10 Myths About Government Debt

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.

100 thoughts on “10 Myths About Government Debt

  1. Hey everyone!

    We are very excited to announce that Learn Liberty is back! And producing new content! To get an idea of what's coming your way, check our brand new trailer! https://www.youtube.com/watch?v=EW99cN_Yjfk

  2. I feel like he's doing some sleight of hand with the numbers. And that's even though I feel sympathetic to his overall message. I just don't believe he's giving an honest and unbiased read. I believe he's not directly lying, i.e. his numbers can be corroborated. But I suspect he's more interested in convincing people than he is in educating people.

  3. Actually, the last point is incorrect. We didn't have debt until we went off the gold standard and went onto the central banking system standard. Fiat currency creates the debt and inflation. When you have sound money backed by tangible assets, inflation is contained.

  4. Bullshit anyone middle income getting back more than they paid in are tax frauds and cheats, TAX CODE 100% prevent this -15 is a lie for middle class. Their is no deduction that goes beyond pay in for middle income people period. Not 50 kids, not mortgage deduction not expenses

  5. The money system is a fiat system…owed by an illegal US corporation. Default on the debt and the debt falls on the illegal US corporation, which will no longer exist. Rise the legal government, debtless, and arrest everyone that created the rouge US corporation.

  6. He states and I quote “ only the top 40% are net payers into the government “ while stand in front of his own chart showing only the the top 21% pay in and neither is correct only the bottom 20% have negative rates

  7. Everyone can describe the problem and maybe even a "governmental solution" IN THE LONG RUN. But in the immediate present, Peoples can only resolve their problem by refusing to participate. But don't believe for an instant that there's a political solution (In your lifetime) !

  8. Learn Liberty just red-pilled you. Now go into the world and red-pill others.

    This video was indirectly brought to you by all of the creators of all of the government entitlement programs in the United States (mostly Democrats and RINOs).

  9. The fact is that Obama added 10 trillion dollars to the deficit in eight years, so what the hell are you expecting from Trump ? Fix it in three years? Go back to your cage and stay there. You are complaining eight years too late! You are an economics professor? lol Save the young people from a disastrous brainwashing!

  10. You forgot to ,enticing the millions the rich get in subsidy …. like Walmart for instance gets hundreds of millions ,but you didn't mention that part

  11. The transaction capacity of Bitcoin will increase over the years, eventually putting pressure on central banks to inject less, and make it harder for governments to tax via inflation. Note that I am not advising people to invest in BTC necessarily; I don't think it will matter to Bitcoin's success whether they do or not, so I don't care if people catch on to it now or later.

  12. The US Government makes about 130 Trillion. They're just going by cost of government to run and the private sector so they can make the case against rebuilding America. They just love those homeless Americans.

  13. 6:25 if i make $10 a burger cost $2 and a shoe cost $5 i save 3. if i make $20 a burger cost $4 a shoe cost $10 i save $6

  14. It's mind control ! US Debt doesn't exist ! It's illusion ! It's majic . There is no debt becuase it does'nt exist ! Federal Reserve is criminal enterprise creates 1914 by Inter National mafia.

  15. It's a bit of a myth in itself that certain groups pay more taxes than others. In reality everyone pays them at the cash register disguised in the form of higher prices.
    Both the left and the right can't see this, but if you showed this aspect people would feel they have more of a stakes in reducing government expenditure.

  16. Didn't FDR put America into bankruptcy in 1933? And signed an EO confiscating (making it illegal to own) and people had to turn their gold in. Then there's this: https://www.congress.gov/bill/115th-congress/house-bill/5404
    H.R.5404 – To define the dollar as a fixed weight of gold.

    115th Congress (2017-2018)

  17. how about we just abolish the shitty federal reserve, which isn't federal, and allow the NSA to issue a quantum resistant cryptocurrency.

  18. Justifying a discredited Laffer Curve, when it has caused so much harm to so many…

    The reason why taxes collected equated to 17%, regardless of tax rate, is because you are collecting this from the same group, the ones stuck in the middle – the ones at the bottom are not paying because they can't, they ones at the top are not paying because they have rigged the system in their favour…

  19. Assets and Liabilities. The government's liabilities (debt) are the assets of institutional investors and other countries who are required to accumulate US dollars to participate in international trade. This guy is an absolute lib-tard. Everything he is saying is contradicted by his agreeing statement that the government cannot go bankrupt which is "technically true." Notice how people like him have been fearmongering everyone about the national debt for like EVER and nothing has happened. The government keeps on "borrowing" (issuing debt) and interest rates have never been lower. Don't waste your time with these clowns who just want your money.

  20. Americas making $ 7 trill domestically and $8 trill globally.
    citzens would love to make nearly half of there debt in a single years salary.
    suddenly $20 trill isnt much debt.
    We are on the verge of passing on advancments in AI tech and medical tech that will ensure grandchildren will have lomg lives with robot slaves. at this time the robot will make up the debt plus live as phylamprathist cause the gov will have to pay salarys for free.

  21. Debt helps keep inflation down. This is basic western economics 101.
    If theu did pay off the debt then the inflation would go up.no one would need to borrow which then would stop increasing the profit because 90% iof all money made is from the interst in loans.
    the loan ibterst is new money injected into the total worth .
    its like each birth has value of epected worth. this matches the new dollars made so it levels out debt to inflation.

  22. Were at about 62% spending on social services abd projects. this will be increaseing in the future as robots take on more jobs. in the next 100 years taxes wont come from citzens .

  23. So if my savings are in cash, then inflation would damage the purchasing power around, say, 5-15% a year. But if they are in stocks, then the stocks would need to outpace the inflation to keep it's dollar value? Am I correct, or did I miss something?

  24. There is no social security trust fund. Go look under the United States code I believe it's title 31 and title 42 which contains all of the known trusts the US government holds and you'll never find anywhere a social security trust fund because Social Security is absolutely not a trust fund but just a tax collected which the government keeps track of how much of that tax you paid so that you may possibly in the future receive benefits pertaining to the amount of tax you paid referring to social security tax. That's it.

    In 1960 the US Supreme Court upheld in a case Nestor V Fleming 363 U.S. 603 that social security payroll taxes paid into the federal government's coffers does not guarantee benefits in the future. Go read all about it right here https://www.ssa.gov/history/nestor.html

    In fact it basically goes on to say that the u.s. government could cut off benefits to any beneficiary pertaining to Social Security funds with no recourse by the beneficiary because all they paid was just an additional tax because it's not a trust fund.

    I don't know why so many people don't understand this. They keep calling Social Security a trust fund yet it has nothing to do with a trust fund. Most people have been lied to or are completely misunderstanding what Social Security actually is….

    Now if you really want to learn Liberty as your channel suggests why don't you learn all about what the income tax actually is.

    most Americans do not owe income tax. The income tax is specifically an indirect excise tax. Congress could only impose the income tax as an indirect excise tax. This all started back in 1913 with the passage of the Sixteenth Amendment which some thought gave congress some new taxing Powers pertaining to direct taxes. Specifically people thought that Congress could now impose a direct tax called income tax no longer having to use the rule of apportionment to impose it. Nothing could be further from the truth. In 1916 the US Supreme Court took up 2 key cases dealing explicitly with the nature of the 16th Amendment and what it actually did. The court specifically said the amendment conferred no new powers of Taxation but merely confirmed congress's taxing Powers concerning income which they've possessed from the very beginning from being taken out of the category of indirect excise to which it inherently belongs and being improperly placed under the category of direct to which it does not belong. Hence the reason the income tax does not have to be apportioned because it's not a direct tax. But now there are ramifications upon whom Congress could actually impose that tax since it can only be imposed as an indirect excise. And if you read the law you'll actually find out who those classes of persons actually are.

    The following are whom Congress has imposed the income tax upon. Ready? Non-resident aliens and foreign corporations with us domestic Source income and u.s. citizens who live and work abroad with foreign earned income. That's it. There are no other classes. The W9 for instance is used to track the control, receipt, custody, disposal or payment of any item of income belonging to a foreigner who is subject to withholding. It is not intended for use of tracking a US domestic Source payment to another us domestic Source entity and that's where it ends. it must be a US domestic Source transaction flowing through a US person or a pipeline of US persons and that transaction has to be on its way to a foreign owner which would be either a non-resident alien or foreign corporation. There is no other purpose for the W9 contrary to what you think you might know

    Here's 2 video of Dave Champion, who is the author of a book entitled, "Income Tax: Shattering the Myths" stating clearly that he has not filed an income tax return or paid any income taxes since 1993!

    https://youtu.be/lrnVRqjTHSY

    https://youtu.be/DgfhKZS3A8A

    It's the most detailed book you will ever find on the topic of what the income tax is. Here are two additional videos from Dave Champion that you can watch yourself and find out what the W-4 and W-9 are actually for

    W-4 form
    https://youtu.be/7hWLMRDzOjQ

    W-9 form
    https://youtu.be/Fc99um0QbaA

  25. I'm wondering if transfers include police, courts and schools. If so then at best you're over valuing these "transfers" , more properly they should be considered an additional tax.

  26. How unfortunate for Duquesne University to have this guy's name attached to it. Completely reduces the value of that brand. LOL Such a poorly reasoned budget-scaring fear-mongering video.

  27. I never seen a financial bullshit artist try to fool people with such obvious lies lol

    Does anybody honestly believe that nobody pays income taxes except the rich xD yeah okay

    How about just because you pay way too much up front bc you cant do your taxes and get more back from your own money the gov still keeps the other portion of YOUR money that you actually owe in taxes…Its also beyond me how you can flash people in 2019 with the concept of inflation

  28. Explained so well that even a child could understand this. The problem is that we have a government that is infantile in understanding economics. I wish they would all watch this video so they would get a clue. But I doubt it.

  29. When to government defaults our money will be worthless and the banks will go belly up. On the plus side our personal debts will be gone and the entire country can get a fresh start.

  30. The US Tyranny does NOT print money. Within the syndicate of fractional-reserve grift, like the current Khazarian fifth-column grift-machine we endure today, the Khazarians produce, print, "money"–fiat-money. Fiat-money is our bank deposits, wealth, stolen from us, purchasing power robbing (price inflation) fiat-money "printed" a top of that, and then fenced, loaned, back to us, with usury attached–fiat-debt. We are literally borrowing and paying interest on wealth stolen from us.

    If we fail to service the fiat-debts the Khazarians say we owe them, the Khazarians steal more of our wealth–homes, cars, labor, and increasingly, freedom.

    "Unfunded Obligations" are fraud. A multitude of massive frauds. It's like taking earnings from employees under the pretense of investing that wealth for their retirement, but spending it on yourself instead. It's FRAUD!

    It is not we that owe them, but they that owe us.

  31. Also left out is that government revenue totals include rebates, taxes, government employees pay. That is, a federal worker pays NO federal taxes–None. Such a worker rebates part of his salary back to Uncle Tyranny. Ditto state, municipal, etc. workers; A state employee pays no state taxes, etc.

    What is more, a government worker for one jurisdiction also rebates a portion of the taxes they pay another if there are transfer payments between the jurisdictions. For example: 15% of state workers' federal taxes in a state that get 15% of it revenue from Uncle Tyranny is flowing to the US Tyranny as a rebate, not a tax.

    It's as if I paid my workers $50,000 each, but took a third of that back. Now imagine that I include that $17,000 on my balance sheet as revenue?! Of course, that would lower my net profit margins, but government is a for-theft, not for-profit, industry, and does not maintain a net profit margin.

    What this all means is that the US Tyranny revenues are much lower than stated. An more accurate number would be revenue net of the above rebates.

  32. If you have a strong inflation you automatically raise Taxes because your higher income would fall in higher Tax rates. (If the tax rates wouldn't be corrrect with inflation, which is usally delayed by a year or even not happening.

  33. I can see a few issues with this video. First, you rightly make the claim the government can't go bankrupt, then backtrack in an effort to make it after with your ideology. The federal reserve can service all our debt, without any issues.

  34. It sure don't feel like it, hell, after working for 50 years and retiring 2 times I'm barely making it and don't get a foking dime back from the government, Amazon sure pay a lot of taxes!

  35. Yang proposed a 10% VAT tax… people screamed it will hurt the poor… if automation stories are true and more people are pushed out of jobs in the next decade… who will fill the void in tax revenues? can't tax a robot or a software program… but I bet the government will implement a VAT to fill the lost revenues… and it won't be a paltry 10% either

  36. This needs to become talk of the news… "money/debt" is just numbers in a system someone invented and the rest put their stock into

  37. Eliminate all of Congress and replace them with a Rational Thinkers council of 25 people who have passed an IQ test, a psychiatric evaluation, a rigorous financial literacy/economics exam, a logic test, and a test showing they understand the U.S. Constitution and Bill of Rights.

  38. Stop taxing the rich. Raise taxes on the worker. They can't hide it or escape it.
    If you need more tax revenue, FLIP THE TABLES. The more you make, the less percent you are taxed.

  39. To defend itself from inflation, a government will always give itself the power to intervene in the free market and set the prices. They are already trying to do this in the medical industry. the real question is whether America is in a unique position, which history couldn't attest to, to be in a position to actually get away with this, since were a country who is only somewhat dependent on other countries to prop up our economy.

  40. This is misinformation and probably astroturf:
    – table at 11:38 onwards is missing 19% of the population (the top 19%)
    – he never talks about US debt internationally. Almost all international debt is either in USD or Euros.
    – if you have $10k in savings and $100k debt in a mortgage, inflation is in your best interests. He's lying to you by not mentioning your mortgage, medical or educational debt.
    – cycle at 5:00 is incorrect. The Obama government more than doubled the money supply and inflation decreased. This is because there are a whole lot of processes not represented in this graph that cause money to create more money and skim any transaction. These combine to the extent that the model of the consumer cycle he's trying to trick you with is pushed into an ever shrinking corner of the economy. So more money means a stronger push into the corner, which is what happened.

    Going back to the table, this is an old libertarian nonsense trick. Here're the non-proportional numbers, assuming 300M people in the US:
    Poorest 20% = $800 * 60M = $48B in tax
    Next 20% = $4000 * 60M = $240B in tax
    Middle 20% = $8900 * 60M = $534B in tax
    Next 20% = $17600 * 60M = $1056B in tax
    Missing 19% = ? = ? in tax
    Top 1% = $534000 * 3M = $1603 in tax

    For starters, the total amount here adds up to the total US Govt income so I'm guessing either the missing 19% pay no taxes or his numbers are wrong. It's hard to even talk about this because the numbers are so wonky.

    Secondly, the data I can find shows that corporate and individual tax respond to changes in governance. I don't know what the specifics are but Obama was big on corporate tax avoidance and it really shows in the data (google it).

    Reality: printing money decreases inflation because the US economy is horribly dysfunctional. Beware of anything you think you understand and pay more attention to anything that leaves you confused, uncertain and frightened, because it's much more likely to be real.

  41. You are worse off if you have "savings", and you are never "just the same" because wages always lag inflation, wages havent gone up really in almost 20 + years on average probably 30+ years, yet from 2009 to 2019 the price of a delivered pizza with no toppings and a soda went from about 13$ to 25$.
    The only way to save is in metals or dollar alternatives and to reduce your tax exposure (dont earn a paycheck), work on your company and keep your payroll as low as possible (because the corporate rate is lower than the personal rate) better to start a business, leave money in the business to grow the business than to take a fat paycheck and give up 30% of your years labor in one go.
    The working class will never retire comfortably because of the governments obligations, only the entrepreneur class will "make it".
    The system is mathematically designed to fail.

  42. This guy is an idiot , the government does not print money. The federal reserve which is a private company prints our money.

  43. This is missleading because future obligations do not have to be paid out right now. You don't pay interest before you spend the money which drastically reduces the amount of interest you need to pay. The rest is accurate but that is extremely misleading.

  44. inflation is propaganda. stop using that word. it confuses dumb people. Say what it really is, say currency devaluation. Back in the day people cared about currency devaluation but since they started calling it inflation people seem to accept it as normal.

  45. At 6:00 what about the fact that now your are in a higher tax bracket. The government steals a higher percentage of your $100,000 than when you only made $50,000- hence you are losing purchasing power.

  46. "Owe"… TO WHO DO WE OWE THIS MONEY TO?

    I have never been able to understand exactly who/what/where these amounts of "National Debt" are owed to.

    Do we owe it to ourselves?/ WTF?!!!!

  47. When you spend 850 million dollars annually on weapons and army bases abroad to combat an imaginary enemy or made up enemy, you cannot save any money nor make your own people's life bearable. What do you expect ?
    It's a shame, I always though that Americans were wise but in fact are only looking to spread suffering across the globe.
    5 wars are actually going on by the US, with countries that the average American never heard of, only that they are enemies. Aggraveted diplomacy with 2 major superpowers, and tariffs against the Europeans + Canada. Sooner or later this is going to back fire heavyly.

  48. There is people in the government that get paid more than the President and does nothing the corruption is the problem. Quality Control can fix this.

  49. This is nothing more than spin bullshit.
    We are a family of upper middle class, my wife and I claim zero on our employee tax deduction form (W2), when it's tax season, we always have to pay in on top of that despite having 2 children, in other words, I haven't seen a refund from Federal taxes.

  50. Your charity u supporting isnt connected to the proper trading company of "The United States of America" .. basically what u doing is stealing for a foriegn church thats corporate.. n i dont care about your 10 myths. There is no debt.

  51. Some interesting data, but several questionable assumptions. Under your "solution" of growing out of the debt, how does the economy continue to grow if there are 10% budget cuts followed by no increases? Aren't certain industries and geographical locations going to be severely impacted, leading to localized contractions, which could then lead to a general contraction, and then lower revenue. That sounds like the downward spiral associated with the Great Depression.

  52. 6:20 You'd have $20,000 in savings in scenario #2. Which would be worth the same as the $10,000 in savings in scenario #1. It's not nominally the same though, nominally it's doubled.

Leave a Reply

Your email address will not be published. Required fields are marked *