CrashCourse - 2015-09-23
What is debt? What is a deficit? And do these things have different outcomes for individuals and nations? Adriene and Jacob answer all these questions and more on this week's Crash Course Econ. Deficit and debt are easy to misunderstand, but luckily, they're also pretty easy to understand. This week we'll explain what deficit and debt are, and talk about what the sources of deficit and debt are for the US Government. Also, we'll take a very special trip to Cliffordonia to try and understand these concepts and get a look at what a colonial-era space program might have looked like. Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever: Mark , Elliot Beter, Moritz Schmidt, Jeffrey Thompson, Ian Dundore, Jacob Ash, Jessica Wode, Today I Found Out, Christy Huddleston, James Craver, Chris Peters, SR Foxley, Steve Marshall, Simun Niclasen, Eric Kitchen, Robert Kunz, Avi Yashchin, Jason A Saslow, Jan Schmid, Daniel Baulig, Christian , Anna-Ester Volozh Want to find Crash Course elsewhere on the internet? Facebook - http://www.facebook.com/YouTubeCrashCourse Twitter - http://www.twitter.com/TheCrashCourse Tumblr - http://thecrashcourse.tumblr.com Support Crash Course on Patreon: http://patreon.com/crashcourse CC Kids: http://www.youtube.com/crashcoursekids
i’m from the future. the epidemic thing was right 🦠 zombies still tbd. 🧟♀️
What if there’s a pandemic that whites out half the population ‘What if’ yeah nervous laughter
the 6 year old is not unemployed, it is economically inactive
The 6 year old boy isn't unemployd , it is just not apart of the labor force( you are in the labor force if you are 16 or older ussualy)
Unemployment rate and participation rate are two different things. Unemployment only contain those who are participating in the labor market.
Yeah the 6 year old is not because only those 16+ and actively searching for a job are considered unemployed. You can be over 16 and jobless but not considered unemployed, if you are not trying to find work. But if you're under 16 and working, you're still not a part of the labor force. Weird, huh?
Main outtakes of this lesson
1) Budget deficit - the amount by which a government's spending exceeds it's income over a particular period of time.
a. Debt - the accumulation of budget deficits.
b. In the same way our GDP grows every year, due to population growth and productivity increases. And our ability to sustain debt grows along with our income.
2) "Default"- the investors who loaned the government money lose billions and the government loses all credibility, and it causes massive recession.
3) Debt ceiling - limit on the amount of national debt that can be issued by US Treasury.
Oh man you are cracking it. Thanks for the highlights!!
Thanks! Please do this for all economic vidz
I'm in 7th grade so this is very helpful for my up coming competition. Thanks! Also very helpful in the other vids too.
Thanks for this! I did my homework for this commentary xd
Small historicl point: The USA got its economic start by defaulting on all its loans and tax bills with the British govt. Sometimes defaults can be useful.
So basically we have to take granny and grandpa out to fix the economy?
@Farouk sallak I can't wait for it.
i mean corona is kinda wiping out grandpa and grandma
@Hugo Garro so I guess we shouldn't have to worry about the economy then.
I mean Granpa & Granma & all others who succumb to COVID5G are part of a test run...preparing the rest of the population for the completion of 5G rollout.
For those of you who think this is nonsense please direct those of us who believe this 'NONSENSE' to the scientific 'peer review' articles/publications that state the research done indicates it is not hazardous to human animal & plant life on this planet..
Waiting..
Also...the increase in ventilators hospital beds & morgue s are on preparation for 5G rollout around November 25 just in time to blame it on the COVID19...
5G interrupts the atmospheric Oxygen Molecule...waiting for any evidence otherwise.
@Mama Warbucks K
"Global pandemic"
Evil laughter from adrienne hill
1:30 Ah the good old days when US debt was only 18T
@bongo155 At one point, we won't be able to sustain this debt and we should be looking in the long term. You either got to increase revenue through areas such as taxes, or you have to decrease spending. Pretty much everybody from both sides of the political spectrum agrees that the debt/deficit needs to be curbed somehow, but which of the two is the big debate. Personally, I am in favor of reducing both taxes and government spending, but if people saw how much polices such as universal healthcare would truly cost, they would be against adding fuel to the fire.
@TheAwesomePoo The debt figure by itself means nothing. You have to look at GDP, revenue as % of GDP, GDP growth and very importantly the interest rate on the bonds issued.
For a number of years now government bonds have had a very low coupon rate on bonds. Bonds repayments are going to drop in the upcoming years as bonds issued with that low interest rate start to mature.
The issue currently isn't size of the current budget deficits but what the budget deficits are spent on - tax cuts for the rich and corporations and military spending increases. Those things aren't productive or good investments.
Currently the US is looking at budget deficits of almost $1 trillion but if that money was being spent on education, health, infrastructure, repairs etc then that is fine because that will increase productivity and create revenue down the track.
bongo155 Yes, the government does spend unnecessarily. The issue isn’t just what its beong spent on, but its also about how much. The government does spend more money on the military than necessary, but the same can be said about much of the welfare programs that make of the majority of its budget. Those programs are ineffective and are often times wasted. There are certain areas where the government should be involved, and certain areas where it shouldn’t. There are a lot of areas where the government is involved, but shouldn’t. Cutting down on those will reduce spending and reduce the deficit. Tax cuts on the supposed rich/corporations are actually tax cuts on thr middle class as well. Most tax cuts reduce taxes for working americans, and improve unemployment by giving companies more money to work with, allowing them to give raises, employ more people etc.
@TheAwesomePoo Well, thats just your political opinion that welfare programs are wasteful. Every piece of data and research says good welfare programs benefit a society.
Tax cuts have virtually no effect on employment or even stimulate the economy. If you want to stimulate the economy the government spending on things like infrastructure are much more beneficial now and in the future. Tax cuts are among the worst ways to improve an economy.
And have a think about this. The average family in Norway has MUCH MUCH more disposal income than the average American family.
For example if you earn $100 and live in a high taxing place and you pay 50% of that $100 in taxes and out of that remaining $50 you have expenses of $10 leaving you with $40. On the other hand you live in a low taxing place that only takes 20% in taxes leaving you with $80. But then you have to spend $50 of that remaining $80 on bills leaving you with $30.
Which place would you rather live in? 50% tax place or 20% tax place? Obviously the 50% tax place since you have $10 more left over after taxes and bills.
Problem is Americans have been indoctrinated and brainwashed from birth to believe nonsense like "derp derp government bad" "government is wasteful". The whole libertardian movement is one complete and total lie told to the poor by the rich.
Plus the US government cannot go broke. The US controls is own currency. And even though the US will have close to $1 trillion budget deficit it wont be hard to service that debt because the coupon rates, ie interest rate on that debt is so low.
I mean when was the last time you checked the yields of bonds like 2, 5, 10, 15 etc? Look at how low the yields are.
@bongo155 Its not just my political opinion nor does 'every piece of data and research says good welfare programs benefit a society". There are many studies that in fact prove how the government welfare programs are ineffective and are wasteful. Look at how much we have spent on welfare and how much of the government budget goes to it. Then look at the results. Welfare is not working despite how much money we keep throwing at it. The majority of the government spending is spent on welfare programs NOT infrastructure.
Comparing the US to the Scandinavian countries is more apples to oranges than a fair comparison. First, they are successful off their oil and natural resources. This growth was due to capitalism, not their supposed socialism. When countries like Sweden rolled in socialist policies, the economy tanked significantly. And the Swedish economy is still not as good as it may seem. Second, they have ethnic homogeneity, and a strong social trust+culture. People trust each other, and crime rates are low. However, take a look at the refugee communities in the Scandinavian countries and how they are doing. Not so good right?
The problem isn't that we are brainwashed into the libertarian movement. Quite the opposite: colleges and many of our educational institutes continue to spread leftist ideology to the next generation and brainwash them into socialist policies progressivism. Libertarian-ism isn't some big lie told to the poor by the rich. The government really IS inefficient and wasteful. The larger the government grows and the more power it has, the further it inches to tyranny. We are a country built on the free market and a minimal government. Just take a look at the constitution, which places the inalienable rights of every human above the government.
Tax cuts do improve the economy. Nobody can deny the state of the economy right now under Trump. Unemployment is down historically and wages are up. And with a better economy, you can generate more tax income even with a lower percentage.
There is bipartisan agreement that the budget deficit and debt should be controlled. There are many reasons for this, but we are essentially digging ourselves into a hole. Even with low interests, we are still paying a huge percent of the budget to that interest. 22 trillion dollars is an incomprehensible amount of money. That is money that could be spent in a more useful area. And should something like a recession were to happen, out debt will be a further burden. The solution isn't to try to generate more revenue by increasing taxes: you could suck the rich dry and not have enough. Thinking long term, you need to cut down government spending on programs like SNAP where billions go wasted on junk. Otherwise, the hole will only deepen, with interest costing us even more. The last time I checked, the debt to gdp ratio was in the 110%s.
The US gov. can go broke and nearly has on several occasions. One thing that keeps the dollar's value is our military prowess, though at a certain point, the rewards are minimal for every extra dollar spent on it.
This comment was made during Coronavirus pandemic. Will look forward to see this back after years.
God bless you 🙏.
This one was way too short. ..
Indeed it was.
I know these have to be simple videos, but you missed some very important points. For example, the Federal Reserve Banks are major lenders to the federal govt and the US dollar is a global reserve currency. Basically, the US is in a very, very different situation from other countries like Spain or Greece. Technically there isn't a true lending limit for the US. It's not the same pool of savings that most commercial lending is handled from. The Federal Reserve does, basically, make money out of thin air to purchase US treasury notes. It's not finite. Now that being said, they have to keep a very close eye on inflation and growth. They also face political pressure from time to time. Yes countries like China and Japan also own a lot of US debt, but that's for simple currency conversions. They basically don't have a choice. The real limit, if there is one, would be if the federal govt forced the Reserve to lend so much that inflation would skyrocket and the rest of the world dropped the US dollar as a reserve. That's a really extreme situation that I doubt would happen any time soon. Not sure what it would be, but it would be far worse than a technical recession or default.
What an idiot you are, the amount of debt that you owe will cause a problem even if usd as a global reserve currecy . U cant print your way out of 20 trillion dollars
Next video bub
John Mason you are right and I think there’s a name for it, it’s called quantitative easing, they do this from time to time it’s like stalling for a better solution to arise.
Can a lunatic in the White House cause it?
The
When a six year old has been actively seeking employment for the last four weeks...
5:11
why is there a Swedish flag with the title Norway? :D
6:44 I found waldo
THIS IS WHY THE CORONA VIRUS EXIST. To make sure america stays #1
so 25% in health and still shitty as hell?
+Rochester Oliveira brazilia is a shit country though why not compare us to the more civilized countries?
+Rochester Oliveira thats true, but brasil is growing fast, if you avoid a revolution and fix the corruption you are going to be a developed country
+Rochester Oliveira Nice cherry picking argument.
You can't just point at one country and look at one aspect of their economy/government and say "Look how shitty it is there! If we do that it will certainly be shitty here". There are myriad factors which contribute to a working system, and myriad examples of where a system works great in one country and poorly in another. If you logically break down the situation and account for the factors present in the US, it is obvious why our healthcare costs are so high.
+Rochester Oliveira lol, as a Brazilian I can confirm this.
+Sebastián “SebaUruKiller” De Vida
You need universal healthcare insurance, and you need big group buyers to pressure pharmacists to give generic drugs, hospitals to share information, physicians to prescribe the most affordable treatment and seeing if it works before going for the 20 000$ surgery, and you need to do something about your epidemic of obesity.
I know you don't like to hear that USA but the private investor is actually pathetically ineffective at managing health insurances even if "it's his own money". Because it's not his own money. It's the money he snatches from the salary of those who are insured, and they have literally no incentive to limit costs, unlike the governement.
*Watches this while in covid lockdown*
of course I see this after I took my financial test this morning ugh
me: what if that 6-year old-
other crash course fans: impossible
Whoa, I normally love this series, but there was a lot of missing information from this episode. . . and a lot more tongue in cheek zombie jokes as well.
"Remember, we try to keep it real around here" I lold
I was always under the impression social security came from payroll deductions kept separate from US spending
US National Debt is about to hit $20 Trillion soon. 💩🔥🔥🔥👌
why are you fear mongering
we are gonna be no.1 again.-DONALD TRUMP.he made AMERICA no.1 again
So what ?
LIBERTAGE
22T right now
"they deserve it, they worked hard." The elderly in America are entitled af and are the root of the problem
ARE NOT the root of the problem ...an inept Government is the root of the problem...power hungry greedy Corporacratic Crony Capitalists...Wall Street ... you know the 1% and above who are intent on increasing productivity without increasing the labor needed ...modern day slavery they call it...while social security dwindles away to nothing...something the millennials need to be concerned about because they are paying into a system that will be defunct long before they reach retirement age...not to mention that they are having less to no children to continue paying into the system...
Why oh why to these neoclassical economists think that when people lend money it comes from people's savings?
Banks just create the money! #FractionalReserveBanking
and the dollar shrinks....
6:38 um....was this planned? Like if the government is spending a ton on healthcare and social security, and suddenly a pandemic which kills more elderly than any other group shows up... Is it too hard to believe that some of the elite would want this to happen?
I was hoping cliffordonia was gunna segway into talking about the fiscal cliff richard but alas.
"i have 2 jobs" – economist and actress, I guess :)
This episode was as cheery as my favorite comedy podcast! Good stuff, though!
6:41 corona time
5:12 I don't think going past the debt ceiling means much when you just keep increasing it
Thanks for all of this great content - using for assigned watching in a university course.
Hahaha, I like how they refer to lenders as "savers".
The art of spin
@6:40 she predicted the future. She was talking about COVID-19.
Love the hosts and the production, great work!!! <3
After helping me through college im happy to have found your videos again as an adult to brush up!!. Way to go!!
5:11 Anyone else saw Norway with Swedish flag? :))
Am I the only one that expected to see John Green after listening to the intro only to be disappointed?
6:40 that did not age well
Was looking forward to this video. Don't get me wrong, it was great. But it ended just as it was getting started. You left out so much. Great candidate for a part two and three.
As I am moving forward through this economics series, I am not able to recollect the past videos, I feel like going back to 1st video, What's the best way to remember the major crux of each video?
Take notes. Welcome to class.
Hola: Just heard your explanation on Economics #9, I as a 70 year old person receiving Social Security and Medicare, would like for you and/or your collegue to also put in that both Medicare and SS, have their own investment accounts, thereby they are funded without having to depend or take a lot from the National Budget. You make it sound as though older people, who have worked and put part of their income into SS, for at least 35 years are parasitical! We have pain into our SS payments, and many of us, older than 65 still work. Also, there are at least 43 Billion yearly deposited into SS by people who are unable to get it back due to the fact that the U.S. DOES NOT HAVE A REALISTIC OR EFFECTIVE IMMIGRATION METHOD TO RESIDENCY OR CITIZENSHIP!! So before you re-record this chapter, please look up information on PEW and other research and realistic organizations. ALSO, DON'T FORGET HOW MUCH IS WASTED ON THE PENTAGON AND NOW ON DUMP'S PERSONAL EXPENSES! Lupe
I'm sorry but I don't understand how immigrants effect senior finances .
Now I'm a newby, so kindly explain it as simply as possible .
Also , I'm not picking a fight with u. I just don't understand is all. Saying this just in case , there's a misunderstanding
THANK YOU SO MUCH FOR KNOWLEDGE - NAMASTE
Dudes, the pool of money is infinite. It's called printing and fractional banking. Inflation and debt have no limits since the gold-standard was abolished.
+John Marlowe You know it's a joke right?
+John Marlowe
" debtors [creditors?]...demand repayment in another currency or with actual assets"
Creditors can only demand payment in the currency in which the contract was written...yes? ;)
"Foreign debt will eventually result in foreign ownership of US property"
If they want to purchase US output, yes. But dollars can settle transactions with almost any country, so foreign dollars reserves can circulate between foreign countries as easy as with US entities. =)
hey whats up btw thanks for wrecking the ecomomy
Well unless you're saying we made a Frankenstein monster that loves debt to say the least, more debt more value, then you miss that any bank that you have for reference has paper money so there is no way to prove what you are saying.
911
omg u helped me so much for my homework (even if they are in french) thksssss
2:19 wow 😋😋😋🙂😍
They talk too fast, I'm very confused... Any tips?
Stella Gilbert playback speed 0.75
Hit pause and replay.
I love how I view videos a few minutes after it was posted ^_^
3:25 I get trying to play both sides, but you can't seriously say they're both wrong, then go on to say social security and healthcare, those are handouts lol
kamara ssakka - 2020-03-16
did she just single handedly predict the corona virus
youtube channel - 2020-04-04
@Sharen Koshy .
DEUCE - 2020-04-05
@Anti-communist ur argument falls apart once you see how many asian people (not even necessarily chinese) are being discriminated because of this whole anti china movement thats being created with this epidemic. It might not be inheritly racist to call the virus "chinese" but in this case its definetly a way to spread racism and discrimination.
Anti-communist - 2020-04-06
@DEUCE would you avoid talking to Americans if the virus came out of America? Yes, you would. Would it be racism? no it wouldn't. But in our case the virus came from CHINA and if Americans avoid the Chinese you would call the white people racists. It's unfair. Why the discrimination against white people isn't racism? Can you explain to me?
Tan Dameno - 2020-04-11
@Anti-communist Tell me more about how Spanish flu originated in Spain.
Also educate me on the scientific approach of naming a disease according to its place of "origin", because I can not see the link between the scientific method in the naming process.
Best wishes, not John Green
Claire Rodriguez - 2020-04-12
Her and everyone else with a brain!