Why the US is always hitting a "debt ceiling"
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2 роки томуIs the huge US national debt a problem?
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Nearly every year, America seems to teeter on the edge of a crisis as the national debt comes dangerously close to hitting the “debt ceiling” and the President and Congress fight over raising it. The “debt ceiling” is really just a limit on how much debt the country can take on. While the US isn’t the only country to have one, it is the only country to have legislation that regularly puts it on the brink of economic disaster.
The current US debt is nearing $29 trillion. That's a trillion with a T. Is that… too much? And who does it affect?
Want to know what the US national debt is as of right now? Here’s where the Treasury has it updated: fiscaldata.treasury.gov/datas...
The Treasury also updates the foreign investor totals every month: ticdata.treasury.gov/Publish/...
You can read more about the US debt ceiling and how to fix it from Vox’s Dylan Matthew: www.vox.com/policy-and-politi...
And more about when the US was downgraded in 2011: www.washingtonpost.com/busine...
If you want to see what your country’s debt is, the OECD keeps this data updated regularly: data.oecd.org/gga/general-gov...
Vox.com is a news website that helps you cut through the noise and understand what's really driving the events in the headlines. Check out www.vox.com.
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@Vox 2 роки тому
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 2 роки тому
Thank you for providing with such a high quality content with free access.
@scpatl4now 2 роки тому
@@ThitutUhthalye Too bad this isn't one of the quality content videos. It gets most of it completely wrong
@henrygustav7948 2 роки тому
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 2 роки тому
0:35 "They pay a bit more" it's DOUBLE the amount???
@dloresch4 2 роки тому
@@henrygustav7948 yeah, because simply adding or subtracting zeros across the balance sheet has worked fabulousness for: weimar Germany, Zimbabwe, Venezuela, ect
@The_Horizon 2 роки тому
its like constantly hitting the snooze button
@thecrippledpancake9455 2 роки тому
America must never wake up and get out of bed. That would be catastrophic.
@kirchoff4733 2 роки тому
No it's not.
@AverageUsernames 2 роки тому
@@thecrippledpancake9455 Welcome to the american dream, because you have to asleep to feel it.
@dickgoblin 2 роки тому
No, it is most certainly not.
@karimaogden3875 2 роки тому
@@AverageUsernames Wise words from the late comedian George Carlin!
@FinancialShinanigan 2 роки тому
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 2 роки тому
America, The Proscinator
@furiouslemmings5207 2 роки тому
Its basically like late 1930s appeasement
@Lyf4rMusic 2 роки тому
by now, it's just seems like it's a formality !
@harry5326 2 роки тому
Appeasement
@horatiokim7141 2 роки тому
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.
@nicolasbenson009 7 місяців тому
The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
@felixf4378 2 роки тому
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 2 роки тому
@ ý 6t 6@ ytlpkiuyyrrewqqakgdwmbcz-z . UKposts,,
@analcommando1124 2 роки тому
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 Рік тому
Exactly
@cancanjaker1620 11 місяців тому
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 2 місяці тому
@@analcommando1124ur reply reminds me of a meme
@nebuchadne33ar 2 роки тому
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 2 роки тому
It’s a way congress can blame the president, nothing more
@Sparticulous 2 роки тому
@@vegardbless5699 blame the president for the spending congress sets.
@Lyf4rMusic 2 роки тому
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 2 роки тому
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 2 роки тому
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.
@Brownyman 2 роки тому
"By the time it becomes a real problem I'll be dead" is humanity's greatest problem of all.
@AlaskaPirates 2 роки тому
boomers fuckd this country so hard
@saikatbag3961 2 роки тому
@@AlaskaPirates Don't confuse me. Some Americans say they were the best generation and you are saying they are not.
@saikatbag3961 2 роки тому
Actually i also think like that.
@openlink9958 2 роки тому
@@AlaskaPirates nope, 40% of all US dollars were created on 2020, this problem is ours
@yetekt8025 2 роки тому
@@AlaskaPirates aside from the fact most of the heavy inflation has been happening now
@ANNAZ1NG 2 роки тому
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 2 роки тому
omw to get a $1000000000000000 loan
@gonun69 2 роки тому
@@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 2 роки тому
Too big to fail
@Liukanginthehouse 2 роки тому
are you quoting Bill Hwang?
@ANNAZ1NG 2 роки тому
@@Liukanginthehouse i think so
@Skybar23 2 роки тому
Imagine how much money the US would of saved over the 20 years it wasted in Iraq/Afganistan
@tsaints852 2 роки тому
I would say $4 trillion in today's dollars. However, that is an estimated guess.
@jerome0929 2 роки тому
Thank Bush and his Friends, but hey now all of them are billionaires
@josealbertoriveradonan2761 2 роки тому
The money for the democrats socialist bill
@StockyDude 2 роки тому
@@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.
@disciplinedgrindset623 2 роки тому
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 .
@salmay4266 2 роки тому
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 2 роки тому
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 2 роки тому
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 2 роки тому
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 2 роки тому
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 2 роки тому
Have you seen Japan?
@Samppwli 2 роки тому
I like how one of the analyst just said "this would work with functioning congress"
@MissS1989 2 роки тому
It's so true tho, and embarrassing for America.
@thebravegallade731 2 роки тому
and it HAD, untill 2011.
@alastairhewitt380 2 роки тому
We desperately need a new system of government
@Healthandwealth9422 2 роки тому
Key word functioning
@JatPhenshllem 2 роки тому
I laughed at how much sad truth it implied
@FindTheFun 2 роки тому
I love how literally no one knows how our global financial system works anymore. That definitely won't ever become a problem.
@TiagoOrange 2 роки тому
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 2 роки тому
Already is a problem
@Frostie323 2 роки тому
Less tax revenue, more spending, more countries using different currencies and less US debt being purchased. It will 100% become a problem.
@lewis123417 2 роки тому
Most people don't know much about anything, that's irrelevant.
@FindTheFun 2 роки тому
@@lewis123417 Another pearl of wisdom from the UKposts comment sections.
@dunglaovoitao 2 роки тому
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 2 роки тому
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 2 роки тому
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 2 роки тому
@@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 2 роки тому
It will not be just another recession
@Laxton07 2 роки тому
@@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 2 роки тому
USA *every year* : "Oh we are about to touch debt ceiling" Denmark: "Lemme draw the line once and for all"
@haeveen8255 2 роки тому
China : My time has come! To become the World superpower. 😈
@MaydayKeeper 2 роки тому
@@haeveen8255 Japan: Nope
@haeveen8255 2 роки тому
@@MaydayKeeper . Pay your debt first Homie.😈 Remember your Debt is higher (GDP Nominal - Debt) Than the US.
@deshandouglas136 2 роки тому
Bank 🏦
@plumebrise4801 Рік тому
@@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 .
@arheo9702 2 роки тому
this was a really good video because i fully did not understand how the national debt worked untill this
@dathguy556 2 роки тому
they don't explain it well for the American context. Read super imperialism by Michael Hudson.
@Lyf4rMusic 2 роки тому
@@dathguy556 well, I'm not American but I understood it well. I guess the basic version of the US Debt.
@peterisawesomeplease 2 роки тому
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 2 роки тому
@Vox Q and A
@thrisbt1 2 роки тому
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.
@kimyoung8414 Рік тому
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 Рік тому
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@Chineseconcrete 11 місяців тому
THIS IS A SCAM. THE PEOPLE ABOVE ARE NOT REAL.
@Aznprada 2 роки тому
It's amazing how many people don't understand this. This should be basic training in schools but its not.
@thespooner3906 2 роки тому
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 2 роки тому
Too busy teach CRT and pushing socio-political agendas
@soggmeisterlasagnagarfield 2 роки тому
We went from no education to a failing education. And we haven’t passed the latter.
@paulrendon7570 2 роки тому
Not sure about other states but this is covered in California (all students required to take an economics and US government class)
@user-ti6ix5tn2o 2 роки тому
@@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?
@Thebreakdownshow1 2 роки тому
Because the ceiling can't hold us. - Macklemore
@duncansiror5033 2 роки тому
I used to love that song
@Thebreakdownshow1 2 роки тому
@@duncansiror5033 every now than I use it as my hype music before shooting a video.
@UntitledLess 2 роки тому
Was this Macklemore’s real intention?
@eliezerarvelo7372 2 роки тому
Nah. It's actually because my country is always asking the US for money.
@Thebreakdownshow1 2 роки тому
@@eliezerarvelo7372 what is your country?
@benkoskinen3871 2 роки тому
This is basically Goodhart’s Law: when a measure becomes a target, it cease to be a good measure.
@futurecorpse8253 2 роки тому
Kindly elaborate, good sir.
@wyntyrmute 11 місяців тому
No, it's nothing like that.
@Mr-sweeny 5 місяців тому
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 5 місяців тому
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@1.4142 2 роки тому
This is like postponing the deadline for a homework assignment.
@tremondial 2 роки тому
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 2 роки тому
It seems that you are very familiar with this aspect, do you often watch z'zheng
@roadrunner6224 2 роки тому
@@rainy4217 nah he is just german
@oliverm1255 2 роки тому
tbh if germany is doing it it is probably a good idea
@rainy4217 2 роки тому
@@roadrunner6224 How do you know he is german
@roadrunner6224 2 роки тому
@@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.
@djcfb2889 2 роки тому
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 2 роки тому
so basically faking it? that sure went well in 2008..
@functhefucc5798 2 роки тому
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 2 роки тому
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 2 роки тому
It is inefficient spending.
@braincell4536 2 роки тому
@@zUJ7EjVD or you know. Raise taxes on the rich and whenever they sell their stocks
@RichardJohnson-rm2sft 11 місяців тому
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 11 місяців тому
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.
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@WAMTAT 2 роки тому
maybe if the U.S. stopped spending so much on the military this wouldn't be an issue.
@tremondial 2 роки тому
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 2 роки тому
That is such a small portion of the debt though. 600 billion vs 28 trillion
@adrianconete1864 2 роки тому
Or maybe it should tax more big corporations and very rich people, and less the poor and middle class.
@bradley8575 2 роки тому
Well the US only spends 650 Billion dollars on the Military out of our 21 Trillion Dollar GDP Economy.
@GunplayIsntGameplay 2 роки тому
@@tremondial Yeah adding sanctions to countries because of their relations with other country's is definitely economically damaging.
@ratkutti 2 роки тому
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 2 роки тому
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 2 роки тому
This guy is spitting facts
@braincell4536 2 роки тому
@@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 2 роки тому
factsss
@Joseph-ub5wh 2 роки тому
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.
@casienwhey 11 місяців тому
Imagine if you were drowning in credit card debt and could just barely pay the interest, rather than accepting you were insolvent and needed to restructure your finances and take some bitter medicine along the way, you were able to obtain still yet another credit card and paid your current creditors with the new credit you were just extended and also now had more interest to pay as a result. That is what the US is doing.
@therevelator31 2 роки тому
Looks like decades of spending trillions of dollars on futile wars and not taxing billionaires has consequences
@josh3471 2 роки тому
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 2 роки тому
@@josh3471 then they could just invade the tax havens and then it would be us soil.
@harukrentz435 2 роки тому
@@MaydayKeeper you have any idea how much wealth possesed by that 1% group?
@soggmeisterlasagnagarfield 2 роки тому
For example, Trump has off shore accounts in Putin controlled banks in Russia. So technically he’s stealing the nation’s money legally.
@josh3471 2 роки тому
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.
@patrikstreng6834 2 роки тому
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 2 роки тому
and not because US keep printing money at their own will?
@patrikstreng6834 2 роки тому
@@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 2 роки тому
@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 2 роки тому
@@patrikstreng6834 great explanation!
@maximvs3834 2 роки тому
Post scarcity is the solution
@FakeAssHandsomeMcGee_ 2 роки тому
I love the part of the government owing money to itself. Sort of like if you borrowed money from your other personality and that other personality is demanding payment.
@substanceandevidence 2 роки тому
It just shows how the explanation is incorrect. It's not real debt bc the gov can issue as many dollars as it wants. It's just surplus spending that hasn't been collected through taxes yet
@drewmortenson 2 роки тому
@@substanceandevidence Well sure, the government *CAN* print as many dollars as it wants, but if you look toward Germany after WW1, you realize that's not necessarily good. Absolutely not a solution.
@lonelychameleon3595 2 роки тому
@@drewmortenson - Germany after WW1 and the US are in different situations. The US is the largest economy in the world and the US Dollar is the global reserve currency. Germany was a broken nation that was bankrupted by a war and had its main economic regions occupied by a foreign power.
@Karlach_ 2 роки тому
@@drewmortenson No no no no no. You are forgetting the biggest ace up the US's sleeve- *the US dollar is the world's reserve currency.* This gives the United States MASSIVE power over the world economy and lets it do and get away with things no other nation on Earth can do.
@tacosmexicanstyle7846 2 роки тому
@@drewmortenson nah. The Fed can print a lot of money without getting to hyperinflation, the limit on printing/borrowing is dictated only by whether those dollars can actually be invested anywhere in the economy for growth. ie. the limit is employment. That’s why the govt prints money in bad times (like the $3 trillion it printed last year) and literally nothing bad happens, but not in good times when employment is near full.
@donaldkinsey5245 Рік тому
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?
@susannnico 10 місяців тому
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@lailaalfaddil7389 10 місяців тому
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@susannnico 10 місяців тому
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@lailaalfaddil7389 10 місяців тому
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@mdrzn 2 роки тому
0:35 "They pay a bit more" and show a graph where Tesla pay DOUBLE what Microsoft pays.
@dickgoblin 2 роки тому
What?
@mdrzn 2 роки тому
@@dickgoblin What what? Click the timestamp and tell me if 5.3 is "a bit more" than 2.5
@dickgoblin 2 роки тому
@@mdrzn yeah that's more than double.
@TheBooban 2 роки тому
@@dickgoblin more than
@rkan2 2 роки тому
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.
@Tustin2121 2 роки тому
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 2 роки тому
Garbage Truck Simulator is appropriate for Vox.
@RichTapestry 2 роки тому
@@Bonzi_Buddy Thanks Bonzi Boomer
@jayski9410 2 роки тому
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 Рік тому
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 6 місяців тому
It’s actually money we do have. If it can be borrowed, and used to some purpose in the economy, then it certainly exists.
@heavymetalrox268 2 роки тому
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?
@user-gc1hg9sp9k 2 роки тому
Basically debt limit is like nuclear bomb for opposition party
@ShadowGaming-xw8zj 2 роки тому
The debt ceiling and defaulting have nothing to do with each other defaulting just means you didn’t pay your debt
@DevDev-dm3st 2 роки тому
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.
@inveniamviam4691 2 роки тому
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 2 роки тому
No you're not
@fionafiona1146 2 роки тому
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.
@IsaakvonKaempfer0 2 роки тому
I rather think that (global) inflation is a bigger threat to Germany bcz of it's export economy
@20Maxi20 2 роки тому
Germany has a debt limit (called “Schuldenbremse”)
@Elucidator- 2 роки тому
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 2 роки тому
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 2 роки тому
@@20Maxi20 That's an household comment not extending to all institutions
@redrum86 2 роки тому
They might as well just raise the debt ceiling to infinity.
@feydeway Рік тому
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.
@jamesregli4754 2 роки тому
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 2 роки тому
It would take only one day for that confidence to be lost. So the chickens choose to enjoy today happily.
@sharann3482 2 роки тому
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 2 роки тому
@@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 Рік тому
@@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.
@joshhalliday7903 2 роки тому
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 2 роки тому
Wow, a wild Ned's Declassified reference!
@joeykeenan2079 2 роки тому
I’m so happy I got this reference! 😂
@Lyf4rMusic 2 роки тому
The great debt taking country and how addicted they are to it :)
@Shadowman820 2 роки тому
One big reason is because they spend too much on defense and lowered taxes too much , especially for the rich .
@astrofxmining1393 2 роки тому
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 2 роки тому
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 2 роки тому
@@joygiver9347 You're right but any Investment without a proper understanding is suicidal.
@mulizimustapha4406 2 роки тому
@Funmi Tejeey Yeah Investing in crypto currency is so lucrative.
@jameswinter6902 2 роки тому
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
@morenahlatshwaya8067 2 роки тому
Most people don't invest due to ignorance and discouragement from family or friends.
@Thehackerguy2000 2 роки тому
Since we ain’t in Afghanistan anymore, can we cut some of the pentagon and military spending?
@barbariandude 2 роки тому
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 2 роки тому
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 2 роки тому
@@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 2 роки тому
@@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 2 роки тому
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
@bangbangninergang7573 2 роки тому
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 2 роки тому
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 2 роки тому
@@smokinace926 good point
@mokooh3280 2 роки тому
@@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
@kierand9410 11 місяців тому
Stunningly clear articulation of the issue at hand. Well down to the design team. Subbed!
@DavidOrlandBrown 2 роки тому
Thank you, Vox. I gain so much value from your videos.
@gilpo 2 роки тому
0:45 I can’t imagine what Portugal’s debt must be like for them to be cut off the map
@dynamitedmt666 2 роки тому
It isn't even gray like the ones without information which makes it even weirder! It's a BBB rating since 2019 btw ;)
@pedrobarao4558 2 роки тому
Yeah it must be the worst of all. It even made my country sink to the ocean
@afonsocampos166 2 роки тому
@@pedrobarao4558 😂😂
@TheBooban 2 роки тому
@@pedrobarao4558 its debt is under water
@YourLocalMairaaboo 2 роки тому
Don't worry! They probably just lumped us in with spain by mistake.
@benkula 2 роки тому
This is one of the most informative videos I’ve ever watched. Amazing job Vox!
@luciflash 2 роки тому
That was nicely done; and informative.
@MoreBestEverFoodReviewShow 11 місяців тому
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.
@lu881 2 роки тому
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 2 роки тому
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 2 роки тому
Yes. There is a country that does this, Argentina.
@ChumX100 2 роки тому
Printing money to pay your debts, what could go wrong?
@pistolen87 2 роки тому
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 2 роки тому
@@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
@K4R3N 2 роки тому
"This Time is Different" is a great book on the topic
@skewdtchr85 2 роки тому
I learn a vast amount of info from Vox, TedTalks, and a few others. Thank you for all the background on specific things.
@arnisrus 2 роки тому
that's a really fascinating topic!
@xxbrian69herxx88 2 роки тому
I would like to remind everybody, if you are against spending because of the debt, then you should’ve been against Trumps tax cuts for the rich, and any spending on the military budget in which the country spends trillions. Just be consistent.
@rainy4217 2 роки тому
Thank you for your reminder, it is very useful for me or everyone
@texaswunderkind 2 роки тому
For all the rhetoric, the effective tax rate for Americans has not changed more than a percent on either side of 24% in 30 years. The income tax rate for the wealthy is higher, but rich people don't make money through their paychecks. Most have investments that have capital gains only when sold. The tax rate on capital gains is 15%, unless you're really loaded, where it jumps up to 20%. That's why I don't shed a tear when some billionaire complains about all of the taxes they are paying.
@diegomontoya8889 2 роки тому
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 2 роки тому
Yes, modern American politics is like this, and there are also 6 to 7 nians who come to the United States.
@yohji4309 2 роки тому
household debt != government debt
@jrus690 2 роки тому
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 2 роки тому
Unfortunately politicians are incentivized to care more about their next election than about the long term
@MartinPoulter 2 роки тому
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.
@splattrick2432 11 місяців тому
Best explanation I've seen! Thank you Vox!
@zacharybohlman4069 2 роки тому
3:24 how is it "win win" if your interest is less than inflation and that $1000 is worth way less in real terms
@oterenceo 2 роки тому
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 2 роки тому
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 2 роки тому
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 2 роки тому
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 2 роки тому
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 Рік тому
@@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.
@PSgameFilms 2 роки тому
If the U.S. cut their military expenditures by 50% that would surely help.
@kirchoff4733 2 роки тому
That would mean less influence in a world already run by autocrats.
@mutav2166 Рік тому
@roasted pancakes It's now 30 trillions.
@williamkesler2373 2 роки тому
Because the government is spending money they don’t have. And rather than figuring out how to balance the budget, they proposed 3.5 trillion more, then count it as a victory if they can cover the cost of that, never mind what’s already accumulated.
@bobbender5858 Рік тому
This video was excellent!, Thank you!!!
@hikari_no_yume 2 роки тому
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 2 роки тому
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 2 роки тому
@@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 2 роки тому
@@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 2 роки тому
@@rjfaber1991 Exactly. Therefore, the original comment presents a moot point at the end.
@tacosmexicanstyle7846 2 роки тому
@@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.
@tsuchan 2 роки тому
I'm conjecturing that the bond 'interest rate' isn't actually static for a given risk level, but also: - Depends on the prevailing Minimum Lending Rate, because otherwise bonds will become unattractive relative to other investments - Will be some exponential factor of the MLR. Because if the reward for taking on a riskier bond is 4% interest instead of 2%, that 2% difference is an attractive doubling on return. But if the baseline is 10%, then raising by 1/5th (+2% interest rate) to 12% doesn't look such an attractive reward for the additional risk. Is that how it works?
@letstalkwithwarren3028 Рік тому
I’m watching this at 31 trillion
@michaelchan8031 2 роки тому
thanks for the simple explanation 👍🏻
@mt8956 2 роки тому
Cut programs and just keep the ones we can pay with taxes and not bonds. Cut the military spending by 50%
@subotaiKhan 2 роки тому
They are NEVER going to cut military spending.
@udbhavsingh8608 2 роки тому
China wants to have a word with you
@bradley8575 2 роки тому
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 2 роки тому
Cut programs? No. These programs have a sense.
@udbhavsingh8608 2 роки тому
@@bradley8575 705 to be exact , thats only 10% of budget. You spend more on healthcare , 1.4 trillion.
@LucaBl 2 роки тому
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 2 роки тому
Debt brake sounds like a good law
@jimpad5608 2 роки тому
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.
@vladimirglutentag1469 2 роки тому
I recommend CGP Grey’s video too for those looking. “The Debt limit explained” is the video. It’s helpful for a more digestible explanation.
@ElyasBinYahya 2 роки тому
So, the debt ceiling is a self-inflicted “ticking time bomb”. 🙄
@Abram-Delgado 2 роки тому
Yes.
@Sudupe16 2 роки тому
6:45 That graph shows the debt temporarily decreasing by a lot, I don't know if that'll ever happen.
@verticalfracture 2 роки тому
Clinton left Bush with a federal budget surplus it took Republicans a year to go back to massive deficits.
@henrygustav7948 2 роки тому
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 2 роки тому
I don’t think it has ever happened in history- but empires collapsing do!
@shrayesraman5192 2 роки тому
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 2 роки тому
@@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)
@ashishxx 2 роки тому
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 2 роки тому
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 2 роки тому
@@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.
@GeneralSalt Рік тому
Gov't always hits the "debt ceiling" because it spends frivolously on things like the OmniBus bill. Cantillon effect for politicians and wall street.
@FutureAIDev2015 11 місяців тому
I'm only halfway through the video right now but this is a much better explanation than other sources that I've looked at. I'm now slightly less confused than I was before because I was originally taught that debt is defined as when you spend someone else's money and they want their money back at some later date usually with interest, and that being in debt is always bad.
@migsvensurfing6310 6 місяців тому
It is always bad. The US just pushes the problem onto the next generation because they want to be reelected at the next term. The cardhouse will come down at some time.
@baronvonval5353 2 роки тому
*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 2 роки тому
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 2 роки тому
Stock are Good Too
@lilianmacarthur5465 2 роки тому
I actually started trading investing in Bitcoin before lockdown, now I made a lot of profit more than I expected
@prakritibhusal7356 2 роки тому
I heard that his strategies are really good
@stanlyscheider4767 2 роки тому
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
@BrokenMedic 2 роки тому
“The us come close to hitting it , but it’s then raised.” Maybe we should ask why we keep raising it.
@BLUEBoyPlayzPH 2 роки тому
3:51 BRO that record scratch spooked me, i was just listening while studying LOL
@diablo55 2 роки тому
I like at the end they say “we could just repeal it…” We don’t have time for rational solutions!
@CatchyNameF1 2 роки тому
At 5:58 I like that the script considers workers salaries and social programs less important and must be cut first, than debt obligations to the richest 0.1% of the world. Nice one Vox.
@stovehanes 2 роки тому
That’s not just what the script considers, it’s what actually what happens
@therealcool1144 2 роки тому
Credit rating for monetary sovereign countries are useless. Those governments will always have the money to pay the bonds.
@M69392 2 роки тому
No, countries have defaulted in the past. It depends on a number of things including central banks and exchange rates.
@therealcool1144 2 роки тому
@@M69392 US and Russia did, but it was a political choice. They didn't have to.
@M69392 2 роки тому
I doubt Argentina always had a choice (9 times)
@kaushalpatel75 11 місяців тому
loved explanation
@FakeAssHandsomeMcGee_ 2 роки тому
Knowing America the govt usually tends to do something the most inefficient way possible.
@rjfaber1991 2 роки тому
It's almost like that famous quote often attributed to Winston Churchill: _"You can always trust the United States to do the right thing, after they've exhausted all other options."_ He was using 'the right thing' in a moral sense, but I suppose it works in this sense too. Efficiently doing anything certainly isn't in the US' nature.
@TheSpatulaCity 2 роки тому
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 2 роки тому
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 2 роки тому
Tax the rich
@nadie8093 Рік тому
Or the goverment will just raise the ceiling in advance and by a higher margin, laeding to basivaly the same result
@Zeverinsen 2 роки тому
"We could change the tax system" Ah yes, a logical solution... Too bad that's impossible!
@jiminlargo 2 роки тому
we could cut the pay of all elected officials and limit their time in office..........
@analcommando1124 2 роки тому
@@jiminlargo That would account for 0.0000001% of the budget. Big deal. How about we make billionaires actually pay tax?
@CJjefferson94360 Рік тому
Very informative
@kkk2.077 2 роки тому
Debt is a tool for development. China did same during 2008 recession . Japanese debt is mostly held by its own citizens and japan has invested that money in foreign countries like USA/China /India . Because their economy is not growing that much so this is the way they fund their elderly population. Method is You take debt-> spend it in your economy-> your economy grows and that debt taken look small when compare to enhanced gdp -> take more debt -> cycle repeat
@royhuang9715 2 роки тому
Or you can do the USA way. Take debt, give it to the rich people, let them keep it.
@dakshjhamb5514 2 роки тому
@@royhuang9715 take debt start a massive wealth distribution program in the name of war
@dikshitaravariya836 2 роки тому
This one works for Japan because they opted to have a weak currency even if they have a good economy. That is the advantage of weak currency.
@kkk2.077 2 роки тому
@@dikshitaravariya836 Japanese currency is stable , it's even used as reserve currency by many countries to diversify their forex reserves .
@KaranSingh-yn4sr 2 роки тому
Weak here means it has low exchange rate to dollar. I think It was 100 yen to 1 dollar .
@jeffreymarshall4572 2 роки тому
We shouldn’t need a debt ceiling. We should be able to trust the government will regularly balance a budget.
@lostandlonely2112 2 роки тому
This is sarcasm, isn't it?
@nbibby 2 роки тому
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.
@nicolajrath1570 2 роки тому
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 2 роки тому
@@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 2 роки тому
@@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.
@learntostrafe Рік тому
Paying off all the debt would do nothing. As long as the US does their payments then it's going to be exactly the same as if they payed it all back.
@eggmannghi1515 2 роки тому
wao, the video illustration is so gooddd!!!
@robzonefire 2 роки тому
Good thing CGP Grey already taught me this lol
@championofwits4621 2 роки тому
Which video ?
@ocadioan 2 роки тому
@@championofwits4621 The debt limit explained, by CGP Grey
@internetazzhole7592 2 роки тому
Working hard is worthless Just be Rich.
@Duck-wc9de 2 роки тому
the problem with finantialy responsible polititians is the fact that people dont vote for them
@cristianalbert6389 11 місяців тому
Having a deficit for long term will work only if GDP will grow infinitely. But it is not possible to grow your GDP infinitely so we need to change our economic policies and philosophy.
@Kalinga_3 2 роки тому
India has a similar system of legal limit on fiscal deficit. Though our debt levels are far lower (in % GDP)
@indiancowpissdrinker7151 2 роки тому
Jeet
@Lyf4rMusic 2 роки тому
I doubt we can afford to borrow at such high levels (exceeding 100% of our GDP)
@asherjames1318 2 роки тому
The first time I heard Bonds here I thought I heard it as bombs and was not surprised 😂
@rushikeshsisode1533 2 роки тому
Congrats for 10 million subs 👏
@DrSwoose 2 роки тому
The US is just doing its best to build credit, don’t judge!
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