How Governments Can Harm Economic Growth
HTML-код
- Опубликовано: 13 сен 2022
- In the previous tutorial we learned about six ways that governments can support economic growth. But there are ways in which governments can harm economic growth as well. What could those be? Let's take a look!
Script by Matt Beat: / iammrbeat
Animation by Ignacio Triana: / unraveled
Watch the whole Economics playlist: bit.ly/ProfDaveEcon
Mathematics Tutorials: bit.ly/ProfDaveMath
American History Tutorials: bit.ly/ProfDaveAmericanHistory
History of Drugs Videos: bit.ly/ProfDaveHistoryDrugs
General Chemistry Tutorials: bit.ly/ProfDaveGenChem
Classical Physics Tutorials: bit.ly/ProfDavePhysics1
EMAIL► ProfessorDaveExplains@gmail.com
PATREON► / professordaveexplains
Check out "Is This Wi-Fi Organic?", my book on disarming pseudoscience!
Amazon: amzn.to/2HtNpVH
Bookshop: bit.ly/39cKADM
Barnes and Noble: bit.ly/3pUjmrn
Book Depository: bit.ly/3aOVDlT
Critique on over-taxation point (all others are perfectly fine):
A) The gas example is actually a particularly bad choice of example. Some Canadian provinces have implemented a heavy tax on gas that we can show has had effectively 0 effect on consumer prices compared to provinces (and USA states) that don't have a carbon tax. We know that this kind of tax *is* felt almost, if not entirely, by the corporations.
B) When you say business "often" pass on the cost of a tax to consumers, I'd have to ask for this claim to be qualified. Because as noted above: this doesn't seem typical, especially with gas. This idea that the costs "often" get passed to consumers seems to contradict standard theory regarding supply and demand (which is to say, if we know customers are willing to pay $1 more for gas, why wouldn't the gas company be charging that price pre-tax anyways?).
C) Discouraging spending might be a good thing. By some measures, the above carbon tax is actually considered a failure because it _didn't_ raise consumer prices. It was supposed to discourage gas purchases in favour of green energy production/investment. I'm sure you're already aware this is called a "sin tax" and understand it's purpose, I know this video is supposed to be simple, but this might be important to note.
D) Your point on companies moving headquarters is definitely a correct fact, but you don't actually explain _why_ it hurts economies. When Google moved it's HQ to Bermuda, that didn't prevent people from using Google or purchasing Google products. If the only advantage of keeping the HQ of a large corporation is the corporate tax revenue: then there's no sense in trying to hold onto them when the competition is at 0%. So you need to explain specifically why this is bad.
Over-taxation can definitely be an issue but I believe you should have approached this point from a much different angle. Highly competitive goods (like foodstuffs) tend pass taxes onto consumers far more due to low margins and low price elasticity. Additionally high taxes on lower incomes/small business might put an undue strain on small businesses creation (reducing competition) and/or discourage consumer spending in general (just by having less disposable income). Explaining that a corporate HQ leaving is an issue because that's a loss of jobs, or a loss of important control over a key business, may also better strengthen this point.
Feel free to disagree with this critique, but hopefully it helps you in the future. Keep up the great work Dave!
this is due to elasticity. he has a valid point even if the example is bad
@@TheMCGibson he doesn't have a valid point. He oversimplifies to a ridiculous level and supports the RW fiction that taxes are always passed on to the consumer, which is simply wrong. See the OP's point B.
As to point D), I note that large companies frequently receive tax incentives which result in paying less tax than an individual supposedly would with the same income. Similarly, high income individuals pay much less in taxes proportionately than lower income earners, due to various deductions and exemptions, and just gaming the system. See Trump and Romney. Also, it is fallacious to equate taxation to "productivity". Who gets to say what "productive" means? The economic definition favors concentration of wealth and does not comport with reality for most people. Don't even get me started on externalities.
We have had a very recent "success case" in Brazil regarding fuel taxes. Goverments had reduced the taxes to avoid a truck drivers strike (and the president in charge, aka Jair "the genocider" Bolsonaro, was willing to improve his popularity also to promote his reelection). In a few weeks the fuel got cheaper in the stations, products transportation costs have been reduced, and the prices in the supermarket shelves had slightly decrased too. For the first time in this century we had a deflation in a August month.
@@TheMCGibson Yes. I didn't mean to imply the point was invalid, so I apologize if that's the way I come off initially. As I note in my final paragraph, it's simply a critique of the presentation, not the validity point itself. A poor example can cause issues in comprehension down the line as it comes with some implications that may be false.
It feels illegal to be this early.
Fr
Fr
Fr
@@inreallife530 Fr
Fr
Appreciate all your content Dave. Been following since intro chem teacher posted your videos to watch, great stuff. 👍👊
Science man savagely demolished my SimCity 2k playthrough.
Thank you! You expressed more elenquently what I have always thought, the government must create a healthy ecosystem and safety nets.
Yeah, like Healthcare!
@@Worthless-one it seems so cruel to want to have a heal economy while not wanting to heal people.
I wanted to see him explain (or refute) the argument that personal savings in lieu of welfare take money from the economy in a negative feedback loop. People fear that the economy is contracting and anticipate job loss, so they start saving and cut spending. The economy contracts as discretionary spending decreases, layoffs begin as non-essential businesses see declines in revenue, the economy falters, and more people begin saving and cutting discretionary spending.
The so-called Underwear Model that predicts economic health states that men "splurge" on underwear as a luxury good when the economy is doing well, and overall sales of underwear suffer when families start to tighten their belts. If people had more faith in the welfare system, including healthcare, then they could afford to be stronger consumers even when the economy stumbles. Instead, the wise personal choice to save aggressively hurts the macro economy by contracting purchasing and limiting business growth.
It would had strengthen his point if he had said that people without home and lacking sustenance would produce less demand so their working power is wasted while the economy gets a high demand shock resulting in a loop that more and more people get fired by companies cause they try to catch the more and more decreasing demand devouring their profits by having to high production costs.
Workers for something are also consumers of something, it is that simple.
Kinda funny to hear all this and notice every single point applies to my country
It's almost like all countries are very similar.
Uh, are you from Argentina by any chance? lol
@@juanmajmt yes
@@jalilsalomon5587 I'm so sorry to hear that but at the same time that's great to hear lol
De todas maneras, si, todo lo que dice aplica para Argentina, lamentablemente.
And on taxes, the US has it's highest rate of economic growth when taxes are high.. and that is a provable historical fact. In fact tax cuts have ALWAYS been followed by economic crashes... every single time, again a provable historical fact.
Is this possibly correlation and not causation? Is it possible that taxes were cut in a preemptive move to reduce the shock of a predicted economic downturn?
Interesting. I haven’t heard this before. What’s an example in recent US history? I remember Trump being really into tax cuts, did those cause economic issues?
@@averagejoe2232 Yes, Trump's tax cuts, combined with Covid, is now driving the economic slow down. But Bush also cut taxes, which fueled the 08 crash. Reagan cut taxes in the early 80's and we had a massive recession in the late 80's early 90's. Even the Great Depression was proceed by huge tax cuts. Mean while the 50's which was the largest, fastest economic growth the US has ever seen, the top tax bracket was 90% and Cooperate taxes were 40-50%. The whole lower taxes equals economic growth is from Keynesian economics, which was taught like it was the bible for the last 100 years. The issue is Keynesian economics are wrong, and more and more younger economist are seeing that, and are instead using either classical or new Keynesian economics, which is them trying to fix the models. In the new Keynesian economics models, we can see tax cuts are contractionary to economic growth as they cause deflationary pressures in the model and thereby increase the real interest rate. Higher interest rates means people are spending more, while making it harder to get new lines of credit, thus causing a down turn in economic growth. The main issue is we have had 6 generations learning old Keynesian economics, and don't want to change.
2:35 "Whenever governments regulate an economy, they are manipulating a free market."
"Free markets" seldom exist, and not for long when they do. Large entrenched interests alway reach a point where they cooperate to fleece the customers, while preventing small competition from growing.
thats kind of the point of regulation.
@@maskie4189 My point is that, by definition, a free market is about prices being set fairly by competition. Real markets are governed by anti-competitive practices. Thus we don't even have free markets to be regulated.
I see what you mean, but since the prices have still been set by private companies alone, it still technically is a free market. But not really. It should be noted that a lot of times government intervention can accelerate the growth of monopolies and trusts, so you have to be careful when messing with the economy.
@@maskie4189 That is false. It is not *just* about private companies setting the price, but competition between private companies. A monopoly or a cartel is not a free market. By extension, it would also require competition between private buyers, so a monopsony is also not a free market.
Government regulation is only *one* way the 'free' part can be broken.
@@jursamaj Fair enough.
Love this series! Thanks for the high-quality content.
Great video 👍
I do think we all need to do less in general though. Feels like noone, including me has time for family, friends or hobbies. We also over consume and destroy the enviornment, and lastly depression and stress related health issues are on the risk. What do you think about lowering work time and introducing ubi?
i know youre not asking me buy ubi is just welfare reimagined
Thanks for this series. Enjoying it.
no, governments don't pay for things through taxation! according to modern monetary theory, governments pay for things by printing money, and taxation is only necessary to remove currency from the economy to prevent/lower inflation. otherwise, the video was fine.
also, the lack of enforcement of contracts has a very simple real-world example: any criminal deal gone wrong, because that's how things get solved when you can't rely on the government to enforce a contract...
Not all contracts should be enforced -- racially restrictive covenants, contracts in aid of fraud, contracts contrary to public interest, contracts where the bargaining power is disproportionate between the sides in certain circumstances (consumer finance, residential leases, labor law).
Hence laws that limit what can be in an agreement
the real issue is whether or not any given economic growth is a good thing...
between externalities and the practical reality that free market mechanisms arent absolute nor fully functional we have systemic issues in aligning economic theory with reality...
A main problem is these companies/executives want infinite growth in a finite world
They want a pipe dream
One example is the House building industry in England.
After WW2 an emergency house building programme was started and whole new Towns were built with up to 700,000 units per year being completed.
Once the emergency ended the house building subside and pressure groups and Government laws seeped in restricting the availability of building building.
This resulted in the rise in value of building land from about 25% the total value of a new house in 1960 to £100,000 per unit now in the North to £500,000 per unit in London
The purchaser of the house pays for this vast cost with a long term Mortgage which limits the house to high earners.
The industry has collapsed from some 700,00 units per year in 1960's to about 150,000 expensive houses today.
The quality of the new houses has deteriorated from a good size solidly built to small quick build units which are expensive slums.
There is no easy fix to this disaster as the builder has expensive land in his work in progress the land owner would refuse to sell his land at a lower price and
Any Government intervention to reduce the cost of building land is impossible as it would need scrapping of many laws introduced to please action groups and the release of green belt land.
The House Building industry would also collapse and land owners would need to have their land purchased by the Government at a much lower price.
The shortage of houses in England will only get worse and poor people will end up in slums or being homeless.
5:38 why can't there be a contract between the landlord and renter ? Both the landlord, and the renter can come to an agreement and both sign a contract. Tehy can print it and, have copies for both themselves.
This video just helped me write my economic essay. I am no longer failing economics🎉
Hey Proffessor dave how does worker safety measures fit into government regulation
Hey!
Regulations must be specific according to the size and stage of the companies..
Overtaxation kills Brazilian economy. In here, about 50% of any product prices goes to the government, and by the end of the year, people and companies still have to pay their anual incoming tax. The worst part, is that we've never saw the government taking good care of those huge amounts;
Taxation of the wrong people is indeed bad. That's why wealthy people need to be taxed. Brazil is not a government that seems to care about their people, they care about wealthy people and those in power. It's similar everywhere, but Brazil is more visible and brazen with how they only care for certain people.
Please explain this to Our government. . .
they know, but it is way more complicated than this video.
Have a nice day dave
I feel like it would be good to change the title to "How Governments *Can* Harm Economic Growth"; don't want to fuel people's poorly preconceived notions and biases
good call
@@ProfessorDaveExplains what was it before?
@@lanzibangli1259 I think just without the "can".
I would add to the list subsidies for companies that pay a non-living wage.
Oh I just KNOW the kind of people this video is gonna attract… good luck Dave, you are a braver (and more intelligent and patient) then I will ever be.
But don’t you know Dave??? They heard it on a podcast! Surely no one would ever randomly spout uninformed garbage and pass it off as a valid argument
Surely! They wouldn’t do something like that!
The UK has managed pretty much all of those and a few others into the bargain.
I'm sorry, I can't get over the example of the 50 cent tax per gallon on gas! Gas is 1.8 dollar per liter here (if you find a real cheap one) so one gallon would be 6.8 dollars. Adding 50 cents to that is an increase of 7%. Not huge considering how gas was 2.2 dollars per liter here just a few weeks ago.
Great video
Taxes do not fund the government. The government can create all the currency it needs. A government that has a monopoly on currency which is fiat based can never run out of it.
00:6
6:00
Including science and technology
And Healthcare
I, for one, am proud to be this early.
How do you have 2,13 million subscribers and only a few thousand views on most of your videos?
Maybe you should actually look around my channel, sweetie.
@@ProfessorDaveExplains You have a bunch with many views too, that's true, but I'm just curious on the reason. What makes flat earth so interesting to people for example? Some of your most watched videos are on quite "dry" topics so I'm a little confused. What makes people subscribe to a channel they don't really watch? I know your channel is not the only one suffering from this, but it just seemed to really be a problem for your channel and I don't really understand why. What do you think?
@@MrBjoern91 It's an educational channel. People subscribe when I help them with what they need. They don't need everything I cover. Look at Khan Academy. Same thing.
The taxation for revenue might be a necessity for state and municipal governments, but not on the federal level. Uncle Sam has a monopoly on creating the dollar. The concern at the federal level is avoiding excess inflation, spending on things that actually provide a real benefit to society, and making sure the workforce is used efficiently.
0:6
00:06
I like to think that a presidnet has watched this to know how the heck to run the economy
Once again, I appreciate your balanced approach. Just a couple of things... When discussing contracts and regulation, you did not discuss that the landlord can also be the victim of a bad tenant and needs to be protected. We could keep down the costs of regulation and taxes by making both the landlord and the tenant purchase their own insurance. Why should someone who has no part in this contract (the taxpayer) pay for this insurance? A lease is a contract between adults who can each perform due diligence. Similarly, I have a problem with the taxpayer paying for post-high school education. My entire extended family have sacrificed our own consumption to save and pay for our degrees and I resent having to pay for someone else who should have sacrificed for themselves and their own children. This sets a very bad precedent as it does not hold anyone accountable for their own actions - this is the biggest risk to America. It is a very slippery slope that will lead to an economy like Greece where more and more people live off of the government. This is the United States, not Greece. As you eluded, the current administration doesn't consider the downstream effects of over taxation and we have yet to see the real impact of the monetary expansion policy. It's not going to be pretty.
I think you've missed a major thrust of his argument. He's arguing that when we share reasonable risks (small businesses, unexpected unemployment, education) we can all benefit from economic growth, eg a workforce with higher productivity. His argument for why the government should pay for education (idk his opinion on higher education) is that it makes the workforce more productive, which means they generate more goods/services and contribute more easily to public services (he argues through tax). So you even if you don't value education in itself as a societal goal, he argues you are still benefiting from it just like you are from roads through general economic growth. Technically, he only really argues it leads to growth without actually tying it to ethical claims, but it is somewhat implied (and contentious).
Also, yes he does think landlords also need their side of the contract defended, they're just the ones with the and money to hire lawyers and police on their side so it happens less often. Also, while both parties can do "due diligence" the landlord has experience, money, and time. The tenant is inexperienced, likely also working doing this time, and likely need a place to live soon. Add pressure to "get a good deal before it's gone" etc.
I disagree with him here, because the landlord is extracting wealth for doing nothing but threatening to withhold housing from a not completely housed population, so I view it as an inherently immoral profession. Not to say there aren't good landlords, grandma renting to pay for her retirement is doing it out of economic necessity, or joe shmo might be an otherwise upstanding citizen, but the profession shouldn't exist. Building manager is a legitimate profession, landlord is not.
@@noincognito1903 Hi, thanks for the comment, I appreciate the feedback. I don't believe that most of the people attending college should be there and I believe that they could have found a better alternative in trade schools or apprenticeships. I've learned almost all of what I know from doing, not sitting in a classroom (BTW, I am a highly skilled software engineer/technologist - self taught). Education is more about a desire to learn than an expensive, in many cases, self serving and politically motivated institution. Of course I believe there is a lot of value for certain people to acquire higher education - for example, certain doctors, engineers and scientists because they cannot afford the tools of their trade. I don't believe in subsidizing higher-education at all - up to high school, of course, but after that, you have to work and pay for your own education like my family did. It builds character and teaches personal responsibility and the most important lesson of all - nothing in life is free.
Landlords have money because they had to earn the money and then take the financial risk to purchase the property and they have to deal with all kinds of tenants, regulations, and they have to spend more money to maintain the property to safety standards. You seem to be saying that if you are poor, you are a victim. Poor people make poor choices and poor choices have consequences. I also don't believe in subsidized housing - incentivize those people to better themselves instead of enabling their poverty.
One last thing. If you understand how taxes work, the landlord has to pay taxes which s/he collects as part of the rent. Local governments force land owners to make property productive in order to collect more and more taxes for the services that Professor Dave says are needed, so the higher the taxes, the higher the rents must be. I am not a landlord, but a landlord is an essential part of the economy that provides a service for people who cannot afford to purchase or who are not willing to take the financial risks.
Again, thanks for the feedback.
no Dave don't stoke the flame
thank you
Isn't economic growth impossible on a finite planet with finite resources?
government enforcing contracts? maybe on the tenant/consumer but not on the land lord, unless I have a lawyer, which are very expensive. I was once having trouble with my landlord. I looked up the laws concerning landlords and tenants and I believed they were breaking the law. I when to the police and court houses and the district attorney and judges but they wouldn't do anything. They basically said oh well and that I needed an attorney but I can't afford one. They want several hundred dollars just to talk to my landlord, or manager in this case, for me. So, justice is only for the rich, it seems.
True
It goes both ways. As a former “landlord,” I gave it up. Had to raise rent to cover the cost of abuse and fraud from renters and taking months to get them out. Try it yourself?
Ah, nothing better than seeing capitalists, anarchists, and tankies all losing their mind over uncontroversial information
I am a communist (or/and an anarchist) and i think there should be no controversy around the fact that governments can do bad stuff to harm the economy. It is just that capitalists who think that the government necessarily harms the economy so much that it needs to be abolished and replaced with nothing are brain dead.
Hahaha I had to urban dictionary “tankie”
In what way would an anarchist be upset about a video explaining problems the government creates?
Amen to that brother! Shit I'll drink to that 🍻
@@nodieza Tell me you didn't watch the video without telling me you didn't watch the video.
Everything in this video is common sense... but sense isn't very common
Question... would a overbearing general welfare system also hurt the economy
It could. I heard that in the UK, unemployment benefits were at one point quite plentiful, but that had the negative effect of many people just living off of these and not actually getting a job, so they lowered them significantly so these benefits would only ensure you don't die, it won't ensure comfort.
@@sourcedudetrustme8831 thank you
Yes. Do a little absurd and extreme thought experiment: give every inhabitant a monthly social payment that's higher than the average income.
All of this things are present in Argentina... And people are just used to it now... Is depressing.
Except the last one. The middle class is supporting a lot of unemployed people that do not want to work, if you doubt it there are lots of videos of people saying "those stupid workers" and "why would i work? I can earn the same money scratching my scrotum at home".
Exactly what percentage of the population is "a lot"? I'd like to see meaningful statistics, rather than anecdotes.
I suppose there’s a difference between “safety net,” and “salary.” Seems there’s a fine balance that must be achieved.
@@zemorph42 i responded earlier, but it seems you cannot share links in this video. So my comments were deleted...
I used the statistics provided by the INDEC ( the oficial institute for statistics in my country.
There is a 7% of unemployed people and 53% of inactive people.
Only 43% are economically active.
The "Center for the Implementation of Public Policies for Equity and Growth" or Cippec for short, says that:
The amount of people working in the private sector (the people that pay taxes and support all of the other ones) is about 34%.
(The amount varies highly depending on the province, in the south the amount of people working for the state can be almost half of the entire population, wile in the center it can be as low as 13% of the employed working for the state)
That means only about 34% of the population is paying taxes, and only 20% are paying retirement contributions (that us assuming all of them actually pay them).
And that is ignoring the fact that 55% of the population is under a "plan" (government assistance plan), there are a lot of different ones, some of them pay you for having kids, others for signing up on an university (you don't need to go) others for been injured or taking care of someone with a disability (and i am not saying this are bad plans, the idea is good, the execution is shit), etc.
If you convine a bunch of them you can earn more or less the same as a minimal wage worker without working, so ¿Why work at all?.
O and we also have like a 37% of people living under the line of poverty.
So yeah, you wanted numbers, i can't share links here but you are welcome to google the INDEC and read all the PDFs there like i did (they are in spanish).
@@Gaston-Melchiori Why does this mean that they all do not want to work? I see no indication of their motivation or lack thereof. Only statistics of the current circumstances. It seems that you're making weak inferences on insufficient data. We just went through a pandemic(that's still not gone, btw), and many people have lost everything they had and struggled just to survive, and I don't believe that they are all, or even mostly, staying on welfare because they don't want to work. I just don't accept that that is a widespread attitude among the poor.
@@zemorph42 if you read te PDFs you can see that there is a % people that do not have a job and are not looking for a job.
Look man, i am making assumptions based on the data and the fact that i live here and i know people that live live this. Again, there is people that abdicate for this style of living, they even get interviews on the news.
And also I cannot explain everything in a youtube comment, politics are complicated and i am assuming you don't know the current situation of my country (since you mentioned the pandemic as the cause, when tis is a problems thay has been present for decades, worsen by the pandemic of course).
I am just stating that the government can "over help" people.
I know it can be done well, in the north of europe they also have "big states" that works, but they don't have a "Kleptocracy" like we do.
Look man, i don't want to argue, any amount of people living "for free" socking on the country's economy with no guilt whatsoever is a lot.
This seemed like a fair take, I don't get the butthurt in the comments. Economics is just polarized I guess.
That's the big problem. Too many economists can't separate their political views from their research.
it's complicated.
I liked that video although I disagree with some points. Thats because you are just talking about some problems without taking a specific site so that the viewer has to think about these problems by their own. I think it would be awesome if someone like you could introduce people in theories like the modern monetary theory, Keynesianism, etc without taking the critical thinking away
He did pick a side. Strong welfare programs, taxation, enforcement of strict regulations. That's a side. Conservatives do not believe in those things. Therefore Dave saying they work means he has picked the side of "not conservative"
love my professor dave.
I’m… embarrassed that I got here so quickly
Great video and you made some very stable and legitimate arguments for the rule of a small government. The fact that we have a spending problem in Washington DC and the fact that we keep raising the debt ceiling means all of your arguments are basically non-invalid. When Nixon took us off the gold standard that started diminishing the power of the dollar. Then we turned to Saudi Arabia to back to dollar with oil henceforth the petrodollar. Now that China manufactures almost everything and the fact that they have bypassed the petro dollar with the petrol yuan,it is only a matter of time before the B.R.I.C.K.S. nations finalize their currency it will totally dethrone the dollar. I would love to hear your thoughts on the fact that our military spends more than a year than the next 10 countries below it combined. It’s crazy to think we are 30 trillion dollars in debt. Hey quick question? Why in 1980 a new house cost about $60,000-$100,000,and now today a new house is around $400,000. A new car in the 80s cost around $6000-$10,000, and now today a new car is wrong $40,000-$60,000. And Silver had an all-time high of around $50, something that has been used as a means of payment or a store of wealth for thousands of years and today it’s only worth $20. Silver and gold never require new appliances, plumbers and electricians, or other household expenditures. Silver and gold never require new tires, weekly gas bills, and others nickel and diming that a car can do. Do you think that we could get back to a gold standard?
[⬆️ See, Dave, THIS is the kind of person encouraged by these overgeneralized videos … which present “rules” for which so many exemptions exist, they aren’t really rules so much as they are rhetorical truisms carted out by z-tier campaigners worldwide every election cycle. Identifying to which school of economics each “rule” belongs AND outlining the exemptions and variables would be _so_ much more interesting and enlightening.]
@Stackin Ag47 - Simply put, in a mixed-market or free market economy, fixed currencies mostly reduce income mobility (which is why so many blue-bloods advocate for them), and the way they reduce income mobility is by reducing currency circulation, which stagnates the economy in general, thus stifling innovation. Even more simply put: people hoard the gold (or the currency attached to it), then there is no more gold, and then most people live hand-to-mouth and the gold-hoarders live it up and occasionally let a doubloon trickle down when something is needed, like if you need guards for your fortified compound/your police state, depending on what scale of operation you’re talking about. But by the democratic state controlling a monopoly fiat currency, as we know from a combined Marx-Veblen-Keynes approach, currency becomes more fluid, and itself becomes an efficiency capable of increasing innovation in markets, such as when the government engages in exigent spending-the U.S. effectively abandoning the gold standard in 1933 laid the foundations for all the country’s post-W.W.II prosperity: see for instance FDR from ‘33 to ‘45 laying the groundwork which created the modern U.S. middle class, and NASA in the ‘60s and ‘70s and the 1,000,001 crazy industries still thriving today that they spawned … living large off of the inherited generational wealth your great-grandpappy created from his G.I. Bill jump-start, with which you made your 2001-2012 investments in FAANG stocks? then you can thank the FDR Administration and the Kennedy Administration and the practically blank checks they handed to U.S. safety net programs and to NASA, investments still paying outsized dividends today and made possible by sane monetary policy. Now, does the state always get it right? No, such as when certain administrations-backed by the same blue-bloods who want a “gold standard”-speechify as if there were a fixed currency in order to impose austerity on the vast laboring class, while simultaneously using exigent spending to wastefully reward their patrons in the capital-holding class with “tax breaks,” all while implementing a tax policy which rewards corporate stock buybacks along with other forms of currency hoarding … basically giving us all the drawbacks of a fixed currency, only to a much more exaggerated degree.
I agree with basically everything you stated. It's basically from a textbook. I think we could have a good discussion about our current welfare system though. One of the principles of economics is that people respond to incentives. A welfare system that hands out too much will cause a stagnation in productivity due to people not wanting to work so they can just collect the welfare check.
Me and wife paid over 80k in taxes last year! Absolutely horrible! 😡😡
how much do u earn?
@@davidacosta9158 240k
one video to become an anarchist
one video to determine liberalism can a scientist to have too biased opinions and sharing them with misleading points
@@texrot9781 i took the title out of context on purpose
This is easy:
look at Myanmar
Since Bible believers think that a zoo boat owned by Noah helped restart civilization after a flood which no one knows when it happened, and were descended from them. Can I ask random people for money? After all, we’d be family right? What would Jesus do?
@@oakhillclassroom4827 Noah’s Ark happened 12,000 years ago? 12,000 years ago would put him at about 10,000 BC. 10,000 BC is about 1,000 years after the time that the site at Gobekli-Tepe in Turkey would have been built, but Gobekli-Tepe doesn’t show any signs of having been inundated by a world-wide flood, all while Humans were still undergoing drastic evolution.
And he was able to oversee a birthing of an African, an Asian and an Anglo Saxon?
And plus creationists put Earth’s age at 6,000 years, so how could the flood have happened 12,000 years ago
If you’re right (which you aren’t) I guess I can ask random people for money or gifts.
@@oakhillclassroom4827 Name one flood which drowned planet earth. And cite evidence Noah was able to oversee his wife giving birth to a variety of races.
If it happened 12,000 years ago, that alone disproves creationism.
I couldn’t find a flood that happened 12,000 years ago being severe enough to devastate ancient kingdoms, one of which I already named.
This feels like civics for dummies
in capitalism*
in general
@@ProfessorDaveExplains In general? What do you mean? Reason number 2 is centered only around the capitalist market, so how would that apply to planned economies? And this video is also about economic growth, which is the goal of a capitalist economy. But the goal of a socialist economy is the equal distribution of goods.
@@dangboor4277 You seem to be adamant in spouting misconceptions throughout this video's comments this early into the upload so I know you won't listen to reason or fact, but... if there's someone on the fence out there hear this out:
Markets do exist in all systems and growth is the goal of all systems (unless you plan on having your society to go extinct the final number must be positive). This video tackles basic society aspects that do exist in every society throughout all history of civilization just doing it from a more modern perspective. If you can't comprehend that then maybe you shouldn't be commenting saying people are wrong.
@@ioritenshi Of course markets exist in all systems, i'm not denying this. But this video is still only about capitalist markets. And no, growth is not the goal of a socialist economy. Growth does happen in socialist economies tough, it's encouraged even. But it's not the ultimate goal. Why? Because it can't be. We cannot infinitely grow in our finite world, it's impossible. How are we going to grow once our planet is devoid of resources? Once we have used everything that there is to use the numbers can't go up anymore.
@@ioritenshi Also, why do you have to be so condesending dude. That's not helping anyone. At least list the misconceptions that im spouting if you're gonna act like that.
Maybe you're just tackling too much for 8 minutes. This is at least overly simplistic and probably just wrong in some areas.
This is standard high school economics curriculum.
👍🙂
Economics is all supposition. Zero knowledge is not worse than confidently knowing economic theory and enacting it. Either to the left or right. Some people find success, but guiding a country is hit or miss, it's a sport not a science.
It's a social science.
@@ProfessorDaveExplains
Social Science as a whole is - at least by public perception - less rigorous than things like Chemistry and Physics.
In the case of Economics specifically, I think it's less an issue of rigor and more a problem of a heterodoxy of theoretical models for how economies work. Probably because economies are chaotic emergent systems full of irrational actors (insert easy NFT joke here).
@@Camkitsune probably true for economic theory but there's a lot of mundane day to day regulation that is essential for managing a modern economy
As a Social Science, Economics is prone to biases and pet theories just like the other sciences. It fares worse than most because it's about money. But Knowledge about it exists and has value. Approaching a subject with an open mind is very important, but acquiring knowledge is kind of the point here.
Economics certainly has serious problems and economists should be criticized for it. However some topics are uncontroversial. Monetary financing of government budgets is a very reliable tool for impoverishing the majority of a population. There is no more effective way to increase social-economic inequality.
Mmm yes i love that growth ending up in top 1% of society while the poor can barely survive...
The 1% produce things that the rest of us “can’t live without.”
If we don’t like “big oil” or GM, we can always go back to a horse or bike…
@@DM-zq8qy OMFG OMG you're even more dumb than i expected... "the 1 percent" don't produce shit. They make money by exploiting labour of their workers. You think Musk or Bezos produce shit? It's not Marvel and Musk is not Tony Stark, everything is done by people he hires. Those people could be hired by the government and they'd do same shit but cheaper because they would not be robbed by the bourgeoisie.
@@marcinwozniak6901 I may be “dumb.” But if you are so smart, why didn’t you start Tesla or Apple?
Very few are supper successful. But they provide jobs (for those who CHOOSE) to work.
And they provide products (for those who CHOOSE) to buy them.
Some are jealous. I don’t care how much they make. In 80 years they will be dust just like us.
The rest of their Billions will be left to provide jobs and products until the government or unions or politicians destroy or takes the remainder.
@@DM-zq8qy they don't provide shit. People who work for them provide them everything and they just sign papers and do cringe dad jokes on Twitter. Just like NASA invented a lot of stuff you use every day other government agencies could invent more if we give them the resources. So you don't care how much they make? Well i care about my society and therefore i care if our money is wasted and hoarded by the rich instead of helping those in need. If you're a sub into findom please keep it to yourself, I'm not happy about being robbed by the rich.
Besides that in 80 years we'll have technology to prolong lives for 100s of years and we'll be able to upload our minds into computers and live as long as we have the resources to do so.
@@marcinwozniak6901 Your points seem somewhat valid. But socialist countries have never been able to deliver on the utopian dreams.
China seems to be trying your approach. Are they better off than the west?
Regarding #2, I guess there could be too much regulation but the regulations that left-leaning governments impose should be offset economically by a lack of corruption that you would have with a right-leaning government. Food for thought.
What's the food for thought here?
A "lack of corruption" isn't an inherent good in this context, it's simply a response to overregulation.
Example: If my regulation is "don't dump dirty diapers onto the children's public park" then how do we rank outcomes in this scenario?
- No one dumps diapers
- People pay the city $1000 to dump diapers
- Everyone dumps diapers for free because the city doesn't enforce the regulation
Obviously, the fewer people dumping diapers the better. And thus people paying $1000 is *better* than people dumping for free. Is this corruption? Technically is it the worst possible outcome? No, a lack of regulation doesn't have corruption in this case: but it's objectively a worse outcome than the one that has corruption.
@@NoChance18 no, sir. The corruption occurs when a right-leaning government award contracts to friends who grease the govt officials palms before or afterward. It obviously costs taxpayers much more.
Did you seriously say that right leaning governments aren't corrupt? Okay bud.
@@SleepyMatt-zzz try reading. I said the exact opposite. You don't want to be constructive. Any fool could have discerned my thoughts by reading the entirety of my comments. Piss off troll.
@@SleepyMatt-zzz I don't think so; I think they just need "the" just before "corruption to clear their meaning up.
Much less libertarian REEEEEeeee in the comments so far than I expected.
That's because it's about bad things governments do. They love it.
common prof dave exaplains W, btw u saved me thru ochem. whatever u want, ill do.
You should do a video about socialism and countries that are greatly benefiting from it, like Switzerland, Germany, and other European countries (I'm not 100% sure on the entire list)
Switzerland isnt socialist.
Switzeland benefits most from extensive money laundering, certainly NOT socialism.
*Really*? Weird, because I'm pretty sure I've heard Americans call Canada Socialist, and Europe is WAY more socialist than Canada
@@galileog8945 I didn't say that Switzerland was EXCLUSIVELY socialist, or even FIRSTLY benefiting from it, but the fact remains that it *IS* benefiting from socialism, more so than Canada or the US.
@@kiwichippie5465 Yes they are, they just aren't EXCLUSIVELY socialist. Free Healthcare, free transportation, free museums, etc. Obviously they still have *some* capitalism, yes, but they are still greatly socialist too
👍
Dave have you got the balls to do another covid fact vlog, Mmmmmm
Fact vlog? What are you rambling about?
Didn't think I'd see "Mmmm" and "balls" in the same sentence under a prof Dave vid
How governments harm... Say no more fam
Stick to science professor
I'll cover whatever topics I please, thanks much.
This ís science, silly. Social science.
You forgot #6: Government corruption
It's definitely hinted at in #3/#4
Healthcare insurance should only be administered by the government.
I like the idea of having more options
@@WanderTheNomad options of what?
@@jrsanti healthcare insurance
@@WanderTheNomad you want options which insurance will rip you off more? Why would you favor a for profit healthcare insurance instead of pooling our tax money to cover ourselves?
@@jrsanti If private insurance companies can provide a better product and people can afford a better product, then I think that option should be available. And the people that don't want/can't afford it can just use the government provided healthcare.
Misappropriation of funding is another huge problem with taxes. Like, why the fuck - why the /fuck/ - do we spend billions of dollars yearly on the military? We could afford to be much less warlike and save a lot of money by giving peace a chance. That's true regardless of politics. Like, who actually LIKES war? There's other examples too, but that's by far the most stark.
You should stick to science, there is no such thing as free markets, it's an oxymoron.
You really should watch this series from the beginning, champ.
Too much welfare can be harmful too.
@Orrion Dude do not personalize it.
Obviously it does not applies to you or anyone in your condition.
Surely you understand that if a government provides unemployment compensation for 6, 12 or 18 months it will have different outcomes in the economy. I know, I live in a country that used to have lots of government benefits.
But you can also look at Greece example 10 years ago for instance.
@Orrion
So you think that, if a country could support 2 years of unemployment compensation, instead of 6 months, it should do it? Or even 5 years? Lifetime...why not?
You think people are all like you and that the majority will not abuse from the system?
Welfare wins elections, and politicians have no problem in piling up welfare to win them even when they shouldn't, pushing problems for the next government.
Greece defaulted because their debt was huge, which grew over the years precisely to support an increasing welfare that they could not support. One of the main issues was very early retirement:
"Greece once had a generous pension system - too generous to be sustainable, especially with an aging population. Retirement was possible from as early as the age of 55 after 30 years of work. Many had extra perks: public sector employees could retire as early as 52. Some women with young children could retire with a reduced pension at 50.
But the financial crisis left Greece reliant on international creditors, who pushed for economic change - not least to pensions. The standard retirement age is now 67. Many early retirement provisions have been abolished. Including pensions, incomes have dropped 40 percent over the last seven years of crisis."
@Orrion Look, I am not advocating for no welfare. What I am stating is that too much welfare can be harmful and you kinda prove me right when you say that there are "people who will abuse the system".
In other words, there is an optimum welfare amount (like the regulation issue Dave was talking in the video).
The Great Recession _triggered_ Greece's economic crisis. All the right ingredients for the crisis were already there, just waiting for a spark. Namely too much govern spending, a huge chunk of it in welfare benefits, which they could only support with debt. And while most countries have long surpassed the crisis, Greece is still deep in the hole, such were the mistakes done.
As far as I know only Clinton reduced the debt in the US (Clinton btw., after Monica, is considered a male chauvinist over here, while my american friends call it Da Man).
I don't live in Greece, but I live in one of the famous PIGS in Europe. We did the same mistakes as Greece, albeit in a much smaller scale (fortunately!) and we are still paying for it. And now, with the new inflation crisis, the seatbelt is getting further tight again.
Over here, America's left wing is far right... Socialism, is literally written down in our Constitution as the path the country should take/aim for. Communist party (yes, we still have one!) was supporting the last govern in the parliament.
The word Social wins you elections and welfare benefits can only increase over here. If you say you'll cut anything you will lose the elections.
As someone that lives in a country with excessive welfare, excessive govern intervention, I could give you a huge list of examples showing that is doesn't work. But trust me on this, hard core Socialism does not works!
Btw, we have crime here also (surprise!), because what you're missing out is that most crimes are not driven by lack of welfare. Catalytic converters are being stolen b/c they worth a lot. Robers, when caught, usually already have lots of money, but still they keep robbing.
I'll finish with 30,000 foot view. You say welfare boots economies. Well, let's fact check that. US usually looks at Europe's welfare to point out it works (most countries still have less welfare than mine). Europe's GDP is stagnated for 14 years now, US GDP keeps growing and China's GDP has just surpassed Europe's.
Where is the boost ??