other people and innovate was high. That is no longer the case, today we have a bunch of "wage slaves" and the people who would get that pie would more than likely spend it on the next iphone then invest or innovate with it. This is WHY the ultra wealthy have made the argument against the higher taxes, because regular people in THIS generation are terrible with money, they were not taught what to do with it, and how to make it work for them and better society as a whole. In other words it's not just unadulterated greed, they are taking the "I know how to spend money better than you can" position. That and the rich elite today see themselves as some kind of weird corporacratic Neo-feuldism where they ownership stake in things is their "fiefdom" in which they insist never be challenged. It's odd, but the point is, simply jacking up taxes in the current society would do more harm than good precisely because society isn't structured the way the historical model your referencing needs society to be for it to work.

[@ernststravoblofeld]

@@AgentExeider That's an awful lot of words for a KZbin comment. I'm not going to read it. Maybe break it into smaller chunks?

[@jonblaze32]

@@AgentExeider Raising taxes probably makes more sense in an economy with less small businesses. Large corporations leverage their size to make the economy less competitive. In this state, companies can price their products more freely to maximize profit. Taxes represent a way to capture some of this profit and use to ameliorate the issues of having such a society. You can also give small businesses specific tax breaks and make them more competitive. Wal mart might be the archetypal example of this. Wal mart moves in, leverages economies of scale to offer products at a lower price point and drive small business out. They then pay people less, demand municipalities help pay for infrastructure to accommodate them, and cause other issues. Taxing wal mart more makes total sense in this situation. On a slightly different note, if you want to help small business out, we need to go a downtown main street model which relies less on car infrastructure and encourages people to bike and walk around. If you look at Asian and European economies, there are lots of small businesses and vendors which operate in night markets and other venues which aren't conducive to cars. They have density and bikability/transit which allows people to hang out in their city centers without the noise and smell of cars. Making downtown into a place you want to hang out is the best way to counter the "drive-park-shop-drive' modality of America.

[@KravenTheKnight]

@@jonblaze32 That would be the dream, but unfortunately that requires getting rid of several ideas deeply entrenched within the American psyche, such as the "freedom" offered by cars and that public transportation brings problems to the parts of the cities it reaches.

[@spallis]

Great video. Thanks for not making a bunch of clickbait crap like all these other KZbinrs and actually providing stats on what’s going on

[@CarDriveYou]

What do you mean? The title is still clickbait.

[@rholalbi8155]

​@@CarDriveYouTitle is Facts NOT clickbait "FACT" 🤷🏿‍♂️🤦🏿‍♂️

[@ok373737]

Your videos are so clear. I've heard many times about US debt situation but never understood it so clearly.

[@EPBResearch]

Glad you think so!

[@rockfire1669]

I mean, he does ignore that during those years of decline(but except from 1970 to 1980) was happening while it was also deregulating. I.e. the private sector taking over. Edit: okay so overall the video is correct, I am just a very heavy nick picker when it comes to economics due to how complex it just is.

[@AzzekaTheRealOne]

who elects The Fed? The corrupt Corporations and oligarchs like blackrock/wef

[@michaeld4861]

You come at this from a very... "I'm rich" standpoint. Taxes for the rich and corporations are literally lower than ever. And crushing peoples social security or Medicare is a fucking horrible idea. We are already the only country in the world where a third of the population can't afford basic medical care/insurance.

[@ThatGuyz82]

So much of that is not true. I will only address healthcare, for anyone reading. If you make a payment every month, hospitals and other healthcare facilities cannot take you to court. If you owe $1M and you are making $20 payments every month... they have no path to doing anything but accepting it. Medical bankruptcy never has to be an option, because what is owed is not extended as credit. So there is no negative mark. And as long as you pay something ( even $5), then nothing can be done to you financially.

[@OhNotThat]

One thing that needs to be stated here though is that since the 1960s the REAL tax rate on the highest bracket went down from like 90% to like 10% or in some cases nothing at all with intentionally introduced loopholes to help the elites. Demographic shift aside, there isn't an avalanche of "old people" that are now swarming the system with medicare and social security payments. It's just collecting less taxes from the elites where the money stays and more from everyone else who barely has any compared to them due to neoliberalism and reagan's poison. This is not sustainable. This "crisis" was engineered by design.

[@titolovely8237]

yea the tax burden has shifted massively. the business sector and the wealthy used to foot the bill for the majority of taxes, but it's now shifted towards the middle class. in fairness though, entitlements have been expanded for lower income and disabled people, which has forced debt upwards. in simple terms we tax those who can pay less and we pay those who cant produce more. the result is exactly what we see in this video - a collapsing savings rate of households and an uptick in debt across all sectors.

[@gilgalad6231]

The tax burden is shifting to the middle class, but the middle class is becoming more and more unhealthy. If the median income of a middle class person is going down AND the number of people considered middle class is going down, but we expect to collect our taxes from this group… how could we expect anything else than these scenarios? Less $ from less people while the rich make $1 billion but buy $1billon space rockets and then say we broke even, I made no money for you to tax. They can write off space ship $ but I can’t write off my mortgage?

[@GhostSal]

We are completely overlooking a very important question, why is the gøvernment “borrowing” or taxing its own money? Why do we even allow a private bank to be in charge of printing/allocating our own money? This is the bigger problem here, not “entitlement” programs. The word entitlement paints a false picture, that the elderly and disabled aren’t worth taking care of. It’s a sad statement on our society if we choose to see seniors and disabled as just a burden.

[@aquarius5719]

Being green is about protecting green dollar. Saving planet Federal Reserve against climate change of dedollarization. When you watch news this will help you to understand them.

[@honkhonk8009]

We the federal reserve exist, because it would be fucking moronic to let Congress manage it. I dont think you watched the full video. Relative to other countries, the US is doing GOOD. Its just the world as a whole is heading towards a shitty decline because birth rates. Yeah but id rather have taxdollars go towards funding the productive than the elderly and disabled. Call me cold, but seeing as how the future going, i want to actually live within first world standards.

[@darrenk7163]

In a way we do we only want to take care of the elderly and disabled if it don't cost us nothing so we borrow and send the cost to our children thanks to democrat program s and our wanting free things like stimulus money our children will inherit a Bankrupt nation

[@mikerotchburns42069]

You are supposed to save and invest while you are productive so that you can live comfortably upon retirement. Why should the current youth be forced to pay the bill for those who failed to plan for the future? Nobody should be entitled to the labor of others.

[@GhostSal]

@@mikerotchburns42069 That’s idealistic but in a country where healthcare is the number one reason for bankruptcy, it isn’t realistic.

[@titolovely8237]

i work in the industrial sector, as well as almost all the men in my family, and we've all seen the same thing - companies are extremely reluctant to invest into new equipment. mostly they just patch existing equipment or run it with it not functioning properly. there's almost no interest in adequately staffing these areas either. ive been working chronically understaffed for almost 10 years now with old equipment that never really gets fixed. companies just dont want to or cant invest into new equipment and adequate manpower within capital intensive industries like manufacturing and construction.

[@patperez7415]

Why are the big corporations not paying their fare share of taxes, there is no reason to give oil companies government money, when they are breaking records in profits

[@terrysteichen873]

The top 1% own 92% of the wealth. Could this be the problem?

[@coindorni]

1: That's not the real figure, it's more like 30% 2: Not really. That's more of a subproduct. Are you familiar with the Cantillon Effect? Well that.

[@mtrautt1]

@EPB Research, I watch a lot of financial content and yours stands out as coherent, professional and engaging. The level of quality of your videos is completely disjointed from the level of current subscribers. I am sure that will resolve itself in time as more people discover you. For example, I shared this video on my Facebook page with the hopes that some of my friends and family would share my interest. Please keep the excellent content coming! I look forward to more videos.

[@michaelbindner9883]

Actually, he is sadly to misinformed on how federal debt purchases work as a private asset

[@AustinTexasGardening]

Very descriptive of what we're already seeing. Normalizing power grid failure and shortages everywhere is something a failing state has to justify. My wife and I live in a city called Manor, our home is 17 miles (25 minutes) from the Texas capitol, and even at such a short suburban distance from a major metropolis, many roads in my neighborhood are borderline undrivable because of potholes and poor maintenance. In my neighborhood, new homes that are going for half a million (which is like $5000/mo at 7% interest and 3% tax) have construction issues, like fences falling over because KB (a reputable home builder), had the construction teams use insufficient amounts of cement in the fence post holes. This corner cutting has serious consequences, people's fences falling down means their dogs are escaping, and in an upper middle class neighborhood, we have packs of hungry, desperate, and aggressive dogs roaming around. Just subscribed

[@Tential1]

To be fair to homebuilders, they increased production like crazy recently to take advantage of new buyers. They knew quality didn't have to be top notch. The big home builders don't do too quality homes. I did custom homes for awhile, and we would walk or drive through big names like kb and my guys would tell me all about how many corners they cut because the consumer really can't tell.

[@Subat0micR0gu3]

Why aren't people feeding their dogs? Geez

[@ShorlanTanzo]

@@Tential1 KB is big, but definitely not a quality builder. But at the end of it, those people are still better off locking in a mortgage than getting an apartment and being at the mercy of landlords either raising rent 40, 50, 100% or keeping rent the same but letting the place fall apart. It's scummy either way, but having your own house at least provides value. And if the US is "bankrupt" then all those dollars they owe will be easier to obtain in the future because no one will care to own dollars that get inflated away... That's what people predict, but so far the dollar has been quite strong despite record high Federal debt. It's not that the dollar doesn't stink, it's that most other currencies have even gloomier outlook, and capital goes to where it's safest.

[@greyfox78569]

People like to conflate local government failures with federal government failures. I live in near by Bastrop plenty of roads are perfectly maintained but many are not and that is do to local government failures not a federal one in fact local governments have been sabotaging federal projects in the area for decades for reasons. (NIMBY)

[@toomanymarys7355]

That's your LOCAL town government. Find out what's up. Local good governance is still the norm. Texas cities are frugal, but nit pothole frugal because that's Penny wise/pound foolish. KB is also a hack builder. Lol.

[@timgaleza8523]

Your videos are absolutely the best I've ever seen on the topics that you've covered to date. You explain your topics in a manner that is thorough and detail oriented, yet VERY easy to understand. Please keep up the good work!! I just subscribed today.

[@menumlor9365]

Thanks.

[@BRunner12]

Well it’s 100 percent wrong, Government spending does not crowd out private credit, that is an idea economist spread who don’t understand banking and credit creation, they actually believe banks lend deposits…

[@clank8989]

i was about to write the same

[@BRunner12]

@@josep3776 You can check out Wayne Vernon on KZbin on how banks work, look into MMT such as Warren Mosler Economics, 7 deadly innocent frauds, although take care the some of MMT policies are nuts. It comes down to understanding banking and Endogenous money, loans create money(deposits), e.g. government spending that is not taxed back is private savings.

[@kokomo9764]

Except is is wrong about almost everything.

[@eatbreakfasts7993]

Wow, bravo. Made a subscriber out of me. Very refreshing to see an economic channel without the rhetoric and fear mongering, those seem to be all the rage. Thanks for the sober and indebth analysis

[@FlameSpark2013]

Highly recommend you adjust how you show data on graphs. It's poor form to trim the tops and bottoms of a Y axis on a line graph just because the data doesn't go that far. Especially when the Y axis is representing a percentage. It can be incredibly misleading because most people don't read the numbers, just the titles.

[@FlameSpark2013]

@WhatsApp±𝟏𝟐𝟏𝟖𝟓𝟐𝟏𝟐𝟗𝟑𝟖 EPB Research I don't think that I will 🤔

[@kitirena_koneko]

One thing I'd like to see is CEO pay rates and taxes on the rich and super-rich over time graphed against GDP and national debt. I have the feeling that the result may be very unpleasant for the working class to see.

[@lancelessard2491]

Social security is ENTIRELY paid for by wage deductions from worker's paychecks and from matching employer contributions. None of that money is borrowed. There is no debt accumulated from it for that reason.

[@justinokraski3796]

Well the government borrowed from the social security funding to pay for other things

[@lancelessard2491]

@@justinokraski3796 That's not really how it works. The Social Security Trust Fund is required by law to be invested in government bonds, which isn't at all the same thing as borrowing from the trust fund. Those bonds are paying interest into the Social Security Trust Fund. The problem with projected shortfalls in Social Security is that years ago when the schedule of payroll deductions was formulated (each year it is to increase to keep up with rising wages) nobody ever dreamed that there would be so much wage income going to the super wealthy who pay NOTHING in Social Security deductions on anything over that formulated cap ($147k in 2022) So if you make $247k in 2022, then $100k gets ZERO deducted for Social Security. And some are making way, way, WAY more than that, meaning there are billions of untaxed dollars going out in people's paychecks that were never part of the original calculations, simply because nobody anticipated the enormous growth in wage inequality we have seen in the last 20 years. Raise the cap on Social Security taxable income, and the problem will be fixed. But the super wealthy don't want that, so they deliberately sabotage the whole program.

[@richardpuckett8127]

@@lancelessard2491 it's not a problem of people who are rich not paying enough into social security. Because rich people actually pay in more money. Than they actually will receive. Because social security has a maximum benefit amount. And you also must not understand how "rich" people are mostly earning money. They don't make money from a paycheck. This is why rich people pay low income taxes. But rich people are still taxed more than the average person. Because of business taxes, property taxes, and employee matching of income taxes. And you forget (or don't know) that employers have to match social security, Medicare, and other taxes.

[@timschultz1928]

@@richardpuckett8127 employee matching is not a tax on the rich but the worker that’s all just part of the shell game.. that’s money they pay that should go into the workers pocket that is a tax on them.. ssi has always been a shell game.. the rich certainly don’t pay the rate that that the working class does

[@richardpuckett8127]

@@timschultz1928 an employer having to match the amount an employee pays social security. Is 100% a tax on a employer. So a "rich" person who pays not just his social security. He also pays to match all of his employees social security. Yet whenever he finally gets to claim social security? He is only going to receive payment for his personal wages claimed. He doesn't get nothing he paid in out of his pocket, for his employees. So a "rich" person will never get back from social security. As to what they've paid

[@jarrod752]

_Private savings has 2 parts: Household and corporate..._ And _Government Savings_ has _2 parts:_ A massive Deficit, and *87000 new IRS agents.*

[@monad_tcp]

Stupid socialists, they'll never learn that the government don't produce, it only takes from one to give to another meanwhile consuming a lot of resources in the stupid payroll with lots of useless person working useless jobs.

[@julesmasseffectmusic]

Liar. But hey your gunna die 20 year younger than Ozzies so that good.

[@MrSimonious]

This channel is seriously underrated, or under viewed, either way the research and quality of production is outstanding. Looking forward to 1M subscribers!

[@LaSombraa]

This channel definitely will be over 100K subs soon

[@michaeldunphy796]

Recommend consistently using graphs that include 0 on the Y-axis. Visuals at 1:00 and 3:18 can be viewed as misleading and visually exaggerating what you claim. Just for the future.

[@josephclark5414]

You have really addressed this phenomenon in a complete, clear and concise manner! I am echoing everyone else's comment's, but you have done noteworthy work. Thank you for that! I am also super glad you are describing the technical terms used as you explain. Subscribing now!!!

[@KB-nt7eg]

It's not a phenomenon. At all.

[@terencefan6267]

Genius! Succinct presentation of the impact of high US debt level and possible future trends. Should be used as textbook material for those who really want to learn about economics

[@NinjaThatLongboards]

Taxes were at their highest in the 40s and 50s. Also entitlements are investments in worker health and productivity, they raise the GDP more than they cost.

[@fdd4957]

The government's wasting money on programs we don't need. Should we raise taxes or borrow debt? How about we just get rid of the unneeded programs.

[@cougar2013]

But who will pay for the healthcare of people that flagrantly disregard their own health? Who will help poor people go to college and get Sociology degrees?

[@fdd4957]

@@cougar2013 We could place restrictions on government aid. No aid for preventable injuries. No scholarships for non-STEM fields. Removing all government aid would hurt America in a similar fashion to providing aid foolishly.

[@cougar2013]

@@fdd4957 I’m right there with you. Fraud is possibly the biggest problem and it comes in many varieties. From not taking care of oneself and blaming it on others, to outright lying to defraud a program to collect money.

[@BobtheX]

@@cougar2013 What an evil thing to say. Who paid for the roads you drove on to write that retarded comment?

[@cougar2013]

@@BobtheX why is that evil? People flagrantly disregard their health and truly expect everyone else to pay for it. I’m all for it if it actually is sustainable, but as we can clearly see, it isn’t. And yeah, we would do well to cut funding to worthless sociology programs. Literally sucking value out of society with nothing in return. Thankfully most of those freaks aren’t breeding! 😆

[@holandreas]

3:30 It's not completely clear cut that raising taxes always hurts the economy. If there is a tendency towards uncertainty about the future because of government debt then the market can react positively to getting more certainty about the future if the government balances its budget.

[@allwecanseeisaboveusnow]

Great analysis, you don’t mention how Japan is indebted to itself as the Japanese government is the holder of most of its debt, don’t know if that’s a important thing to add

[@SelfProclaimedEmperor]

Japan is indebted to the Japanese people, which means it can't just be written off

[@maybesomething555]

Love your videos, Eric. Found you on Hidden Forces podcast and I've been following you ever since. Great topics + very clear explanation.Please do not stop doing what you´re doing!

[@real-ishstraighttruthnocha1687]

I always appreciate good economics talk routed in statistical analysis. New Sub. The economist (one of them) who predicted the 2008 crash predicted a 2030 great depression, which tracks to what you are saying. I'm saving to pay off all my debt now, life is going to be hard in 2030 and beyond.

[@ronskancke1489]

It will get real scarry by just next year. Dont worry about 2030.

[@madmikeblvd]

If USA based, why would you pay off the debt??? Just bolster your position with physical generally non depreciating assets and store of value. All the debt will be a wash and you can come out on the other side with only gains. Debt in a currency system is laughable, it doesn't track.

[@ariesmight6978]

@@madmikeblvd How will all personal debt, just disappear?

[@johnhill4481]

Just subscribed. Consistently great videos. My brother is a professor of economics and your videos help me understand him.

[@neilreid2298]

Excellent vid and analytics. As a country, we're deeply, deeply screwed. No entity has led us into the tank like the feds. In all my life, I've never seen a worse convergence of bad news. Choices are additive. Buckle in.

[@BlueGrovyle]

@@tedt5588 this doesn't work when, for example, politicians are bought out by corporations that use inefficient energy sources. What is the US going to do now? Infrastructure doesn't fix itself, and boomers can't work forever.

[@esteban1487]

Ethically, morally, and spiritually as well.

[@danmurad8080]

You underestimate us.

[@watch_this_one]

I work in financial risk sector and this is a great educational videos (as all videos on this channel). And this is the first comment I wrote on youtube in decades.

[@TheGrape1234]

I just know that this channel is going to be huge, keep up the great work sir

[@ericjaenike3937]

Love how clear and understandable your videos are. You have a great talent for cutting to the chase.

[@jamescpalmer]

Great video, the under investment into critical infrastructure to increase productivity at a macro level is near criminal.

[@jonathandavis2107]

Competent, collegiate, and informative of the current economic issues. Keep doing this.

[@michaelfraser4396]

We can offset a lot of government spending by eliminating or reducing the size of the bureaucracies. We need another Calvin Coolidge. Each week he grilled his cabinet on how much they reduced government spending. He ran the government in the black while the Federal Reserve ran the economy in the red.

[@seanthe100]

Bill Clinton also had a budget surplus, but that was due to a growing economy and higher taxes passed during the first bush years.

[@unyieldingsarcasm2505]

@@seanthe100 The higher taxes is the key part. Our spending may have grown, but the real problem is we dont tax the rich near as much as we used to last century.

[@d.jerrycook2994]

I don’t like where the “blame” is being placed...

[@es330td]

The definition of bankruptcy is the inability to pay one’s debts. Can you please explain how a sovereign nation with unlimited borrowing power and its own mint can ever be in a situation where it cannot meet its obligations?

[@chesshooligan1282]

1. A sovereign nation doesn't have unlimited borrowing power, not even the US. Would you lend money to a country that has a debt-to-GDP ratio of 700%, for example? I know I wouldn't. 2. Yes, a country can always print its way out of debt, but the debtors wouldn't be very happy with receiving devalued currency as payment and making a real negative return on their loan. That would be a country's equivalent of screwing your credit.

[@shandog99999]

It can't, this video is clickbait garbage

[@asajayunknown6290]

@@chesshooligan1282 I agree that US debt should lose its cachet and people shouldn't buy the debt, but the reality is that, comparatively, the US is in better shape than most of the rest of the world. Sad, but true.

[@johnreinberg5334]

1 word for you. Democrats. That’s how

[@nathanlindley]

So, I've watched the video twice now and I'm struggling to connect all the dots. Can you explain how low national savings could lead to large trade deficits?

[@brianrobertson7012]

You talk about entitlements witch people pay into and very little on the debt ,where the banks purposely raised interest rates to 21% in 1980 and kept the rate high for 15 years capturing the economy in 1992

[@annemarietobias]

This is crap... He neatly forgets to mention that in 1960, US Corporations paid for over 40% of the total cost of Government. Now it's less than a third of that with the the burden placed on small corporations and the top 40 American Corporations paying no taxes at all. Many receiving billions of tax dollars in corporate welfare. As well, in 1960, most corporations provided pensions for their long-term employees, now that burden has been shifted to the government, creating the entitlement problem. Add to that the insane concentration of wealth in the top one percent, and you create a economic vacuum preventing the investment of infrastructure. In fact the entire point of the Biden Bill was to get billionaires to pay their fair share of taxes to allow the most basic repair of America's infrastructure. Like a predictable knee-jerk, the party of the wealthy stonewalled that legislation, after providing a trillion dollar gift to those very same wealthy from the prior Administration. It only makes sense that if the wealthy don't pay their taxes, the burden falls on the middle class... What we have been witness to is the slow motion advance of Oligarchy, and it's happening all over the world... It's what turned Russia from a budding Democracy into Putin's disaster... Same for Xi's China. Or Brazil, or Venezuela. The answer has always been, to separate corporation from state. Tax business fairly across the board. Make everyone pay their fair share of the common good, and stop stealing $20 in corporate profit taking for every $1 spent on Government service. The rest of this video is smoke and mirrors to obfuscate the fact, the People are being systematically enslave. Deal with it.

[@aimsdrew9]

Fantastic video! Incisive and to the point with helpful visuals. Great job man! Also, frightening wake-up call for anyone who hasn’t been paying attention these past few years. This video ought to be viral, but will most likely be throttled because it’s too clear and damning

[@jasonlacroix6083]

This all started in the Reagan years. I was fresh out of college and saw the beginning of trickle down economics. Turns out it was trickle up. When social security began in the 1930's, I think it was close to 20 people paying in for every 1 collecting benefits and life expectancy wasn't as high as today. Now it's down to 3 people paying in for every 1 collecting benefits. It's gonna get ugly for the United States.

[@FloridaRentalAds1]

You are my favorite “explainer” on YT and a true teacher Sir!

[@Dbulkss]

The Roman Empire went through the same thing. Bankrupt itself and extreme curruption.

[@Furiends]

yeah but there was also something meaningful to replace it. There's technically economic value and innovation that spurred after its fall. In this case it was feudalism. But it was major shift in the bureaucracy.

[@toomanymarys7355]

Killing their own children was huge reason why the West was lost. They had a demographic collapse. The East which was more Christian did well until the Justinian plague, which killed more people in less time than the Bubonic because of bath house culture.

[@Dbulkss]

@@toomanymarys7355 which is why abortion is the most catastrophic thing allowed. 65 million future baby Americand taken away in 49 years because of roe v Wade. Humans never fail to destroy there nations. History will repeat. This time of peace in the USA will end.

[@Furiends]

​@@toomanymarys7355 Justinian plague was the first Bubonic plaque and that alone could account it killing more people. However it didn't. The Black Death lasted about the same amount of time and killed about the same amount of people. What that suggests is a highly contagious and very broad pathogen. Indeed we know now it was the exact same bacterium as well. With this in mind the idea that it was affected by "bath house culture" is insane not just because it makes no sense in the numbers. What there's just massive orgies of far traveling traders in these bath houses? That sounds stupid because it is. But then if we add the historical context it gets worse and also shows us the cultural origin of this myth. Christians considered bathing to be inviting of sexual temptation so they avoided it which led to poor hygiene. Notice though we had a third Bubonic plague and no major one since then. What changed since then? We understand disease is caused by germs (aka is prevented with better hygiene) not by spirits, not by masturbating to much and not by spontaneous generation. Indeed this myth could have helped cause the plague not prevent it.

[@JeanMarceaux]

Economic crisis struck so hard, this channel's owner can't even afford a pop filter, can we hit 50 likes to get this guy a pop filter. Snide comments aside though, this was a very engaging and comprehensive video. I'm all for economics explained in layman's terms.

[@bitcoindaddy1]

Unfortunately as long as feds can continue to monetize govt debt with printing press and world hold dollars then debtgdp can go alot higher.

[@bitcoindaddy1]

@@tedt5588 it's like blaming the addict. When your plug gives you free heroine, you take it.

[@bitcoindaddy1]

@@tedt5588 and no I made my bag

[@bitcoindaddy1]

@@tedt5588 its also like saying its the poor who took stimulus induced broad base inflation and not congress and treasury. Shyt flows downhill

[@bitcoindaddy1]

What's the feds dual mandate to congress? Full employment and price stability. Well, technology in all business is deflationary. And what is the highest cost of capital for any business? Labor. So overtime labor participation goes away and as productivty from tech is efficienct. the feds are force, a loosing battle, to keep inflating the system and monetize govt debt or system collapses

[@bitcoindaddy1]

@@tedt5588 no human behavior doesn't change like greed and fear and the politcal system hasn't change. So if the monetary system changed from hard money to credit base money, then you have this

[@tp1gav]

Son you kill it. A refresh on the -Gap is unsustainable - would be awesome. It would illustrate the corrosive effects of interest rate increases. We're toast. u Rock kid.

[@deenibeeniable]

This is such great content. Clear, intelligently written & well narrated. I repost these videos all the time.

[@usuallyscott7907]

What effect does corporate offshore savings have on your commentary?

[@ramjamflimflam]

I’m 54 and broke. I’m an entrepreneur and have made and lost everything. I’ll never see a penny from SSI or Medicare, or any other government Ponzi scheme. I’ll also never stop taking the necessary risks to get to a better place financially.

[@EPBResearch]

Taking risk makes life more enjoyable. Good luck

[@trumpetpunk42]

Broke but not poor.

[@juxhinmeminaj3446]

How are only 5% subscribers, these weirdos need to smarten up. This is some quality content, no fluff. Love that

[@BlakeeBlue]

I disagree that increasing taxes necessarily hurts the economy. It depends who is taxed and how those taxes are used. If you tax the ultra wealthy, who will be hurt most are companies that make up their assets. And these companies can withstand this hurt. Look at Apple, it has hundreds of billions of dollars that it has no idea what to do with. Companies are not investing, they are simply buying back shares because they are so flush with cash. Ultimately inflating their asset price and returning wealth to primarily the ultra wealthy. Who return it back to them, creating a loop of capital never being used for productive ends. You're right most of this tax revenue will go to entitlement programs, but the more the government pays for the Boomers, the less the younger, productive population has to pay for them with time and money. This is good for savings and productivity. Also, it does not make sense to be heavily spending in infrastructure when we have a strong population decline. Sure, fix the water systems, etc. But adding capacity to infrastructure that will have less and less utility as time goes on is not a good investment. That said, this a great video. Thanks

[@rvc25]

What you’re advocating is the repeal of SEC 10b-18. We should not tax the “Ultra Wealthy” because it’s a relative term that is too subjective to base a tax code on. BUT if we make it illegal again for companies to “return value to shareholders” by making it illegal to buy back their own stock, companies would be forced to deploy that capital in other ways that would drive economic advancement. There is an interesting study out of Yale that looks at the balance sheet of companies prior to 1982 and then again in like 1998 that really shows what that tule change did and how bad it was for workers and wage growth.

[@scenekid0014]

My thoughts exactly!! Thanks for posting!

[@TypeJack]

Your videos are absolutely amazing. Keep this up

[@brandonmorse9000]

These videos are great thank you for making them

[@matthewhopper9988]

Great video as always. What is the breakdown of the sources of 'Mandatory Spending'? You imply that mandatory spending is entitlement programs, but my intuition is that 'Mandatory Spending' is mostly payments on servicing the debt. When interest rates rise, as they are now, that causes and increase in mandatory spending even if no changes are made to entitlement programs. You make great content, so I'm not saying you're wrong, maybe I just don't understand that part. Thanks Eric!

[@tomaszwida]

he is wrong on that part, he is calling "entitlements" as ss and Medicare was not being subsidized by everyone that is in workforce. we all know that in a course of your life everyone that is working is paying into that pot. if u want to make Medicare and ss solvable remove the cap that is on it currently 147k so its not just middle class that has to subsidies that program.

[@UltraGiantMeteor2024]

The moral of this video is AVOID ADMITTING TAXES ON TOP ARE TOOOO LOW 🤣

[@tomaszwida]

@Darren Rice do u want to live in civilized society or not. I love the framing grab. Because you sure as hell do not take anything that government provide for granted. such a lizard brain...

[@platiuscyndar9017]

@Darren Rice no, grab large amounts of money from those that HAVE large amounts of money, and grab lesser amounts of money from those that have less. Not LITERALLY they other way around. This way, everyone can afford to save money. The rich SHOULD pay the largest part of the pie for such programs, because they have the most money. Think of it differently: let's for a moment ignore entirely who has the money. We have X amount of income in a country, and Y amount of people to provide with healthcare. It makes sense to take a percentage of said X amount of income to provide this, then, yes? Right now, what the US is doing is dividing this X amount of income - UNEVENLY - on the Y amount of people, and then taking from these people individually roughly the same amount of money - roughly because below a certain threshold of income, of course, the amount is lessened. But suffice to say, the total income is not taken by percentage. In fact, large swaths of the countrywide income remain effectively untouched entirely because they are above a certain threshold of income per person. So, for examples, we have say, a million dollars income, and a hundred people, one dude gets 900.000 dollars. But because everyone else gets like, a thousand dollars, so the maximum income considered is 2000 dollars. So from the total income of a million dollars, due to this one dude, only 101.000 dollars are actually considered for this specific taxation. 89% of income in this example are completely ignored.

[@gsparrow321]

Setting aside the policy issue here, what should the take away be if you're trying to build and protect personal wealth?

[@peterdisabella2156]

Open question: what is the best solution to this problem? Also, what is the end result of this when applied to the global economy as it seems to be a widespread issue among the major economic blocks.

[@bungkusi2432]

Reduce the mil ita ry spending? By 95%?

[@CathDamienn1776]

@@bungkusi2432 ooooorrrr Get the fucking government out the economy all together and abolish most things on the mandatory spending including Social Security, Medicare, Medicade and all other welfare programmes The only fundamental functions of government that matter is the military, police and the courts, so cutting military spending will make things also worse still

[@peterdisabella2156]

@@bungkusi2432 tightening the military could help lower the deficit but there is not as much wiggle room as you'd think considering that a sizable chunk of it goes to Veteran benefits and salaries. We would also lose revenue from arms sales which means the drop in the deficit might be lower than you think. Beyond that we would still need additional cuts to even eliminate the deficit much less reduce the debt.

[@stevecharmer4296]

Wrong question. Ask “What can I do to maintain & improve my personal quality of life?”

[@peterdisabella2156]

@@stevecharmer4296 Im fine. This is just for academic curiosity.

[@Dangerousbros1]

Glad to see the rapid success of your channel keep it up!

[@Tvck3rm]

What about the benefit the US enjoys having much of our bonds owned by foreign governments which gives our currency further power. I recall learning once about this but would appreciate your view. To echo the other commenters, your content is great as it’s data driven and tries to get all the context. I’m sure you’re subscribers will rise.

[@terrybumpass4799]

Besides being one of the best macro economics videos I have ever seen, I really liked that you waited until the end of the video to ask people to subscribe. Which I did. Thanks.

[@george_white]

I absolutely love your videos! The only thing that would be cool to add to this is what are the potential options U.S. has and will likely to do to avoid the crisis. :) Thank you! Keep it up!

[@p51mustang24]

1) outgrow the debt. Unlikely, unless we start building commercially viable fusion power in the next few years, or some other breakthrough of that nature. 2)austerity for a few decades - unlikely because voters and politicians typically won’t tolerate this. 3) default - unlikely because voters and politicians will never choose an economic collapse like this when they have the option to print money. 4) high inflation + financial repression (most likely option) - the fed will pin rates low, while congress spends enormous amounts on infrastructure and other productive spending. Bond holders (think: pensions) will get wrecked while the debt is inflated away. 5) transition to bitcoin - USD hyperinflates against bitcoin. Plausible option, maybe in 5-10+ years if/when the bitcoin ecosystem is large and mature enough to handle it. 4 and 5 are really the only outcomes that are likely.

[@colombiantom]

The problem is not the slow pace of growth that we could have a decade from now, the problem is that we got used to an unsustainable growth rate that we think 1% is little. This is why we have bubbles, we need to find a sustainable system, that will lead to constant growth and no bust every 10 years. This might mean a 1% or less growth per annum. Also, politicians whether dems or rep will not reduce spending, they either increase it, or lower taxes, but not a combination of both, so they will never reduce the deficit.

[@peterfmodel]

Good video, it should be noted that Japan sustains its high deficit from very high level of private sector savings, also note the euro zone is divided into different sectors, North, South and East. The South has the largest issues, the North has high levels of savings and the east is investing a lot into infrastructure. China is its own special case. Of course the US dollar will never really collapse as it’s the only real global trade currency, so there is demand for it overseas, but high levels of inflation within a country are possible.

[@Tyler_W]

Considering the BRIICS nation's are wanting a new global reserve currency, you so sure the dollar won't collapse?

[@peterfmodel]

@@Tyler_W If an alternative reserve currency ever emerges, then the US dollar will be in real trouble. The issue with creating an alternative market is the largest market, in terms of money, is the western bloc. Even the old Soviet Union ended up trading with the west back in the 1980’s because that western money was too hard to resist. The only medium term threat is if a viable trading bloc reserve currency, similar to the Euro, emerges in the BRIICS bloc. If this does occur the demand for US currency will drop, but will not totally be eliminated as the various trading bloc will still trade with each other in US currency, as occurs between the EU and the rest of the world. But I even doubt this will occur because its all about trust, no one will ever trust the Yuan as the CCP will always manipulate it for its own personal benefit.

[@georgepalmer5497]

Someone said on the internet that something like the top 150 corporations in the U.S. do not pay any taxes. The government might get some revenue there.

[@tanvikishan5198]

He won’t agree with that. He is sucker for all those corporations. Dude has problem with social security and Medicare that is keeping 2/3 of our senior citizens above poverty.

[@gregbeaudry]

I think there are 2 flaws in your logic regarding the dollar crash. First, the petrodollar is basically done. OPEC is going to the way of the gold standard after the 1970’s. BRICS will be purchasing oil in their own currencies (or in Yuan/rubles) by next year. This means that foreign nations will no longer need to hold the American Dollar as their reserve currency. Second, you don’t mention the loans to foreign banks in the EU and our Allie’s in Asia. For instance, Japanese banks received billions in dollars due to Pandemic Relief programs, so it’s important that other countries will play a role in the dollars devaluation. The Dollar is not just an American currency, but rather a global one. When it starts to devalue, other nations will seek to spend it while it’s value is still relatively high, further increasing the global rate of inflation. If you look at debt to gdp to military spending, the world looks very much like it did during the first and second world wars. There may be a global conflict in order to try to reset nations’ debt, however the more likely scenario is that the world will bifurcate like it did during the Cold War. The West will necessarily have to reset our currencies in order to function in this new system.

[@alp.9672]

You must watch AMTV because that is exactly what you sound like

[@gregbeaudry]

@@alp.9672 No idea what that is. The only non-mainstream sources I watch are China Insights, China Uncovered, Wendover/half as interesting/Real life lore, And Caspian Report for international news. Other than that it’s BBC, RT, Forbes, and Daily Wire.

[@gregbeaudry]

@@alp.9672 kzbin.info/www/bejne/fIG2gI15g9Z7ms0

[@alp.9672]

@@gregbeaudry It is a youtube channel, your write up sounds exactly like his views. So you believe we are going to experience a global economic reset?

[@gregbeaudry]

@@alp.9672 it’s not a matter of belief. It’s recognizing trends. You listen to what the billionaires and politicians are saying to each other, then you look at the markets, then the global political landscape, then make an assessment. The growth built upon quantitative easing is unsustainable, but we won’t go back to a “goods backed currency”, so governments will have to reset their currencies by necessity. History doesn’t repeat itself but it rhymes.

[@richardjames9918]

A few more comments as I watch through this video, the analysis on savings government versus consumer, completely misrepresented. In the 40s the household savings went up because the government was issuing T bills to the consumers. Now we have international markets. The government is borrowing money from all over the world. Not only that until very recently we are borrowing an extremely low rates. Rates that are in effect after adjusting for inflation, negative. He is right about the recent spike in government debt brought on by the Trump tax plan followed by stimulus packages from biden. We received none of the promised benefits of the Trump tax plan and have kicked the can down the road to the next generation. But, as the economy goes, things are adjusting we are now seeing High inflation which is exactly what we would expect. The value of the money that we borrowed as much less than when we borrowed it relatively speaking.

[@JASHJustASectionHiker]

Your video is very informative. I don’t agree with everything but most of it is spot on. Government COULD correct its bad behavior but it appears to act more like a drunk that is in sole possession of keys to the fiscal liquor cabinet.

[@firefalcoln]

Terrifically presented information both narratively and visually. It really makes a lot of the economic stuff much easier for me to understand. It’s common for people to present the doom and gloom of the U.S. economy or the fact that the United States is doing so well globally. But surprisingly both are kind of true depending on how you analyze and contextualize the data.

[@adventurebabyboomer7318]

If private investment will suffer as a result of the economy, it means American infrastructure conditions will decline (derelict). The country will become less developed. (electric grids, airlines, water crises, food shortages).....

[@willpatterson4866]

What was the corporate tax in the 50's under Eisenhower?

[@ransomholbrook7428]

This video I can agree on 100%. If it wasn't for the fact that our more socialistic friends were doing way worse economically, our dollar would be in the toliet and we have hyper-inflation with a collapse around the corner.

[@kerwinbrown4180]

Technically we are doing bad but we export some of that to others that also heavily invest in the dollar. That is the benefit have having a monopoly on the world currency.

[@landanwarren5394]

Small family farms are the future of America. Food will always be in high demand.

[@stewiesaidthat]

Small family farms are vastly inefficient at producing food in sufficient quantities to be affordable for the masses. They serve one purpose only and that is to fill a niche that is not profitable on a large scale and that people are willing to pay a premium for.

[@landanwarren5394]

When America is a 3rd world country and people see that you can't eat money. Farmers of all sizes will be on top.

[@scenekid0014]

It’s an incredibly awful oversight to not include impact of changes to tax code and distribution of tax revenue over time. That’s had such a direct impact on the broader economy it makes it seem like your intended takeaway message is costs and the problem while ignoring revenue. I also disagree that taxes implicitly hurt the economy. It depends on who, how, when, and how much the person or entity is taxed. Taxes can incentivize corporate investments that directly improve the nation’s productivity - and can even offset cost of mandatory spending when companies put those resources back into their employees Even the examples you cited were a bit strange as water systems, flight cancellations, and power grids all have root causes separate from the federal government. Everyone is involved in water systems including federal, state, and local officials. Flight cancellations are because airlines downsized their workforce (against the bailout agreement) during covid and wasn’t expecting a sudden, strong return to travel…and there weren’t consequences for them cancelling flights (not from government or the market because airlines have a near monopoly on long distance travel). And power grids are being pushed further as we reach record temperatures, CA made investments to upgrade their grid but arguably not in the optimal places as - while the grid didn’t fail - voluntary limits aren’t ideal either. I know even many economists don’t agree with one another so I’m taking the video in good faith. But, I really like this channel so I’m hoping this was a bit of a hiccup.

[@fusion9619]

Laffer Curve will help you with the taxes

[@alberts9781]

Im confused, you compare total debt ratio's of different jurisdictions but you forget to mention whom they are borrowing from. If a country has a higher debt ratio however this debt is owed to itself how does this matter, no interest payments are leaving the country so it should not effect the net savings rate of the country in aggregate. Unless you wanna suggest that low productivity debt is displacing higher productivity debt, which I could agree with but then the total debt ratio doesn't make sense seeing as this includes both productively employed debt and non productively employed debt.

[@floridaray3380]

We need to increase debt so the dems can continue to buy votes.

[@pgrut8880]

Does that savings rate include contributions to retirement accounts.

[@ryguy4067]

So how do you fix the issues?

[@jaysondelapena8586]

isnt it very contradictory that the government is spending less gdp on private investing? yet the same big money is the one sending millions of dollars in lobbying and making government assets more and more privatised causing less and less spending on private investing?

[@paulriggsy99]

Why strip out residential investment?

[@razial5745]

Just subscribed. You're content is amazing.

[@garrettpazdera8593]

New favorite channel

[@michaelbaker5501]

What can the US government do to fix this?

[@jimc4839]

So basically we're screwed.

[@farhanalimahomed]

Another masterpiece Eric, great stuff.

[@sagitta4291]

Fantastic video Eric, super well presented as always.

[@draye872]

GREAT VIDEO. ALL FACTUAL INFO. VERY HELPFUL! Thanks!!!

[@TheHarimir]

man lisening to the american idea of what a governments spending shoud be is pure terror

[@fryser007]

Your chart animation skills are off the cha... very good.

[@DjDiemonte]

Research is impeccable and those video edits god damn...

[@pmbboc]

Well done video thank you!

[@ashishjain871]

Yet another beautifully made video with great animations and easy to follow charts. Simplication of such concepts requires real skill and a strong background. Respect.

[@samphares8057]

Could you dive deeper into the content at minute 8 on physical investment in the private sector? I’m specifically interested in what’s driving this I.e. is it lower profits, less that ideal investment opportunities, leadership choices, or something else in the design of our system.

[@kzen848]

Great content! Going to watch it a couple times.

[@trunghoang-jummyegg]

I felt guilty watching 2 videos (before this one) from you and not subscribing. I had to after this one. So very much useful. Please keep it up!

[@LightYagami_99]

Completely agreed. The worst part about it to your point is that the global market operates better when there is more good collateral exchanging hands ie treasuries, bunds. To your point, government deficits are likely to increase dramatically going forward.

[@jonleavitt8177]

What if the foreign sector no longer agrees to finance the deficit? Please do a video on that.

[@MojoRevelation]

I think if government spending properly (which is asking a lot) on projects that help the country like infrastructure, power plants and other projects could help the economy and improve the over well being of the nation.

[@denniswatson6622]

Thanks for the well-researched video!

[@Mrfoo2002]

Airlines are private entities. What does that have to do with gov?