How the debt-ceiling debate is clouding the economy

[huyha619]

can anyone give me a short summary of this clip ?

[high5flyer]

So..I guess the answer is to to keep raising the debt ceiling so it is clear skies and lollipops, and the planes can continue to land? How long can we do this for? Raising the debt ceiling essentially is US, the American People, bailing out the government over and over and over b/c they just roll over the debt each time they raise it. No principal ever gets paid! That sounds a lot like a sub-prime/interest-only loan to me. Raising it is an admission by our leaders that they can't do their jobs!

[ninuxy]

The morale of the story is: vote the Teanuts out in 2012.

[1czelaya]

Paddy, I like how you always end with the commentary, "needing a drink". What kind of cocktail does Paddy have at the end of the day?

[nld1960]

You don't get it Paddy.You must not have children,because as it is,our children owe so much to the US government,two trillion more and our great grandchildren will wake up homeless.I have a feeling you must be a real supporter of this great president of ours.Oh, I forget, it is still the fault of the last president.

[nld1960]

Banking institutions are more dangerous to our liberties than standing armies.If the American people ever allow private banks to control the issue of their currency by inflation then deflation,the banks and corporations that will grow up around the banks will deprive the people of ALL property--until their children wake up homeless on the continent their fathers conquered.The issueing power should be taken from the banks and restored to the people where it properly belongs.Thomas Jefferson 1802

[bserg24]

Of all the videos you've done, this is the first time I've not understood what your point is...remake please!

[iceimpulse319]

WELCOME BACK!!!!

[nem3sics]

until we don't understand that this DEBT IS A CREDIT we will be really flying in clouds........think about who gives value to the money....who prints it or who spends it? ......

[petrolbears]

WHERE IS THE PUNCHLINE? 

[josyfelix1]

lets legalize weed, tax it and pay off our debt.

[claus11212]

from benmotorheadrules:

For those that are confused:

airport = economy

cloud/storm = debt debate

planes = investors

passengers = consumers

control tower = American government

thumbs up to get it in top comments!

[y2knoproblem]

Come Aug 2 the Treasury will be out of cash to pay the bills. That means no military pay checks, no social security checks, government shutdown, etc, etc... Then the economy will really be under a cloud.

[furikuri52]

That was a really dumb analogy. Yes, I understand it's basic economic sense to spend and increase volume until you reach critical mass but raising the debt ceiling only partially does that.

Furthermore, you didn't include the scenario where raising the debt ceiling pushes the country into an unsustainable negative feedback loop.

[Radjabov]

Not so clear as past videos. Please re-make!! Thumbs up for him to see this.

[nld1960]

Paddy, love ya, but it is my opinion that this is an awful comparison.We have fools running this government with a debt so high, it could not be paid in 1000yrs.Figure it out or go to usdebtclock and org.Now they want to increase it.Cut HUD,dpt of Ed,transportation,energy,agric­ulture and hundreds more.Some we can do without like the Dpt.Ed,Energy,Agri.Cut monies to countries which hate us,take our military out of 132countries.Cut Senate & House by 50%.Never people or small business.Never.

[classicalbunny]

@nld1960 You are so right!

[FinancialSP]

This is really stupid. The reason we're in debt is because we finance things that don't give back in the form of a high GDP, and the debt ratio to the GDP is so high it's impossible to keep on the course of getting into debt without our bonds being downgraded. But keep being confused... it makes the value of gold go higher.

[daveking777]

i must say you are the only person i have seen that can actually explain credit default swaps clearly so i can understand !!! what is your background ?

[zeromannerd]

usually like you explanations, this one however i believe to be sub par

[xecto06]

hmmm, i don't get it... Please explain...

[freshasdida]

AT LAST PADDY- good to have you back!

[Dummspast]

So without a "debt ceiling cloud" everything is fine?? How about noone wants to buy american debt for low interest rates anyway? How about the FED was buying the stuff for the last 3 years? How about they monetise the debt or default? That's some great certanty for businesses right there... I guess you have to revise this video. I would also like you to talk about creating money out of debt with compound interest attached to it and the sustainability of forced exponential growth. thanks

[bunkermunk]

I thought that was an especially lousy explaination. Where do debt based money, corporatism and war fit in?

[firefox666moll]

5 dislikes , they watched die hard 2 last night.

[dreamslides]

There really is no debt ceiling, there is only a spending ceiling, and they passed that a LONG FUCKING TIME AGO

[gosox773]

Sometimes oversimplifying actually complicates things.

[theflorgeormix]

going to put my own analogy in - Obama & Co. like a Good Confederacy, looking to preserve & protect their own people(the Disenfranchised in this case), Boehner looking to protect all like the North..flat out Civil War, bye bye Stability

[benmotorheadrules]

For those that are confused:

airport = economy

cloud/storm = debt debate

planes = investors

passengers = consumers

control tower = American government

[h1rschp]

@benmotorheadrules thanks mate! 

[lordennis01]

lay off the analogies dude..

[yutuboslaven]

Analogies are only for the stupid people. The modern macro economics is a pseudo science as it is full of analogies.

[lordennis01]

@yutuboslaven Macro economics isnt a pseudo science, and its actually not filled with analogies.. Although you are right in saying analogies are for stupid people...

[yutuboslaven]

@lordennis01

I am a graduate of electrical engineering at the elite German university therefore I claim the right to call the modern macro economics pseudo sciences. I have to admit that I was a little bit harsh when I said 'analogies are only for the stupid people', because one might regard mathematics also as a kind of an analogy.

With regard to macro economics I endorse the model of Silvio Gesell (unfortunately we don't have that anywhere).

[JGiffin88]

Usually your financial analogies are spot on, and relatively simple to understand. However, I can’t say the same for this one.

[lhn6856]

that made no sense. Sorry:(

[daveking777]

why dont you just tell it how it really works.. usa spends more than whats coming in so usa borrows federal reserve fake money out of thin air and lends it to goverment at interest. which it cant now pay back. so increasing the debt ceiling (credit line) is just prolonging what will end in the fall of the dollar.

[h1rschp]

@daveking777 What you say may be true, Dave. But that's not what's affecting the economy right now. Right now the economy's stalled because businesses don't want to do business until the uncertainty over the debt ceiling debate is dealt with.

[daveking777]

@h1rschp any uncertainty has and will always effect the market, this h`s always been true i agree. Though i feel congress are fully aware of the situation regarding the federal reserve is destroying America. The time to get out of the dollar is now or is indeed very close. China is left holding the so to be worthless dollar paper, so i can see there concern right now. Really you dont need to be a mathematician to work out the trillion dollar debt can never be paid back by any means of cuts,tax

[kgtrains]

Not your best, cause I still don't get it, but very glad your back making videos!!!

[energyparticle]

Paddy your video confused me more .

[h1rschp]

@energyparticle @kgtrains I'm sorry this confused you more (it's certainly not what I meant to do!). Essentially I'm trying to say that the debt ceiling debate is like a cloud over the economy, and until it clears, and companies get a better idea of what the economic climate will be like, those companies won't do business. Or at least, they certainly won't expand. That means we're risking a contraction in the economy, and if the situation persists through the election, some business failures.

[dreamslides]

@h1rschp they don't do business anyway, the have been firing for years and making us slave wage

[MrCheckitout123]

@h1rschp per Steve Winn, CEO of UPS and many others it is not the debt ceiling. the clouds are the regulation, economoic uncertianty of the entire national outlook. "We want to grow jobs in this country. We want to grow the economy. We need a better economy to get it going. It's a kind of a chicken and an egg situation." Davis CEO of UPS 12/2010

[h1rschp]

@MrCheckitout123 I agree that the debt ceiling is just one of a whole bunch of clouds overhanging the economy. I'd also argue that it's the noisiest and the closest of all the clouds, and until it passes, evaporates or burns off, businesses have no idea how to estimate what the economy will be like going forward, and how they're going to position themselves to do more business and grow.

[preciousmetals168]

if u look closely at the end, u can see a little leprechaun running to fetch the marker he just threw

[neanderslob]

sooooooo I don't quite get it. What variable represents the debt?

[TechHost]

@neanderslob the storm cloud and i guess the planes are foreign investors.

[beelonzz]

@neanderslob

The cloud represents the debate. The process of debating is causing uncertainty throughout the economy just as the cloud is causing uncertainty for the plane pilots, the people at the airport, etc.

[Atheistprimate]

Wow new video, welcome back. :)