What Are the Dangers of Too Much Debt?

Interest payments on U.S. government debt are three times spending in the Iraq and Afghanistan wars already, and that is with the lowest interest rate we have seen since the 1960s. A rise in interest rates would increase interest payments dramatically. What can the U.S. government do today to prevent a crisis from happening when interest rates go up?

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  Education

[TheYakiin]

So in a nutshell, we're screwed

[Antony Davies]

As the debt becomes unmanageable, we'll see five things: (1) reduction in public services, (2) pressure to raise taxes, (3) significant inflation, (4) artificially low interest rates (which result in delayed retirements and more competition for jobs), (5) effective default as the govt reneges on pension and medical care promises it has made to retirees.

These are the five ways that people end up paying for out-of-control govt debt.

[rkb100100]

The problem is government growth is on autopilot. There is no way that is politically feasible to turn it around.

[rkb100100]

As the video points out, they have to keep interest rates low in order to keep borrowing costs down. Banks will have to borrow printed money to make loans (why save?) and aren't they over-leveraged now as it is?

[707hoser]

Sorry, but you have no clue how a fiat currency works. As the sole issuer of dollars the government can never default on its debts, unless it wants to. That's like saying that the scorekeeper can run out of points at a football game. In a time of high unemployment the government needs to run deficits. Government sector debts equal private sector savings.

[sand wit]

did he take inflation into the account when comparing interest rate through out decades?

[Joseph Gonzalez]

Hahahahaha true.



[zjumps33]

no one wants the government to go bankrupt. they want a government that spends less than or as much as they recieve in income. the role of government is whats causing our debit and taxing more isnt going to solve our debt which means we have a massive spending problem

[zjumps33]

you also have to account most of private schools are students who want to learn or parents that care about their children. not to say private schools are bad but just saying that its more will power rather than government telling me what to do.

[josan4613]

almost every country in the western world is in huge debt.not only US

[LACAJON1]

WHATISUTUBE, stop watching cartoons you dipshit and get real dumbfuck.

[WHATISUTUBE]

I'm gonna invest at least ten percent of my earnings in foreign currencies. Gonna get out of this sinking boat while I still can. The socialists can have it.