Understanding the National Debt and Budget Deficit

In which John discusses the US national debt, the federal budget deficit, plans for shrinking or eliminating the deficit, and tries to provide some context to the political rhetoric and statistics that are constantly thrown around in an election season. Along the way, I hope you'll understand why the United States' sovereign debt hasn't led us to an economic crisis, but also why budget deficits need to shrink in order to ensure that credit remains inexpensive and the US continues to enjoy the trust of the world economy. (Friendly reminder: Educational videos, by extensive precedent, are allowed to be longer than 4:00.) Here's why I think the gold standard is a bad idea: 1. By restricting money supply to the supply of gold, you risk shrinking the money supply just because of a shock leading to a disruption in supply from mining. This creates a lot of volatility in the money supply for no reason. 2. The gold standard limits a government's ability to respond to changes in the market, which can (and has) led to unescapable deflationary spirals. 3. Far from inspiring investor confidence, its implementation would crush it: http://www.ocregister.com/opinion/gold-369936-standard-money.html Posters and stuff: http://dftba.com My tumblr: http://fishingboatproceeds.tumblr.com My twitter: http://www.twitter.com/realjohngreen HERE ARE A LOT OF LINKS TO NERDFIGHTASTIC THINGS: Shirts and Stuff: http://dftba.com/artist/30/Vlogbrothers Hank's Music: http://dftba.com/artist/15/Hank-Green John's Books: http://amzn.to/j3LYqo ====================== Hank's Twitter: http://www.twitter.com/hankgreen Hank's Facebook: http://www.facebook.com/hankimon Hank's tumblr: http://edwardspoonhands.tumblr.com John's Twitter: http://www.twitter.com/realjohngreen John's Facebook: http://www.facebook.com/johngreenfans John's tumblr: http://fishingboatproceeds.tumblr.com ====================== Other Channels Crash Course: http://www.youtube.com/crashcourse SciShow: http://www.youtube.com/scishow Gaming: http://www.youtube.com/hankgames VidCon: http://www.youtube.com/vidcon Hank's Channel: http://www.youtube.com/hankschannel Truth or Fail: http://www.youtube.com/truthorfail ====================== Nerdfighteria http://effyeahnerdfighters.com/ http://effyeahnerdfighters.com/nftumblrs http://reddit.com/r/nerdfighters http://nerdfighteria.info/ A Bunny (\(\ ( - -) ((') (')

Comments

Red Wine Please: He's got it mostly right.
> You can't play Monopoly until the Monopoly Banker prints money in the backroom and hands it out to the players. No money. No game.
> China buys Federal debt instruments with money WalMart used to buy their goods. Money returned to US.
> Money creation (Treas/Fed, Comm. Banks) only a problem when production capacity is absent. Then inflation occurs.
> Medicare/Medicaid (Fiscal spending), at worst, might cause price inflation in meds, hip replacements, nurses, oxygen machines, canes and wheel chairs, rehab and hospice care, and such.
> Focus first on where the money is spent, second on the amount. Collective benefits: Defence, infrastructure, research, education, healthcare, energy, environment. Pretty much where we focus federal money today.

ZR1: listening at .75

Kat UPSC: 4:16 reason why you invaded iraq and libya

Jj Chen: us cant just print money because the us has trade deficits. It needs foreign banks like China's central bank to finance american trade deficits.

Mmm Mmm: The deficit will be lower in 2013 regardless of who is elected. The deficit will shoot back up in 2018 after Drumpf.

Senna C.: US will never go bunkrupt because they can just print more money and pay everyone, problem solved.

Andrew Ocean: LOL

Mike Mattingly: No mention of federal reserve?

alex 45: The US. Is borrowing like they've taken out a teaser rate on an adjustable rate mortgage.

AU: Death by bureaucracy. 7 managers for every consultant and unknown number of quangos. What did you expect!

Julia Lerner: A job guarantee would be a really good investment because it would grow the GNP more than any other kind of investment due to the current 20% or so real unemployment rate in the US. All those people sitting idle are a drain on the real economy when they'd much rather work and make a decent living doing the jobs that really need to be done in their own communities.

Elias Smith: Marty you bone head hover boards don't work on watèr

ON: 4:19 welcome to my world eh.

jookbj: I don't think its easy to pay off debt for most Americans like he's saying the debt is now 20 trillion. We can't handle that debt and we're getting close to great depression in 2020.

ndrthrdr1: Now over 21 trillion. http://www.usdebtclock.org/world-debt-clock.html
He says that we can pay it back. When? When the economy is strong.
Under Trump it keeps going up -- and speeding up.

Alfred Pardoe: PEOPLE. It is not always about how much the government spends. ITs about HOW the government spends it and how efficiently it produces the outcome we want from them. I would rather a government that has a debt of $20 Trillion that if effective, efficient and works for the needs of its people than one who only has a debt of $4billion but does F*** all for its country. Sadly the USA is $21Trillion and does f*** all for its people.

Global Crew Private Consulting GmbH: Think again smart Boy, why do You think 1 USD is only worth 23% in Swiss francs compared to 1980?...., and yes the Swiss Franc was inflated as well!

Dominic Sabol: can you do a updated video of this please?

james robbins: The only thing to do is slash spending on medicaid (biggest cost), social security, and the military. While doing this, simultaneously bring taxes back up to normal (or if that's not possible, keep them where they are post Trump cuts) but follow through with the spending cuts.
.... actually wait, responsibility is not a winning message in politics, therefore no presidential candidate will ever do that.The American people want to have their cake and eat it too. For that reason, bad times lie ahead.

Chloe Wang: So the debt is owed to foreigners like China. Not to americans

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