The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
Since the debt crisis could unleash carnage on the stock market leading to economic downturns. We need to be prepared for potential market volatility. how can I secure my $600K stock portfolio against declining?
Concentrate on two main objectives. First, keep yourself safe by knowing when to sell stocks in order to limit losses and maximize gains. Second, get ready to benefit from market changes. I advise consulting a coach or other professional for advice.
I talk a lot about how important it is to have an advisor.This kept me afloat and increased my $450,000 portfolio by 48% in just 4 months.They have strategies that are tailored to your long-term goals and your desired financial situation.
My CFA SOPHIE LYNN CARRABUS, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
It does matter who's in government, not so much in the short-term, but if Americans can consistently elect people who are financially responsible and not corrupt, then we can turn this trend around. It will take a long time and Americans aren't known for electing financially educated people into office so it's more likely America will simply collapse under the weight of the stupidity of its people while politicians launder all the money they can through pet projects and wars.
The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
I have learnt not to trust corporations, especially these banks. I was badly hit by the '08 financial crisis. Since 2019, I've just been focused on investing through a financial advisor and it has been paying off. No major loss has ever been recorded since 2019 i started. I'm closer to having over a million dollars now than i ever was with the banks. I'm never going back to banks full time.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
‘’Annette Christine Conte’’ is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I appreciate this. After curiously searching her name online and reviewing her credentials, I'm quite impressed. I've contacted her as I could use all the help I can get. A call has been scheduled.
The US economy cannot survive without continuous credit and debt creation. The FED will print more money and the average American will go just that much further in debt. Meanwhile, foreigners lust for the greenback. Their economies are in worse condition than the US... if that's even possible. Someone is going to be left holding the bag...
Gold might crash in a liquidity crunch, but many precious metal holders are prepared for this and unlikely to be forced sellers. The paper market would tank and possibly collapse. Hearing from an experienced investor who has overcome adversity is motivating. It can be scary when your portfolio turns red, but if you've invested in strong companies, stick to your goals and continue growing them
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
‘’Aileen Gertrude Tippy’’ is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
So we should all correct the sentence... the government doesn't go bankrupt, the people do, while the banks prosper. What a GREAT system... to be a banker.
most probably it will attract money from abroad before whole world would go bancrupt, he may create some scams to attract these trillions and use it to go to mars.
@@worldcitizenra Not ONLY my Scandinavian neighbor Iceland... Banksters/Private Equity were out like vultures when they saw "opportunities" in Greece, trying to grab all lucrative Greek islands for themselves and their profiteering. Like... "Welcome to Mykonos, brought to You by Acme Capital. Stay at any of our hotels, rooms starting at only $1,999/night (breakfast not included, and don't bother reading the boring conditions)!"
I recognize the hardships that come with economic struggles like unemployment, job loss, inflation, housing market instability, political uncertainties, and the global impact of conflicts and wars. Making ends meet during such times can be incredibly challenging. To navigate this difficult period, considering alternative job prospects, enhancing skills through online courses, and expanding your network can heighten the chances of securing employment. Moreover, prudent budgeting, exploring available financial aid programs, and seeking assistance from community organizations can offer some relief. How are you currently tackling these challenges? Have you implemented any specific strategies to cope?
In my opinion, now is not the moment to rely on hearsay. Every individual, regardless of their level of experience as an investor OR in a financial market, requires guidance at some stage.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
Please tell me how can I connect to your advisor. My funds are being murdered by inflation, therefore I'm looking for a more profitable investing strategy to put my portfolio to work.
Finding financial advisors like “Melissa Terri Swayne” who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I just googled her name and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a call.
MMT: Public Deficits ($36T) = Private Surplus ($36T) Who holds Government Bonds? US Private Entities: 37% US Agencies & Trusts: 22% US Federal Reserve: 19% Foreign Entities: 23% Source: U.S. Department of the Treasury
Great point! Who benefits from those bonds? The working class helps fund those bonds but gets nothing in return. The standard of living declines. Steve is not able to comprehend reality. Steve does not do anything Elon does.
Keep in mind that if these were allowed to be marked to market, the assets side of the US’s balance sheet would have taken a significant hit since interest rates rose in the fastest manner they ever had before.
@@johnpollard744 Nothing ? Taxpayers get SS, Medicare, national defense, veterans benefits, the FAA, the FDA, roads and infrastructure, FEMA, the EPA. The list goes on. You think we should eliminate or severely cut these things to balance the budget ?
Purchasing power is the only thing that actually matters. Money is just a number, it doesn't mean anything on its own. You can cook the books any way you like.
Sadly most people dont see that. I worked in the financial IT sector. Millons were made around suspect economic instruments and algorithms that has no real value. Just increased the speculation and obfusicate the transfer of value. The level of complexity built in, makes it elite and not accessible to the average person. Simple thinking can point out why banking system behaves the way it does today. Transfer money using any instrument, even with nano second processing, it takes them days to honour a transfer, why? The financial industry needs to be paired down and their influence curtailed. That is what these economists want to protect. Quasi governemntal institutions should be taken down. Remember occupy wall street and what happened to that movement? Bitcoin had an orginal goal. But that was convoluted by speculation. Elon is right. He has created real value, not these banks or the Federal reserves or the wall streets of the world.
Correct, and the value of fiat currencies as well as their purchasing power is going only one way: down. To give an example of one example seen in a recent documentary about the Concorde: 3 million GBP in the mid-1980s would be worth 30 million today. 10 times!
@@IdeaBoxfulbitcoin in specific is a great example as the only use of it is to sell for someone else wanting to buy it to sell it, this means that if there is even a small change it entirely collapses as everyone cashes out, the difference is that unlike money it has one use rather than being used to buy everything,
PPP is for countries. For individuals Social Wisdom/TRUST is the only thing that matters. We will always remember Nikola Tesla that's lighting the XXI century, but the community wouldn't care for sophisticated gamblers like Buffet (other than discovering BYD& similar) or exploiters like Musk who doesn't respect the engineers who build products we use or corrupt MIC/Pharma/presidents who warmonger/manipulate for profit :(
After facing significant challenges, I learned two crucial lessons about the stock market: it played a major role in the Great Depression, and the quickest way to make a million in the market is to start with two million. The Great Recession only reinforced these insights. In hindsight, I wish someone had guided me earlier. A well-defined entry and exit strategy is essential for success in the stock market.
Exactly, many investors are overly focused on potential profits, forgetting that the market has both ups and downs. Securing your financial future requires patience and a strong understanding of market trends to identify the right stocks for investment. For instance, I made over $260k in profits during Q4 of 2021. The key to profitable investing is truly understanding market behavior.
Rebecca Lynne Buie has consistently been my top recommendation. She’s widely recognized for her expertise in financial markets and has a strong track record. I highly recommend her.
Thank you for sharing! Rebecca Lynne Buie seems quite knowledgeable. I found her webpage and reviewed her resume, which was quite impressive. I’ve already reached out and scheduled a call.
"If my math is right, we can inflate the money supply just perfectly so a small elite can steal from the masses. Then we pass the problem to the next generation, and never have to deal with the consequences we created." -this guy
Any tool can equally be used for good or bad. We choose how we use the tool. Not throw out all tools as bad. - Everything has this yin and yang, can be used for bad or good. A hammer began as a weapon to kill, now we mostly build houses with them. As a teen I heard old people saying new music was bad and caused bad, they wanted to outlaw Rock music. The thing is just a tool, you don't outlaw the tool, you regulate how you use it to do good with it.
This video made me feel like the countless hours I've spent on this over the last 15 years are paying off. They've paid off financially, but the personal validation is valuable too, yes? I like your comment. How great is it to live thru a time when the established thinkers can be so sold on their present system that they can't see it limitations?! That said, I hope this guy isn't in charge of anything important and I shudder to think about young minds being shaped by these ideas.
Right on, these paper pushers know nothing about the real economy because they get unlimited paper, while we have to WORK for it. End the paper mafias cycle of theft.
You're never too late for Bitcoin. Being late is a mind trick...it's fiat based thinking. You are never too late to stop being stolen from. People get caught up on the current dollar to Bitcoin trade price.....they should look at what they can get from the Bitcoin to goods and services trade price. When you're using a monetary system that you can't print but others can, you're being stolen from. In a system such as Bitcoin, where the amount of units are set (but infinitely divisable if need be) you are not being stolen from. In a Bitcoin system, value is transacted on mutual exchange rather than someone that received more printed money out pricing you. The bitcoin monetary network disperses wealth based on merit and thus creates less wealth gap vs Fiat that centralizes wealth and business.....and power. In Fiat you become a slave, in Bitcoin the balance of power is on a more level playing field. YOU ARE NEVER TOO LATE TO STOP BEING STOLEN FROM
Right... I assume this guy thinks we should do like Japan, zero interest rates and the central bank buys up the debt and sits on it. Japan does not own the Worlds Reserve currency......
Politics determines how wealth is distributed within a country, while wars and diplomacy determine how wealth is distributed between countries. Regardless of who is elected president, most US citizens will continue to endure all these direct consequences of government policies: Economic inequality, persistent inflation, stagnant wages, soaring healthcare costs, a student loan debt crisis nearing $1.7 trillion, and an education system burdened by increasingly unaffordable tuition. Inadequate public transportation, racial inequality, mass incarceration, militarized policing, deteriorating infrastructure, unaffordable housing, homelessness, the opioid epidemic, and rampant gun violence.
13:40 So wait, debt to gdp ratio of 30-40%? And interest rates of 8%? And this relates to what's going on in the USA? Sorry I don't see the bit where 10% annual deficits - during peace time, with low unemployment -are sustainable. Can you run a model with more realistic parameters to really convince us?
Sure, but then I'd need to deviate from assumptions I made in that model that are consistent with Loanable Funds. The whole point of this video was that Loanable Funds is structurally false. A structurally realistic model with bank and government money creation, bond interest rate setting by the Central Banks, private bank bond sales to NBFIs, etc., would have more realistic numerical outcomes.
So in your "correct" model, the government never goes bankrupt, the banks get richer and the people get poorer, while inflation and interest rates make life more expensive? Math checks out! So we should all correct the sentence... the government doesn't go bankrupt, the people do, while the banks prosper. What a GREAT system... to be a banker.
boom! The entire deficit is because Billionaires/corporations don't pay their fair share of taxes. The deficit boomed since Reagan cut corp tax in the 80's.
Musk didn’t do it, the engineers at space X did it, Musk just funded it. The question is whether that funding came out of his own pocket or is some sort of complex loan arrangement with a third party.
@@lawtutoring i see thanks...technically thats right, money are covered by debt, and at the end by work, as people borrow just to cover their lives expenses, but not necessarily. Question would be if you can obtain gold and avoid using money, as once you start to use money/debt everything is already debt, even gold cant escape. And if gold is not debt then anything else is not debt. Like trees, flowers, rock, water...
@@simonmeszaros2770yep that’s true, money is just a way to keep track of how much you are owed, which is technically different than something with a fake value such as gold, I reckon we could have a totally different economy
I had to watch 5 times to get the summary: Just Inflate out of all debt. When minimum wage is $1 trillion, $36 trillion in national debt is just 1 weeks labor.
He picked minimum wage to show that inflation hits the poor the hardest. The purchasing power decrease of monetizing the debt means that it’s equal to being enslaved to these Ivory Tower denizens for a whole week. They promise to deficit spend on behalf of the poor, but do the opposite.
Yes, I was concerned seeing GDP increase exponentially in the "correct version", and firms bank accounts also increasing exponentially, but household bank balances being effectively a flat line in comparison. So the price of everything goes sky high *pops champagne* but households have the same amounts in nominal terms *sells a kidney to pay for champagne*. Models are bullshit - even if we do predict a future scenario, there is no guarantee the future will reflect the model. It's all assumptions and nonsense. The biggest handbrake/flaw in the system (at least in my view) is corruption and inefficient spending by governments (crony capitalism and people rorting government contracts). Our financial system is broken - I think everyone has an inkling of this - the biggest problem is no one knows [or can agree on] how to fix it without causing pain and huge disruptions. And so on we go, living in a delusional broken world. Le sigh.
@@tommyrich3155What's painful is those who refuse to learn the truth about how Fed level spending & taxes actually work. There are about 100 countries using fiat currency.
I'll make it simple for everyone. If you work for the government and receive a monthly wage of say 5000 dollars, a couple of things happens. And before that remember that Asset = Liability + Equity 1) You receive 5000 in your bank account This shows on your balance sheet as a) 5000 in assets (deposits) b) 5000 in equity (salary) 2)Also notice that the bank you use has a corresponding entry a) 5000 liability (bank deposit owed to you) b) 5000 in assets in the form of treasury bonds 3) the government is the most important piece in this equation as it pays you your wages a) -5000 in equity = 5000 budget deficit b) 5000 in treasury bonds issued! Hence this is critical as it means that for you to receive your wages from the government you need the government to run a budget deficit which is equivalent so to speak in issuing bonds! Also you need to consider the inverse situation where to reduce the deficit the government has to tax you. To earn a surplus, the government will need to tax you more than you earn, in which case you as a private individual has to issue a bond to the state. In this scenario aren't you actually enslaved to the government? Lastly, the bond held by the bank could be sold to you in part or in full. But that would simply make you own some bonds and fewer bank deposits, and correspondingly reduce the amount of deposits in the system.
Got you fact checked by an AI to be sure I'm not missing anything, bless this era: "(...) On the bank’s balance sheet: -Liability: The bank owes you $5,000 because it holds your deposit, so it records this as a liability (an amount they owe to you). -Asset: *The bank’s corresponding asset isn’t always a treasury bond; banks hold a mix of assets to balance their liabilities. While they might hold treasury bonds as safe assets, they also have reserves and other forms of lending as assets* (...) In summary: -Asset = Liability + Equity holds for individuals, banks, and governments, but each has different implications in accounting. *-The government does not necessarily need a deficit to pay wages, although a deficit may occur if spending exceeds revenue.* -Taxation supports government activities, and while it decreases personal income, it’s not equivalent to issuing a bond or debt to the government. -When you buy bonds, you’re simply exchanging one form of asset (cash) for another (bonds), with corresponding adjustments in the bank’s balance sheet." ☝
@alxmtncstudio2066 yep that is right. What I was doing was to let people realise that if the government were to cut the debt, it would lead to them getting poorer in financial terms. The easiest example here would be using wages as the motivating example.
We don't need the government to run a deficit to pay us our wages. The budget was balanced in the 90s and people still got paid. We never used to run deficits like this and the world worked just fine. This time we grow up balance the budget and right this ship.
Hmm what about my tax. So in your example as the government employee making 60k a year. The worker pays roughly 15k in fed tax. Which basically means they pay themselves for 3 months.
@@PaulBisso nope. The government employee is a private individual hired by the government. Another real world example will be government contracts. So let's say you run a firm that provides a certain product or service the government is paying for. You receive say 100k in revenues and pay your wages and other costs, and let's say that's 60k. Your pre tax profits are 40k and let's say corporate tax is 25 percent, your net profits are 30k. Notice as a result that your personal surplus ie profits is a result of government spending. At the same time your non tax costs were 60k, which consisted of wages and revenues for other firms. This will lead to another 15k of tax revenues for the government. Hence total tax received is 25k (10+15) which is the tax rate times the size of the contract given. Consider then, the opposite scenario where the effective tax rate is more than 100 percent. What happens here is a budget surplus. But then it means a reduction of the private sector's net worth. Note that net taxes can exceed spending even if income and corporate taxes are above 100 percent. You have sales tax, wealth tax etc that can increase government income. Last, the size of the deficit which is a negative equity entry is paired off with a positive liability ie a bond that is issued. If the Fed or commercial banks buy these bonds, then you as the non bank private sector holds bank deposits (ie money supply). If banks refuse to buy, then a part of your bank deposits gets swapped with a bond, in which bank deposits disappear from the economy.
At 6:00, The professor says that interest from the government goes back to the household sector. The thing is, aren't a lot of bonds owned by foreign companies? That would mean that the extra interest is not staying within the country,
Factoring in international economy and there are serious problems that the US faces. Our imbalance of trade is an actual problem, whereas the debt deficit BS is just that.
US institutions holds most of the Treasuries. And sure, they get the interests. But they don't get richer from that. The capital they hold is bound by those assets, and obviously doesn't do anything go9d for the economy. No, the only thing the Treasuries does is increase the debt and allow more governmental deficit spending. If it was utilized productively it wouldn't hurt as much. Of course Musk is right and prof. Keen wrong, this isn't sustainable!
If banks lend money into existence, then it follows that governments do the same and use tax receipts to pay for the consequence of the government lending just like banks seek to cover their capital requirements after lending. Deficits are a necessary condition for a functioning economy. That being said, any mention of America that does not take into account it's status as the global reserve currency is useless. Huge quantities of USD don't even originate in the US, it comes from the overseas eurodollar system, lended into existence by foreign banks.
*Taxes are never used or needed to pay any part of the national debt.* Some foreign banks "sell" _bonds_ denominated in USD (which must be purchased with USD); they don't lend US dollars into existence.
Note: NASA was the first to land a rocket, with the Delta Clipper; a technology Musk licensed. Blue Origin also lands their little hopper rocket without issue.
7:00 "I could build a model with production, but it would be much more complicated. It wouldn't change the point I want to show in this video." That's actually the whole point of the disagreement. You need to show that inflation won't occur. Your model assumes it doesn't happen. You assume every dollar spent leads to increasing productivity. This means you assumed your own conclusion. Do you have another model that includes inflation and productivity that supports your conclusion? 13:46 "This is a sustainable system." Pause the video here and look at the graphs. GDP is growing exponentially. Do you honestly think real life productivity can sustain that? Remember, GDP = price * quantity. GDP can go up because quantity (productivity) goes up, or it can go up because prices (inflation) go up. I think you're crazy if you think productivity can asymptote like that. Inflation is what you'd expect, and it's what we got historically. The dollar has lost 90% of its value in the past 50 years. I have to disagree with your conclusion. You have shown what we already expected: endless spending creates inflation. Even MMT says the government spending is limited by resources. Have you even considered the possibility that we past that spending limit a long time ago? I'm honestly asking. MMT proponents never talk about this.
The whole point of the model was to show that the catastrophic outcomes expected by Musk and most conventional thinkers expect from deficits depend on the financial system being Loanable Funds, which is a false model of banking. What you are effectively saying is "IF fiat money THEN inflation". But this is the system under which the USA has operated for two centuries--including periods of deflation.
@@ProfSteveKeenfalse…. We were on the gold standard for a long time. Rapid inflation and decrease in the value of the dollar started with Nixon letting go of Gold standard in the 1970’s. Why? Wars… because nothing creates debt like war. Since 1913 when the creature from Jeckyl island (Fed) was born, we have lost 99% of the value of the usd. Sure lots of gdp growth but massive inequality. That’s why we have populist demagoguery today a la Trump. He is our modern Herbert Hoover. The MMT guys are only correct as long as usd military hegemony can guarantee usd primacy. Do you remember the British empire, a global expanse upon which the sun never set? What happened to it and its precious Sterling Pound? It’s Royal Navy and all its ships…. Once it stopped making its ships its fate was sealed. Elon is a genius and an American national treasure who single handedly is bringing manufacturing back to USA! Those who can do, those who can’t teach!
it's really cool that he shows how the loanable funds model works, even though it is not an accurate representation, it is useful to show how it works precisely so that you can see how it differs from endogenous money models.
@@ProfSteveKeenSteve, are your models real or nominal? In other words do they predict changes to the price level? Also, the big concern for Elon etc re the size of government seems to be the potential waste. ie what is the constraint on government spendjng that compares with the market discipline imposed on the private sector?
I suspect he made his model to launder one crucial assertion: That government has the same good incentives as households... and thus there is no harm in passing one third of the economy through the government.
Does anyone think that Elon designs the system that put his rockets into space. He hires smart people to do that. I’ve had the thought that the reason Musk is supporting Trump is because Trump will put Tariffs on Chinese electric vehicles and make Teslas competitive and save Tesla and make Musk a lot of money.
There were YT shorts about Elon: - There are too little people (to sell his cars to) - People wanting to work from home is evil (evil or something similar he said) (again, he sells more cars to people who drive to work in stead of stay home) I would believe it if Elon supports Trump because he believes he makes him richer.
Bingo. I've always wondered why no one ever digs into his true superpower, which is getting people to do great work for him. I know folks who worked for him and I'm pretty sure the secret is purpose and authenticity.
America does not have politics. America is a plutocracy with money as it's lifeblood. That's it. There are no hidden depths. Mr. Musk isn't even American. He understands you buy influence in the USA using money. That's it. There are no hidden depths.
In most countries they are. But the FED is not owned by the US gov. And there are some hybrids where CB is owned by government and private shareholders.
@@ashwinipingle8832 The Federal Reserve System is a US government agency created and governed by Congress. The Fed Board of Governors cannot refuse an order of Congress. The 12 regional Fed banks are only nominally private.
The only attribute often lacking in an Asperger is empathy? Elon Musk shows he is concerned for all mankind but what is his plan for all the unemployed when his Optimi robots take over the jobs?
huh? free production of goods is impossible to be a negative thing, on its own... for example, taken to the extreme of everything is produced for free would mean nobody would have to work
wow this guy never watch wall E. you dumb mutt . why do you think western world are so rich. Because someone else been doing the fking job somewhere else.
This is a simple model with just monetary rather than production dynamics. The basic point is simply that the crises expected by Musk are dependent on a false model of the financial system.
@@cyberft Yes, but that normally requires the military defeat of the government. Currencies don't outlast the countries that issue them, and tha "100% of fiat money systems have failed" line is really "100% of countries have failed".
@@ProfSteveKeen Are you not just using another "false model" (since you acknowledge it has limitations) to prove another model is also false? Congratulations, all models are bullshit.
It seems to me this model would create a lot of inflation. Isn't that bad when it comes to comparing the relative value of goods, therefore leading to inefficiencies? Also, it has a big wealth redistribution effect.
This model for equilibrium seems inprobable as it ignores the impact of currency inflation ( and subsequent corresponding reduction of purchasing power ) on general household consumption.
With all this said, it’s amazing that those that create the laws and govern our destiny are not subjected to some level of rigid qualifications, as we expect from many other professions that affect our lives! It’s time we change who can be in office, not just those with the loudest mouths!
What people need to hear is what pays for the accumulating interest on government debt, in simple terms. The models are great, but most people are not going to understand them at all. It needs to be presented more succinctly. Obviously most politicians don't understand economics much better than the average citizen, and they are the ones who have to sell their economic plans and pass the budgets.
Interest payments on government debt are paid for just as are deficits, by the government going into negative equity and creating identical positive equity for the non-government sectors. And it's harder to be more succinct than I was in that video. Except to say that government deficits are not a bug of the system: they are a necessary feature.
@@ProfSteveKeen So does this imply that tax revenue is growing at the same rate as government interest payments? If the government never intends to repay principle, then interest is really its only obligation with regards to debt.
yes. in macro economics that is true. its idiodic to think of govt fiances as the same as a house holds unless than house hold can literally print its own money. there no profit motive for the govt to do this, its about liquidity i the market in order for it to expand. if we kept the money supply down to 1980 levels america would be broke and no on ewould complain about the homless cause we'd all be homeless. intrest is a problem but not theproblem people think because because the debt could never be paid off anyway. the intrest on that money doesnt exist yet in physical currency. and it wont for a few years, but in a few years the deb tiwll be bigger so the two never meet. if they do, thats a serious structural problem and somethng you shouldbe very concerned about. also, its hardly suprosing that someone without an econ degree doesnt get it. it often doesnt make rational sense when you forget were not talking about households. theres a reason it takes more than 30 minutes of class to earn an econ degree and other reasonsas to why its called the dismal science. like religion many parts of it are open to interpretetaio and depending on yoru political slant there are other possible answers. capitalism isnt the only economic model. its certainly not the first and it wont be the last. primarlity because capitalism will eat its self. without government intervention the only outcome for capitalism is stratosperic inequality and a single monolithic empire producing all goods and services. that is literally distopia but thats the outcome capitalism is constantly striving for. "money" and "interest" are just tools to keep it going and eqaulize barter and balances.
@@nonconformist9930You're never too late for Bitcoin. Being late is a mind trick...it's fiat based thinking. You are never too late to stop being stolen from. People get caught up on the current dollar to Bitcoin trade price.....they should look at what they can get from the Bitcoin to goods and services trade price. When you're using a monetary system that you can't print but others can, you're being stolen from. In a system such as Bitcoin, where the amount of units are set (but infinitely divisable if need be) you are not being stolen from. In a Bitcoin system, value is transacted on mutual exchange rather than someone that received more printed money out pricing you. The bitcoin monetary network disperses wealth based on merit and thus creates less wealth gap vs Fiat that centralizes wealth and business.....and power. In Fiat you become a slave, in Bitcoin the balance of power is on a more level playing field. YOU ARE NEVER TOO LATE TO STOP BEING STOLEN FROM
@@ProfSteveKeen the Japan GPD Debt ratio is 256 %, ( USA 126%) but mostly of the Japanese public debt is held by the Bank of Japan,Japanese banks, funds and Japanese pension funds. Please note that it's not a choice because they are obliged by law to buy Japanese bonds. A country (it's not USA) may have a problem when foreign investors own let say 50% of its public bonds but you can always decide who can buy your bonds. Bottom line: the FED knows its business so no need to worry about it. It is true that several time you may see white elephants funded without apparent reason but that it's up to other branches of the government to take the most appropriate actions if necessary.: the most obvious one don't fund them.
Gee I remember when I was a kid and candy bars were a $knickel, the house my father bought that I grew up in cost him $20 thousand dollars, new cars/trucks were around $2500-$5000 but wages were also a lot lower and people had to borrow money from the banks at interest to buy a house/car. Today candy bars are $1+, houses are $1million to $1.5+million, new cars/trucks are $60k-$100+k but wages are a lot higher and people still have to borrow money at interest to buy a house/car. Question: Why aren't the items mentioned the same price today as they were when I was a kid with the same wages??
@@NathansHVAC Money printing being inflation? It seems to me this entire monetary system that used to be anchored to Gold and is now fiat (by decree) and anchored to basically the confidence of it is what it is just because of the public's belief in it just "IS". I'm reading into this video that he is basically saying as long as wages keep up with the natural inflation of endless money printing this system can keep buffaloing along indefinitely meaning candy bars can cost $100 as long as your salary rises to meet it so $1million/year. Wouldn't it come down to who the Gov't owes the debt of money printing to so whom really owns a country's central bank. I saw a video that said 52% of the New York Fed is owned by 8 families being the Rothchilds, Rockefellers, Lehman's, Lazard's, Goldman Sachs, Warburg's, Khun Loeb's and Israel Moses Sieffs families. Why would we care if they get defaulted on if you say we're ditching the Fed and starting our own currency say the Greenback or Silver Certificate and Federal Reserve Notes will not longer be accepted and put these banking families out of business??
Professor, please create a list of textbooks that could teach a person true economics from zero, include your own books in there, please make it as long and as complex as would be necessary, thank you.
Aloha Prof. Keen, I appreciate your insight on the economic modeling. My understanding of the US debt is the other side of it is rarely discussed; the money that is pumped into the economy that is not offset by revenue, (debt), is an investment into the private sector, (businesses and services for the citizens). The US Govt. can never go bankrupt as it is a sovereign currency, meaning they can offset any debt with Congressional approval. The FED uses the sale and purchase of US bonds and establishes the short term interest rates to help control inflation. The same with taxes; the purpose is not so much revenue generation as much as it is a control on inflation and unemployment.
Yes that's correct, though unfortunately the control system is in the hands of Neoclassical economists, who don't understand the monetary system in the first place.
@@ProfSteveKeen Aloha Prof. Keen, thank you for your insight. As I am just an average citizen and not an economist, I am often dismayed how the US debt is portrayed in the media. Most citizens believe as Mr. Musk does, that the US is going bankrupt because of interest payment obligations on the debt, passing it along to future generations, but my understanding is that is a false presumption. These people are very intelligent and are surrounded by people who know the system intimately; if that is the case, I don't understand why they insist on pushing the negative narrative. My belief is that we continue down this path because the Executive Branch, Congress and Senate are too deeply vested in the status quo; any vision deviating from that is looked upon as an attack on their livelihoods, to the detriment of the US population, IMHO.
@@deanfukawa3260 It's fundamentally from accepting a false model of banking, which is taught in every economics textbook: Loanable Funds. I'm writing a very long treatment of why this false model, and not the reality, is actually the problem. Look out for it: I hope to publish it this week on my Patreon and Substack pages.
@@deanfukawa3260 Stephanie Kelton points out that the common (mis)conception is that the government finances work like every family's "kitchen table" finances: you cannot spend more than you earn. EXCEPT that governments (through their licensing of banks) can create money! We cannot, else we get jailed for counterfeiting. It seems that politicians and most bankers promote that misunderstanding, because they do not want people to understand the banks special privileges. Where does money come from? It is created by the banks for the government.
It's refreshing to see someone trying to be honest and not particularly partisan in their critiques. Trying to be politically agnostic is painful at the moment. You can't say a thing without both sides assuming you're on the other side. I appreciate the clear pursuit of objectivity. If Elon were to respond to this and take it seriously, even if he ultimately didn't agree, I think I would see him as more genuine.
Thank you Professor Steven for your Input. So what is the main course that drives inflation up, for example food prices? Is it the central banking system? Profesor Steven, Muchas gracias por tu informacion tambien disfruto mucho tu video🤔👍
Money creation at exponential rate that does not track productivity will lead to loss of trust in the currency and the monetary system itself. Nothing good will come out of it. Elon is right, he is not an economist ..
Steve is right. In a way money creation is the same as tax collection. Only money creation is not so visible and money devaluation is the same for rich and poor, whereas tax tarifs favours the rich. The way that bank families got richer throughout history is by creating recessions (by making money scarce occasionally). At that moment the rich can buy stock under the real value and get even more rich. So the system of money creation itselve is not bad. Hence the market can only grow if the ammount of money grows with it.
It is the case, but the fact that people managing the system believe a false theory as to how it works is possibly the best thing Bitcoin has going for it.
Yes. It takes research outside the textbooks to realise that mainstream economics is completely false about how the financial operates--and many other flaws besides that. If you treat economics as like physics--in that you can trust the textbooks--then you are being very badly misled.
@@ProfSteveKeen yes theyre wrong. every system in history that has had smaller size of government has done better. so the general direction of where to go is obvious
@@wasdwasdedsf All the world's most prosperous nations with the highest quality of life have huge levels of government intervention in the economy and spending as a percentage of GDP.
you need to do more of a laymans explanation of this Steve, so basically if we grow productivity and have just the right level of money creation/inflation then everything will be fine? this still leaves the money printer in the hands of corrupt politicians who will always use it excessively, and I don't think you address anywhere the ludicrous public debt interest payments (over 1 trillion for the states) it makes you cry when you think of what that money would have been better spent on
The key footnote Steve mentioned is Gdp. Of which is-on, the chopping board being disguised, hollowed/unwound. - Everything-else, ...is stag, hyper & deflation. Don't buy the melancholy inbetween. Gdp per capita has stalled, has it not. Good luck.
@@djdos83 Perfecto 🥰 Gfc period began fake-stimulus, until, all collapses at no end, of/account. *Potus-Clinton, (2000-2001) pushed the ball at frac.reserve-lending. And where we go next future-speaking is..*not in the realms of current/modern economic theory. That is to say, conflicts of ideological (socio) principals. Once you've worked out the Gdp (conclusions), ...it's then ideology, philosophy, theology. The best-tools to take with you Are, Music ...and Comedy 😉Take care.
The only reason they are saying wait wait wait is because auditing the Fed will prove corruption up to our eyeballs, and that means American Debt becomes MOOT. If it is found out that the Fed Reserve has been manipulating the numbers, that is FRAUD, and that will totally Erase the Debt of America. The EU is going to face some hardships over this because they have taken so much advantage of America via the Fed Reserve that they are holding America in a state of Economic Terrorisim, and vicariously the World. Time to cut the puppetmasters strings and boot the Fr**M*S*NS from America soil and ban them from ever holding office anywhere in America again. Charles (head of the snake) is PETRIFIED right now, because if the Fed is Exposed for what it is to the world, then Charles looses total control of the American Economy, and loses control of the World. They are TERRIFIED and DESPERATE to stop this any way they possibly can.
I'd take the money of course--as compensation for the 50 years of nonsense I've had to endure thanks to economics being treated as a science! And I'd make a speech that would book-end Hayek's where he said there should be no such prize. But that's fantasy talk. I know damn well that I'll never be offered it.
You don't have to "get out of" debt. Besides, debt and credit are equal and cancel. Just keep the barrow moving in circles and credit/debt is fine and sustainable - put a dynamo on the barrow's wheel and power lights, and manufacturing and social care.....?
@@CurtOntheRadio Are you trying to insinuate that the amount of Debt is equal to the amount of "credit" that the Fed is creating is sustainable??? You know what the unsustainable payment is on that? Your not being rational ..we are compounding our debt by 1 trillion now every 100 days.Our payment on that is great then what we pay to the M.I.C. and very soon it will exceed all of our tax dollars...then what?...Or maybe your just referring to a family who uses a credit card to pay for things they need for there home and at the end of the month they pay off that bill..even then the debt is paid off.Gold is money everything else is credit.
The economy does not amount to an accounting exercise. It consists of a network of individuals making single transactions over time and space. To reduce "the economy" to an accounting exercise leads directly to the misallocation of resources and a continual series of booms and busts that harm people.
0:33 Actually one _can_ use the epicycles to do astronomy and space navigation. The reason is that using epicycles amounts to using the Fourier transform of the relevant data in a particular way. That's why epicycles _were_ in fact successful as a tool before Copernicus and Kepler. What those two did was a simplification of the model. But the previous model was not really _wrong,_ it only represented the universe from an inconvenient (computationally) frame.
Nobody can become financially successful overnight. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking bold steps we need in other to reach our goals. you have to contend with inflation, recession, decisions from the Feds and all. I was able to increase my portfolio by $289k in months. You have to seek for help in the right places.
I think it's not always about fear, Sometimes realistic factors discourage people from reaching their goals in life. For instance, I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value
The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.
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Yes, and what the hell is his definition of a household? This presentation sounds like a review for people who have already sat through long classroom hours of presentations of his ideas.
Sustainable ONLY if there is parabolic growth. So I guess you just described a Ponzi scheme(which our whole economy and banking system is). And yes, any Ponzi scheme is sustainable if there is "growth", you are 100% correct with that. Dear Prof, would you like to model this in a zero or small growth scenario (caused of course by the global decline in population) and tell us what happens ?
Frankly, unless we understand how fiat money is created, then ecological collapse is guaranteed. The private money system will fail under planned or unplanned degrowth (the latter being far more likely), as will Bitcoin and all other energy-based currency systems. And I'm describing how the system has worked for the last 120 years. Check the US data. It's run a 2.5% of GDP deficit on average for the last 120 years. So where's the hyperinflation? It's just how a fiat money system works.
@@ProfSteveKeenwhere’s the hyperinflation? Have you looked at gold and bitcoin lately? They’re the ultimate barometers of USD hegemony. The ponzi continues as long as we have usd primacy.
This is the most respectful and informative critiques I have ever witnessed in my life. An example to follow. And this video gave me the will to want to learn Professor Keen's software package Raven. I hope it's open source?
The U.S. economy can actually get better if only the govt can start making better decisions for the sake of it's citizens, cos' they've really made life more difficult for its residents. Hyperinflation has left the less haves bearing the brunt of the burden. Its already eating into my entire $620k retirement portfolio. Like where else can we invest our money with less risks?
Just get a financial planner straight up! personally, I would invest in etf and also love investing in individual stocks. yes it’s riskier but I'm comfortable in my financial environment.
I agree. Exactly why I now work with one. A lot of folks downplay the role of advisors until being burnt by their emotions, no offense. I remember some years back, during the covid-outbreak, I needed a good boost to stay afloat, hence researched for advisors and thankfully came across one with grit. As of today, my cash reserve has yielded from $350k to nearly $1m
I work with *Izella Annette Anderson* as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with "Izella Annette Anderson" for the last five years or so, and her returns have been pretty much amazing.
In this system, it looks very easy to end up with an impoverished workforce. As money printing becomes commonplace, wages will always be behind the curve. It almost looks like what the Argentine government was modeling in the 80s and 90s when it was saying it could print and spend it's way to greatness. Run 200% inflation and give the workers 100% wage hikes every year... but everyone just fell further and further behind. The currency just kept adding 0s, and people would need a wheelbarrow of bills to buy a loaf of bread.
Our national debt has ALREADY effected our country's ability to borrow via higher rates on bonds. Idc what this guy has to say, he's wrong. Our spending is UNSUSTAINABLE period and there will be a reckoning if we don't make changes soon.
No, the Fed's interest rate policy is unsustainable. The only reason the interest payments are high is the Fed's rate hikes. There is no "day of reckoning" when someone will have to "pay for it"-that's just not how it works. Treasury bonds are paid for at the time of purchase at the Treasury acutions; it makes no sense to pay for them twice.
@@randyallred2382 there is always a day of reckoning.... the more an entity borrows, and the more incompetent and untrustworthy that entity is to the people who lend it money,m the higher the interest rate will be
@@randyallred2382 do you even know what your talking about? people give the treasury $ when they buy bonds. our gov is now 36 Trillion in debt- that's bonds that need paid back to investors. as our gov gets more and more indebted (national debt continues to rise), investors will begin to demand higher yields for buying these bonds, as it becomes more and more clear that our gov is struggling financially. those higher yields will require more $ printing from the fed, sparking inflation. that inflation will prompt the fed reserve to hike rates even higher. that is the "debt spiral" and we are headed there probably this decade. hope you own silver/ gold/ land. cheers.
@@Dan-yw7sy - Yes, I know what I'm talking about, allow me to point out some of your misconceptions. Treasury bonds, notes & bills ("bonds") are sold at Treasury auctions to Primary Dealers-banks and other financial insititutions. Treasury bonds are forms of US dollars. When a Treasury bond is purchased, buyers exchange bank account dollars for Treasury bond dollars. The advantage is that Treasury bonds are 100% safe assets and pay interest premiums. When a Treasury bond matures, the dollars in the bond account are debited and the associated reserve account is credited. That's how Treasury bonds are redeemed, i.e. how the investors are paid back. No outside money is required. In this way, last year alone, the US govt redeemed a total of *$140 trillion* in maturing Treasury bonds. This automatic process happens while we sleep. No taxes are every used or needed to pay any of it (a common but false claim). The dollars used to buy Treasury bonds all come from prior federal spending-whether it's the Fed providing bank reserves (do you know what bank reserves are?) to purchase the bonds or federal fiscal spending. (Nobody takes out a bank loan at 5% to buy a Treasury bond that pays 3%.) The issue of "bond vigilantes" does not apply. The Fed sets the interest rate. The government doesn't have to sell bonds when it deficit spends, but rather the purpose has been to drain excess bank reserves to maintain a target interest rate. The govt could stop selling Treasuries, but the private sector relies on them as safe assets, and constituting much of the banking system's capital. "Debt" is the wrong word for describing US Treasury bonds. The govt doesn't sell bonds to raise revenue (despite what you hear); it sells bonds to drain excess bank reserves. (Although this is moot since 2008 when the Fed started paying interest on reserves. The US goverment is *not* struggling financially. The government's "red ink" (an accounting entry) is the private sector's "black ink"; federal deficit spending is the primary source of net savings (and business profits) in the private economy. The Fed issues bank reserves, which are used only by banks, and do not enter circulation in the the real economy. Thus, an increase in bank reserves cannot cause inflation, nor does it cause banks to make more loans. Most of these myths are aspects of neoclassical "trickle-down" economic theories, which have clearly failed (except to make the rich richer and workers powerless). There is no "debt spiral" in federal finance, but rather it's private debt that's out of control-thanks to all the financial deregulation of the last 40 years. If you'd like some references, I'm happy to provide a reading list.
They have been getting close to broaching this issue in their panel discussions recently, but I think there is a taboo against suggesting that the government could create assets without incurring a balancing obligation. Of course the very real risk is hyperinflation. The question is, do we trust our politicians to spend wisely and un-corruptly if they know that money actually grows on virtual trees?
@crawkn ye I mean I don't have strong opinions right now on whether they should or not, I was more highlighting as a matter of fact, it isn't the case they couldn't run deficits without issuing bonds Like Warren Mosler says, the train companies don't need to go out and gather old tickets to sell new ones, they create them in the first place
@@Sock1122 Not a perfect analogy, but interesting. It is a very real problem that when money can be created from nothing, everyone is going to want some for nothing. It would pretty much take a dispassionate bugless algorithm coded in hardware and rigorously enforced in wetware to prevent it.
@@CharlesB-NGNM Wrong. Wait just more 15 days to flatten the curve. And follow the experts. Maybe someday you will be able to correctly guess something.
@@Nnnnniiiiii Okay, be sure to never go to the doctor for anything. You know better right. If you get a message that the water supply in your area is contaminated, don't listen, you need to drink it because you know better. They say sugar and processed foods are bad for you, better not listen. Who needs exercise and clean water? Not you, we found the one man who is never wrong about anything right :)
All households are not equal... There are households who borrows money and there are households who lends money out. The situation we got now is unsustainable as a greater and greater wealth divide is unravelling. Historically, this kind of situation has ended in revolutions.
Typical college professor.... lives in his own world supported by the tax payer so he can dream up unworkable economic models that don't actually function in a real world economy.....
Exactly, somehow the professor seems to think that you can just print money forever without consequence. As I said above, his argument is not logical. Professor who?
Learn real finance kiddos.. Fiat currency is limitless can be printed out any time, it's no longer backed by gold already almost for century now Learn to know "money vs currency" many lessons around RUclips
So can anyone explain how this system is "sustainable" when young people can't ever dream of affording a home, food prices are skyrocketing, its takes 2 working incomes just to pay for a basic middle class lifestyle when it used to (70s and early 80s) take one. At the same stime , the billionaires just keep getting richer. Ask any small business owner who has to generate their own income. It's nice to get a theory from a professor who is paid a stable income by a university, but how about he open a subway shop and try to pay for his middle class lifestyle from that?
Interestingly government of Switzerland is prohibited by law to run deficit... (almost always). And how swiss frank and Switzerland is doing? How to apply this professor explanation to this simple example?
We have had real wages decreasing while cost of living increasing due to infinite money printing. The US exports inflation through it being the reserve currency and your local federal bank follows the lead to further redistribute wealth to banks and corporate firms. Maybe stopping the circus is the tough medicine we need, or we just keep doing the same and expect things to magically improve.
The US has had wage deflation for most skilled labor jobs and certainly unskilled jobs as the global economy shifts industry out of the US the past 40 years. The result is US labor has to compete against much cheaper foreign labor and of course wages decrease as a result. This seems like an economic issue, but it's facilitated by politics first. If we don't like it, we should vote for different politicians.
@@EDAHSCcorrect. Offshoring has been totally discredited. However, voting for capitalist politicians will not fix this problem, not unless we have better politicians.
In Europe it is said that US debt only works because dollar is a world reserve currency. I somehow doubt that debt has no consequence, perhaps unless maybe if you are lending from yourself, like in Japan, and maybe to a decree in the US. But how long is US Dollar going to be the reserve currency?
I didn’t understand what benefit Elon was getting for promoting trump until his stock went up 15% in pre market trading. Less regulation equals more profit for Elon, got it.
It does in a counter-intuitive way. For example people think the EV tax credits are great for Tesla and he would want to keep them. But if you get rid of them, Tesla is the only company making EV's for profit, so no more tax credits means other companies lose even more money on every car they make. And whether the credits stay or go, the media will tell you it helps Musk and thus is a corrupt action.
As more and more money is being created by banks lending, how come there isn't a greater increase in inflation? Is inflation irrelevant to this or why is it not factored in, or have I missed it? Serious question, I don't understand.
In the President Clinton era, when we paid off the national debt and had a SURPLUS, that is no different or the same as $35 trillion in debt? Remember, two years ago when there were serious talks and discussions with the people who were claiming the Earth is flat??? Same thing with this guy
We did not pay off the national debt under Clinton! They just didn't add much to it. *Federal budget surpluses are paid for out of private savings* and consequently the four years of surpluses sucked the savings out of the economy. A recession followed. *Every time* the US govt ran budget surpluses, a depression or recession followed. That's because government surpluses put the private sector into *deficit.*
so how do we the people avoid massive private credit debt in this model? What is sustainable about that? Is the premise that people can resort to bankruptcy the anawer?
Interesting. But unlike in the simulation, US government debt currently more than 120% of the GDP. Does your simulator have a happy deleveraging scenario for this type of situation?
I'm not sure inflation and productivity are in Steve's models. I think they are the biggest issues economics and government should be concerned with. There's no point having a model that can take you to Mars if it embeds an assumption the atmosphere there is breathable.
I agree with the money creation part, however... Is this MMT? Historical examples seem to contradict the professor's model, out of control spending and hyperinflation led to the collapse of the Roman Empire and many other states throughout history.
Let’s imagine a scenario of total deregulation kiddos! Do you really trust private industry to maintain the roads, ensure clean water, keep sewage systems running, protect the environment, and support farmers? If you think government is doing a bad job leave it to people who do everything for profit! They would likely outsource everything, cut corners with subcontractors, dismantle regulatory agencies, and open our public lands to private exploitation. And when it all goes hell, they’ll look for scapegoats-immigrants, Blacks, the poor (most of the US population) LGBTQ+ people, anyone but themselves-while enjoying their wealth from a comfortable second home abroad.
You are assuming that the type of corporatism that thrives within the current system of government intervention would exist in the absence of the government. In fact, private ownership by individuals or collectives rather than by private interests which are able to purchase government influence and use regulation to maintain control and reduce competition would look much different than what you imagine. Crony capitalism and corporatism are functions of government intervention, not the other way around.
It's a good point. People like Ron Paul would disagree with you. He always said give private citizens more power to sue the private industries over these infractions, of course we all know how that goes... However, the government DOES do a bad job... Why? well at least partially because there is 3 lobbyists for every governmental official. So basically I'm pretty cynical about either way and pretty bearish on the human race.
Let's try an experiment. You go have that govt and others of us opt-out. And let's observe our relative prosperity going forward. And no, you will not be allowed to switch teams later. You stay in your morass.
Our various governments providing the very needed social services you listed aren't doing their best. Why is that? Likely a lack of adequate funding. But why is that? Our governments' revenues greatly exceed the funding required to provide our very essential social services. I think our governments are throwing a lot of our money at new social ideas (often driven by developers or big name sports teams and various activists) justifying it with good intentions. For example the covid pandemic shutdown (good intentions...save us from certain death) which then required the federal government to print money to fund the economy while assuring inflation to follow soon after...all that new money but no productivity!
I may be misunderstanding something, but, this "sustainable" model does not address inflation caused by the creation of new money. If new money is created without a matching increase in supply of goods or services, inflation will eat away at consumer spending. Also, the government becomes less and less effective at spending money, meaning, it costs more and more money to get less and less benefit from that spending, this is due to both government size and regulations. Just because the numbers in the models don't collapse, I would argue peoples standard of living will go down in complete correlation to government spendings and overall size. When governments spend money inefficiently, its taken away from the private sector that could have allocated it with much better outcomes.
You’re missing the deflationary force that is technology. Inflation in terms of Keen’s video cause growth and therefore technological innovation. Think about how everyone compared to the 1950s have air conditioning, smart phones, refrigerators, cars, and access to air travel. These things make the transfer of information, goods, and services to move more quickly and therefore become more available to the general public.
@RonniiV I understand the deflation of technological productivity, my point was that government spending does not create productivity but actually reduces it as compared to that money used in the private sector by people who are innovative, lean and objectively good resource allocators, and not career bureaucrats.
@ Well if you look at Keen's model, you'll see that Fiscal spending increases the Private Sector's balance sheet. The Private sector to do the things you explain, need that money creation. Does the bloat of the beuracracy increase, yes, but it's not the reason why people's spending power decreases. It is related, as I agree bloat and rent-seeking increases with highly regulated sectors like education, housing, and healthcare (all areas that do not benefit from the deflation of tech due to reguatlion). Are you morally against the system thet Keen explained? Are you for Elon's solution of extreme Austerity?
@@RonniiV I am for improving government efficiency for sure, I don't know if that means reducing spending, or money printing, but I do think we would all be better off with a smaller, more productive government. If we could cut spending but keep austerity at bay, that would be ideal.
Some government funding, in the order of $5 Billion (with a "B") dollars from the "government trough". LMAO $5B to direct food assistance to children would have returned actual growth in GDP, as well as fed kids. So in my model, it was a complete waste of resources to give one single cent to elno has his toys.
@@_nebulousthoughts Well, If you are around in the next few 100k years, you might just see the sun start to burn the earth up, Till then, I won't worry about it.🤣
Agree with everything regarding the privatization. However debt reduction, and govt restructure and de-regulation needs to be done. Also a lot of issues in economics come from how you define things and then using words to describe other things. For example, people talk about privatization, but forget a lot of 'privatized' areas still get contracts from the government.
The size of the 'national debt' or the deficit should never be a target. Federal deficit spending is a tool. More financial deregulation is the *last* thing the US needs. The financial industry is out of control and needs to be reined in.
@@randyallred2382 De-regulation for other sectors. Big Pharma, Financial Sector, Banking needs to be regulated, they're free to do whatever they want i agree + Food Industry
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I believe Elon emphasised reducing spending by increasing government efficiency mainly but keeping the same level of service. This is something he is an expert on whether it’s making cars and reducing factory costs or lifting things into space. For example lifting things into space cost 1/10 what it used to and that’s a direct result of SpaceX while at the same time increasing the number of flights going into Low earth orbit. Reducing waste is a good thing.
It sounds like pouring water in wine and still pretending it is wine. Nobody is saving money anymore. Everybody is in debt. Debt is deducted in income statements. It is the new normal: pay as you go. It may very well work. We have negative numbers, haven't we?
Banks lend more than their deposits. The central bank creates money by quantitative easing. The use of government borrowed money is relevant e.g. to fund current revenue expenditure or to invest?
More government spending creates higher inflation, people are getting poorer, costs are rising, wages are stagnant, unemployment goes up, house ownership goes down. Nothing to see here
Was there inflation during WW2? The government borrowed 200% of GDP to fight the war. Or do you think we should have fought Hitler on the cheap? Where exactly do you get your ideas from?
The flaw of this reasoning is that Households are the source of the money lent by Banks. This is just wrong. Bankers, at all levels (fractional banking) create money out of thin air then charge you to use it. The Banks are not restricted by how much money Households have.
@familyshare3724 shows me you didn't understand Weimar and we do not print (most of) the money anymore. Why ate so many people sticking to neoliberal narratives and don't start thinking logically?? No one wants to print endless money, but economic libe as we know it now, does not word without state money net spending. Just think about who issues all our currency and what happened to money lend out by private banks or where the money comes from companies collect es request and partly pay to their employees Just a little bit of logic and double-entry bookkeeping. Or going on to be the slave o neoliberal narratives and waiting for dooms day. Your choice 👍🏻
He should stick to paying actual smart people to do those things. But note well that Tesla's FSD is going to fail miserably, and mankind is NOT going to colonize Mars (or any other place in the universe).
@NelsonGuedes I'm talking about what HE is good at. His employees likely all do a great job, even under his in part enormous pressure! But to my knowledge he has no business and employees with macro economics. So he also just talks the wrong narratives of others. In the end he might nit care, as long his business get much easier in terms of deregulation etc.
The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
Since the debt crisis could unleash carnage on the stock market leading to economic downturns. We need to be prepared for potential market volatility. how can I secure my $600K stock portfolio against declining?
Concentrate on two main objectives. First, keep yourself safe by knowing when to sell stocks in order to limit losses and maximize gains. Second, get ready to benefit from market changes. I advise consulting a coach or other professional for advice.
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Mind if I ask you to recommend how to reach this particular coach you using their service?
My CFA SOPHIE LYNN CARRABUS, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
It does matter who's in government, not so much in the short-term, but if Americans can consistently elect people who are financially responsible and not corrupt, then we can turn this trend around. It will take a long time and Americans aren't known for electing financially educated people into office so it's more likely America will simply collapse under the weight of the stupidity of its people while politicians launder all the money they can through pet projects and wars.
The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
I have learnt not to trust corporations, especially these banks. I was badly hit by the '08 financial crisis. Since 2019, I've just been focused on investing through a financial advisor and it has been paying off. No major loss has ever been recorded since 2019 i started. I'm closer to having over a million dollars now than i ever was with the banks. I'm never going back to banks full time.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
‘’Annette Christine Conte’’ is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I appreciate this. After curiously searching her name online and reviewing her credentials, I'm quite impressed. I've contacted her as I could use all the help I can get. A call has been scheduled.
The US economy cannot survive without continuous credit and debt creation. The FED will print more money and the average American will go just that much further in debt. Meanwhile, foreigners lust for the greenback. Their economies are in worse condition than the US... if that's even possible. Someone is going to be left holding the bag...
Gold might crash in a liquidity crunch, but many precious metal holders are prepared for this and unlikely to be forced sellers. The paper market would tank and possibly collapse. Hearing from an experienced investor who has overcome adversity is motivating. It can be scary when your portfolio turns red, but if you've invested in strong companies, stick to your goals and continue growing them
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
impressive gains! how can I get your advisor please, if you don’t mind me asking? I could really use a help as of now
‘’Aileen Gertrude Tippy’’ is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
So we should all correct the sentence... the government doesn't go bankrupt, the people do, while the banks prosper.
What a GREAT system... to be a banker.
It worked well for banks everywhere but Iceland in 2008-09.
@@worldcitizenra Why is that? Let me guess... leverage?
most probably it will attract money from abroad before whole world would go bancrupt, he may create some scams to attract these trillions and use it to go to mars.
@@worldcitizenra Not ONLY my Scandinavian neighbor Iceland...
Banksters/Private Equity were out like vultures when they saw "opportunities" in Greece, trying to grab all lucrative Greek islands for themselves and their profiteering.
Like...
"Welcome to Mykonos, brought to You by Acme Capital. Stay at any of our hotels, rooms starting at only $1,999/night (breakfast not included, and don't bother reading the boring conditions)!"
@@worldcitizenra Iceland did it the right way NOT too big to fail. KUDOS
I recognize the hardships that come with economic struggles like unemployment, job loss, inflation, housing market instability, political uncertainties, and the global impact of conflicts and wars. Making ends meet during such times can be incredibly challenging. To navigate this difficult period, considering alternative job prospects, enhancing skills through online courses, and expanding your network can heighten the chances of securing employment. Moreover, prudent budgeting, exploring available financial aid programs, and seeking assistance from community organizations can offer some relief. How are you currently tackling these challenges? Have you implemented any specific strategies to cope?
In my opinion, now is not the moment to rely on hearsay. Every individual, regardless of their level of experience as an investor OR in a financial market, requires guidance at some stage.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
Please tell me how can I connect to your advisor. My funds are being murdered by inflation, therefore I'm looking for a more profitable investing strategy to put my portfolio to work.
Finding financial advisors like “Melissa Terri Swayne” who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I just googled her name and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a call.
MMT: Public Deficits ($36T) = Private Surplus ($36T)
Who holds Government Bonds?
US Private Entities: 37%
US Agencies & Trusts: 22%
US Federal Reserve: 19%
Foreign Entities: 23%
Source: U.S. Department of the Treasury
Great point! Who benefits from those bonds? The working class helps fund those bonds but gets nothing in return. The standard of living declines. Steve is not able to comprehend reality. Steve does not do anything Elon does.
Keep in mind that if these were allowed to be marked to market, the assets side of the US’s balance sheet would have taken a significant hit since interest rates rose in the fastest manner they ever had before.
@@johnpollard744 Nothing ?
Taxpayers get SS, Medicare, national defense, veterans benefits, the FAA, the FDA, roads and infrastructure, FEMA, the EPA. The list goes on.
You think we should eliminate or severely cut these things to balance the budget ?
@@howard5992 Priceless. Those are available for everyone. What do they get from the bonds? Do you own T-bills?
@@johnpollard744 What do taxpayers get as a benefit from selling bonds ?
We get lower taxes.
Am I wrong ?
Purchasing power is the only thing that actually matters. Money is just a number, it doesn't mean anything on its own. You can cook the books any way you like.
Sadly most people dont see that. I worked in the financial IT sector. Millons were made around suspect economic instruments and algorithms that has no real value. Just increased the speculation and obfusicate the transfer of value. The level of complexity built in, makes it elite and not accessible to the average person. Simple thinking can point out why banking system behaves the way it does today. Transfer money using any instrument, even with nano second processing, it takes them days to honour a transfer, why? The financial industry needs to be paired down and their influence curtailed. That is what these economists want to protect. Quasi governemntal institutions should be taken down. Remember occupy wall street and what happened to that movement? Bitcoin had an orginal goal. But that was convoluted by speculation.
Elon is right. He has created real value, not these banks or the Federal reserves or the wall streets of the world.
Correct, and the value of fiat currencies as well as their purchasing power is going only one way: down. To give an example of one example seen in a recent documentary about the Concorde: 3 million GBP in the mid-1980s would be worth 30 million today. 10 times!
@@IdeaBoxfulbitcoin in specific is a great example as the only use of it is to sell for someone else wanting to buy it to sell it, this means that if there is even a small change it entirely collapses as everyone cashes out, the difference is that unlike money it has one use rather than being used to buy everything,
PPP is for countries. For individuals Social Wisdom/TRUST is the only thing that matters. We will always remember Nikola Tesla that's lighting the XXI century, but the community wouldn't care for sophisticated gamblers like Buffet (other than discovering BYD& similar) or exploiters like Musk who doesn't respect the engineers who build products we use or corrupt MIC/Pharma/presidents who warmonger/manipulate for profit :(
Purchasing power doesn't just come from the supply of money. It's also influenced by the demand for that money, which is hard to measure.
After facing significant challenges, I learned two crucial lessons about the stock market: it played a major role in the Great Depression, and the quickest way to make a million in the market is to start with two million. The Great Recession only reinforced these insights. In hindsight, I wish someone had guided me earlier. A well-defined entry and exit strategy is essential for success in the stock market.
There are certainly ways to achieve high yields during a downturn, but these moves are best executed under the guidance of a financial advisor.
Exactly, many investors are overly focused on potential profits, forgetting that the market has both ups and downs. Securing your financial future requires patience and a strong understanding of market trends to identify the right stocks for investment. For instance, I made over $260k in profits during Q4 of 2021. The key to profitable investing is truly understanding market behavior.
I appreciate your comment; I’ve been trading stocks for some time, but I haven’t seen significant gains. How do you achieve such results?
Rebecca Lynne Buie has consistently been my top recommendation. She’s widely recognized for her expertise in financial markets and has a strong track record. I highly recommend her.
Thank you for sharing! Rebecca Lynne Buie seems quite knowledgeable. I found her webpage and reviewed her resume, which was quite impressive. I’ve already reached out and scheduled a call.
"If my math is right, we can inflate the money supply just perfectly so a small elite can steal from the masses. Then we pass the problem to the next generation, and never have to deal with the consequences we created." -this guy
Any tool can equally be used for good or bad. We choose how we use the tool. Not throw out all tools as bad. - Everything has this yin and yang, can be used for bad or good. A hammer began as a weapon to kill, now we mostly build houses with them. As a teen I heard old people saying new music was bad and caused bad, they wanted to outlaw Rock music. The thing is just a tool, you don't outlaw the tool, you regulate how you use it to do good with it.
This video made me feel like the countless hours I've spent on this over the last 15 years are paying off. They've paid off financially, but the personal validation is valuable too, yes?
I like your comment.
How great is it to live thru a time when the established thinkers can be so sold on their present system that they can't see it limitations?!
That said, I hope this guy isn't in charge of anything important and I shudder to think about young minds being shaped by these ideas.
Right on, these paper pushers know nothing about the real economy because they get unlimited paper, while we have to WORK for it.
End the paper mafias cycle of theft.
You're never too late for Bitcoin. Being late is a mind trick...it's fiat based thinking. You are never too late to stop being stolen from. People get caught up on the current dollar to Bitcoin trade price.....they should look at what they can get from the Bitcoin to goods and services trade price. When you're using a monetary system that you can't print but others can, you're being stolen from. In a system such as Bitcoin, where the amount of units are set (but infinitely divisable if need be) you are not being stolen from. In a Bitcoin system, value is transacted on mutual exchange rather than someone that received more printed money out pricing you. The bitcoin monetary network disperses wealth based on merit and thus creates less wealth gap vs Fiat that centralizes wealth and business.....and power. In Fiat you become a slave, in Bitcoin the balance of power is on a more level playing field.
YOU ARE NEVER TOO LATE TO STOP BEING STOLEN FROM
Right...
I assume this guy thinks we should do like Japan, zero interest rates and the central bank buys up the debt and sits on it.
Japan does not own the Worlds Reserve currency......
Politics determines how wealth is distributed within a country, while wars and diplomacy determine how wealth is distributed between countries.
Regardless of who is elected president, most US citizens will continue to endure all these direct consequences of government policies: Economic inequality, persistent inflation, stagnant wages, soaring healthcare costs, a student loan debt crisis nearing $1.7 trillion, and an education system burdened by increasingly unaffordable tuition. Inadequate public transportation, racial inequality, mass incarceration, militarized policing, deteriorating infrastructure, unaffordable housing, homelessness, the opioid epidemic, and rampant gun violence.
BINGO!! 💯🔥
you got it right.
We need to go back on the gold standard OR a zero inflation bank goal.
You're describing the Biden administration. That's changing.
drink this black pill
13:40 So wait, debt to gdp ratio of 30-40%? And interest rates of 8%? And this relates to what's going on in the USA? Sorry I don't see the bit where 10% annual deficits - during peace time, with low unemployment -are sustainable. Can you run a model with more realistic parameters to really convince us?
You don't see...based on what?
Look at Japan for the last 30 years. Not a model--real world outcomes.
@@randyallred2382 So, what?
Sure, but then I'd need to deviate from assumptions I made in that model that are consistent with Loanable Funds. The whole point of this video was that Loanable Funds is structurally false. A structurally realistic model with bank and government money creation, bond interest rate setting by the Central Banks, private bank bond sales to NBFIs, etc., would have more realistic numerical outcomes.
So in your "correct" model, the government never goes bankrupt, the banks get richer and the people get poorer, while inflation and interest rates make life more expensive?
Math checks out!
So we should all correct the sentence... the government doesn't go bankrupt, the people do, while the banks prosper.
What a GREAT system... to be a banker.
Billionaires always point to spending as the only cause of the debt, then they demand a tax cut. This just in, tax cuts ADD to the debt too.
boom! The entire deficit is because Billionaires/corporations don't pay their fair share of taxes. The deficit boomed since Reagan cut corp tax in the 80's.
Don't forget the added benefits of greater income inequality and social instability.
Tax cuts make the gov't borrowing bigger...
Don't credit Elon for the engineers he treats harshly.
No he does it all himself. That’s why he never gives credit to anyone else. Duh.
Musk didn’t do it, the engineers at space X did it, Musk just funded it. The question is whether that funding came out of his own pocket or is some sort of complex loan arrangement with a third party.
Then why boeing and NASA not able to do it for all these years with unlimited funds
"I have created a model without debt" Professor. "All money is debt." current reality
so what is debt then?
Fiat money is debt..it's a promise to pay. Only physical gold is not debt since it's not anyone else's liability.
@@lawtutoring i see thanks...technically thats right, money are covered by debt, and at the end by work, as people borrow just to cover their lives expenses, but not necessarily. Question would be if you can obtain gold and avoid using money, as once you start to use money/debt everything is already debt, even gold cant escape. And if gold is not debt then anything else is not debt. Like trees, flowers, rock, water...
@@simonmeszaros2770yep that’s true, money is just a way to keep track of how much you are owed, which is technically different than something with a fake value such as gold, I reckon we could have a totally different economy
I had to watch 5 times to get the summary: Just Inflate out of all debt. When minimum wage is $1 trillion, $36 trillion in national debt is just 1 weeks labor.
you might need to watch it a few more times then if thats the conclusion you came to
@@serptimis1552 What did he miss?
Minimum wage is minimum to accommodate survival. 36 weeks of survival
He picked minimum wage to show that inflation hits the poor the hardest. The purchasing power decrease of monetizing the debt means that it’s equal to being enslaved to these Ivory Tower denizens for a whole week. They promise to deficit spend on behalf of the poor, but do the opposite.
This model is right, but case is that households have less and less $ and banks have more and more, so im not sure if we want this model
Yes, I was concerned seeing GDP increase exponentially in the "correct version", and firms bank accounts also increasing exponentially, but household bank balances being effectively a flat line in comparison. So the price of everything goes sky high *pops champagne* but households have the same amounts in nominal terms *sells a kidney to pay for champagne*. Models are bullshit - even if we do predict a future scenario, there is no guarantee the future will reflect the model. It's all assumptions and nonsense. The biggest handbrake/flaw in the system (at least in my view) is corruption and inefficient spending by governments (crony capitalism and people rorting government contracts). Our financial system is broken - I think everyone has an inkling of this - the biggest problem is no one knows [or can agree on] how to fix it without causing pain and huge disruptions. And so on we go, living in a delusional broken world. Le sigh.
@@drtitusit’s because it’s a fiat money system, they always fail eventually. The way to fix it is come off a fiat system, which will be painful
@@tommyrich3155What's painful is those who refuse to learn the truth about how Fed level spending & taxes actually work. There are about 100 countries using fiat currency.
@@tommyrich3155 one thing we know for certain is that all hard money systems have failed as well
@@tommyrich3155 Gold standard OR zero inflation target OR constant GNP spending.
I'll make it simple for everyone.
If you work for the government and receive a monthly wage of say 5000 dollars, a couple of things happens. And before that remember that
Asset = Liability + Equity
1) You receive 5000 in your bank account
This shows on your balance sheet as
a) 5000 in assets (deposits)
b) 5000 in equity (salary)
2)Also notice that the bank you use has a corresponding entry
a) 5000 liability (bank deposit owed to you)
b) 5000 in assets in the form of treasury bonds
3) the government is the most important piece in this equation as it pays you your wages
a) -5000 in equity = 5000 budget deficit
b) 5000 in treasury bonds issued!
Hence this is critical as it means that for you to receive your wages from the government you need the government to run a budget deficit which is equivalent so to speak in issuing bonds!
Also you need to consider the inverse situation where to reduce the deficit the government has to tax you. To earn a surplus, the government will need to tax you more than you earn, in which case you as a private individual has to issue a bond to the state. In this scenario aren't you actually enslaved to the government?
Lastly, the bond held by the bank could be sold to you in part or in full. But that would simply make you own some bonds and fewer bank deposits, and correspondingly reduce the amount of deposits in the system.
Got you fact checked by an AI to be sure I'm not missing anything, bless this era:
"(...)
On the bank’s balance sheet:
-Liability: The bank owes you $5,000 because it holds your deposit, so it records this as a liability (an amount they owe to you).
-Asset: *The bank’s corresponding asset isn’t always a treasury bond; banks hold a mix of assets to balance their liabilities. While they might hold treasury bonds as safe assets, they also have reserves and other forms of lending as assets*
(...)
In summary:
-Asset = Liability + Equity holds for individuals, banks, and governments, but each has different implications in accounting.
*-The government does not necessarily need a deficit to pay wages, although a deficit may occur if spending exceeds revenue.*
-Taxation supports government activities, and while it decreases personal income, it’s not equivalent to issuing a bond or debt to the government.
-When you buy bonds, you’re simply exchanging one form of asset (cash) for another (bonds), with corresponding adjustments in the bank’s balance sheet."
☝
@alxmtncstudio2066 yep that is right. What I was doing was to let people realise that if the government were to cut the debt, it would lead to them getting poorer in financial terms. The easiest example here would be using wages as the motivating example.
We don't need the government to run a deficit to pay us our wages. The budget was balanced in the 90s and people still got paid. We never used to run deficits like this and the world worked just fine. This time we grow up balance the budget and right this ship.
Hmm what about my tax. So in your example as the government employee making 60k a year. The worker pays roughly 15k in fed tax.
Which basically means they pay themselves for 3 months.
@@PaulBisso nope. The government employee is a private individual hired by the government.
Another real world example will be government contracts. So let's say you run a firm that provides a certain product or service the government is paying for. You receive say 100k in revenues and pay your wages and other costs, and let's say that's 60k. Your pre tax profits are 40k and let's say corporate tax is 25 percent, your net profits are 30k. Notice as a result that your personal surplus ie profits is a result of government spending.
At the same time your non tax costs were 60k, which consisted of wages and revenues for other firms. This will lead to another 15k of tax revenues for the government. Hence total tax received is 25k (10+15) which is the tax rate times the size of the contract given.
Consider then, the opposite scenario where the effective tax rate is more than 100 percent. What happens here is a budget surplus. But then it means a reduction of the private sector's net worth. Note that net taxes can exceed spending even if income and corporate taxes are above 100 percent. You have sales tax, wealth tax etc that can increase government income.
Last, the size of the deficit which is a negative equity entry is paired off with a positive liability ie a bond that is issued. If the Fed or commercial banks buy these bonds, then you as the non bank private sector holds bank deposits (ie money supply). If banks refuse to buy, then a part of your bank deposits gets swapped with a bond, in which bank deposits disappear from the economy.
At 6:00, The professor says that interest from the government goes back to the household sector. The thing is, aren't a lot of bonds owned by foreign companies? That would mean that the extra interest is not staying within the country,
International investors own roughly 1/3.
@@alterego157 U.S. Department of the Treasury says 23%
Factoring in international economy and there are serious problems that the US faces. Our imbalance of trade is an actual problem, whereas the debt deficit BS is just that.
@@NoName-py4en Fair enough. Have a good one.
US institutions holds most of the Treasuries. And sure, they get the interests. But they don't get richer from that.
The capital they hold is bound by those assets, and obviously doesn't do anything go9d for the economy.
No, the only thing the Treasuries does is increase the debt and allow more governmental deficit spending.
If it was utilized productively it wouldn't hurt as much.
Of course Musk is right and prof. Keen wrong, this isn't sustainable!
You're a treasure to the world Mr. Keen. You awoken me from my economic dogmatic slumber and revealed the world of money to me. In great debt to you.
If banks lend money into existence, then it follows that governments do the same and use tax receipts to pay for the consequence of the government lending just like banks seek to cover their capital requirements after lending. Deficits are a necessary condition for a functioning economy. That being said, any mention of America that does not take into account it's status as the global reserve currency is useless. Huge quantities of USD don't even originate in the US, it comes from the overseas eurodollar system, lended into existence by foreign banks.
Bank lending (a personal debt) occurs simultaneously, but in a separate lane from Fed Gov't money creation. Their debt is our asset.
*Taxes are never used or needed to pay any part of the national debt.*
Some foreign banks "sell" _bonds_ denominated in USD (which must be purchased with USD); they don't lend US dollars into existence.
@@flamesintheattic 2nd reply - no US dollars originate from overseas.
Note: NASA was the first to land a rocket, with the Delta Clipper; a technology Musk licensed.
Blue Origin also lands their little hopper rocket without issue.
7:00 "I could build a model with production, but it would be much more complicated. It wouldn't change the point I want to show in this video."
That's actually the whole point of the disagreement. You need to show that inflation won't occur. Your model assumes it doesn't happen. You assume every dollar spent leads to increasing productivity. This means you assumed your own conclusion. Do you have another model that includes inflation and productivity that supports your conclusion?
13:46 "This is a sustainable system."
Pause the video here and look at the graphs. GDP is growing exponentially. Do you honestly think real life productivity can sustain that? Remember, GDP = price * quantity. GDP can go up because quantity (productivity) goes up, or it can go up because prices (inflation) go up. I think you're crazy if you think productivity can asymptote like that. Inflation is what you'd expect, and it's what we got historically. The dollar has lost 90% of its value in the past 50 years.
I have to disagree with your conclusion. You have shown what we already expected: endless spending creates inflation. Even MMT says the government spending is limited by resources. Have you even considered the possibility that we past that spending limit a long time ago? I'm honestly asking. MMT proponents never talk about this.
The whole point of the model was to show that the catastrophic outcomes expected by Musk and most conventional thinkers expect from deficits depend on the financial system being Loanable Funds, which is a false model of banking.
What you are effectively saying is "IF fiat money THEN inflation". But this is the system under which the USA has operated for two centuries--including periods of deflation.
@@ProfSteveKeen To Summarize, your model shows the current economy as it is, rather than what it could be.
@@Tullochr105 Yes, exactly. I'll need to add some empirical posts to help reinforce that point.
@@ProfSteveKeenfalse…. We were on the gold standard for a long time. Rapid inflation and decrease in the value of the dollar started with Nixon letting go of Gold standard in the 1970’s. Why? Wars… because nothing creates debt like war.
Since 1913 when the creature from Jeckyl island (Fed) was born, we have lost 99% of the value of the usd. Sure lots of gdp growth but massive inequality. That’s why we have populist demagoguery today a la Trump. He is our modern Herbert Hoover. The MMT guys are only correct as long as usd military hegemony can guarantee usd primacy.
Do you remember the British empire, a global expanse upon which the sun never set? What happened to it and its precious Sterling Pound? It’s Royal Navy and all its ships…. Once it stopped making its ships its fate was sealed.
Elon is a genius and an American national treasure who single handedly is bringing manufacturing back to USA!
Those who can do, those who can’t teach!
Every economics theorist and "professor" tends to overlook production and the resources available for it.
great video and very timely. People need to hear this.
it's really cool that he shows how the loanable funds model works, even though it is not an accurate representation, it is useful to show how it works precisely so that you can see how it differs from endogenous money models.
Thanks! Please spread the word.
@@ProfSteveKeenSteve, are your models real or nominal? In other words do they predict changes to the price level? Also, the big concern for Elon etc re the size of government seems to be the potential waste. ie what is the constraint on government spendjng that compares with the market discipline imposed on the private sector?
Did you really make this giant model to try and explain how a whole country can borrow its way out of debt?
This guy is hilarious and retarded, like all left wing economists
I suspect he made his model to launder one crucial assertion: That government has the same good incentives as households... and thus there is no harm in passing one third of the economy through the government.
Borrow from whom? Borrow from where?
@@lanadellhatestheclock3325 The dollars used to buy bonds come from prior federal spending.
@@randyallred2382 Yes, they do. That's not borrowed.
Does anyone think that Elon designs the system that put his rockets into space. He hires smart people to do that. I’ve had the thought that the reason Musk is supporting Trump is because Trump will put Tariffs on Chinese electric vehicles and make Teslas competitive and save Tesla and make Musk a lot of money.
Exactly . The company Musk is least involved in seems to be the only one that he’s not ruining.
Even if he said he does how would you even know it's not true? you are not an engineer or a technologist or what systems have you designed and built?
There were YT shorts about Elon:
- There are too little people (to sell his cars to)
- People wanting to work from home is evil (evil or something similar he said) (again, he sells more cars to people who drive to work in stead of stay home)
I would believe it if Elon supports Trump because he believes he makes him richer.
Bingo. I've always wondered why no one ever digs into his true superpower, which is getting people to do great work for him.
I know folks who worked for him and I'm pretty sure the secret is purpose and authenticity.
America does not have politics. America is a plutocracy with money as it's lifeblood. That's it. There are no hidden depths. Mr. Musk isn't even American. He understands you buy influence in the USA using money. That's it. There are no hidden depths.
Central banks are owned by the state? Really?
Yes. Central banks are government agencies.
In most countries they are. But the FED is not owned by the US gov. And there are some hybrids where CB is owned by government and private shareholders.
The people who wanted to have the fed remain a government entity and were opposing privatisation of fed actually drowned in titanic
@@alterego157ok
@@ashwinipingle8832 The Federal Reserve System is a US government agency created and governed by Congress. The Fed Board of Governors cannot refuse an order of Congress. The 12 regional Fed banks are only nominally private.
The only attribute often lacking in an Asperger is empathy? Elon Musk shows he is concerned for all mankind but what is his plan for all the unemployed when his Optimi robots take over the jobs?
huh? free production of goods is impossible to be a negative thing, on its own...
for example, taken to the extreme of everything is produced for free would mean nobody would have to work
wow this guy never watch wall E. you dumb mutt . why do you think western world are so rich. Because someone else been doing the fking job somewhere else.
@@wasdwasdedsfhehe you know that’s not how it works
Where in your model are you accounting for the real goods and services in the economy and more importantly their real cost to households?
This is a simple model with just monetary rather than production dynamics. The basic point is simply that the crises expected by Musk are dependent on a false model of the financial system.
@ wouldn’t the system have to collapse/the government be bankrupt if the currency could no longer be exchanged for real goods and services?
@@cyberft Yes, but that normally requires the military defeat of the government. Currencies don't outlast the countries that issue them, and tha "100% of fiat money systems have failed" line is really "100% of countries have failed".
@@ProfSteveKeen Models are pointless when they can’t map to varying vectors of Reality.
@@ProfSteveKeen Are you not just using another "false model" (since you acknowledge it has limitations) to prove another model is also false? Congratulations, all models are bullshit.
the government is NOT a business- its much more complex and important.
It seems to me this model would create a lot of inflation. Isn't that bad when it comes to comparing the relative value of goods, therefore leading to inefficiencies? Also, it has a big wealth redistribution effect.
This model for equilibrium seems inprobable as it ignores the impact of currency inflation ( and subsequent corresponding reduction of purchasing power ) on general household consumption.
With all this said, it’s amazing that those that create the laws and govern our destiny are not subjected to some level of rigid qualifications, as we expect from many other professions that affect our lives! It’s time we change who can be in office, not just those with the loudest mouths!
There's little doubt that our electoral system favours narcissists rather than specialists.
What people need to hear is what pays for the accumulating interest on government debt, in simple terms. The models are great, but most people are not going to understand them at all. It needs to be presented more succinctly. Obviously most politicians don't understand economics much better than the average citizen, and they are the ones who have to sell their economic plans and pass the budgets.
Interest payments on government debt are paid for just as are deficits, by the government going into negative equity and creating identical positive equity for the non-government sectors.
And it's harder to be more succinct than I was in that video. Except to say that government deficits are not a bug of the system: they are a necessary feature.
@@ProfSteveKeen So does this imply that tax revenue is growing at the same rate as government interest payments? If the government never intends to repay principle, then interest is really its only obligation with regards to debt.
@@crawkn Yes. Check the dynamics of the model. I'll post it on my Patreon site in the next few days.
@ProfSteveKeen I will thanks.
Is he implying that government spending somehow adds a benefit because it allows the broken system to continue?
Lo😊l, yep. Exactly what he is saying. Don't even know why I'm entertaining this idiotic video. How stupid.
Sounds like it for sure.
yes. in macro economics that is true. its idiodic to think of govt fiances as the same as a house holds unless than house hold can literally print its own money. there no profit motive for the govt to do this, its about liquidity i the market in order for it to expand. if we kept the money supply down to 1980 levels america would be broke and no on ewould complain about the homless cause we'd all be homeless. intrest is a problem but not theproblem people think because because the debt could never be paid off anyway. the intrest on that money doesnt exist yet in physical currency. and it wont for a few years, but in a few years the deb tiwll be bigger so the two never meet. if they do, thats a serious structural problem and somethng you shouldbe very concerned about. also, its hardly suprosing that someone without an econ degree doesnt get it. it often doesnt make rational sense when you forget were not talking about households. theres a reason it takes more than 30 minutes of class to earn an econ degree and other reasonsas to why its called the dismal science. like religion many parts of it are open to interpretetaio and depending on yoru political slant there are other possible answers. capitalism isnt the only economic model. its certainly not the first and it wont be the last. primarlity because capitalism will eat its self. without government intervention the only outcome for capitalism is stratosperic inequality and a single monolithic empire producing all goods and services. that is literally distopia but thats the outcome capitalism is constantly striving for. "money" and "interest" are just tools to keep it going and eqaulize barter and balances.
@@nonconformist9930how do you see macroeconomics progressing in the future? What is after capitalism?
@@nonconformist9930You're never too late for Bitcoin. Being late is a mind trick...it's fiat based thinking. You are never too late to stop being stolen from. People get caught up on the current dollar to Bitcoin trade price.....they should look at what they can get from the Bitcoin to goods and services trade price. When you're using a monetary system that you can't print but others can, you're being stolen from. In a system such as Bitcoin, where the amount of units are set (but infinitely divisable if need be) you are not being stolen from. In a Bitcoin system, value is transacted on mutual exchange rather than someone that received more printed money out pricing you. The bitcoin monetary network disperses wealth based on merit and thus creates less wealth gap vs Fiat that centralizes wealth and business.....and power. In Fiat you become a slave, in Bitcoin the balance of power is on a more level playing field.
YOU ARE NEVER TOO LATE TO STOP BEING STOLEN FROM
Elon Musk is famous for paying smarter people than him to build things and then taking full credit for it.
Maybe Elon should take a trip to Japan. It would be nice if Keen did a video explaining Japan's economy in relation to its money printing :)
That's worth doing, so I probably will.
@@ProfSteveKeen the Japan GPD Debt ratio is 256 %, ( USA 126%) but mostly of the Japanese public debt is held by the Bank of Japan,Japanese banks, funds and Japanese pension funds.
Please note that it's not a choice because they are obliged by law to buy Japanese bonds.
A country (it's not USA) may have a problem when foreign investors own let say 50% of its public bonds but you can always decide who can buy your bonds.
Bottom line: the FED knows its business so no need to worry about it.
It is true that several time you may see white elephants funded without apparent reason
but that it's up to other branches of the government to take the most appropriate actions
if necessary.: the most obvious one don't fund them.
See the documentary on Japan by economist Richard Werners Princes of the Yen '. ruclips.net/video/p5Ac7ap_MAY/видео.html
I love how you give yourself the title “top economist” :)
Gee I remember when I was a kid and candy bars were a $knickel, the house my father bought that I grew up in cost him $20 thousand dollars, new cars/trucks were around $2500-$5000 but wages were also a lot lower and people had to borrow money from the banks at interest to buy a house/car. Today candy bars are $1+, houses are $1million to $1.5+million, new cars/trucks are $60k-$100+k but wages are a lot higher and people still have to borrow money at interest to buy a house/car. Question: Why aren't the items mentioned the same price today as they were when I was a kid with the same wages??
money printing = perfectly sustainable.
@@NathansHVAC Money printing being inflation? It seems to me this entire monetary system that used to be anchored to Gold and is now fiat (by decree) and anchored to basically the confidence of it is what it is just because of the public's belief in it just "IS". I'm reading into this video that he is basically saying as long as wages keep up with the natural inflation of endless money printing this system can keep buffaloing along indefinitely meaning candy bars can cost $100 as long as your salary rises to meet it so $1million/year. Wouldn't it come down to who the Gov't owes the debt of money printing to so whom really owns a country's central bank. I saw a video that said 52% of the New York Fed is owned by 8 families being the Rothchilds, Rockefellers, Lehman's, Lazard's, Goldman Sachs, Warburg's, Khun Loeb's and Israel Moses Sieffs families. Why would we care if they get defaulted on if you say we're ditching the Fed and starting our own currency say the Greenback or Silver Certificate and Federal Reserve Notes will not longer be accepted and put these banking families out of business??
What interest rate did he pay, and what was the parity purchasing power of his wages?
Professor, please create a list of textbooks that could teach a person true economics from zero, include your own books in there, please make it as long and as complex as would be necessary, thank you.
Aloha Prof. Keen, I appreciate your insight on the economic modeling. My understanding of the US debt is the other side of it is rarely discussed; the money that is pumped into the economy that is not offset by revenue, (debt), is an investment into the private sector, (businesses and services for the citizens). The US Govt. can never go bankrupt as it is a sovereign currency, meaning they can offset any debt with Congressional approval. The FED uses the sale and purchase of US bonds and establishes the short term interest rates to help control inflation. The same with taxes; the purpose is not so much revenue generation as much as it is a control on inflation and unemployment.
Yes that's correct, though unfortunately the control system is in the hands of Neoclassical economists, who don't understand the monetary system in the first place.
@@ProfSteveKeen Aloha Prof. Keen, thank you for your insight. As I am just an average citizen and not an economist, I am often dismayed how the US debt is portrayed in the media. Most citizens believe as Mr. Musk does, that the US is going bankrupt because of interest payment obligations on the debt, passing it along to future generations, but my understanding is that is a false presumption. These people are very intelligent and are surrounded by people who know the system intimately; if that is the case, I don't understand why they insist on pushing the negative narrative. My belief is that we continue down this path because the Executive Branch, Congress and Senate are too deeply vested in the status quo; any vision deviating from that is looked upon as an attack on their livelihoods, to the detriment of the US population, IMHO.
@@deanfukawa3260 It's fundamentally from accepting a false model of banking, which is taught in every economics textbook: Loanable Funds. I'm writing a very long treatment of why this false model, and not the reality, is actually the problem. Look out for it: I hope to publish it this week on my Patreon and Substack pages.
@@deanfukawa3260 Stephanie Kelton points out that the common (mis)conception is that the government finances work like every family's "kitchen table" finances: you cannot spend more than you earn. EXCEPT that governments (through their licensing of banks) can create money! We cannot, else we get jailed for counterfeiting. It seems that politicians and most bankers promote that misunderstanding, because they do not want people to understand the banks special privileges. Where does money come from? It is created by the banks for the government.
It's refreshing to see someone trying to be honest and not particularly partisan in their critiques. Trying to be politically agnostic is painful at the moment. You can't say a thing without both sides assuming you're on the other side. I appreciate the clear pursuit of objectivity.
If Elon were to respond to this and take it seriously, even if he ultimately didn't agree, I think I would see him as more genuine.
lol Elon is not thinking "correctly about the universe," either.
😂 😂 Beat me to it
Thank you Professor Steven for your Input. So what is the main course that drives inflation up, for example food prices? Is it the central banking system? Profesor Steven, Muchas gracias por tu informacion tambien disfruto mucho tu video🤔👍
This can only work if you’ve got productivity!
Money creation at exponential rate that does not track productivity will lead to loss of trust in the currency and the monetary system itself. Nothing good will come out of it. Elon is right, he is not an economist ..
" Crisis that you think will happen...just doesn't happen "......then why did 2008 happen
Steve is right. In a way money creation is the same as tax collection. Only money creation is not so visible and money devaluation is the same for rich and poor, whereas tax tarifs favours the rich. The way that bank families got richer throughout history is by creating recessions (by making money scarce occasionally). At that moment the rich can buy stock under the real value and get even more rich. So the system of money creation itselve is not bad. Hence the market can only grow if the ammount of money grows with it.
If this is even 1/100th the case, btc case is greatly diminished.
It is the case, but the fact that people managing the system believe a false theory as to how it works is possibly the best thing Bitcoin has going for it.
So basically, your issue is not with Elon, it's with universities which are teaching economics incorrectly.
Yes. It takes research outside the textbooks to realise that mainstream economics is completely false about how the financial operates--and many other flaws besides that. If you treat economics as like physics--in that you can trust the textbooks--then you are being very badly misled.
@@ProfSteveKeen yes theyre wrong. every system in history that has had smaller size of government has done better.
so the general direction of where to go is obvious
@@wasdwasdedsf All the world's most prosperous nations with the highest quality of life have huge levels of government intervention in the economy and spending as a percentage of GDP.
Universities treat the economy like it exists in a textbook and never update their view when faced with the real world.
@@Kropotkin2000 Yeah, I don’t know where @wasdwasdedsf is getting their info
Wow!! Insane love this. Glad i found your channel
you need to do more of a laymans explanation of this Steve, so basically if we grow productivity and have just the right level of money creation/inflation then everything will be fine? this still leaves the money printer in the hands of corrupt politicians who will always use it excessively, and I don't think you address anywhere the ludicrous public debt interest payments (over 1 trillion for the states) it makes you cry when you think of what that money would have been better spent on
The key footnote Steve mentioned is Gdp. Of which is-on, the chopping board being disguised, hollowed/unwound. - Everything-else, ...is stag, hyper & deflation. Don't buy the melancholy inbetween. Gdp per capita has stalled, has it not. Good luck.
@@znmcmhn exactly, but also if you measure GDP per capita AND account for inflation then my guess we have been in a decline probably since the GFC
@@djdos83 Perfecto 🥰 Gfc period began fake-stimulus, until, all collapses at no end, of/account. *Potus-Clinton, (2000-2001) pushed the ball at frac.reserve-lending. And where we go next future-speaking is..*not in the realms of current/modern economic theory. That is to say, conflicts of ideological (socio) principals. Once you've worked out the Gdp (conclusions), ...it's then ideology, philosophy, theology. The best-tools to take with you Are, Music ...and Comedy 😉Take care.
The only reason they are saying wait wait wait is because auditing the Fed will prove corruption up to our eyeballs, and that means American Debt becomes MOOT. If it is found out that the Fed Reserve has been manipulating the numbers, that is FRAUD, and that will totally Erase the Debt of America. The EU is going to face some hardships over this because they have taken so much advantage of America via the Fed Reserve that they are holding America in a state of Economic Terrorisim, and vicariously the World. Time to cut the puppetmasters strings and boot the Fr**M*S*NS from America soil and ban them from ever holding office anywhere in America again. Charles (head of the snake) is PETRIFIED right now, because if the Fed is Exposed for what it is to the world, then Charles looses total control of the American Economy, and loses control of the World. They are TERRIFIED and DESPERATE to stop this any way they possibly can.
The government can afford anything priced in US dollars. The interest payments do not constrain either public or private spending.
I’d say give Steve Keen a Nobel, but he knows better than anyone the Nobel prize for economics isn’t a real Nobel 🤣
I'd take the money of course--as compensation for the 50 years of nonsense I've had to endure thanks to economics being treated as a science! And I'd make a speech that would book-end Hayek's where he said there should be no such prize.
But that's fantasy talk. I know damn well that I'll never be offered it.
Says the banking industry about government overspending is good when they play a huge role in this. How the irony
Kemala Harris ran on the great economy this bloke espoused.she ignored the groceries, gas prices, house rent and mortgage 😊 and she got booted out
You can't barrow your way out of debt with credit...it's impossible.
You don't have to "get out of" debt. Besides, debt and credit are equal and cancel. Just keep the barrow moving in circles and credit/debt is fine and sustainable - put a dynamo on the barrow's wheel and power lights, and manufacturing and social care.....?
@@CurtOntheRadio Are you trying to insinuate that the amount of Debt is equal to the amount of "credit" that the Fed is creating is sustainable??? You know what the unsustainable payment is on that? Your not being rational ..we are compounding our debt by 1 trillion now every 100 days.Our payment on that is great then what we pay to the M.I.C. and very soon it will exceed all of our tax dollars...then what?...Or maybe your just referring to a family who uses a credit card to pay for things they need for there home and at the end of the month they pay off that bill..even then the debt is paid off.Gold is money everything else is credit.
You can't compare a private debt to a gov't debt since the gov't creates the money.
@@WJV9 explain...
The economy does not amount to an accounting exercise. It consists of a network of individuals making single transactions over time and space. To reduce "the economy" to an accounting exercise leads directly to the misallocation of resources and a continual series of booms and busts that harm people.
00:00 - The GREAT STEVE KEEN ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
0:33 Actually one _can_ use the epicycles to do astronomy and space navigation. The reason is that using epicycles amounts to using the Fourier transform of the relevant data in a particular way. That's why epicycles _were_ in fact successful as a tool before Copernicus and Kepler. What those two did was a simplification of the model. But the previous model was not really _wrong,_ it only represented the universe from an inconvenient (computationally) frame.
Nobody can become financially successful overnight. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking bold steps we need in other to reach our goals. you have to contend with inflation, recession, decisions from the Feds and all. I was able to increase my portfolio by $289k in months. You have to seek for help in the right places.
I think it's not always about fear, Sometimes realistic factors discourage people from reaching their goals in life. For instance, I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value
The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.
please who is the consultant that assist you with your investment and if you don't mind, how do I get in touch with them?
'Carol Vivian Constable, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
Thanks for the advice. The search for your coach was simple. I investigated her well before using her services. Considering her résumé, she appears competent.
Oh so you're a top Economist hey. "Economists are good for one thing, to tell us what will not happen".
What households have money to lend ??? They are all in mortgage and consumer debt!!!
Yes, and what the hell is his definition of a household? This presentation sounds like a review for people who have already sat through long classroom hours of presentations of his ideas.
And how do you explain Germany in the 20 &30 Yugoslavia and zimbabwe
Sustainable ONLY if there is parabolic growth. So I guess you just described a Ponzi scheme(which our whole economy and banking system is). And yes, any Ponzi scheme is sustainable if there is "growth", you are 100% correct with that. Dear Prof, would you like to model this in a zero or small growth scenario (caused of course by the global decline in population) and tell us what happens ?
Frankly, unless we understand how fiat money is created, then ecological collapse is guaranteed. The private money system will fail under planned or unplanned degrowth (the latter being far more likely), as will Bitcoin and all other energy-based currency systems.
And I'm describing how the system has worked for the last 120 years. Check the US data. It's run a 2.5% of GDP deficit on average for the last 120 years. So where's the hyperinflation? It's just how a fiat money system works.
@@ProfSteveKeenIsn't that pure THINKING IN A BOX?
Study Bitcoin.
@@ProfSteveKeenwhere’s the hyperinflation? Have you looked at gold and bitcoin lately? They’re the ultimate barometers of USD hegemony. The ponzi continues as long as we have usd primacy.
@@cyrusg5976 And that ain't long buddy !!!
"The pomzi scheme worked for 120 years. Why would it fail now?" -@@ProfSteveKeen
This is the most respectful and informative critiques I have ever witnessed in my life. An example to follow. And this video gave me the will to want to learn Professor Keen's software package Raven. I hope it's open source?
The U.S. economy can actually get better if only the govt can start making better decisions for the sake of it's citizens, cos' they've really made life more difficult for its residents. Hyperinflation has left the less haves bearing the brunt of the burden. Its already eating into my entire $620k retirement portfolio. Like where else can we invest our money with less risks?
Just get a financial planner straight up! personally, I would invest in etf and also love investing in individual stocks. yes it’s riskier but I'm comfortable in my financial environment.
I agree. Exactly why I now work with one. A lot of folks downplay the role of advisors until being burnt by their emotions, no offense. I remember some years back, during the covid-outbreak, I needed a good boost to stay afloat, hence researched for advisors and thankfully came across one with grit. As of today, my cash reserve has yielded from $350k to nearly $1m
@@ThomasChai05Mind if I ask you to recommend this particular coach you using their service? Seems you've figured it all out.
I work with *Izella Annette Anderson* as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with "Izella Annette Anderson" for the last five years or so, and her returns have been pretty much amazing.
In this system, it looks very easy to end up with an impoverished workforce. As money printing becomes commonplace, wages will always be behind the curve. It almost looks like what the Argentine government was modeling in the 80s and 90s when it was saying it could print and spend it's way to greatness. Run 200% inflation and give the workers 100% wage hikes every year... but everyone just fell further and further behind. The currency just kept adding 0s, and people would need a wheelbarrow of bills to buy a loaf of bread.
Our national debt has ALREADY effected our country's ability to borrow via higher rates on bonds. Idc what this guy has to say, he's wrong. Our spending is UNSUSTAINABLE period and there will be a reckoning if we don't make changes soon.
No, the Fed's interest rate policy is unsustainable. The only reason the interest payments are high is the Fed's rate hikes. There is no "day of reckoning" when someone will have to "pay for it"-that's just not how it works. Treasury bonds are paid for at the time of purchase at the Treasury acutions; it makes no sense to pay for them twice.
@@randyallred2382 there is always a day of reckoning.... the more an entity borrows, and the more incompetent and untrustworthy that entity is to the people who lend it money,m the higher the interest rate will be
@@wasdwasdedsf You don't understand that it's not "borrowing." Selling bonds is a monetary operation, not for raising revenue.
@@randyallred2382 do you even know what your talking about? people give the treasury $ when they buy bonds. our gov is now 36 Trillion in debt- that's bonds that need paid back to investors. as our gov gets more and more indebted (national debt continues to rise), investors will begin to demand higher yields for buying these bonds, as it becomes more and more clear that our gov is struggling financially. those higher yields will require more $ printing from the fed, sparking inflation. that inflation will prompt the fed reserve to hike rates even higher. that is the "debt spiral" and we are headed there probably this decade. hope you own silver/ gold/ land. cheers.
@@Dan-yw7sy - Yes, I know what I'm talking about, allow me to point out some of your misconceptions.
Treasury bonds, notes & bills ("bonds") are sold at Treasury auctions to Primary Dealers-banks and other financial insititutions. Treasury bonds are forms of US dollars.
When a Treasury bond is purchased, buyers exchange bank account dollars for Treasury bond dollars. The advantage is that Treasury bonds are 100% safe assets and pay interest premiums.
When a Treasury bond matures, the dollars in the bond account are debited and the associated reserve account is credited. That's how Treasury bonds are redeemed, i.e. how the investors are paid back. No outside money is required.
In this way, last year alone, the US govt redeemed a total of *$140 trillion* in maturing Treasury bonds. This automatic process happens while we sleep. No taxes are every used or needed to pay any of it (a common but false claim).
The dollars used to buy Treasury bonds all come from prior federal spending-whether it's the Fed providing bank reserves (do you know what bank reserves are?) to purchase the bonds or federal fiscal spending. (Nobody takes out a bank loan at 5% to buy a Treasury bond that pays 3%.)
The issue of "bond vigilantes" does not apply. The Fed sets the interest rate. The government doesn't have to sell bonds when it deficit spends, but rather the purpose has been to drain excess bank reserves to maintain a target interest rate.
The govt could stop selling Treasuries, but the private sector relies on them as safe assets, and constituting much of the banking system's capital.
"Debt" is the wrong word for describing US Treasury bonds. The govt doesn't sell bonds to raise revenue (despite what you hear); it sells bonds to drain excess bank reserves. (Although this is moot since 2008 when the Fed started paying interest on reserves.
The US goverment is *not* struggling financially. The government's "red ink" (an accounting entry) is the private sector's "black ink"; federal deficit spending is the primary source of net savings (and business profits) in the private economy.
The Fed issues bank reserves, which are used only by banks, and do not enter circulation in the the real economy. Thus, an increase in bank reserves cannot cause inflation, nor does it cause banks to make more loans.
Most of these myths are aspects of neoclassical "trickle-down" economic theories, which have clearly failed (except to make the rich richer and workers powerless).
There is no "debt spiral" in federal finance, but rather it's private debt that's out of control-thanks to all the financial deregulation of the last 40 years.
If you'd like some references, I'm happy to provide a reading list.
model: see equilibrium stays at 40% gov debt
reality: ehmmm...
gave up after 7 minutes, sorry
What does Mr Kean consider as money( ready. Credit) or does he really mean currency.
How did Elon ever succeed without this guy…
😂😂😂😂
it's called BORN ON THIRD BASE THINKING YOU HIT A TRIPLE
Not well
Elon hasn't succeeded at setting economic policy.
He has succeeded at other - unrelated - things.
Actually Elon is desperate now, Elon depends on Trump wins so Elon can have an office position and have a piece of Trump’s pie. Good Luck Elon.
5:50 possibly worth clarifying the its not that the government absolutely HAS TO sell bonds, but rather it chooses to manage deficits in this way
They have been getting close to broaching this issue in their panel discussions recently, but I think there is a taboo against suggesting that the government could create assets without incurring a balancing obligation. Of course the very real risk is hyperinflation. The question is, do we trust our politicians to spend wisely and un-corruptly if they know that money actually grows on virtual trees?
@crawkn ye I mean I don't have strong opinions right now on whether they should or not, I was more highlighting as a matter of fact, it isn't the case they couldn't run deficits without issuing bonds
Like Warren Mosler says, the train companies don't need to go out and gather old tickets to sell new ones, they create them in the first place
@@Sock1122 Not a perfect analogy, but interesting. It is a very real problem that when money can be created from nothing, everyone is going to want some for nothing. It would pretty much take a dispassionate bugless algorithm coded in hardware and rigorously enforced in wetware to prevent it.
@crawkn ye I accept it was a flawed analogy but bares some resemblance
The Experts are ALWAYS wrong
If so, the next time you need surgery, contact your gardener.
@@CharlesB-NGNM OK. Don't forget to take your booster.
@@Nnnnniiiiii Let me guess. You did poorly in school and are living paycheck to paycheck?
@@CharlesB-NGNM Wrong. Wait just more 15 days to flatten the curve. And follow the experts. Maybe someday you will be able to correctly guess something.
@@Nnnnniiiiii Okay, be sure to never go to the doctor for anything. You know better right. If you get a message that the water supply in your area is contaminated, don't listen, you need to drink it because you know better. They say sugar and processed foods are bad for you, better not listen. Who needs exercise and clean water? Not you, we found the one man who is never wrong about anything right :)
All households are not equal... There are households who borrows money and there are households who lends money out. The situation we got now is unsustainable as a greater and greater wealth divide is unravelling. Historically, this kind of situation has ended in revolutions.
Typical college professor.... lives in his own world supported by the tax payer so he can dream up unworkable economic models that don't actually function in a real world economy.....
Elon's taken billions in gov subsidies and contracts
Exactly, somehow the professor seems to think that you can just print money forever without consequence. As I said above, his argument is not logical. Professor who?
Learn real finance kiddos..
Fiat currency is limitless can be printed out any time, it's no longer backed by gold already almost for century now
Learn to know "money vs currency" many lessons around RUclips
So can anyone explain how this system is "sustainable" when young people can't ever dream of affording a home, food prices are skyrocketing, its takes 2 working incomes just to pay for a basic middle class lifestyle when it used to (70s and early 80s) take one. At the same stime , the billionaires just keep getting richer. Ask any small business owner who has to generate their own income. It's nice to get a theory from a professor who is paid a stable income by a university, but how about he open a subway shop and try to pay for his middle class lifestyle from that?
Like you would know. Yanks are stupid, they elected the orange guy.😂
Interestingly government of Switzerland is prohibited by law to run deficit... (almost always). And how swiss frank and Switzerland is doing? How to apply this professor explanation to this simple example?
Taking advise from someone from another country that is in more debt than a America is a brilliant move.
We have had real wages decreasing while cost of living increasing due to infinite money printing. The US exports inflation through it being the reserve currency and your local federal bank follows the lead to further redistribute wealth to banks and corporate firms.
Maybe stopping the circus is the tough medicine we need, or we just keep doing the same and expect things to magically improve.
Nice to see a reality based comment.
Are you saying that capitalism doesn't work? Or that it only works for the chosen few close to the source? OK...stop the circus, then what?
The US has had wage deflation for most skilled labor jobs and certainly unskilled jobs as the global economy shifts industry out of the US the past 40 years. The result is US labor has to compete against much cheaper foreign labor and of course wages decrease as a result. This seems like an economic issue, but it's facilitated by politics first. If we don't like it, we should vote for different politicians.
Inflation is not caused by money printing.
Money printing is a *response to inflation*
@@EDAHSCcorrect. Offshoring has been totally discredited. However, voting for capitalist politicians will not fix this problem, not unless we have better politicians.
In Europe it is said that US debt only works because dollar is a world reserve currency. I somehow doubt that debt has no consequence, perhaps unless maybe if you are lending from yourself, like in Japan, and maybe to a decree in the US. But how long is US Dollar going to be the reserve currency?
I didn’t understand what benefit Elon was getting for promoting trump until his stock went up 15% in pre market trading. Less regulation equals more profit for Elon, got it.
Glad you got it. Elon Musk is a nauseating reptilian. As is Trump
It does in a counter-intuitive way. For example people think the EV tax credits are great for Tesla and he would want to keep them. But if you get rid of them, Tesla is the only company making EV's for profit, so no more tax credits means other companies lose even more money on every car they make. And whether the credits stay or go, the media will tell you it helps Musk and thus is a corrupt action.
As more and more money is being created by banks lending, how come there isn't a greater increase in inflation? Is inflation irrelevant to this or why is it not factored in, or have I missed it? Serious question, I don't understand.
In the President Clinton era, when we paid off the national debt and had a SURPLUS, that is no different or the same as $35 trillion in debt? Remember, two years ago when there were serious talks and discussions with the people who were claiming the Earth is flat??? Same thing with this guy
Clinton repealed the Glass-Steagall Act…that’s his legacy and we are still dealing with the results.
it is flat. tabooconspiracy has great videos
@@ANoticer guessing you fell on yer head when ya crawled out of the cellar.🤣
We did not pay off the national debt under Clinton! They just didn't add much to it. *Federal budget surpluses are paid for out of private savings* and consequently the four years of surpluses sucked the savings out of the economy. A recession followed. *Every time* the US govt ran budget surpluses, a depression or recession followed. That's because government surpluses put the private sector into *deficit.*
so how do we the people avoid massive private credit debt in this model? What is sustainable about that? Is the premise that people can resort to bankruptcy the anawer?
Interesting. But unlike in the simulation, US government debt currently more than 120% of the GDP. Does your simulator have a happy deleveraging scenario for this type of situation?
I'm not sure inflation and productivity are in Steve's models. I think they are the biggest issues economics and government should be concerned with. There's no point having a model that can take you to Mars if it embeds an assumption the atmosphere there is breathable.
I agree with the money creation part, however... Is this MMT? Historical examples seem to contradict the professor's model, out of control spending and hyperinflation led to the collapse of the Roman Empire and many other states throughout history.
Let’s imagine a scenario of total deregulation kiddos! Do you really trust private industry to maintain the roads, ensure clean water, keep sewage systems running, protect the environment, and support farmers? If you think government is doing a bad job leave it to people who do everything for profit! They would likely outsource everything, cut corners with subcontractors, dismantle regulatory agencies, and open our public lands to private exploitation. And when it all goes hell, they’ll look for scapegoats-immigrants, Blacks, the poor (most of the US population) LGBTQ+ people, anyone but themselves-while enjoying their wealth from a comfortable second home abroad.
You are assuming that the type of corporatism that thrives within the current system of government intervention would exist in the absence of the government. In fact, private ownership by individuals or collectives rather than by private interests which are able to purchase government influence and use regulation to maintain control and reduce competition would look much different than what you imagine. Crony capitalism and corporatism are functions of government intervention, not the other way around.
It's a good point. People like Ron Paul would disagree with you. He always said give private citizens more power to sue the private industries over these infractions, of course we all know how that goes... However, the government DOES do a bad job... Why? well at least partially because there is 3 lobbyists for every governmental official. So basically I'm pretty cynical about either way and pretty bearish on the human race.
Let's try an experiment. You go have that govt and others of us opt-out. And let's observe our relative prosperity going forward. And no, you will not be allowed to switch teams later. You stay in your morass.
A stupid opinion based in fear but well written.
Our various governments providing the very needed social services you listed aren't doing their best. Why is that? Likely a lack of adequate funding. But why is that? Our governments' revenues greatly exceed the funding required to provide our very essential social services. I think our governments are throwing a lot of our money at new social ideas (often driven by developers or big name sports teams and various activists) justifying it with good intentions. For example the covid pandemic shutdown (good intentions...save us from certain death) which then required the federal government to print money to fund the economy while assuring inflation to follow soon after...all that new money but no productivity!
I may be misunderstanding something, but, this "sustainable" model does not address inflation caused by the creation of new money. If new money is created without a matching increase in supply of goods or services, inflation will eat away at consumer spending. Also, the government becomes less and less effective at spending money, meaning, it costs more and more money to get less and less benefit from that spending, this is due to both government size and regulations. Just because the numbers in the models don't collapse, I would argue peoples standard of living will go down in complete correlation to government spendings and overall size.
When governments spend money inefficiently, its taken away from the private sector that could have allocated it with much better outcomes.
You’re missing the deflationary force that is technology. Inflation in terms of Keen’s video cause growth and therefore technological innovation. Think about how everyone compared to the 1950s have air conditioning, smart phones, refrigerators, cars, and access to air travel. These things make the transfer of information, goods, and services to move more quickly and therefore become more available to the general public.
@RonniiV I understand the deflation of technological productivity, my point was that government spending does not create productivity but actually reduces it as compared to that money used in the private sector by people who are innovative, lean and objectively good resource allocators, and not career bureaucrats.
@ Well if you look at Keen's model, you'll see that Fiscal spending increases the Private Sector's balance sheet. The Private sector to do the things you explain, need that money creation. Does the bloat of the beuracracy increase, yes, but it's not the reason why people's spending power decreases. It is related, as I agree bloat and rent-seeking increases with highly regulated sectors like education, housing, and healthcare (all areas that do not benefit from the deflation of tech due to reguatlion).
Are you morally against the system thet Keen explained? Are you for Elon's solution of extreme Austerity?
@@RonniiV I am for improving government efficiency for sure, I don't know if that means reducing spending, or money printing, but I do think we would all be better off with a smaller, more productive government. If we could cut spending but keep austerity at bay, that would be ideal.
@@aelisenko You cannot cut your way to prosperity. Prosperity is driven by spending.
Some government funding, in the order of $5 Billion (with a "B") dollars from the "government trough". LMAO
$5B to direct food assistance to children would have returned actual growth in GDP, as well as fed kids. So in my model, it was a complete waste of resources to give one single cent to elno has his toys.
Sigh those "toys" are going to save life from being inside the sun.
@ brah if the sun outer atmosphere gets to Mercury we already cooked. Lmao
@@_nebulousthoughts Well, If you are around in the next few 100k years, you might just see the sun start to burn the earth up, Till then, I won't worry about it.🤣
Agree with everything regarding the privatization. However debt reduction, and govt restructure and de-regulation needs to be done.
Also a lot of issues in economics come from how you define things and then using words to describe other things. For example, people talk about privatization, but forget a lot of 'privatized' areas still get contracts from the government.
The size of the 'national debt' or the deficit should never be a target. Federal deficit spending is a tool. More financial deregulation is the *last* thing the US needs. The financial industry is out of control and needs to be reined in.
@@randyallred2382 De-regulation for other sectors. Big Pharma, Financial Sector, Banking needs to be regulated, they're free to do whatever they want i agree + Food Industry
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Using the correct model what happens when you simultaneously restrict wage growth and run a fiscal surplus?
Can you please do another video?
Top economist is like saying top astrologist. He's built multibillion dollar businesses while the professor indoctrinates future morons
just cause someone has huge businesses it doesn't mean they understand the dynamics of government spending
He was given billions of dollars and paid other people to do the work. Musk is utterly useless. 😒
I believe Elon emphasised reducing spending by increasing government efficiency mainly but keeping the same level of service. This is something he is an expert on whether it’s making cars and reducing factory costs or lifting things into space. For example lifting things into space cost 1/10 what it used to and that’s a direct result of SpaceX while at the same time increasing the number of flights going into Low earth orbit. Reducing waste is a good thing.
It sounds like pouring water in wine and still pretending it is wine. Nobody is saving money anymore. Everybody is in debt. Debt is deducted in income statements. It is the new normal: pay as you go. It may very well work. We have negative numbers, haven't we?
Banks lend more than their deposits. The central bank creates money by quantitative easing. The use of government borrowed money is relevant e.g. to fund current revenue expenditure or to invest?
More government spending creates higher inflation, people are getting poorer, costs are rising, wages are stagnant, unemployment goes up, house ownership goes down.
Nothing to see here
Was there inflation during WW2? The government borrowed 200% of GDP to fight the war. Or do you think we should have fought Hitler on the cheap?
Where exactly do you get your ideas from?
The flaw of this reasoning is that Households are the source of the money lent by Banks. This is just wrong. Bankers, at all levels (fractional banking) create money out of thin air then charge you to use it. The Banks are not restricted by how much money Households have.
Oh man Elon should stick to building his rockets and maybe E-Cars. These are the only things is really good at
Just print more money. Weimar could go wrong?
@familyshare3724 shows me you didn't understand Weimar and we do not print (most of) the money anymore.
Why ate so many people sticking to neoliberal narratives and don't start thinking logically??
No one wants to print endless money, but economic libe as we know it now, does not word without state money net spending.
Just think about who issues all our currency and what happened to money lend out by private banks or where the money comes from companies collect es request and partly pay to their employees
Just a little bit of logic and double-entry bookkeeping.
Or going on to be the slave o neoliberal narratives and waiting for dooms day. Your choice 👍🏻
He should stick to paying actual smart people to do those things. But note well that Tesla's FSD is going to fail miserably, and mankind is NOT going to colonize Mars (or any other place in the universe).
You mean these are the only things his employees are good at 😒
@NelsonGuedes I'm talking about what HE is good at. His employees likely all do a great job, even under his in part enormous pressure!
But to my knowledge he has no business and employees with macro economics. So he also just talks the wrong narratives of others.
In the end he might nit care, as long his business get much easier in terms of deregulation etc.
Can you possibly devise a lecture with visual aids that are more opaque than this? . Wizzing boxes and machine gun delivery is insane.
Elon .. how much govt subsidy did u recieve from Uncle Sam ?
None of your effin business lowlife