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10 Myths About Government Debt


ANTONY DAVIES: Myths about the government
debt. Myth number one, the government owes 20 trillion dollars. How much is 20 trillion dollars? Suppose you go to Germany, and in Germany,
you go to every town. In every town, you visit every store. In every store, you look at every shelf and
grab everything that is for sale. The amount of money you spend will not be
$20 trillion. If you go to Germany and then to France and
you go to every town, and within every town, you go to every store. In every store, you look on every shelf and
you buy everything. You still will not have spent $20 trillion. You can go to England and while you’re there,
you can go to the North Countries and buy everything that’s for sale, and you still
will not have spent $20 trillion. In fact, to spend $20 trillion, you have to
go to every country in Europe, visit every town, in every town, go to every store. In every store, look on every shelf and buy
everything. And then you will have spent about $20 trillion. But the myth is that this is how much money
the government owes. It turns out that there’s more, called unfunded
obligations. Unfunded obligations is money the Federal
Government has promised but which it does not and will not have the money to pay. Largely, this consists of promises of retirement
and medical benefits. If you would take the present value of all
the future promises of retirement and medical benefits the government has made and subtract
from that the amount of money that’s in the government’s Social Security and Medicare
trust funds, and then subtract from that the amount of money the Federal Government anticipates
collecting under the current law from future Social Security and Medicare taxes, you will
still have an amount of money left over that the government does not have. And that’s the unfunded obligations, an amount
of money the government has promised, which it does not and will not have the money to
pay. Estimates of unfunded obligations vary from
the astronomical to the unbelievable. On the low end, people have estimated unfunded
obligations to be about $80 trillion, on the high end, $200 trillion. This means that the Federal Government’s total
financial obligations range somewhere from 100 to $220 trillion. Let’s say, roughly speaking, the Federal Government
owes about $150 trillion. Myth number two, the government owes $150
trillion. Well, it turns out there’s more to it. There are federal agencies that don’t appear
on the Federal Government’s budget. There are government-sponsored enterprises
like Fannie Mae and Freddie Mac that don’t appear on the government’s financial statements,
and they owe another $8 trillion. There’s then state and local governments that
collectively owe about $3 trillion and have another 5 trillion in their own unfunded obligations. When we put it all together, the total US
governmental financial obligations total about $165 trillion. Myth number three, government borrowed from
the Social Security trust fund isn’t really debt because we owe it to ourselves. Well, it turns out there is no ourselves here. The trust fund belongs to current and future
retirees. So when people retire and the government does
not have the money that it has promised them, one of two things must happen. Either the government must increase taxes
on future workers to pay for the Social Security and Medicare obligations it has promised,
or the government has to cut the promised Social Security and Medicare benefits that
it had promised to retirees. Either way, someone must pay. Myth number four, the government can’t go
bankrupt. This is technically true because the government
promised to pay back a certain number of dollar bills. And so as the government starts to run out
of money, it can simply print more, thereby satisfying its obligation. But while that’s technically true, it’s effectively
false because when the government prints money, it erodes the purchasing power of dollars,
thereby creating inflation. For example, suppose you have a bunch of people
and these people buy things. They buy things from Wal Mart, from Mcdonald’s,
and Ford. In buying these things, they give these businesses
money. In return, they receive goods and services
from these businesses. The ratio of the dollars they pay to the goods
and services they receive, we call prices. We have the average price of a hamburger,
the average price of a pair of shoes, the average price of a car. Now, if the government were to print enough
money to double the money supply, we would have twice as many dollar bills floating around
but the same amount of goods and services. All that would happen is the prices of these
goods and services themselves would double. With twice as many dollar bills, a hamburger
now goes from a price of $4 to a price of 8. The car goes from $30,000 to a price of $60,000. One of the prices that will double is people’s
wages. Interestingly, you’re left with the following. Under scenario one, without the government
printing money, let’s suppose you earn $50,000 a year and the price of a hamburger, shoes,
and a car, things you would buy, are $4, $30, and $30,000. And then along comes a government who prints
lots of money, and in printing the money, it doubles all the prices, including your
income. So now, in scenario two, you’re earning twice
as much as you were before, $100,000, but the prices of the things you buy have all
doubled as well. If I ask you, are you better off in scenario
one or scenario two, the answer is you’re the same in both. It doesn’t matter to you whether you’re earning
$50,000 and a car costs 30, or whether you’re earning $100,000 and a car costs 60. It’s the same car. Now, there is a difference in the two scenarios,
and the difference shows up when you look at your savings. Let’s suppose, in scenario one, you had $10,000
in savings, you’re earning $50,000, and a hamburger costs $4. Along comes the government, it prints money. In printing money, all the prices double. That means that the hamburger now costs twice
as much, the shoes cost twice as much, you’re earning twice as much, but your savings is
the same. It’s the same $10,000 sitting in savings. What has happened, when the government comes
along and prints money, in effect, what it’s doing is draining away the purchasing power
of your savings. Economists say it this way, “Inflation is
a tax on savings.” When the government prints money and thereby
creates inflation, we get the same exact effect as if the government had imposed a tax on
people’s savings. The fact is that the government ultimately
pays for bankruptcy by taxing the purchasing power of people’s savings. Myth number five, the government can solve
its financial problems by raising taxes. Well, it turns out the government can’t raise
taxes at all, it can only raise tax rates. Taxes are what happens when the tax rate that
the government impose interacts with people’s behavior. This is perhaps the most interesting picture
in all of economics. It’s interesting precisely because it’s so
boring. What you’re seeing here is federal tax receipts. This is all tax revenue from all sources combined,
payroll taxes, income taxes, estate taxes, tariffs, everything, federal taxes, all sources
combined, as a fraction of GDP. What you see is, from 1950 up to the present,
this has remained relatively stable at about 17%. That is, over time, if you think of the economy
as a pie, the government has collected a constant 17% slice of this economic pie. Now, let’s superimpose on top of this, for
example, the top marginal income tax rate. Back in the 1950s, the top marginal income
tax rate was north of 90%. It dropped in the 1960s, reached an all-time
low during the Reagan years, goes back up during Bush the first, comes back down, goes
back up again. This is the top marginal income tax rate. When you talk about taxing the rich, this
is the rate that applies to the rich. But notice what happens here. In years in which we taxed the rich at a very
high rate, the government collected 17% of the economy as tax revenue. In years in which we lowered the tax rate
on the rich, the government still collected 17% of the economy as tax revenue. The same is true of, for example, the capital
gains rate. When capital gains taxes were particularly
high, the government collected 17% of the economy as tax revenue. When capital gains taxes were particularly
low, the government collected 17% of the economy as tax revenue. The same is true of the average effective
corporate tax rate. When corporations paid higher fractions of
their profits to the Federal Government, the Federal Government collected 17% of the economy
as tax revenue. When tax rates on corporations were lower,
the government still collected the same 17% of the economy as tax revenue. It didn’t matter whether we taxed the rich
or capital gains or corporations. It didn’t matter whether we taxed them a high
amount or we taxed them a low amount. Regardless of what the government has done,
historically, it has consistently collected the same 17% of the economy as tax revenue. Now, you might say, “All right, but we’re
looking at tax revenue as a fraction of GDP. Tell me what’s happening to tax revenue, straight
up.” Let’s look at what happens to tax revenue
as tax rates change. What you see here is the top marginal income
tax rate. This is data from 1940 to 2015. Across the bottom as we move to the right,
we’re taxing the rich at a higher rate. As we move to the left, we’re taxing the rich
at a lower rate. Up and down, we’re measuring tax revenue per
person, one year later. This is total federal tax revenue on a per
capita basis, one year after the tax rate goes into effect, and this is all adjusted
for inflation. The story we hear when we hear things like,
“Well, we need more tax revenue so we need to tax the rich more,” implicit in that statement
is as you increase the tax rate on the rich, we will collect more tax revenue. But if we actually look at the data, what
we see is a different picture. The actual data looks like this. On average, as we have increased the tax rate
on the rich, one year later, the Federal Government has actually collected, on average, less tax
revenue. There are exceptions to this but there’s also
a very clear trend that the tax revenue moves in the opposite direction that we think it
should. This is not just true of the top marginal
income tax rate. We also see it if we look at the capital gains
tax rate. Now, the relationship here is not as tight
but it’s disturbingly in the same direction. On average, as the government has increased
the capital gains tax rate, one year later, it has collected less tax revenue than it
did before. We see the same phenomenon with the corporate
profits tax. We see the same thing with the estate tax. In fact, of all the federal taxes, I’m only
aware of two which, historically, as the government has increased these tax rates, its tax revenue
has actually gone up. Those two taxes are Social Security and Medicare. The disturbing part of this is these are the
taxes that fall most heavily on the poor and the middle class. Myth number six, the rich aren’t paying their
fair share. What constitutes a fair share? What you see here is average market income
of various income groups in the United States as of 2013. We have the poorest 20% of Americans at the
top. Their market income, that is income they earn
from participating in market activities as opposed to money the government gives them,
their market income is about $15,800 on average. Here’s the middle-income Americans, their
average income is about $53,000, and the top 1%, just over $1.5 million. Let’s ask, what is a fair tax rate for these
people to pay? As we talk about tax rates, let’s talk about
effective tax rates. What I mean by that is after you have done
all of your legal and accounting gymnastics and write-offs and deductions and exemptions,
when all that’s finished, what fraction of your income did you end up paying to the IRS? That’s the effective tax rate. We can argue about what constitutes fair. A lot of people tend to answer the following
way, the poor should probably pay somewhere around 2%. A lot of people think that the middle-class
Americans should pay around 15%. And a lot of people think that the top 1%
should pay around 30% of their income as taxes. Now, we could argue about whether these things
are indeed fair but these seem to be numbers that lots of people will tend to agree with. Let’s look at what these groups actually pay. If we look at the federal taxes collected
from each of these groups, we see something like the following. The average household amongst the poorest
20% of Americans pays, on average, $800 in federal taxes. The average middle-income household in the
United States pay about $9,000 in taxes. The average household amongst the top 1% pays
about half-a-million dollars in federal taxes. Now, this isn’t the end of the story because
we don’t just pay money to the Federal Government, the Federal Government also gives money back. A lot of this comes in the form of the earned
income tax credit or Social Security benefits or unemployment compensation, but all of these
things are instances in which the government has first collected money and then turned
around and given the money back. Let’s account for this, and economists call
this transfers. Transfers are money the government gives to
people. The average household amongst the poorest
20% received an average federal transfer of about $9,600 in 2013. The average middle-income household received
about $16,700. The average top 1%-er earned about $800, most
of that is likely coming from Social Security retirement benefits. But notice what happens now, if we calculate
the effective tax rate by accounting not just for what people pay to the government but
for the money the government pays them back, what we find is something astounding. We claimed that a fair tax rate for the poorest
Americans is 2%, and a fair tax rate for the top 1% is 30%. If we run these numbers, what we find is the
poorest 20%, on average, are actually paying -56%. That is, when all the dust settles, they’re
actually receiving more money back from the Federal Government than they paid in the first
place, making their effective tax rate below zero. This is true all the way up through middle-income
American. The average middle-income American is receiving
back 15% more from the Federal Government than he paid in, the top 1%-er paying about
34%. Here, we have an interesting conclusion. On average, and there are exceptions but on
average, only the top 40% are net payers into the Federal Government. This raises an interesting point because every
time someone says, “Well, we should cut taxes,” someone else responds with, “Well, you mean
tax cuts for the rich.” But in fact, our tax system, at least at the
federal level, has become so progressive that virtually every tax cut, by definition, is
a tax cut for the rich because on average, those are the only people who are actually
paying. Myth number seven, the government can settle
its debts by selling off its assets. The government has some debts and unfunded
obligations of about $150 trillion but it’s also sitting on a bunch of assets, 8,000 tons
of gold in Fort Knox, 500 million acres of land out in the West and Midwest, and then
miscellaneous assets on top of that. These total actually only about 2 or $3 trillion. When we’re done, even if the Federal Government
were to sell off all of its assets, we still have a shortfall of $147 trillion. Myth number eight, the government needs to
pay off its debts. The good news here is the government actually
doesn’t need to pay off its debt. Just as a household with a credit card does
not have to pay off the credit card, all it has to do is keep up with the minimum monthly
payments, so too the government only needs to keep up with its minimum monthly payments. We call this servicing the debt. The bad news is if we count all of the money
the Federal Government owes, $150 trillion, and the Federal Government currently pays
about 2.5% on its debt, to service the full $150 trillion of obligations, the Federal
Government would have to come up with $3.8 trillion per year. That is, to service the debt and obligations
the Federal Government currently has, it would have to pay $3.8 trillion a year in interest. Yet, the Federal Government’s annual income
is only about 3.3 trillion. That is, the Federal Government actually is
bankrupt right now. Even if it were to devote all of the tax revenue
it collects solely to servicing its $150 trillion in debt and obligations, it still would not
have enough money to service that debt. Myth number nine, well, the government could
just keep on borrowing. The problem here is the government has borrowed
so much money that it’s running out of places to find more. Currently, the American people, state and
local governments have loaned about $6 trillion to the Federal Government. Social Security, Medicare, Veterans Benefits
trust funds have loaned about $5 trillion to the Federal Government. Foreign governments have loaned another 4
trillion. The Federal Reserve has loaned 3 trillion,
and foreign people have loaned about 2 trillion. This is the total amount of money that people
the world over have loaned to the Federal Government. The problem with this is Social Security,
Medicare, Veterans Benefits trust funds have run out of money. They have no more left to loan to the Federal
Government. In fact, in the case of Social Security and
Medicare, they’re starting to pull back the money that they had loaned to the Federal
Government, which they now need to turn over to retirees in the form of benefits. Foreign governments and foreign people have
been slowing the growth of their lending to the Federal Government. The American people, state and local governments
have been slowing, and in some cases, actually cutting back on how much they loan the Federal
Government. That means that as time moves forward and
the Federal Government wants to borrow more and more money and these groups are all tending
to cut back on how much they loan, the one place left the Federal Government can turn
to for money is the Federal Reserve. The problem here is when the government borrows
from the Federal Reserve, unlike its borrowing from any of these other groups, it creates
inflation. Inflation is a tax on savings. In effect, as the Federal Government runs
out of places to borrow, it must turn to the Federal Reserve to borrow money. When it does that, it creates inflation, which
erodes the purchasing power of all of our savings. Myth number 10, there’s no way to fix this
problem. It turns out that there is. We could have a balanced budget within five
years if we followed this recipe. First, cut all spending this year by 10%,
no exceptions. If there’s some things you don’t want to cut
by 10%, then cut something else by more so that when you’re done, in total, you have
cut by 10%. When I say cut by 10%, I mean the word in
the way any normal human being uses it. When politicians say, “Cut the budget,” what
they mean is to increase the budget by less than they would actually like. This is a actual 10% cut. We spend 10% less than we did the year before. Then hold spending constant for four years,
don’t even adjust for inflation. What happens over these four years is as the
government holds its spending constant, the economy continues to grow. At the end of the fifth year, the economy
is now large enough that it can support the government that exists. At the end of the fifth year, we’ll have our
first balanced budget. Thereafter, the Federal Government can continue
to increase its spending if it likes, provided that the increase does not outpace the growth
rate of the economy as a whole. This solution stops the bleeding. It prevents the debt problem from getting
worse, but it doesn’t solve the debt problem. However, we can grow out of this. It took perhaps 100 years for our debt problem
to grow to the size it is now. If we can stop the problem from getting worse,
over the course of the next 50 or 100 years, the economy will grow enough that the current
$150 trillion debt won’t matter.

Stephen Childs

100 Comments

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  2. The debt is a reminder that the government isn't in control of the National money

  3. Yep. Saw this years ago. They claim curing spending by 10% will cause recession. Even if it does, better than bankrupt. I vote for your plan, but will they do it?

  4. I guess the moral of the story is save as much as possible to safeguard your future and diversify your holdings and also say a prayer for the future of our country and its people

  5. The government doesn’t print money a private bank does , its called the federal reserve. End the federal reserve banking cartels and their collection agency the IRS and in a decade things will get better.

  6. I make 22 a year as a pool service guy and I don’t get anything from the federal government

  7. Cut Washington D.C's salary, benefits, pension by 10 percent. Freeze their pay raises until the budget is balanced.

  8. Why would you expect the economy to grow at the same rate when you cut spending?
    I'm no economist but I was lead to believe that governments overstep their limits in order to increase their economy, corelation to this would be if you cut spending, the economy might not only stagnate but even shrink.

  9. Who do we owe all this money to? Can't we just have them whacked? Let's make them an offer they can't refuse. LOL

  10. Two things. Income doesn't increase at the same rate as inflation. Two it didn't take us 100 years to get the debt we have now, it took more like 20 years.

  11. 🤣😂😹 JESUS inventors are scamming the earth wow look at here 🧩😊

  12. And the people who work for a living will be outnumbered by those who vote for a living

  13. To support the Petrodollar and peddle overpriced energy, Governments, banks and energy corporations suppressed very cheap, clean energy technologies for more than 50 years. We pay $5Trillion per year for energy, so adjusted for inflation, this suppression cost everyone $250Trillion in unnecessary expense, not including pollution costs.

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  14. Wow- the sorcerer's apprentice is far more terrifying when it's real, it's about money, and there is no sorcerer to bail us out.

  15. This guy is only half correct, and that is being nice. He's trying to blame the poor for the nation's problems. He's a f×××ing moron. Don't fall for his rhetoric(bullshit).

  16. Did anybody else notice how he transfers from percentages to actual dollar amounts?

  17. Banks will eventually close will be a ressision better be preparing or you will have it rough hyperinflation coming money lose value Revelation we will become a cashless society mark of the beast one work order

  18. Question: Right at the end you said that the gov needs 3.8T to just keep up with the minimum payments on its debt. How will cutting gov spending by 10% for 5 years solve the problem? – that's saving 330 billion dollars per year to make minimum payments of 3800 billion per year.

  19. i like the pepole bying goods and survices and how stuff dubbeled now if ones goverment did not have to pay for its money or buy good form other countrys that do not folow beter economic practices. and companys did not hold money in its extream amounts and if ther was a limet to the amount of money pepole can have then the money wouldnt need to inflaite are econony is something we made up make it better make it so it works insted of makeing it to feed the weathy and debt the poor and the only way that taxing the rich dose not give more money to the goverment is if the rich done pay it

  20. The myth of myths
    big companies will bend you over and take what ever they won’t!! No myth cos they do

    No need to try blaming government! Get rid of the stock market and see how it goes!!

    One cannot run any economy when 3 percent of the people have 97 percent of the money

  21. We need sound money like Bitcoin otherwise this problem will continue perpetually

  22. What's with the downvotes? Are people sticking their fingers in their ears shouting "la la la la not true, everything's fine!"?

  23. Answer: stock up on gold. As much as possible. Expand FED dump money into paying off debts.

  24. I would like to opt out of social security and have a return of my funds put in since I began working 34 years ago; due to mismanagement. If only that was an option.

  25. The government prints money… this guy an idiot… the private corporation called the federal reserve prints our money and keep all the interest and through fractional banking create trillions of dept which our government receive none of the profits from this creation out of thin air…

  26. 8,000 tons of gold is only valued at $0.3 trillion huh ?
    Something don't sound right here…🤔

  27. But most people have more debt than savings. So inflation would help people with their debt.

  28. WTF is this dude talking about when he just adds to the definition as including "WILL NOT HAVE" when he defines Unfunded Liabilities. How does he know if the government will be able to pay these unfunded liabilities or not??? He does not. Hell, the government could possibly decide it wanted to start issuing its own currency (like it is supposed to according to the US Constitution). If the government decided to do this, they could pay them off overnight by simply issuing the currency on the spot instead of borrowing it. To leave this out of any possible equation regarding federal debt, means somebody does not really see the full picture and needs to go sit down and shut up about the topic. FACT! It could be like a different kind of quantitative easing.

  29. 5:05 Why though? I've been listening abput inflation for decades and know what it means but this makes no sense to me. It's not that the prices grow becsuse there's more money in circulation. No one but the printer knows how much is in circulation. No one can ever have enough money. Therefore inflation happens when people don't believe in their own system anymore and companies ramp up prices even though they don't have to. Ok so it's a tax on savimgs because I'm saving the same smmount supposedly,ok, but I'm not buying a car every year

  30. Government is a myth.  There are only people.  Government is just a lie people use to do horrible things to other people without repercussions.

  31. So in the quintile column there is missing 19% of the people. 4 X 20 +1 = 81 %. So there is a hole line of info missimg just below the top income.

  32. It's certainly a big problem – but I'm not sure that cutting 10% of all government spending whilst leaving taxes the same for 4 years will lead to a growing economy and surplus – quite the opposite.

  33. In other words, governments want the population of Poorest, Next & Middle gone (bottom 3 tiers)! And yet, the Top aren't counted as underpaying their workers as the government gives the difference to the poorest in subsidies, thereby making it look like the bottom 3 tiers are the problem, when indeed they are not!

  34. The FED creates currency and it never gets to wage earners. The currency just goes to the rich and they bid up the prices of the assets they already own. The wealth gap grows.

    When the rich default on loans the government bails them out and they get to keep all their assets.

    Your model is only academic, not real.

    The real model would show how 90% of new currency goes to the top .01%.

    There is no wage growth

  35. For inflation, it's a wealth transfer. And the people who get newly printed dollars are the recipients of this wealth transfer. That's the government and the banks. And then by extension the stock market, real estate, and anything else that the banks lend to. Like say student loans. Which is why we have a ridiculously inflated education system.

  36. By 2025 a Big Mac Combo will be $50. However you wages won't have risen that much. If you save money in the bank for your old age, as they tell you to do, with no interest your savings will be practically worthless. What is happening is the government and business are stealing your labor paying you with scrip that steadily depreciates faster than that new car you drove off the parking lot. When you're old they will pay you a pittance in pension or none at all and tell you you should have saved. What are you going to do take your labor back for the last 50 years?
    It's a Ponzi scheme allowed as soon as money was taken off the gold standard. After that your money was just a piece of paper the government will tell you what it's worth. You have to trust the government that it has any worth at all. Do you trust them that much?
    The best way to estimate prices is how long you have to work to buy something. A lot of things like TV's are much cheaper than 50 years ago. Things like home computers didn't exist.
    Compare the prices of food or housing. In 1950 you could buy a three bedroom house in town for $4000. It would take you maybe 7 years to pay it off. Today the very same house 70 years old might cost you half a million dollars and some places like LA, San Jose, Seattle, Vancouver over a million dollars that you might pay off in 50 years if you never get sick or lose your job. Good Luck.

  37. This is mind blowingly well put. I especially appreciate the data concerning taxation, I have never heard anyone say out loud that raising most taxes reduces tax revanue, but it makes sense.

  38. This is not how it works. Yes, burger costs $1, but when the govt prints money and doubles dollars in "circulation," the cost of burger does NOT become $2. And this is true of two reasons.

    1. The money printed is used to pay debt holders. These debt holders when they receive money are not running out to buy hamburgers (or other goods and services), they are saving or investing them. This stimulates economic growth. And since this is the case the price of burger does not go up in proportion to increase in money supply.

    2. The price of the burger does not go up, because of supply and demand. The demand has not gone up. Thus sellers of burgers cannot charge more.

    The only way we would see inflation is if those who receive payment in (1) destroy its value through poor investments. This is highly unlikely, because these people are intelligent and have even more intelligent financial advisors.

    Of course "burger" is stand in for goods and services.

    This guy is an economics professor? Hmmmm … Im in 9th grade and know more then he does. Hey, can I get a PhD, please?

  39. But inflation also eats the DEBT. As long as inflation is a little bit higher than the interest debts; the system is healthy. Balance is essential still so there won't be too much changes here.
    If you have eg. $150 trillion of debt with 0% interest AND inflation is 2% -> year later you've ~$147 trillion of debt.

    Now look at Europe. Euribor interests to which the mortgages are linked to (95%+ of cases), are negative. Inflation is meaningfully higher than the interest rates. Average interest rate with bank fees is even less than the inflation.

    As there's inflation and low interests, people (and businesses) aren't "supposed" to keep money as savings. So what happens? Gold and stock are bought. Even when the stock P/E looks mediocre.

  40. Main issue is inequality. In 2019 the 1% richest netted ~85% of ALL wealth generated. No matter in which way you solve the issue – these numbers aren't viable. In the US, over 40% of ALL populace fall under poverty. That is absolute madness for a Western country.

    Top 1% should pay ~70%+.

    10% austerity on spending isn't the solution. The solution is to redistribute wealth.

  41. When he pulled the old (only the wealthy pay taxes ) he brought into question everything he said. When Obama was president they took almost exactly one half of my pay, and I am by no means wealthy. I was just over the cut off for the rebates. I know for a fact it is the middle class that gets screwed. The rich are able to use loop holes, hide wealth, get company paid necessities, and all means of avoiding the taxes he claims they are paying.

  42. Everything this hack is telling you is so perverted out of context that it's all a bald lie, but a lie meant to frighten the economically illiterate, which is about 99.8% of you. There will be no mention that private enterprise, particularly through collateralized debt obligations, is what destroyed the economy in 2008 and 2009. And guess what–his "answer" will be implicitly to turn the economy over to the billionaires whose 'think tanks' funded this video.

  43. They will tax you until you're destitute and print the money into oblivion even faster when that doesn't work anymore

  44. I stopped watching after the point where this joker uses the example that as the prices of goods and services increase due to inflation brought about by money printing that our wages would increase a commensurate amount and thus there would be no difference in our financial position.
    The real world has not worked this way and what has happened is that people have become more indebted to keep spending.
    This is the problem with economics. It takes generalized assumptions and pretend that they map exactly onto the real world. They don't.
    Never have. Never will.
    People are the shock absorber for economists faulty predictions. Their individual failure just feeds into a statistic that is left out of their modelling when it suits them.
    The government sells bonds into the financial system to generate an income to fund itself.
    Where does that money keep coming from? It's loaned into existence by the various financial institutions that buy them. That's why the money/credit supply always increases because the debt always increases. To do anything else would be deflationary and the system would implode.
    Governments already print money through their bond issuance. They just hide it in this game called the bond market. Our monetary system is a Ponzi scheme and it's going to cost us everything when they finally go to kick the can down the road a bit more and find it's been filled up with cement (un-serviceable debt due to it's magnitude).
    I personally can't see how they can do a debt jubilee fairly without just concentrating the wealth that's left to an even greater extent.

  45. The ultimate reason why taxing the rich doesn't work is because they have layers and layers and layers of tax breaks for them. You'd have to get rid of almost 50 years of tax breaks to make them pay an equal % to everyone else. That would get their share to be equal to everyone else. But the bottom line is they are able to hide their "true" income and pay as little taxes as possible, but the poor and middle class you have to pay as much as is demanded or else. The rich also have lawyers which delay the courts to allow them to move their money about, and the government agencies that try to get the money don't have enough funding to stand a chance against their stall tactics.

  46. I like his fantasy-land solution of cutting all federal spending by 10%. Recipients of that largesse would literally assassinate any President who tried to impose such a measure. The media would immediately be weaponized against such a man. Synthetic riots in the street by paid protesters would be used to de-legitimize him. And then consent would be manufactured to accept his death when a "lone gunman" pops out of a crowd to kill him (under the false claim that his spending cuts cost him his job). If we didn't have such a corrupt kleptocracy, the republic could be saved. But it's far, far, FAR too late by this point. There's no going back from where this is headed.

  47. A good bill for Congress is to award the employee, employer, self employed, government employee and military personnel with $125.000 in a lump sum after 60 months on the job full time. Now the citizen can pay off a home or start a business. The printing and issuance of money is validated by any legitimate labor and production, for payroll purposes. Taxpayers money doesn't run the whole world. It's only used for specific items, such as purchase of the finished product, pensions and welfare. Contact your Tea Party or Republican Party Congressman for an exceptional bill in Congress. Every citizen that has already worked their 60 months full time, regardless of number of employers, will receive their lump sum from Uncle Sam.

  48. This system might crash soon and USSR collapse would look like a child's book comparing to this.

  49. Saying it took 100 years is a bit misleading, in 1948 we signed the Bretton Woods accords, which made the US the global reserve currency, which allowed America to switch from savers to consumers (thus 70 years of replacing the money in the piggy bank with IOUs).

    In 1974 we abolished the gold standard (because, really, if the Saudis came knocking and said "we would like the trillion dollars you owe us in gold please", you wouldnt pay them either.)

    In 1979 Volcker became the head of the federal reserve and introduced supply side economics which has hypercharged our business environment for 40 years now, leading to everyone who owned stocks during that time to see their wealth increase significantly (about 1/3 of the population)

  50. When are you "Chicago guys" gonna start coming up with some solutions that dont include monopolies and overthrowing governments for once?

  51. The U.S government doesn't print its money. The Federal Reserve Bank prints the U.S. money. The Federal Reserve Bank is a privatized bank.
    It's been that way since 1913 when Woodrow Wilson signed the Federal Reserve Bank Act of 1913.
    The Federal government can go bankrupt because that's what happened in 1933 when Franklin Delano Roosevelt signed the Emergency Bank Act of 1933 and sold land and the assets on those lands. They also stole the citizens gold outlawing the "hoarding " of gold, so citizens had to turn in their gold for those paper bank notes.
    Congressional and presidential acts signed into law aren't myth.

  52. 56here.when I was you man.i was send to Mexico for been up to no good. Dad had a small bakery. One the paso lost a zero as I remember.so a customer would come with a 1000 pesos bill we had to explain to them that they we had lost a zero.and so on to cents.

  53. Too bad that no politicians exist that care enough to implement a 10% reduction in spending.Therein lies the true problem.

  54. Jump to 21min.you mean 8year .Obama era were most people in us cut back in spending .trump time spend spend spend.

  55. Let's cut $600 billion per year out of the military budget,cease all foreign aid for 25 years,and deport 10 million illegals.

  56. Just watched this on 1.25X speed, and the whole time I was just going, “Hooooooly craaaap?!?” Lots of interesting info in this one. Suprised its not more mainstream, especially considering how important an issue it is. People are completely clueless about it.

  57. Just watched this on 1.25X speed, and the whole time I was just going, “Hooooooly craaaap?!?” Lots of interesting info in this one. Suprised its not more mainstream, especially considering how important an issue it is. People are completely clueless about it.

    EDIT: I guess total economic collapse and thievery on a mass scale just aren’t interesting enough to people, lol…

  58. The problem I see is the US government has only to service the debt it has on the books at this time. The unfunded portion of the debt will require servicing when payment for those funds when they are actually dispersed.

  59. Parasitic system will eventually eats itself from tail.
    Growing tent cities means: cheap rent, low property tax.

  60. Dude, it seens you are NOT very knowledgeable about the economy.
    1. The wages haven't significantly increased for over 20 years.
    2. The mid class is NOT receiving any significant money back from the government. In case YOU are receiving, please let me know how how…

  61. This is full of shit, there is NO such thing as unfunded liability. They are telling you that the government cannot possibly pay all it has promised and show you all kinds of charts why not. The reality is that government works on a cash accounting basis not accrual accounting. These pigs that want to fool the gullible are attempting to convince you that all income is cash accounting while all outgo is accrual and it just does not work that way. A political promise made is NOT a liability, it only becomes a liability in accounting when it is actually going out the door. And the largest so called unfunded liability is social security that the political right keeps telling us is broke. Again just a crock of shit. Daily outgo will soon be more than daily income on payroll taxes, and politicians can EASILY fix that in an afternoon simply by lifting the cap on the affluent and wealthy. And even if they decide for political reasons not to there is currently $6 TRILLION in the SS trust fund and they will simply start cashing in those bonds. Mind you the shortfall is going to be small, it will grow over time, but only for about 15 years and as baby boomers die the income/outgo will revert to neutral, then return to surplus. And there will still be TRILLIONS in the trust fund. The problem here is that the entire concept of unfunded liabilities rests upon something that they KNOW is not allowed in accounting, the mismatch of periodocity. And SS has been (by law) investing all surplus revenues into treasury bonds to "save" for the future when outgo will exceed income, they did it and the money is there, so why all the panic on the political right? Because the government borrowed that money for decades and used it to give rich people like the host of this video gigantic tax breaks. And now that the government is going to have to make good on the trust fund's investment those same rich people are going to have to pay some of those tax breaks back via higher taxes. And here is what I have to say to these greedy right wing morons, tough shit dude. Pay up or go to prison!

  62. Opppssss…. bankers, politicians and our economic & financial gurus have designed these but have not thought of the end game through…. they thought there will be a war before everything collapses ……but no big war so far …..so there's no answer to these…. just live with it until everything explodes in our faces…… all our savings gone, and our paper money becomes worthless… labor, faming & industry will stop …what then?? God help us!!!

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