Name: Why The U.S. Can’t Go Broke
Uploaded: 2021-04-26T03:34:07.000Z
Duration: 9 min 18 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

The U.S. national debt is more than $28 trillion.

Bigger, bigger than the size of our economy.

In fact, it's the biggest debt in the world,

but the U.S. government keeps spending more than it brings in.

Our rising debt levels poses a national  security threat.

People need to start taking this seriously or it'll be too late.

With the COVID pandemic, government spending has exploded,

even as demands for more government programs are growing.

It's Washington, DC's game of kicking the can, and your kids are gonna be it.

Are future American generations really getting a broke country?

Not all economists think the national debt is something we should worry about.

She's a professor of economics and public policy at Stony Brook University.

And I'm the author of New York Times bestseller

That book has a lot of interesting ideas about government debt.

We'll start with the fact that there's a big difference between you taking a loan,

If you can't get money to pay your debts, your creditors can take your assets,

and you could be in for a lifetime of misery.

It doesn't have to worry about where it can get

The federal government's the issuer of the dollar.

So it can never find itself in the same sort of

financial trouble that you might find yourself in

because the government is paying back its debt

In other words, the federal government doesn't

have to worry about earning dollars in order to

because it gets to manufacture the currency.

This is the key point: The U.S. government can make more money

whenever it wants to, to pay for whatever it wants to, including its debts.

That means that not only can the U.S. federal government never go broke,

it doesn't need to borrow money from anyone else.

If you stop and think about it and you say,

would you ever feel the need to go get it

OK. Now we've established that the federal government makes U.S. dollars

and that's how it can always pay its debts.

And that's why it never has to borrow from  anyone else.

So if the government doesn't need to borrow, why is there a national debt?

It's a good question. But to answer that,

we first have to understand what a deficit means.

So those $10 are actually circulating in the economy.

It's a negative in the government's books, but it's a positive for the rest of us.

Where do they go? And what is that deficit being

Is the money going to people who will spend it on things they otherwise can't afford,

Or is it going to people right at the top, who will likely just save it?

Seeing our own money in the negative is scary.

So it's understandable to have a similar reaction

when we look at the government's finances.

And that's probably the idea that Mitt Romney was channeling when he said:

I think it's frankly not moral for my generation to keep spending massively more than we take in,

knowing those burdens are going to be passed on to the next generation.

But we know the next generation won't be paying for this spending out of their own pocket,

because the federal government makes U.S. dollars, so it can't go broke.

which means it doesn't have to borrow from anyone.

Plus, deficit spending actually leaves money in the non-government part of the economy.

If you're thinking there has to be a catch,

that the government can't just keep printing money to fill our bucket.

At some point, there will be too many dollars chasing too few goods,

We have so many dollars and we're so eager to

go out and try to chase after goods and services,

We don't have the productive capacity. And all of a sudden, all of that spending

Subtitles ListPlay Video

Why The U.S. Can’t Go Broke

perception

guarantee

infrastructure

negative