How Big Is the U.S. Debt?

For more details on the total Federal debt, start on slide 35 of this PowerPoint presentation: http://www.antolin-davies.com/present...

Economics professor Antony Davies illustrates the size the U.S. federal government's debt and unfunded obligations. He breaks down the total U.S. debt and obligations into parts and compares them with the size of the GDP of countries around the world, showing the magnitude of America's fiscal situation.

Want to give that graph a closer look? Prof. Davies has made it available on his website here:
http://www.antolin-davies.com/convent...

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  Education

[Ryan Jamieson]

Is this taught to high school and college students? Do they know what it would mean if everyone working in the country would have to pay this back in the short term? Are the deeper causes of it explained to students? It's reprehensible that virtually nobody educated enough to know better is dealing with this issue. This is our future--and it doesn't look good.

[Jotto999]

You presume I have lots of time to browse your channel. Please give a concise reason why this video is stupid.

[gwynedd1]

Right and notice how few people even noticed the biggest default in history. Money is a sovereign power, not a market force. That is what I am trying to tell you.

[Cashstock Moneybags]

You're mistaken. Under a gold standard, if the government does not have enough tax revenue to pay its bills, it must sell gold in the treasury to pay for those bills, as well as trade deficits to other nations. Not wanting to do so was why Nixon ended the gold standard in the first place. When we sold products to other countries, we made them pay gold for them. When we started importing, we refused to offer them in return what we took for decades. It was the biggest default in history.

[gwynedd1]

I disagree. Every time government goes into debt they print money. The standard doesn't matter. The sovereign matters. I wish it were not true, but it is. Sovereign debt is spent just like money and the debt is never paid off.

[Cashstock Moneybags]

In order to buy votes, politicians must have an infinite source of free money, that a gold standard doesn't allow. No free fiat currency equals no new programs to use to appeal to voters. Interest rates in a free market are determined by savings vs outstanding loans. When the bank needs to collect more money to supply a loan, they will raise interest rates. This offers a better reward to savers which encourages saving, and discourages borrowing until the interest rate goes back down.

[gwynedd1]

How will one ever have a true gold standard without government anyway?  A "gold standard" is a legal creation. On top of that fractional reserves came out of a free market. Full reserve must be enforced so why would that scare them? It suggests sovereign power anyway. Both gold standards and full reserves is nothing but government power and intervention. That will not scare politicians.

[Cashstock Moneybags]

Gold can only be leveraged under a fractional reserve banking system, which isn't permitted by a true gold standard. Credit can only be offered on a 1:1 ratio. This is also called full reserve banking. Economists don't like it because it strangles the credit market down and forces savings and high interest rates, while making deficit spending actually cost physical assets. If the government overspends, they have to sell gold to make up the difference, or default. So it scares politicians, too.

[Cashstock Moneybags]

No, the government is not within a trillion dollars per year of scratching the debt. Every man, woman and child in the country would have to pay in $3,000 extra in taxes per year to break even. A trillion dollars is a whole lot of money. All the billionaires in the US wouldn't be able to sell everything they own and come up with a trillion dollars, and that's how much more we need to come up with each year than we actually do. We haven't paid down debt since 1966.

[gwynedd1]

Its even worse than that. Sovereign debt acts much more like money than debt. People need to realize just how different debt really is. We depend on government debt for liquidity. We certainly don't trust each others debt.

[gwynedd1]

I would agree with you except to the point where you would say "the physical limit" since even gold can be leveraged if its recycled back into the banking system. A cartel could certainly expand credit gold enormously as did the reserve banks with low gold lease rates causing gold carry trade. Its certainly is not at the level of fiat currency but then the threat is the reverse. Gold is vulnerable to monopoly and thus may become a financial investment to the demise of the real economy.

[Cashstock Moneybags]

Yes. The difference would be the ceiling on how much the bank would be capable of loaning. Under a fiat currency, there's literally no limit to how much money a bank can loan out, because it's all printed out of thin air under permission of the Federal Reserve and declared valuable. Under a true gold standard, only the amount of money that physically exists can be represented by notes. Gold is only one of dozens of commodities that can be represented by notes for the purpose of trade.