Name: Something is going deeply wrong inside US economy
Uploaded: 2025-08-26T18:01:46.000Z
Duration: 11 min 53 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...

There is something strange and weird happening inside the US economy.

To-infinitive

The US government is about to take 14 trillion dollars out of US taxpayers money and give it to foreign governments and wall street.

Past simple

This sounds like an exaggeration, however, last year alone, the US government paid the Japanese government about 50 billion dollars in pure cash, the UK government about 35 billion dollars, the Chinese government about 40 billion dollars and so on and so forth.

But that number is about to explode, you are working so hard, making so much money and paying a good portion of your income to the US government as taxes in hopes that this money will be used to build better roads, better infrastructure, provide you with better social security, better medicare.

But that money is being taken and given directly to wall street and foreign governments.

It might seem like I am exaggerating, so let me explain.

Over the last decades, we have built a perfect system, where trillions of dollars will be taken from US taxpayers and will be given directly to foreign governments and wall street.

This is probably the best investing strategy that I have ever seen.

The US government last year earned from taxes about 5 trillion dollars.

This is the most amount of money that any government has ever made.

And it might seem like this is enough money to make the United States great, to pay for everything, build roads, bridges and everything the United States ever needs.

But a trillion dollars of that money was taken last year and was paid in interest payments.

Because the United States has around 37 trillion dollars of debt.

And the interest payments on those debts are about 3% to 4.5%.

Last year alone, it amounted to 1 trillion dollars.

And the irony of this debt is that it explodes because of the compound interest.

Just like you can invest in the stock market and over a long period of time, your investments are going to exponentially grow, the exact same terminology works against you when you have debt.

And because the US debt has grown to 37 trillion dollars, there is no way back. 9 trillion dollars of that debt is being owned to foreign governments. 7.4 trillion dollars is intra-governmental debt.

But most of that debt or about 20 trillion dollars of that is domestic debt.

Most of that debt is being owned by wall street.

For example, Berkshire Hathaway, Warren Buffett's company owns around 350 billion dollars of US treasurer bills.

And this year alone, Warren Buffett is going to receive 15 billion dollars from the US government just because he holds so much US treasurer bills.

Warren Buffett has hundreds of billions of dollars worth of cash, and he doesn't know where to invest that money.

So the best investment right now is probably US treasurer bills since they are very liquid, they are very safe, and at the same time, they are providing the investors with at least 4.5% in interest rates.

You can easily liquidate that money anytime you want.

But the vast majority of that investment is being held by mutual funds and hedge funds.

So if you are an investor at least in the S&P 500 or any of these mutual funds, then you are directly benefiting from this.

This investment is so good that the vast majority of countries across the globe has been investing in the US debt.

The best example is, of course, Luxembourg.

This is a tiny country in the middle of Europe, and they hold around 430 billion dollars in US treasurer bills.

And last year alone, Luxembourg received 17 billion dollars in pure cash from the US government.

Since the population of Luxembourg is about 678 thousand people, every single person in Luxembourg has received 25 thousand dollars in pure cash directly into their pockets.

Like people in Luxembourg do not have to work because the US taxpayers are paying off for their lifestyle.

I mean, 25 thousand dollars is of course not enough money to change any person's life, but for the vast majority of people all across the globe, 25 thousand dollars is a decent income.

Imagine you have somebody there who already has a roof over his head and has a car.

An extra 25 thousand dollars is probably gonna pay for most of his bill if he is a middle class.

So the middle class people in the US are financing literally the lifestyle of the vast majority of people all across the globe because the US has borrowed so much money.

This is the largest transfer of wealth that has ever happened in history because trillions of dollars are flowing out of the pockets of middle class americans and getting into the pockets of middle class people all across the globe.

And that's all because of the fault of the US government.

As if the US government has built an automatic system of transfer of wealth from middle class americans to everybody else. 80% of all the taxes in the US are being paid by the middle class americans.

They are not being paid by the bottom 50% of americans and they are not also being paid by the top 1%.

Because the top 1% or even the top 10% of americans primarily make their money from investments and dividends and businesses and that is where you have the lowest tax rate.

Most of the taxes that comes into the budget of the US government are payroll tax and income tax and most of them are being paid by the middle class americans.

And because the US government has accumulated 37 trillion dollars of debt, and just let me clarify this, this debt is growing day by day.

If you literally pause this video and check out the total amount of debt by the time this video is over, it is probably like 37.3 trillion dollars or 37.5 trillion dollars or god forbid by the end of the video it's gonna be 38 trillion dollars who knows.

And then all of that money is going to go directly into the pockets of investors.

And since there is an interest on it, the debt compounds over time.

Based on the best projections that we have right now, the debt to GDP ratio in the united states by about 2055 is going to reach 175 percent.

And this is probably the best estimates that we have.

If you actually take the worst case scenario, this is probably going to be like 250 percent.

Because this estimation didn't take into account that there are going to be multiple crises on the way in the next 20 to 30 years, so it's very easy to assume that this number is going to cross 200 percent for a fact.

And because the debt is growing over time, the interest on the debt is also growing over time.

According to the best estimates, at least by 2035, and that's within the next 9 years, the united states will pay 14 trillion dollars in interest to the people who hold this debt.

And who are the people holding the US debt?

It's the foreign governments, which is about 9 trillion dollars.

Maybe by 2035, it's gonna be like 15 trillion dollars, who knows.

It's mostly wall street, and some of that debt is being owned by social security trust funds and trust funds that pay medicare.

But what is interesting is that by 2035, the total interest payments annually is going to be about 1.8 trillion dollars.

And this is the best case scenario, it can easily go to 2.5 trillion dollars.

So you are working so hard and paying so much taxes, all the americans working super hard and paying so much in taxes, and yet this money, instead of being used to make America better, to clean the american streets, build better infrastructure in America, will simply be paid to investors because the US government has accumulated so much debt.

And based on the projections that we have, the average interest payment is going to be about 4%.

So if you accumulate for example 100 trillion dollars of debt, it can easily go to 100 trillion dollars within the next 30 to 40 years.

The US government will be paying 4 trillion dollars in interest payment just to maintain that debt.

That is assuming that interest rates on US bonds are not going to rise above 4%.

Absolutely, because there are going to be times when inflation will get out of control and investors will demand a much higher interest rate on US debts because it makes no sense to loan money to the US government below the inflation rate.

The real question is that how did we get over here?

Why wasn't the government careful and how did the government manage to bring the United States in such a position?

If you go prior to 2008, the debt to GDP ratio was about 60% and it wasn't a problem.

Yes, the US government used to pay some amount of interest to the people who loaned that money to the US government but it wasn't much.

However, since 2008, that number has exploded and now the new debt to GDP ratio is about 120%.

What makes this even more interesting is that most of that debt was acquired when the interest rate on the US debt was lower than usual.

For example, between 2008 up until 2022, the interest rate on the US debt was about 2.5% or even lower, in some years, it was even 1%.

So no wonder the government borrowed so much money.

When you can borrow money at 1% interest rate, the government continue to borrow trillions of dollars.

But because that debt is going to expire a certain time in the future and you have no money to pay it back, what you have to do, you are going to refinance it.

And you will refinance it at a new interest rate, which is the current interest rate in the market, which is how the United States got into this problem in the first place.

So over the next couple of decades, the United States will remain this place where trillions of dollars will be generated by the middle class Americans but at the same time, a good portion of that money will be directly paid into foreign governments and Wall Street.

And this is probably the biggest wealth transfer in history.

And that's why the real question comes back to you.

Do you want to be the person who pays so much taxes to the US government or do you want to be the beneficial out of this system.

This system is going to exist for years to come, nobody is going to change this system.

Because if you change this system, if the US government stops paying their interest on its debts, the United States dollar will no longer be the global reserve currency.

So the entire wealth or the top 1% will milk everything out of the US government over the next couple of decades.

So the question comes back to you again, do you want to be an investor or do you want to be in the middle class who pays so much taxes.

Because at certain point, the US government will realize that all the money that's being collected from the US taxpayers is being spent on investors.

And that's why probably or that's when probably the US government will default on its debts.

But that's not going to happen 5 years from now or 10 years from now or even 20 years from now.

So until we have the time, it is probably the best for you to take the best advantage out of it and to make the most amount of money.

That's it for today, thanks for watching, and I will see you in the next one.