What Happens When The US Debt Reaches Critical Levels? | Business Insider Explains
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- เผยแพร่เมื่อ 21 เม.ย. 2024
- The US debt is skyrocketing to unprecedented levels not seen since World War II. Our Investing Correspondent Laila Maidan explains how we got there, and how this looming financial crisis could impact you.
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What Happens When the US Debt Reaches Critical Levels? | Business Insider Explains
![[TH]FFWS SEA Spring 2024 Final](http://i.ytimg.com/vi/TK2mu-8yBFU/mqdefault.jpg)
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
I call retirement the "just in case I get let go fund!" I am far off from my goal I doubt I will ever have retirement. Heck I am already tired - I am ready to retire!
@@donna_martins The US Government seems to have problems finding Money to support the US Economy.
So do not go and feel like you are the only one with economic problems.....
The American Dream is supposed to be about getting ahead, but inflation feels like it's pushing me backwards. Just trying to make ends meet is a struggle
Inflation can be discouraging, but it's not insurmountable. By taking control of your finances and exploring ways to save and earn more, you can still build a secure future despite inflation's challenges.
even the Government Accounting Office that reports economic figures,
has been forced to admit that inflation is 3X Wage Growth.
That figure seems to point out the same point that you make
Without the resources that now appear content to be exchanged with other Nations that have resources to deliver, is making all G-7 Nations experience economic hardship.
The Inflated Costs that have become an economic issue for the US Government, now appear to threaten the US Currency.
So the Government now confronts the Bill Collector from other Nations who ask,
"Where is the Money?"
So the Government now seems to be having issues they can not afford either.
Notice how she never said cut spending as an option to get out of this?!
This is why things will never change. The US will default and it will be bad.
That sounds good for the rest of the world.
Hey.. we're amazing Americans we don't stop spending..
Lies again? UDK Module USD SGD
Exactly because she talked about the current amount of debts. To cut public spending is a way to decrease future debts, it won't have an outstanding impact on debts at these moment
@@sandponicsno it’d be terrible for the entire world
You know it serious when the lego blocks comes out.
I wonder if the new money will be "Lego blocks"?
This reminds me of the jenga blocks in “The big short”.
@@noclicheplease Treating Currency like it is a child's toy,
does indicate some immature understanding of Economic terms?
Are they treating the general public like Kids?
"Wait for Me Mr Ice Cream Man!"
"I have a Nickle."
Debts so high it had to be Mega Blocks instead
I love how they avoid saying cut spending
Cutting spending doesn't necessarily work.
My country had austerity to curb debt, but the debt continued to grow and it resulted in stagnant salaries for the past 15 years and a basically complete economic collapse for anyone not yet a homeowner.
@@user-ds8rj2vc4vyeah sometimes cutting spending is not an option
@@user-ds8rj2vc4v That's the correct answer. You cut spending, the economy shrinks and the debt goes up faster. I call it shrinkonomics and itz dum. It sounds good, though, doesn't it?
Periodically debt/GDP peaks, during and after WWII and the 2008-11 crisis leading to slow GDP growth. It should be clear that it's the GDP (flow) side rather than the debt (stock) side that should be the focus of a solution. You can't fix a supposed debt stock problem by reducing the GDP flow. So why isn't it clear? I'm waiting....
@@erniekeller1093
Yeah, not to mention, how much would they need to cut it in order to cover the debt?
We're not talking about making up a £100 loss. The debt is at $34 trillion. You're not solving that from cuts.
If they started taxing billionaires and offshore companies properly, that would certainly help fix the national debt problem.
Look at companies like Apple, which have over $10 billion just sitting in the bank. Apple makes about $400 billion per year, but pays a total of $17.5 billion per year in taxes. It makes about $97 billion a year in net profit after all costs etc.
So of that $97 billion, they're paying $17.5 in taxes. So about 17%. Really, they should be taxed at about 40%. Right there, that's another 20 billion that would be able to
For reference, that $20 billion is the predicted cost to feed every American child at school a lunch. I know they sell internationally and should be paying taxes everywhere appropriately, but you get my point. If more companies were appropriately taxed, then more money would be available to cover national debt and improve the living conditions of the people living in said countries.
@@user-ds8rj2vc4v The debt stock is not a problem. It's all the financial assets the economy has accumulated that the government wisely chooses not to tax into oblivion. Prove we need to do that. Tell me what problem is solved by taxing it all back.
I’m not sure why reducing any sort of government spending was not mentioned as a solution
I agree, she also should have mentioned what happens to the dollar after the world stops it as world reserve currency.
yeah like sending money to ukraine and israel to protect blackrocks investments
This! That should be the first option, but she failed to even mention it. I kept waiting for it, but then remembered why I unsubscribed to these fools awhile ago.
Propaganda disguised as information.
The government shouldn't reduce spending. Unlike you and me, it's actually a good thing when the government runs a deficit because their deficit is our surplus. If the government starts running surpluses, that would mean we in the private sector have been pushed into deficit, and thats is a recipe for disaster. This is why every depression in US history has occurred after a period of deficit reduction
"Our debt could balloon to the point of no return..."
I have terrible news for you.
Right? I'm like, "who wants to tell her?"😂😂😂
In 20 years too!!! She is beyond stupid.
Who has the Currency to support the Debts of the USA?
The $200 trillion of Derivatives estimated to lurk in the economic bushes?
The $50 billion of Commercial Real Estate debt ???
How do Fiat Currencies maintain the power to purchase products from the Nations who provide resources to enable industrial production?
Where is the actual power to purchase the products that are needed to continue the Capitalist exploitation of resources to continue the flow of funds to Cayman Island Banks who appear to be discreet about their Clients?
The shits already at critical levels.
nothing happens, japan which is one of the world's leading economies is an example of that...
After that yellow dragon fruit
@@trader2137 Japans economy is a disaster though. A perfect example of where we don’t want to be.
@@lukeh3020 We were told if a country has a debt to gdp ratio half as bad as Japans that they would suffer hyperinflation or lose control of their interest rates. None of that happened. So this idea that our debt is at critical levels is nonsense. Granted their economy has been suffering from slow growth, but that's because of their 20% consumption tax and other contractionary fiscal policies.
Been to Japan lately? We should be so lucky as to have a country like theirs.
So like, reduced spending isn’t an option? 🤔
The most obvious option, reducing the government, just isn't on the table apparently. Pretty sure they're intending on sticking *you* with the bill.
@@LyricsQuest Why hurt people by cutting public services when you can just stop selling bonds? There's no rule that says we need to sell bonds and add to the debt every time the government runs a deficit
@@grimaffiliations3671 Tax revenues apparently can't pay for the current budget, so stopping the sell of bonds/debt, would lead to a collapse of spending and cutting of public services by necessity.
@@LyricsQuest Tax revenues don't pay for anything the government does on the federal level. They're debited out of existence. Anything the government needs, it simply creates as it goes. They rolled over 120 trillion dollars worth of debt in 2021 alone. Thats trillion with a T. Besides, neither taxes nor bond sales can finance the government since spending comes before taxing or borrowing
Sure
If u want to have less money in your bank. The spending of a government is the income of the population. So, if the Government goes negative in spending, it will take money out of the system and everyone will have less.
no more retirement no more social security.. MAYBE THE US SHOULD STOP GIVING OUT BILLIONS TO OTHER countries
the solution so simple yet so complicated , always got money for other countries except for us
partly agree, but it would just go to billionaires and the less rich millionaires. Just ask 45, that was a joke and slap in the middle class's face.
Get some land, build a house and start to grow your own food. There will be more than enough shit flying around to fertilize your plants.
Reverse all the tax cuts the rich have enjoyed over the last 50 years, the US government used to not have to run debt
the social security isn't going to go to 0 suddenly, at worse it's more like the payouts wouldbe 75% what they were.
Just blame it on your predecessor and keep elevating spending.
nothing wrong with spending as long as you don't spend beyond your economy's productive capacity
his predecessor was all about spending and rich people tax breaks.
he's spending, for different reasons, but is doing it wrong here too. it's a bad combo these two.
@@w1-em4nq spending on people is much better than spending on tax breaks for rich people
@@grimaffiliations3671you all should actually read multiple news sources.
@@grimaffiliations3671he lowered tax for everyone. Biden is raising it for everyone including you so don’t worry our prices have gone up purposely. Biden is also projected to spend more than trump.
And the people who caused this will finally be gone within 20 years and we will be settled with their children making it worse while everyone else is in misery.
Yeah because no-one will think to do anything in that time...loooool Debt is just a factor in economics it isn't the entire picture
Yea they were spending it on you trying to make your life easier.
Yeah that one's laughable. Run for office and have your slogan be "Save America, raise taxes" and see how many votes you get.
It was a small group with an oversized reach of power that convinced millions of Americans across different generations that very low taxes is good, the govt. is bad, and global warming is fake.
Oh, and they convinced people of other things too such as Democrats stealing babies and such.
@@mosijahi3096 Yes, I'm so glad the 20 years worth of military spending in Iraq and Afghanistan has produced so much value on making my life easier.
@mosijahi3096 can you explain your hypothesis, good sir? I am from Switzerland and I'm very intrigued by this.
I made a video just like this while in high school in 2014 about the national debt. Sad to see nothing has changed, but nice to know the information is mostly the same.
The debt has literally doubled in the ten years since 2014. See? Something has changed after all.
@@LarifariRambazamba But not for the better. See?
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Success depends on the actions or steps you take to achieve it. Building wealth involves developing good habits, such as regularly setting aside money for sound investment...
Money invested is far better than money saved, when you invest it gives you an opportunity to increase your financial worth
It's remarkable how long term advantage people like us have gotten trying to be consistently not stupid, instead of trying to be very intelligent
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I keep seeing how lots of people testify about how they make money from stocks, Forex and crypto currencies (BTC) and i wonder why i keep losing.. Can anyone help me out or at least advise me on what to do 🙏.
"Critical levels" is such a relative term.
We just borrowed 61 billion to pay for a futile war in Ukraine that should never have happened.
wars should never happen. but Americans are weak. Big bad scary Russia, we HAVE to let them win. weak weak weak boys in America.
You sound like the people who opposed fighting the Nazis... "We just borrowed $345 billion to pay for a futile war in Europe that should never have happened..."
The "Military" jar needs to be at least 10 times bigger 🙄
The scary thing is that the the social security and Medicare jar are drastically larger than the military one and it's only going to increase as more boomers hit retirement age.
@@Watcher4187that isn’t true. The military is about 50% of all our government spending
@@Freiheit1232This also isn't true, at least not completely. Our defense budget makes up around 50% of our discretionary spending, but discretionary spending only makes up around 30% of our total budget. The other 70% is mandatory spending which must be paid in full before a single dollar can be spent on discretionary spending. Mandatory spending includes Medicare, Medicaid, Social Security, and payments on the National Debt. Mandatory spending can only be changed by changing the bills that created them in the first place.
@@Freiheit1232 military spending is approximately 15% of the US budget.
@@Freiheit1232 That isn't even close to true. It is about 13%. Transfer payments are like 60%.
Thank you for this. This video is very informative, extremely easy for anyone to understand and well edited.
Thank you for this video. I've searched other videos and taken an high school econ class but this really takes the cake for being the most explanatory, just when I had given up on trying to understand.
The debt began when the US dollar came out of the gold standard. During gold standard the rule is you can only borrow (Print) according to the amount gold reserve the treasury has, anything extra becomes worthless as it does not back by anything. After the gold standard the dollar was priced in commodities like oil, then it became popular through the easy trade system called SWIFT where the fiat currency is not backed by anything than the trust. Now the trust is gone which shows the actual burden of the debt with fiat currency with no trust or gold as its backer.
She a bit 30 years off. Must been bored lol
that explains why we had so many depressions during the gold standard, tying our entire money supply to shiny rocks was a bad idea
When the US dollar came out of the Gold Standard, Americans started spending money like their was no tomorrow, and now there is no tomorrow, and no hope of saving the USA.
@@sandponics spending money is good
Try to make few research before letting anyone trade for you like I did ❤ Thank you Jesus, God bless America.
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Sure I am a born again Christian I recommend and share what is good and profitable, (Sandrina Edmondson). That's her name
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She's a licensed broker here in the states
+1
I like how the answer is always to raise taxes….how about SPENDING LESS OF OUR TAX MONEY??
the government doesn't spend your tax money. Federal taxes are debitted out of existence
Because we need our government, spending less means there might as well not be a government. You want to live like that go to Haiti.
@@ILikeMyPrivacytbt so it’s this size government or Haiti? Don’t be that simple minded.
@@jjwallnutts4341 Okay, what spending do you think we could do without? We need defense with the expansion of authoritarian states and the loss of democratic ones, we need a safety net in times of hardship, we need education and healthcare. What do you think we should give up? Frankly I don't think we spend enough on our education and healthcare, those are things that pay for themselves but are usually the first to go when people cut taxes.
@@ILikeMyPrivacytbt you dont think there is VAST waste in each department you mentioned?? We could cut a millions bureaucratic jobs tomorrow and no one would notice.
Strong appreciation for these videos to be produced. Thank you Business Insider. The context is clear and precise. Love it.
so US of A is a 27 trillion dollar in GDP and its debt is 33 trillion dollars. Am I correct?
I can understand that it's scary for a US citizen.
She is referring to the debt hold by public
@@larskaminskidk what's the difference?
and by public you mean the US population and government except the private companies?
Debt hold by public is the total debt minus debt hold by government organisations : Social security, medicaid, medicare ect
@@larskaminskidk So according to you US population holds 33 trillion dollars in debt?
Should've used a bucket instead of glass to represent military spendings.
Defense spending is less than 15% of the total budget.
…it’s a good thing you can still recognize the helicopters that fly above Max. If the defense budget is dropped further from the 13% it is now, you might not recognize anything that flies in our airspace…
As a newbie that wants to invest, you must have these three things in mind
1. Have a long term mindset.
2. Be willing to take risk.
3. Be careful on money usage, if you're not spending to earn back, then stop spending.
4. Never claim to know - Ask questions and it's best you work with a financial advisor.
I'm favoured financially, Thank you Jesus $32,000 weekly profit regardless of how bad it gets on the economy.
How
..? Am a newbie in crypto investment, please can you guide me through on how you made profit?
Thanks to Mrs Maria Davis.
She's a licensed broker here in the states
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While printing money is always a risky option, the US is in a unique position in the world as the dollar is in such high demand and acts as the world reserve currency. This gives the US more leeway when it comes to printing money, something they took advantage of during covid for example.
This video is so simple and concise that all the idiots in our government can understand it! Hope they watch it.
should be "this video is so stupid" and naive, debt(by the government) is nothing but government expenditure on development, the government can pay the debt right now, but that'll lead to hyperinflation, instead the government needs to print money, at a rate, just below the rate of GDP growth, some inflation is good for the economy in the long term, take Japan for example this is the biggest example of a country will the most amount of debt, there it is. this is just a higher level explanation, of course there are more nuances to this
Does not bother them the politicians are getting rich and richer 😂😂😂😂
You are assuming they know how to use a computer...
i thought war is good for the economy?
The mistake is thinking those in government are idiots, just as it's a mistake to think they have the citizen's best interest at heart. They're literally selling out the U.S. and getting richer, but have fooled most of the population into thinking they're blundering about like buffoons.
It can actually get better if only the govt can start making better decisions for the sake of it's citizens, cos' they have really made life more difficult for its residents. This hyperinflation has left the less haves bearing the brunt of the burden. My entire $520k retirement portfolio already took a big hit. Where else can we invest our money FFS
Get a financial planner straight up! personally, I would invest in etf and also love investing in individual stocks. yes it’s riskier but I'm comfortable in my financial environment.
I agree. This is exactly why I work with an investment advlsor. I currently have $690k in a well-diversified portfollo and my portfolio is well-matched for every season of the market. We are working on more figures ballpark goal this year.
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She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing
Excellent video, great job!
Most of that debt is owed to ourselves, so the Federal Reserve can cancel all that debt, and the US government can cancel its own debt. Then, they can reverse the system where the Federal Reserve borrows Treasury notes and pays back the Treasury notes with interest instead of Federal Reserve notes. Afterward, the government will have a surplus of money to pay back foreign debts. Of course, the government can always stop issuing bonds and just increase the money supply itself.
Video didn't talk about SPEND LESS! There no need to print more or tax more if gov actually responsible and cut spending.
This!
theres nothing responsible about austerity. Not only does it hurt people and slow the economy, it doesn't save you money in the long run
@@grimaffiliations3671 you probably need to understand what a true free market is. A propped up one by artificially pumping money in all sectors is why it can't be maintained in the long-run. The longer the spending balloons the more people it will impact and longer the impact.
@@Xyz99899 The governments deficit is our surplus, so if the government balances its budget, that would simply push the private sector into deficit. That's not a good thing for the economy. Government deficits provide the only way for the private sector to net save.
Also, government deficits can be maintained. The fed has full control of interest rates, so they can always put the interest rate below the growth rate of the economy. They could also stop selling bonds and adding to the debt at any time
@@Xyz99899 The free market can't function without the nations currency. The government's deficit is our surplus. If the government runs a surplus, that means its pushing us in the private sector into deficit. Only way for the private sector to net save is for the government to net spend
Balanced Budget Amendment. 38 states need to ratify the amendment. I love how no one ever talks about cutting spending. I could balance that budget in 10 minutes.
This!
Terrible idea. The governments deficit is our surplus. So balancing the budget just means pushing the private sector into deficit. You're basically calling for a depression
When a government has a surplus and no debt and continues to keep taxes low but greater than spending, the surplus keeps growing.
The people, with low taxes, have more purchasing power. That spending helps the economy.
Deficits means borrowing. Borrowed money costs more because of interest. That means more money must be taken from the public to pay back not just the borrowed amount, but the interest.
Everyone knows that if you need $100 and you have $200, you can cover the debt with $100.
But if you have to borrow that $100, it'll cost over $100 to clear.
On the large scale, people go bankrupt, companies go bankrupt, and history shows countries can go bankrupt.
The question is simply when will it happen.
@@frpgplayer This is wrong. the 3 sectors of the economy (private sector, public sector and foreign sector) can't all be in surplus at the same time. The only way for the private sector to run a surplus (which it needs to do to stay out of recession) is to draw that surplus from one of the other sectors. And since it can't draw the surplus from the foreign sector because of our trade deficit, it must draw it from the government. So until we get rid of our trade deficit (which can't happen unless the US loses it's reserve currency status) the private sector will rely on government deficits to stay afloat and calling for a "balanced budget" is basically calling for a recession. This is why every depression in US history came after a period of deficit reduction
And no, more money doesn't need to be taken from the public to pay the interest of the debt. The government pays this interest by rolling over the debt, taxes do not pay for this. The fed rolled over 120 TRILLION dollars worth of debt in 2021 alone. Also, there's no rule that says deficits must equal borrowing. The government could run deficits without selling bonds, since bonds don't finance government spending. Bonds were sold to control the interest rate, not to fund the government. But since 2008, the fed has paid interest directly on reserves, making bond sales (borrowing) no longer necessary.
Countries can indeed go bankrupt, but only if they borrow in someone else's currency. Every country you can name that has ever gone bankrupt in a fiat system did so because they raked up too much foreign currency debt. But you can never go bankrupt in your own currency. Just ask Japan, who are perfectly fine after raking up a debt to gdp ratio of 250%
@@grimaffiliations3671 Socialist thinking type. No, wealth equals to production capacity which leads to greater capacity to buy anything, not from monetary manipulation.
The State isn't the "engine" of the Economy, the private sector is.
Governments don't produce anything, their spending come from reducing the current (taxes) or future (debt + interests) purchasing power of the population/private sector.
The less governments influences the economy, the better it tends to go...political decisions aren't usually logical/rational decisions, they are decisions to privilege certain groups/lobby while the collective result is jeopardized.
There are three ways to look at debt: the worker who sells their service by the hour, the business that expands by borrowing, and the government expanding the economy (central bank). Understanding each perspective is critical for understanding the overall economy. I found it interesting that the US Treasury Reserve attempted to sidestep alt currencies by US NOW or whatever it is called.
Strictly speaking, the government doesn't need to borrow money. It's the issuer of money.
The investor side view of money presented here doesn't do a good job of illuminating why this debt is a problem for the general public.
When the government issues money, it's attached to some payment obligation. Such as a mortgage.
More selling of government debt to investors means more money can be issued in the form of mortgages.
Which inflates the property market, and turns into a system of usury for renters and prospective property owners. (The rates look reasonable, but those property prices somehow seem a little high...)
Does working longer hours under higher debt levels towards more expensive essentials seem like a good economy to you? It's a good economy for investors!
This is more directly the situation you find yourself in when you configure your economy to be GDP optimized.
A certain brand of economist does an amazing job deluding themselves into thinking they're not just telling people to work longer hours.
The best solution was not mentioned... The government should spend less and spend more efficiently.
For example: So many countries are spending less money (per capita) on healthcare and education, but they have a better system than US.
Don't forget defense. They could cut a lot of spending without reducing readiness by just hiring experts to check what their suppliers are charging. They cut out all the engineers who checked to see if things were good value for money. Now there's a company that does most of the militaries spare parts...bushings worth $500 max were sold to the navy at $100,000. A rubber seal for an apache... $10k. Might be worth $20.
Well you could save 10% of gdp or around $3trillion a year though creating a universal healthcare system as there is huge market failure in the current private sector healthcare system. So no new taxes, less spending, more output…. It’s efficient Europe style.
This is amazing content! Thank you :)
How do we get out of this? Oh I don't know maybe stop spending more then we bring in in revenue. Such a revolutionary concept.
nations are sick of imported inflation again and again (because of Over-Printing U$$D), disrupting their economic growth...
while us enjoy their spending spree without feeling guilty/shame for the world...
world-wide de-dollarization is inevitable and imminent, or is it?
---...----
Short anwser : nothing
YUP
US government debt-nothing happens, because it’s not really a debt.
Now private debt is what people should be concerned with. When that metric rose to 3 times real GDP in 2008, the financial system collapsed.
survey shows that the average american have trouble udnerstaing basic maths such as compounding, i am not surprised they dont understand how national debt works.
Thank You! im glad im not only one!! There is no debt! they could print out the money n pay it off!🙌But would look bad! Every Country does it! prints alil extra!🙄🤷♂️
system collapsed because FED didnt fix it with printed money. Now they print so its not an issue
Agreed. These investors, which are private or foreign nations, are buying America. The American economy is a freight train. Its not going anywhere anytime soon so the US gov debt is a nothing burger...
If its not a debt what is the actual value?
113k debt for each citizen of usa.
so? that debt only exists in theory, it will never be paid, it will always be rolled until the end of time
Better than no debt and living in Cambodia lol
@@trader2137what do you mean so? It's a fantasy that it has no consequences.
I'd love to live in your fake world where we can keep running up the debt with no repercussions.
@@wyattgouldthorpe1880 actually youre living in fantasy overthinking about the debt, look at japan, 263% GDP debt, what did that change? people live like they used to and its leading economy...
@@wyattgouldthorpe1880 The fed rolled over 120 trillion dollars worth of debt in 2021 alone. That's trillion with a T. Also we don't have to keep running up the debt, bond sales don't finance government spending. So they could stop selling bonds and adding to the debt at any time
wow you make things so easy to understand and really put a lot into this video
Thanks for watching!
Most Americans find it hard to retire comfortably amid economy downtrend. Some have close to nothing going into retirement, my question is, will you pay off mortgage as a near-retiree, or spread money for cashflow, to afford lifestyle after retirement?
as most investing-related questions, the answer is, it depends.. my best suggestion is to consider advisory management
I wholeheartedly concur; I'm 60 years old, just retired, and have about $1,250,000 in non-retirement assets. Compared to the whole value of my portfolio during the last three years, I have no debt and a very little amount of money in retirement accounts. To be completely honest, the information provided by invt-advisors can only be ignored but not neglected. Simply undertake research to choose a trustworthy one.
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Debt is healthy, if its used to make income... 97% debt to equity is slightly high, should be closer to 75... but countries like china and japan borrow 500 and 300%
Stop listening to the propaganda.
@sandponics what propaganda, all the propaganda says debt is bad lol, im the only one on this branch... theres a reason every country and corporation has debt, if I can have 1 store and no debt, or 2 stores and debt, u take the debt easy
The bit about more debt --> more bonds issued --> borrowers get cold feet and want higher yield --> private sources like mortgages and car loans have to jack up their rates to get money....
that bubble is quite nuanced though
Cut spendong, economy crashes. Raise taxes, economy craxhes. So huge inflation is what we are getting
Ask Jimmy Carter what the effects of Inflation are.
huge inflation = economy crashes. It crashes either way ,there is no option where you get economic growth because we have consumed more than we produce for too long and you cannot revert that anymore
Another way to get out of debt is hyper inflation!!!
You mean just like Germany did in the 1920s. Then we had WWII to help fix the problem.
easy to understand and clearly described. Great
The US will probably need to declare bankruptcy and start over and never allow tax cuts and unbalanced budgets again.
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A lot of Countries are in trouble, thanks for the insight
everyone not sanctioned into oblivion like russia, NK and iran..
Great video ! Easy to follow ... good job !
Good video
I just have a hunch on how to get out of this. I'm just you know. Thinking out loud, but first things first would be removed. Citizens united thus, corporations can't lobby for political influence next because of that influence loss. The military-industrial complex wouldn't need a little looking at also, I'm a farmer. And we use synthetic nitrogen, which releases so much co 2 into the air.
It literally turns organic matter into co 2 gas. So maybe like changing that for food production. So there are my ideas. We change the political sphere, thus changing the military-industrial complex. If we change our food production, who knows food might be medicine and we might not need so many pharmactutor calls.
Almost like the word pharmacy has the word farm in it.
I made it like 1 minute into the video before I made a comment. Thanks for the vid
If everyone with some land grew their own food, things would improve drastically.
scott: There is no such thing as synthetic nitrogen; N2 = N2 regardless where it originates.
How does N2 release carbon dioxide, CO2, into the air? Any references for this?
As a farmer you ought to appreciate that CO2 is plant food. Just talk to any commercial green house operator.
The USA has the largest economy and is the worlds main reserve currency, that's why investors buy bonds. The USA also has a big military, so good luck enforcing legal action or engaging in war against them over debt.
Until the moment the dollar isn't the main reserve currency and a lot of different countries cannot be silenced by military force...
@@drjp4212 1. Economic chauvinism is a two way street. China can be the reserve currency of the world, but it won't mean jack if they lose MFN and open trade just because some hillbilly populist grabs the reins and tells them to pound sand. Which is a constant danger in the US, and everyone else in the world knows it. The unique position that the US occupies in terms of geography and consumer/manufacturing capability demands that the rest of the world play fair or groan through trade disputes which screws everyone. International trade may be done in Yuan, but not if the US is in the equation. It will have to be done in US$. 2. The military issue is one that is already set in stone. China is not going to defend Europe, and Europe will not allow them to do so. The middle East allows token Chinese forces to gain favor, but no OPEC member apart from Venezuela is going to trust their safety to China given their history. This leaves only two choices, the USA and Russia. Given Russia's recent history and friends list, the choice is clear.
@@starventure lol!
You know nothing about China, China actually don't want their yuan to be appreciated and become world reserve, since it would lose their export-competitiveness.
Everything has trade-off.
Their true objective is "means of productions" (Marxism 101)
As long as they own most of "world productions" they will be the next "cultural hegemony".
Steve Eisman the Big Short just went to CNBC and laughed at people who were worried about the national debt. He was making a point that if it wasn’t a problem for 40 years how is it going to be a problem now.
Military spending is a huge part of the debt. This is mainly due to the monopoly that the war machine has on arms sales to the govt. The markup on some of the arms being produced is insane, and it seems that most of it is just a little better than what other countries produce to a fraction of the cost. One example is the Lancet drone. It is absolutely devastating to the abrams and leopards, even with all the counter measures installed, that cost an arm and a leg. The other example is Javelin, vs stugna, or the sweedish made nlaw. They do exactly the same thing for a quarter of the cost.
Nicely explained in simple words
How do you explain Japan's debt which is 3 times US debt ratio to GDP? The Japanese don't seem to be living in poverty.
This is what I was wondering as well. "Critical point of no return" talk without addressing other countries that have already gone FAR past that. This just makes Business Insider look foolish, like they did no research. Either that, or they have been influenced by Republicans who always make US debt a talking point. This makes me take everything else BI says with a grain of salt.
The Japanese have a massive currency problem.
Japan had negative interest rates. Not anymore (2024). Debts aren't only debt, they represent a cost to be paid monthly/annually, and that's what matters for the government finance.
Many Japanese adults live like slaves. Wake up early to catch the train, and then stay at the office for 12 hours. It gives them an hour to drink at a bar after work before riding the train home to go to bed.
The Japanese are generally miserable if they are working fulltime. That is why there is such a huge NEET population in Japan. Things are so dire that many young people would rather just play video games until something major happens.
Adults don't seem to grasp that when they hand their children a sick, perverted, mismanaged society that many of the kids will say "no thanks" and just live as NEETS
"The Japanese don't seem to be living in poverty." Yet.. Just because the Japanese have dodged the economic collapse bullet so far doesn't mean they always will...
So basically I will have to pay for it thought gov printing more money (inflation) or through higher taxes
The "printing more money" is likely where it'll eventually end up - despite its negative implications.
Print more money, until foreign investment in the US gets so acute that another 2016 happens and the rest of the world collectively poops their pants.
I've been making a lot of losses trying to make profit trading. I thought trading on a demo account is just like trading the real market. Can anyone help me out or at least advise me on what to do?.
I will advice you should stop trading on your own if you keep losing.
If you can, then get a professional to trade for you I think that way your assets are more secure.
I'd recommend Bethany Jennings, her profit is great even when there's a dip
Wow I'm just shocked you mentioned Bethany Jennings, I thought am the only one trading with her
You don't need to be shocked haha because I'm also a huge beneficiary of her
20 years- go for it- I may have moved by then 😊
expat?
Where will you move?
Good move 😎
@@adrianpjagger Trump shattered the Record with a $8 Trillion Dollar increase in just 4 years ~ He said he would do just the opposite ... Guess he Lied to US...
If the US goes to shits, I’ve got a feeling every other country will also get hit.
Or option 4. The government can reduce spending and live within its means.
Politicians have already accepted that the US has had its hay day and is on a downward swing . That’s why they spend like crazy and live lavish now.. the American dream is long gone . Now it’s eat or get ate .. and hopefully by the time it all crashes , you’ll land at the top of the pile
Same as we learn in thermodynamics, a critical point is the end of a phase equilibrium curve
there is no critical point when you have full control of the interest rate
Laila can talk about to me about investing and money all day long
this video is so naive, debt(by the government) is nothing but government expenditure on development, the government can pay the debt right now, but that'll lead to hyperinflation, instead the government needs to print money, at a rate, just below the rate of GDP growth, some inflation is good for the economy in the long term, take Japan for example this is the biggest example of a country will the most amount of debt, there it is. this is just a higher level explanation, of course there are more nuances to this
Paying debts, reduces the money supply, making new debt increases it. Monetary inflation goes one way and not the other.
@@LyricsQuest No it doesn't. There's no pot of money from which the government must spend it simply creates as much money as it needs as it goes
@@grimaffiliations3671 Check out Fractional Reserve Banking on wiki. "When a loan is made by the commercial bank, the bank creates new demand deposits and the money supply expands by the size of the loan.[4] ", and "Just as taking out a new loan expands the money supply, the repayment of bank loans reduces the money supply.[19]"
@@grimaffiliations3671just to let you know, 1. Bonds are already dead, as you look at the largest buyer of debt is the fed. Meaning the bonds are just going back in to a book. Making more money/gdp meaning more inflation. If other countries were buying it then it would spread the cost else where. 2. More or less money doesn’t matter, what matter is M1. That is the reason why the banks are not allowing any withdrawals, more cash more inflation. But as the debt gets higher, the value of dollar gets less, meaning your money will get less in purchasing power any way it goes. Value vs debt problem. To conclude unless you know a way out your are s up both way and side way, there is no way out.
When? What do you mean by critical?
20 years is way more time than i thought we're good!
This video is nuts 🤣 she's calmly saying "abandon ship", "save yourselves" invest in other countries. Yeah, that's surely the way to not accelerate the US crash.
I'm favoured, $60k every week! I can now give back to the locals in my community and also support God's work and the church. God bless America.
Hello how do you make such weekly??I'm a born Christian and sometimes I feel so down 🤦 of myself because of low finance but I still believe in God.
Thanks to my co-worker(Alex) who suggested mrs Elizabeth Ann Graney
She's a licenced broker in the States 🇺🇸
Wow! Kind of in shock you mentioned expert, elizabeth ann graney.What a coincidence!!!
Elizabeth Ann has really set the standard for others to follow, we love her here in the UK as she has been really helpful and changed lots of life's
I'm really glad she used those small glasses to represent Expenditure. I always had a really hard time understanding it.
*Expenditure
the military spending jar was the same size as others, i think that was wrong, she could have used a much bigger jar to represent that
Those countries that have the most US debt will suffer the most.
Reforming entitlements where 2/3 of the government’s spending is occurring are off limits.
Take away: feel scared?
As long as the rain keeps coming from the sky, we will survive.
"This time, it's (always) different."
- Benjamin Felix
It’s not from tax cuts. It’s from spending. There’s a point where the government actually takes in less money by increasing taxes.
Agreed. Cut taxes, reduce government spending, and repeal labor union protections.
While I don't disagree with her thesis, as she is correct, her video lacks any substantial information. It's puff piece.
Yeah. Japan's national debt is 261% of their GDP - the highest in the world. You don't see them in crisis mode. This report is a joke.
@@Rexvideowow Have you ever heard of the "straw that broke the Camel's back"? Keep increasing debt over time and eventually services will stop or hyper inflation will occur.
@@chuckdawit Sure, but the people who report on US debt being a problem have always had the position that going over 100% GDP is a death sentence. It's clearly not. I'm not saying spend all you want like it's an all-you-can-eat buffet - just that the reporting she's done here is straight up fearmongering. Absolutely no mention of other country's debt for comparison. Any time you withhold information like that, you're selling a lie, plain and simple.
@@Rexvideowow they are unable to combat the weakening yen because they don't have the luxury of raising rates. Japanese people are absolutely not happy seeing the yen test 160 per dollar. They are getting poorer.
the only thing about our debt is the fact that over half of our debt is owed to ourselves.
problem is you cant afford to pay back the other half.. even if you pay yourself back first.
Investing more into Real Estate while Zoning Laws are not dealt with will only serve to make the cost of living crisis worse.
Thank you kaynes. Thank you moedern monetary theory.
There really is no US Debt....we will just print money and could pay that off!!💯🙌🤷♂️ But they cant just print...would look bad! Every Country does it! Such a scam how they have it setup!🙄But just my 2 cents!👍
Since Biden took office, there seem to have been more unfavorable results in America. These results include effects on the markets, such as price declines and sharp increases in inflation, as well as bank failures. I wonder if the sudden increase in interest rates will help value investors or if it would be wiser to stay away from the stock and financial markets for the time being.
Well yes, we are taking out absurd amounts of debt to help Ukraine and Israel.
Either lower spending or hike taxes or brace for a debt crisis..
though I feel like this video kinda misunderstood jars and blocks - it's meant to show proportions. Shoving a bunch of money into jars labelled interest on debt, military spending etc **gives no info as to how big each slice is**
We keep giving countries billions…
Peanuts compared to spendings on the military.
Totally peanuts compared what would happen if the rest of the world would abandon the petrodollar
😂0:50 she never said anything about %40 of that money going out to Ukraine, Israel and every place else ! What's up with that !?
Thats war spending
Budapest Memorandum that the US signed in 1994, obligates aid to Ukraine and guarantees integrity of Ukraines borders.
Thats what’s up.
@@andreyromashchenko8967 The 94 Budapest Memorandum is a political security assurance from the US/UK and not a legally binding security guarantee.
We are not sending 40% of our annual budget to Ukraine clown show.
@@dmacarthur5356 you are trying to make it sound not serious. Its about nuclear weapons, so it’s as serious as nuclear weapons.
The expression are amazing 😂
This video is out of date. The debt is now currently the highest in history..
FUNDING SCHOOLS? LET ME LAUGH AT THE STUDENT DEBT. NOW LET'S TAKE A LOOK AT THE MILITARY SPENDING... HAHAHAH WTF
military equls your security and security of your children, so its very important
And then look at medicare/medicaid and despair
@@trader2137 But we are the most powerful nation in human history and our geography makes us virtually unconquerable and our military spending far exceeds even China.
@@trader2137 More like the security of US international corporate interests (oil projects, infrastructure projects, corporate farmland all over the world (Think DOLE), US corporate mines,etc). The USA doesn't need 800+ bases around the world to stop the invasion of the USA homeland.
@@trader2137 Unfortunately, we give donations instead of doing proper business-like deals to the countries we spend billions of dollars on. Meanwhile, anytime we need or want support, our allies barely fund a dime. Why is the American public always on the hook? What we don't lose in taxes, we lose in inflation. However, I still agree a good amount military spending is important for our security (it should just be closer to home, i.e. why do we cut our personal missile defense by 1 billion and increase Israel and Ukraine by 70 billion, where is border security?). Unfortunately, we refuse to build even fund basic border protection and pay people to enter our country illegally. We give them $10,000+ dollars in benefits as soon as they get here, hotels, pre-paid visas, etc. Then, they have there basic needs met and some of them move on to stealing the cars of the working class. They also have the added benefit of being basically untraceable, pay no income tax, change there name every time they get caught breaking the law, and so on. We have no idea how many murders have entered, where they are, who they are. Crime has skyrocketed in every single city housing ton's of "migrant" AKA "illegal as hell people". On top of this the people of the city our then getting taxed higher and can't even use their basic public goods the way they were intended. These "migrants" are spitting in the face of Americans, American law, and American money, and we are handing them money and opportunities to abuse us in return. Even when the police is knowing dealing with illegals, there is essentially no concept of deportation anymore, and no consequences, no fines, nothing. There is no justice. We spend zero dollars enforcing the law saying they should not be here or actually show up to a court case. The system is abused and I'm tired of it. I'd rather pay less tax and have less government because they are clearly a bunch of useless overpaid assholes who don't give barely a care in the world about the people they are supposed to serve.
Ive got 3 bills left and mybgoal is to pay them off by Dec 31 2024. Next year it will be worse. I must be debt free.
Excellent video
Here's what you can do directly to lower the debt. Stop voting Republican.
explain?
I get what you mean , its neo cons and cons still very much like the George Bush era disaster
@@hugostiglitz5798 1:13 - 1:44 The wars on terrorism (Republicans and neoliberals), 2008 financial crisis (Republicans and neoliberals), 2017 TCJA (Republicans), COVID-19 (Republicans bungled response which then necessitated spending to bail out the population).
you read the deficit myth by stephanie kelton?
@@jonathanthainguyenThe Republicans have the right idea in general. Their only issue is military spending.
What is critical levels? Japan has an incredibly high debt to GDP ratio and is being talked about as moving out of its stagnation and is also talking about dumping lots of money into its military because of the threat of China and N. Korea. The US is decades away from the debt Japan has, unless we have another really large tax cut making it incredibly easy for billionaires to become trillionaires. Oh wait, that's already happened. Well, it's not INCREDIBLY easy.
Even without tax cuts, you can elevate debt through increase in spending
Yup, all these doomers need to read The Deficit Myth by stephanie Kelton or watch the new documentary Finding The Money
@@grimaffiliations3671 What if a country runs deficit and the debt is held by external parties?
@@wyw201 As long as the debt is in your own currency, it doesn't matter whether its bought domestically or by external parties, you'll be fine
@@grimaffiliations3671 To be clear, the amount of national debt doesn’t matter. You can issue debt from 0 to infinity as long as the debt is in local currency? This principle also applies to all countries in the world.
And what about those who claim that the debt is simply deferred taxation principally on those who can afford to own and hold that debt for profit?
Lenders will ask for higher interest rates to counter the risk off the endebted goverment?
What happens? They print banknotes, stupid.
💲= fiat currency
@@peekaboopeekaboo1165 so?
@@grimaffiliations3671
Facade
Keep funding other countries with military aid lmao
military aid is a drop in the sea of the US spending, and its necessary to keep the western alliance healthy, its better to send money now than your children to a war in 10 years... ignorant.
better to send money than your children in 10 years... also most of the money stays within USA and gives thousands of job places....