Lesson 1 National Debt & Budget Deficit Explained

[iamtang0]

and failed to stimulate their economy effectively. 

[iamtang0]

Wow, this is pretty bias. Comes as no surprise, as Thomas Sowell has a Conservative bias. This video did not mention that so long as the tax base expands, debt is sustainable. Its not desirable, but sustainable. Eventually the budget deficit can be reduced and the debt to GDP ratio will go down once the economy improves. This video also leads the viewer to believe that Japan's woes are because the Government created a debt bubble, which isn't true. The Government tried to purchase private debt

[tvalerianopereira]

Demagogue

[TimothySmithMIPM]

Too bad your attempt at education falls for the same trick used by every administration since Nixon. Specifically, that is by lumping in the amount of Social Security taxes taken into the calculation. During Clinton, Social Security took in way more than it paid out, and this "extra" amount was added into the totals, rather than being kept separate. Take SS out, and you see nothing but deficit spending for the last 40+ years.

[fothinator]

As of about November 21, 2011 the United States has achieved 100% (or 1 to 1 ratio) of national debt to GDP so I've read. Wonderful news ain't it

[beerad12]

This helped me so much! Thank YOu

[harperonline]

@ajmlkhsa - I used to ask that question too. The central banks loan every pound/dollar/euro to the government at interest (seriously). That means that if there is 1000 dollars in circulation, the national debt would be 1000 dollars plus some 'level' of interest, say 5% = 1005 dollars owed. If you add on the borrowing for public spending then it gets worse.

Have a look at Bill Still's channel, it explains things really well. Also, look at the fractional reserve system - all very interesting.

[Lauxesa]

the best solution is not to have kids.

[jmitnick210]

If the newly-homeless Japanese relocate to Botswana, they wouldn't be homeless, living a hunter-gatherer lifestyle. In a 5% debt to GDP ratio economy they'd have come full circle to prosperity again. Win - win.

[dmbraddy]

The labeling on your chart of national debt as a percentage of GDP is grossly misleading. It shows Obama's name spanning the totality of the past decade making it look incorrectly like the spike belongs on Obama's tab. Only if you look closely at the x-axis labels do see that only the tiny snippet at the end above the line is on Obama's watch. All the rest belongs to Bush2. I hope that wasn't intentional.

[dmbraddy]

Your chart clear shows that the national debt as a percentage of GDP rose from ~32% to ~65% in the Reagan/Bush era, dropped back down to to ~58% under Clinton, and skyrocketed up to ~85% under Bush2. If anything can be concluded from this, it is that electing Republican Presidents is dangerous to our fiscal health.

[mjsmcd]

its not the fed who borrows its the gov borrowing from the fed

[mjsmcd]

its not the fed who borrows its the governmrnt thru the treasury

[BudGray]

This is a wonderful presentation. It is non-partisan and is very valuable reading and listening for everyone. Unfortunately, very few citizens of the USA really understand our economic system. Furthermore, as most of us have observed, even many of our representatives in the US Congress, Senate, Presidency and also national news anchor hosts HAVE INADEQUATE KNOWLEDGE OF OUR CAPITALISTIC FORM OF GOVERNMENT OR ECONOMICS IN GENERAL.

[b2br0wn]

thx



[pas9ify]

Yes, we still had a debt under Clinton, but the surplus lowers the debt, and if you have a sustained surplus, such as in the 50's, you pay off the debt, such as the WWII debt.

[t4705mb6]

No. "Debt" is a very old form of "usury". (Look it up.) Debt is a a scam designed by middlemen to make money by performing no work - no effort toward the common good whatsoever. Debt is offering funds with a payback higher than the goods value. Banks are "middlemen". Car dealerships are too as are insurance companies. The government itself is a form of usury, providing little while sucking up money. The US had NO inflation until the illegal Federal Reserve - over 100 years! Debt is CRIME!

[t4705mb6]

The "national debt" wouldn't have been if it wasn't for a greedy US asshole, a treasonous "president" (hired turncoat) , Woodrow Wilson! "President" (NWO manager) Wilson, a very stupid and easily led egotist, accepted a $100,000 bribe from the Rothschild banking cartel through J P Morgan to sneak through the ILLEGAL Federal Reserve banking system and equally unconstitutional IRS. He eagerly did this not knowing that he just handed over the entire US economy to the Zionist NWO!

[usagill]

As long as you have debt you don't have a surplus, period. You know what you can do with those graphs. If the United States Congress would have used United States Notes instead of Federal Reserve Notes there would not be the problem today.  However we must also ban the inflation by banning the "Fractional Reserve" banking system. That is the problem. The Federal Reserve and Fractional Reserve Banking need to be outlawed. All fractional Reserve banks must be closed and member banks jailed.

[CmdrTobs]

@usagill "As long as you have debt you don't have a surplus, period." - Understand that when people say "surplus" they mean budgetary surplus. So yes you can have a surplus. The fed bonds don't mature at will.

"Fractional Reserve" banking system. That is the problem." - 'savings and loan's' institutions aren't a good place to start either. The lack of liquidity quickly destroys support for that system and you are soon back with the same problems, allow Steve to educate: /watch?v=tLuv5tLUdUA

[davidspade200]

The national debt wouldn't be as high if the federal government wasn't spending so much on welfare. Welfare discourages marriage, personal responsibility, and self-reliance with the wrong incentives. The government pays you to mooch off of the taxpayers. If you can't afford child care, then that's your problem, not society's.

[jesusthroughmary]

3MM/300MM = 1%. 30M/30MM = 0.1%.  Ratio FAIL.

[michiganmoon]

Clinton never actually had a budget surplus. Notice how the national debt increases every single year under Clinton. The confusion is that money was borrowed from funds like social security and counted as revenue - not counted as something that needed to be paid back - which it does.

Also the 1990s saw gov. revenues jump from the dot com stock bubble and the housing market bubble.

[CmdrTobs]

@michiganmoon Sure those SS funds should be counted seprerate, but that's an old Republican(-I think) accounting trick. So when comparing apples to apples we now days just lump it all in.

[michiganmoon]

@CmdrTobs It isn't a Republican or a Democratic accounting trick per se. But, if you must a Democratic congress chose to buy US Treasury Bonds with surplus Social Security, Military Pension, etc funds.

It is only a trick if you make it appear to the public as if doing so doesn't increase the national debt. Social Security owns ~2.6 Trillion dollars of US Treasury Bonds - that need to get paid back.

[CmdrTobs]

@michiganmoon "it is only a trick if you make it appear to the public as if doing so doesn't increase the national debt" That's the accounting trick that is the norm these days.

[MrBabujani1]

No more breaks for oil co's.

[wtong89]

You know whats funny about the debt? Republicans believe that not increasing taxes will lower the deficit. LOL, just like you working part-time and refusing to work fulltime so you can pay off your student loan, mortgage and car.

For you guys that say spending cuts? Well Reagan cut government spending by alot but national deficit still went up. Reagan also raised taxes to fight the deficit problem.

[saadabdulaziz]

i think its still hard to follow for a common person. i don't owe a dime to banker, i never took loan from a bank, i use debit card, i know biggest gangster in the word are bankster, if i give interest or take interest i would burn in hell, and i really believe in invisible power, so now i'm living a really really relaxed life, but my wife is there to kill the buzz but well no one have perfect life do they.

[mediblue9]

@saadabdulaziz So, you are Muslum. If interest is such a big deal within islam, then does Saudi Arabia demand interest payments on US Treasuries? Just asking.

[saadabdulaziz]

@mediblue9 i think they don't but i think they should take it and use it to build orphanage buildings with out aspecting reward from God, there is no proper islamic state in world, they all are puppet of the elite/bankers corporations, if they choose to rebel and don't follow order they will be executed like Lincoln jKennedy etc or like the revolt is taking place now in muslim world, some of it is genuine and some planed, either way elite will hijack their effort one way or the other. check NWO

[saadabdulaziz]

@mediblue9 they should be taking gold in return of oil lol they wish hehehe if they try to raise their voice a big missile will be sent targeted to their ass.

[saadabdulaziz]

@mediblue9 check the dollar pyramid it say secularization of the word that the actual new world order, so basically bankers taking over the world, muslim world my ass , they all turning secular sooner then you think.

muslim moved away from islam that is why they getting their ass kicked all over the world. Quran first revelation was to read and we are the most illiterate nation, but islam is the only solution that is why they try to discredit Mohammed and Quran. we love jesus more then you guys

[mohalishaf]

America's owned by its own debts.. 600b military budget and they're more concern about the domestic 12b budget cuts.. when they should stop the using of taxes for funding wars and dictators.. its time to bring the troops home and shutdown the thousands of bases worldwide..

[MrSmackdown100]

What is this guy talking about !!!! " what happens when the national debt consumes all loanable funds ". The loanable funds can never be consumed. Loanable funds are created by the Fed as accounting entries and they create  a new asset on the balance sheet of the Fed . The Fed extends credit on the basis of collateralised borrowing .So long as the risk is favorable then the funds are created and available .

[nalejbank]

@MrSmackdown100 I was going to make a similar comment until I saw your comment. I'll add that currency in circulation isn't consumed by borrowing, it is put to use by the marketplace and idle currency is placed in savings and bank accounts by profitable commerce or in shoe boxes in some cases. Currency in bank accounts is reloaned out using fractional reserve banking practices that expand the M3 money supply in circulation. Fractional reserve practices drive up inflation due to creating money...

[nalejbank]

@MrSmackdown100 ...out of thin air! The Federal Reserve is not the only one who "loans" the federal government "money" by printing its debt. Fed gov offers T-bills and bonds to anyone who has the money and thinks it a good investment, any remaining debt is then bought by the FED. That's why they call the FR the lender of last resort. Greater debt to GDP ratios undermine government bond ratings and are almost always accompanied by higher bond yields and higher cost in "interest" on that debt.

[MrSmackdown100]

@nalejbank I am not sure what your point is sorry.

[macroman52]

where did u pull the 202% of GDP figure from?

[kariido1]

I would be saddened to see the fall of America to the corrupt and greedy politicians of today whose sole purpose is furthering their own personal lives at the cost of their country.

The US debt will bring it to it's knees. Climbing out of the massive hole it has dug itself in would be arduous and extremely difficult at this very moment. In a few years time it will be close to impossible and the country would then buckle and fall under the weight of it's fiscal irresponsibility.

[macroman52]

@kariido1 If you had said that in 1946 when debt was 120% of GDP many would have believed you. And you all would have been wrong - the US did "climb of of the massive hole" then.

[Mummificationify]

The debt when George W. Bush took office was $5.727 Trillion when he left it was $10.627 Trillion. The total debt that George W accumulated in eight years of office is $4.9 Trillion The debt right now is $13.736 Trillion. In approximately 666 days in office, he has accumulated $3.066 Trillion. Using simple algebra you'll find by Dec 2011, Obama will have accumulated more debt in three years than George W. did in 8 years.

.

[Mummificationify]

Hillary Clinton is being preened to take President Maobama's place. Both Obama and Hilary answer to George Soros who contributed to both and who has the mainstream media in his back pocket. He gets Obama to take the Country to extreme socialism passing treasonous legislation against the will of the American people, then gets Hillary in office. Our dollar is on the verge of collapse, and our sovereignty is threatened as a direct result of legislation and lack of leadership.

[Mummificationify]

Clinton didn't leave a $5.6 Trillion surplus but a $1.4 trillion debt over eight years. He borrowed from Social Security, part of a $115 Trillion unfunded liability, to make it seem he left a surplus. See my about me for links. The Debt Clock should be adjusted increasing the national debt from $14.0 to $21 Trillion and reducing our unfunded liabilities by $7 Trillion to reflect the truth about Clinton.

.

Allen West 2012

[bdhcarbon]

this talk is pretty biased in my opinion. 200% potential for Obama? in April 2009? Comon... its clear that Bush killed our economy and now its clear that the Obama plan is turning our country around. Our countries finances started going downhill in 1980 and its no secret who did it... supply siders and now we are still paying that price.

Best thing for our long term economy? Elect a Democrat. Charts dont lie!

[centenosparky]

Fact: Clinton reduce the national Debt.

[redarrowhead2]

2:43 that chart is not corrected for inflation. There should be a huge spike in 1945-1950. That chart is definitely in nominal dollars, not real. 

[chatnrg69]

Great video. Don't confuse the US Treasury who does the actual borrowing vs the Fed who is the PRIVATELY OWNED banker printing (supplying) the money the government needs to pay any current (budgit) and ongoing (national) debts. This government is controlled and in "debt" to just a few group of individuals hiding behind the Fed.......they are the real ones runing this country.

[bobichina]

Awesome video!! Voice is clear and easy to hear. Knowledge is easy to understand. GREAT JOB!!!

[18820828]

You, sir, lift the level of public discourse in this country.

You are awesome!

[upsilon054]

I wish you hadn't mentioned headaches, and this has nothing to do with your argument.

[redsnowqueen]

It doesnt matter how much your debt is. What is really matter is HOW and WHEN you gonna pay it out to your international creditors. And this is the most funny part of your story =)

No politics, just biz =)

[mortgageangel9]

Asking 3 questions

4min20secs

NARRATOR: 4:20 Most responsible economists believe a healthy national debt level is somewhere between 30% and 70% of GDP.

1-Why do "most" believe this?

2-What do the rest of the responsible economists believe?

4min28sec NARRATOR: And when you reach 100% and over you enter a danger zone

What happened as a consequence to the dangerous debt to gdp levels of the late 1940s?

Stormy moslereconomics Counter Insurgency, Deficit Terrorist Unit

[ConejoZing]

So, ask yourself.. are you one of those people that cranked out too many children during the aughties (when it was trendy to have a large family in a large disgustingly expensive house)?

Yeah, well, now the little puppies are grown up and not so cute anymore (and like to bite your hand).  Good luck taking care of them or paying them through school ! And even if they survive just look at the wonderful debt filled future that awaits them! Maybe gold will rain from the sky. Har har hahahha!!

[420hartless5150]

Perfect solution to our debt. . . . . it's really very simple . . . . don't pay it.

[viego215]

@420hartless5150 hahaha im wit u!!!, fukem all we got bigger and betta gunz tellem to take it in blood!!!

[joeazeh]

very interesting. It breaks it down to simplest understanding. Good job.

Howerever,I still believe theres more unpredictable future for mankind

[MrMick73]

how is it possible for the Federal Reserve ro borrow money from another country , those other countries have differnet currency. If it has to be borrowed and the printed out in US Dollars, then why borrow it at interest from another country. Does the US borrow money from mexico ? Argentina ? who the hell do they borrow money from, this is a scam.

[happybdayo]

This film somehow justify s debt...there is no justification for central banks loaning to governments at interest

the last two American presidents that tried to end this crime were assassinated

Lincoln and Kennedy

check out 11110

[RoySC1]

Your Constitution gives Congress a blank check to tax you, and borrow from you and your grandchildren, until hell freezes over.

Read Article I, Section 8, Clauses 1 and 2. It says that Congress has power to lay and collect taxes, and to borrow on the credit of the United States for purposes of providing for the common defense and general welfare.

So the stage was set long ago by the founding fathers to enable Congress to enslave you. And there isnt a thing that you can do about it.

[matushka78]

Fed does not borrow, it creates it out of thin air. The treasury borrows money from open market or the Fed. If it borrows from the Open Market, then usually it's not directly inflationary, because the lender made the money out of some kind of production. When the Fed buys treasury bonds/notes/bills, it simply creates the money out of thin air.

[dogterd]

over 3 months up on youtube and not even 800 views for a video on this critically important subject.

America is broke. The day the Chinese and the Saudis stop buying American Bonds the party is over.

You can't borrow money from potentially hostile nations while you try to control the whole world. America has done this just about as long as it was sustainable.

[MagicNo7]

Knowledge is power! I'm looking forward to upgrading my "Schoolhouse Rock (TM)" education on economics with this series. Thanks!

[m16adabest]

Thanks for the informative video! I learned some interesting things from listening to it.

[KumoOtokoZero]

Wow I can't wait for the next one, great job!

[caligvla71]

This guy is wicked smart!