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.
They do say gold will crash in a liquidity crunch However, many of those holding precious metals are preparing for such an event. So they are unlikely to be forced sellers. The paper market would tank and hopefully collapse.
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I thought they said debt increased by $20b daily is about $7,300,0000,000,000 annually plus interest rates 😅😂 The US government's liabilities breached an eye-watering $33 trillion on September 18 - a month later, the figure had jumped $33.64 trillion, implying an average daily increase of $20 billion.
@@Kingofthehill84 it usually is around 20 billion but there’s days where the debt jumps by 100-200+ billion. Its happened 2 times in October already. Last major increase was last week, right after they announced 100 billion in aid for Ukraine, Israel and Taiwan. The Debt increased a little over 100 billion from 33.5 - 33.6 trillion in less than 48 hours and Congress hadn’t even voted on the aid.
Its $13,000,000,000 billion dollar aircraft carriers $2,000,000 million dollar missle to shoot down 1000 dollar drones. Being a big bully is really expensive
Teh deficit is now at 1.7tn, but at low interest rates. If the US had to refinance at current rates it would increase by another 1tn alone. So the longer interest rates remain that high, the more the deficit will explode increasing borrowing even further making a debt crisis even more likely. But if interest rates are lowered and inflation is not kept in control, interest rates on US debt will spiral out of control. The US has put itself into a corner.
Medical = debt. Housing = debt. Car = debt. School = debt. Taxes - on everything. Even tried taxing you for breathing. Eliminated horseback trails and travel by putting fences everywhere.
The US economy cannot survive without continuous credit and debt creation. The FED will print more money and the average American will go just that much further in debt. Meanwhile, foreigners lust for the greenback. Their economies are in worse condition than the US... if that's even possible. Someone is going to be left holding the bag...
Yes, but the economies of other countries also mean more debt for the country that issues the dollar, the country that issues the dollar is about to implode due to so much debt that they issue to the entire planet.
The only reason US spends so uncontrollably is because its value is derived from being the reserve currency across the world. If that changes, the US economy will collapse
@@jebbo-c1l Looking at their homelessness and healthcare, I certainly don't see it as "wealthy" per se. With all those trillions of spendings, they can't afford universal healthcare and subsidized housing. Wealthy for the one percenters tho.
For years we had the ability to export death to other countries because our currency was the global reserve currency. That’s why our exchange rate in foreign currencies nexts is higher purchasing power, but now that more than half the countries on the planet are dedollarizing and not buying or dumping our bonds inflation is rising because those dollars are coming back to our shores.
Inflation hits people a lot harder more than a crashing stock or housing market as it directly affects people's cost of living that people immediately feel the impact of It's not surprising that the negative market sentiment is so high now We really need help to survive in this Economics.
The US has increased its productivity over time to match the debt. Any institution will grow by either taking on debt or selling shares of itself. The US governments can't do the latter so it does the former. It then uses that debt to fuel its growth. For the US that has very much paid back in the form of defense spending leading to ARPAnet, biological research, which developed the entire tech industry (valued at roughly 5 trillion) and the ability to rapidly develop vaccines against COVID. Additionally, the US has not defaulted on debt. E.g. if I take a loan of $10 in 1990 and then another loan of $11 in 1991 and I still pay back the debt from 1990, future lenders will see my history of payment and offer $12 loans in 1992. As long as I remain productive and don't diminish my ability to make money, I will be okay. If you can provide a credible reason why the US might default on debts, let me know. You can also make a philosophical case that we should not be using debt to fuel growth but both bootstrapping with profits and debt fueled growth have shown to be well trodded paths towards profitability.
US debt declined from the end of WWII until 1981 from 110% of GDP to 30% of GDP. Since Reagan's innaguration in 1981 until now the debt has exploded back to 110% of GDP. Between 80 and 90 percent of that explosion in debt occurred under RepugliKKKlan administrations.
They are always increasing taxes because inflating a currency causes inflation or as the Nobel Laureate, Milton Friedman, suggested in a speech amidst the period of rising prices in the 1980s, inflation can be thought of as a hidden tax for rampant government action.
Almost by definition, all governments with sovereign currency have to run a deficit. Money doesn't go to the government from the private sector, money comes from the government. The limit on government spending is not tax receipts (not directly), it is inflation. To this end, it is not the total debt that matters, but the interest rate on that debt and the rate of new deficits being added. The U.S. can get away with a lot more deficits than other countries because we have the reserve currency, but that difference is in magnitude only, not in kind. For decades the budget hawks have been wrong. Most are still making the wrong arguments. Unfortunately the conclusion that too many have drawn, that deficits don't matter, is also wrong. Rising interest rates coinciding with exploding deficits are revealing the calamity we're in. Once upon a time, Paul Krugman wasn't an idiot and wrote an excellent piece about how sovereign debt over 120% of GDP makes interest rates impotent as a tool to control inflation. Our economy is not healthy. Economists all expected a recession last year, but we didn't get one because of $2 Trillion of quiet stimulus, mostly from the "Inflation Reduction Act". There are trillions more in state and municipal accounts to be spend in the next 2 years. This is all debt financed at around 4.5%. This culminates in the interest paid on the debt rising faster than tax receipts, which means that the debt must be paid by devaluing the currency. Japan is the only country to have ever done this semi-successfully.
Thank you. I think a lot of the oligarchs if not most know this, this is just another method of control. But it's always shocking how many people, even elected officials, seem to legitimately not understand that.
We cannot have a situation in the world where one country keeps consuming more than they produce. Once debt has all rolled over to around the 5% level, the US will have to grow at over 5% just to service their debt and not grow at all net, ie they'll need to grow over 5% to grow 0%. That's a very tall order, some would say impossible.
@@michaelnurse9089 Or just print dollars to the infinity. As long as the world believes the greenback is stable, there's no problem. Unless USA proves it otherwise or some other nations started trading without the dollar included.
quite shallow video. saleha mohsin incorrectly used debt and deficit interchangeably when talking about financing. Bloomberg is usually better at this.
Everytime I hear of the massive US debt, I cringe to imagine of how much more weapons / military equipments that is needed to churn out to the world. US is like the death reaper looming in this world.
It begs the question that for all its spending, USA can't still provide proper healthcare and social subsidy to its citizens? Weird af when the countries next to it can without that much debt. I guess propping up the greatest nation on earth is expensive.
Republicans have a lot of money invested in healthcare and oil and both work with each other. Oil makes you sick, healthcare profits go up! Remove money out of politicians and Republicans will actually care about humans
But the thing is America is not the greatest country on earth. It’s impossible to be when it can’t even take care of its own citizens, all anybody cares about in this country is greed, all the politicians do is point fingers like children, and they take the citizens tax money and do everything except what we want them to do with it.
$10 trillion in spending on Iraq/Afghanistan needs to be mentioned. We went from $7 trillion to $17 trillion in 10 years. All to secure oil supplies. Fundamentally, a huge subsidy to benefit the oil and gas industry. Shortly afterward, during the fracking boom of 2008 to 2014 the USA became the #1 producer of oil globally, but nobody could have foreseen this success of fracking in 2008.
@@JagaimoNeko all the wars since 2000-2001 till today cost the US about $8 trillion of debt, might even say its one of the main reasons the debt down spiral started to get out of control, and here we are today, with unpayable debt and an upcoming major crisis that the fed is postponing time after time by printing and applying different measures, but theres no escape, the longer u avoid it the more debt will accumelate and the harder it will hit
The real problem is the US government is now using debt to finance every day expenses. It used to be only for emergencies. Sure they'll say its an emergency, like "climate change", but in reality there is no emergency and yet they are still borrowing trillions. Some of which is used to pay interest. When you are borrowing to pay interest you know its not going to end well.
Sorry, what debt spending is going towards "climate change"? Also, the scientific consensus globally is that "climate change" is both real, and an emergency. An expensive emergency. Go ask Florida in 10 years.
Interestingly, Australia has just got a surplus of A$22.1 billion (0.9% GDP) in this FY budget. Government Net Debt is 22.3% GDP. On top of that, Australians live longer than Americans, are healthier and see their doctors more. Where did the US government throw so much of its money into?
The public finances of Spain and Ireland looked great at the peak of their housing bubbles too. They were both in debt crises within 3 years of the bust. Australia is a huge, largely empty country with a modestly sized population and the most unaffordable residential real estate in the world. It is breathtaking to behold. The median house in Sydney cost 13-14 times the median household income. Hong Kong (a special political/economic zone on a island next to China) is the only city in the world comparable to Sydney and Melbourne. The crash will be spectacular.
@@scottpetty4568 the government is scrambling to prevent that by letting in immigrants left right and centre since their (politicians) wealth is largely stored in real-estate
why doesn't the government force you to pay back welfare used like they do student loans with interest. This would create a huge amount of debt relief and payoff debt at the same time.
Thank goodness we don't tax the very rich or the largest corporations because they are our most precious resource. Without them, what would ever trickle down?
Well, actually the largest tax payers are the rich. So I don't know where your statement comes from. But I do agree with you on the trickle down economics portion of your statement. Without the rich, the US economy would be f*cked.
how can you tax some one that they cannot be profitable ? You will ever tax the profit - which means you will always have profit unless the rate is 100%. And if the company make a loss, they get 0 dollar tax and sometimes get support from the government. @@nickthequick
Maybe we could lay off some of the public office holders, like Mitch McConnell . That guy is just a liability/expense at this point, and there plenty more just like him. That should save us a good amount of money.
I'd buy all the debt if I could. If the Feds give me a 0% interest rate, I'll buy it all. Then let me borrow 31.4 trillion against it to buy stocks or countries. It's only scary if you are super rich.
Well...by the time their grandchildren are older, they,ll inherit the house and that should help...unless your grandparents hate you, you don't have to worry too much...
Should never use national debt to GDP ratio. GDP does not pay debt; should use tax revenue to national debt ratio. For example, if Apple or Tesla relocated to Canada or somewhere else, GDP and tax revenue will both decrease but national debt remains the same.
The sum of Federal Tax levies collected barely make a dent on US debt interest payments nowadays. The whole Mr Taxpayer sense of entitlement is misleading.
Inflation is the only way to effect the National Debt. Think about printing up enough hundred dollars bills and pay it off. Gasoline will be $100 per gallon
1:20 - Consider that number for a second (1.8 billion dollars per day on interest alone). If that was a lottery instead, that lottery could literally create 1800 millionaires PER DAY. 75 million dollars per hour, or 1 1/4 million dollars per minute. If the government gave away $20,000 per second every second of every day, that would literally cost us less money.
I hope to ask if you can help us understand what will happen after June 9 2024 when the 50-years PetroDollar Agreement expires between Saudi Arabia and the US? Is the mighty powerful USD currency a concern when Saudi Arabia decides not to renew the PetroDollar agreement? Can US still print money as usual from their 50-years of printing money? Please host a panel of experts to discuss the ending of the 50-years PetroDollar Agreement to global citizens? Please host a panel of experts to discuss the impacts from the ending of the 50-years PetroDollar Agreement to global citizens. Thank you.
Democrat spending? Come on! Trump single handedly increased the debt more than any other president when he slashed taxes during an economic boom. Worst fiscal management ever. Responsible fiscal policy is to increase taxes during boom economy and increase spending during recessions. This would have reduced trillions from our debt.
Once debt is rolled over to around the 5% level, annual interest on debt will run at over 1.5 trillion so that 117bn should cover around 28 days of interest charges. I guess everything helps, but taxes are clearly not going to do a lot
@@Doran_Krotan You'll get those money back in form of military contracts and the country is going to be rebuilt. The gap between rich and poor in USA is growing and growing everyday. And that's not sustainable ..
Not only does the US government own much of the debt, and US households and businesses own another big chunk, one should also consider the US citizens owns lots of foreign equities because they prefer US debt. You can yammer on all you want about doom loops or fruit loops or whatever. If the debt was the kind of problem doomers say it is no one would want to own it.
This was a horribly inaccurate piece of journalism. “The underlying problem isn’t fixed” Market failures (food systems that loaded with processed sugar/simple carbs, health care system where health outcomes to cost are the worst in the world), military and the cost of going to war which is easily 4 trillion for Iraqi/Afghanistan war and over 700B per year. If we were taking huge debt and many people weren’t becoming hugely wealthy that would be a concern. The debt as a crisis is overblown. It is a society that is sick and ailing that should be the real concern.
United States National Bankruptcy/Sovereign Default is inevitable with the enormous spending on defense and intelligence agencies to maintain an empire abroad that the wealthiest benefit the most from, the federal government has been underfunded since the neoliberal economic policies were put in place in the 1970s, that allowed the wealthiest to stop sharing wealth with the rest of society, through taxes and wages,
Ultimately the plan is to default somehow - either outright or via hyperinflation. The USA is like someone who has borrowed so much on their credit cards that they figure they should keep borrowing as much as they can because there is no way they can pay it back - so they might as well spend as much as they can while they can still borrow.
As the reserve currency standard inflation targets spread the burden across the globe. The plan if there is one is to continue with moderate inflation. I don't think there's all that much long term thinking going on in DC.
The Federal Government defaults , the first ones to feel the pinch are US retirees on their Social Security checks …. and Medicare quality of care will hit bottom.
Two words not mentioned yet used as an easy solution to get out of this problem stemming from the 2008 financial crisis ... QUANTITATIVE EASING...it is a drug that the US economy cannot seem to get off, there will be severe withdrawal symptoms and if not handled well could lead to unimaginable economic consequences.
@@djayjp you go and print close to 30 trillion dollars which hasn't been generated as revenue by the economy the ripple effects will last long after you stop printing that money
The Brazilian Government tried this tactic against the IMF lender consortium way back in the early 80’s. Or at least hinted though, heavily influenced by left leaning leaderships . They never executed it. At the time it was USD $100 billion . Successive administrations kept making payments. Bad idea.
Oh and by the way.. that is what Bolivian leaders kept on doing through the 80’s and 90’s. They changed presidents as often as I change my filthy briefs. Generals after Generals. All way up to Evo Morales. You are clueless on world affairs. You must’ve skipped history classes , huh ?
Last time we had a budget surplus was in 2000. Vice president gore been elected he would have paid down the debt once and for all. And would have pushed for a balanced budget amendment. And continue pay as you go. W bush wastrd the surplus and got us into more debt.
Why can’t it just forgive national loan? It’s too big that there is any realistic chance USA will ever pay it back anyways. What percent of this is it paying every month? And how much new loan is it adding every month?
1:02 "As of this year, the US is already spending more on interest payments than defense." No, look at the chart.... that's not going to happen until ~2028.
I've tried to get a clear answer to this but the mismatch between these two statements stems from the different ways to account both numbers, you can argue that this will happen even later, you can argue it happened already
@@jupiterjones3789 Hmm maybe go with the CBO's numbers then? If there is uncertainty, then that should be stated in the video, otherwise it appears poorly edited.
