Paying Down the National Debt: A Good Idea, or Not?

In this election season, some of our leaders are making us feel guilty about the national debt. Would paying it off be a good idea? The answer might surprise you.

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[jeffbi88888888]

well, it is a interesting illustration. However, I do feel it is equally important to teach our kids the principle of integrity, honesty, dont borrow what you can not return, do return what you borrowed..... I can not imagine any adult will tell their kids to borrow his/her classmates or friends and encourge more borrowing..... I guess this mentality got us into trouble in the first place.

[Iaganatzi]

A nice simplistic idea, but far from relating to the real world, and lacking several critical figures and facts. Good effort.

[reniam]

I was going to comment on how silly this video is but, looks like plenty of people got here well before me.

[Nintendomanwill]

If you buy government bonds you will receive low returns due to the low interest rates employed to expand credit and raise demand, in the government's destructive attempts to counter the business cycle by making yet more booms.

And those returns which you gain in US $ will become progressively more worthless due to credit expansion

The national debt is a money pit which is going to have to be paid off either through inflation or through high taxes. You're fucked, as are we all thanks to govt

[vyus9]

no mention of rising debt service costs, the rate of return on debt or the money we borrow. just a simple-minded explanation that assumes debt can be maintained forever. it can't. we pay it off every 1 to 30 years.

try paying off your credit card balance with another credit card, see how far you go. the only difference between you and the govt is the govt can print/borrow its own money. Check out US inflation sicne 1930 if you want an example of that.

[coasteys]

hey mistermoneyman make a comment because obviously your idea and video is wrong

[tjbrooks]

Interesting. Except remember that the bonds are both a financial asset to the holder, and a liability to the tax payer. So only counting it as an asset is a mistake. Our Net position is the one to look at, though there are distributional consequences.

The point he make on the social security trust fund is a good one, but mysteriously he then confuses the issue when he talks about 9 trillion in assets. Remember those same children inherit the tax liability.

[MOPEDBRAD]

This guy is smoking crack.

He bases his ideas about paying off the debt on the ill-conceived notion that treasuries gaining value through accruing interest is a good thing.

The fact is simply that the more money there is, the less it's worth. This is the basic concept of supply & demand. In a system where more dollars compete for the same amount of goods, the goods cost more dollars.

I wouldn't take any financial advice from this guy, as he is obviously living on another planet.

[strolchi10]

If you owe someone (ore believe you do) this person has Power offer you! Our whole economy is built on this money out of dept system it is not fair if one thinks the simply using the power to create money out of nothing there is no real good behind it so the get the real good you get paper! You have to work for it youre work is real Good ore they take youre house if you cant pay anymore so they always win and they can call in at any time of there choice! Its a fraudulent system!

[strolchi10]

One solution would be to go back to a constitutional system let congress have the issuing Power back and not the international Banksters! End The Fed Reserve system!! When he said the govt owes it to the govt he mistakes they owe it to the private Banksters of the Fed! The fed is not part of the Govt as he might assume its a private owned banking cartel witch make endless profit on the simple power to create money out of thin air lending to us wit interest attached to it! They owen us!