America’s Debt Crisis Explained | 5 Minute Video
Fact: America’s national debt stands at $17 trillion. That’s a tough number to grasp. Most people will never come close to making $1 million in any given year. How can we understand the magnitude of the hole our country is in? Well, imagine you owed your credit card company $200,000. On top of that you have to pay them about $4,000 per year in interest. You are bringing in $150,000 per year, but you are spending way more than that. How are you going to ever pay back that $200,000 debt? And what happens if you default? Well, that is America today. The problem is clear. And we brought Michael Tanner, a senior fellow at the Cato Institute, to propose a solution.
🚨 PragerU is experiencing severe censorship on Big Tech platforms. Go to https://www.prageru.com/ to watch our videos free from censorship!
SUBSCRIBE 👉 https://www.prageru.com/join/
📲 Take PragerU videos with you everywhere you go. Download our free mobile app!
Download for Apple iOS ➡ https://itunes.apple.com/us/app/prage…
Download for Android ➡ https://play.google.com/store/apps/de…
📳 Join PragerU’s text list! https://optin.mobiniti.com/prageru
SHOP! 🛒 Love PragerU? Visit our store today! https://shop.prageru.com/
Script:
If you are under, say, 30, you have a tsunami-sized problem coming toward you, and you probably don’t even know it. That killer wave is the national debt.
Countries, like people, go into debt when they spend more than they have. You and I buy things with the money we earn. Governments buy things with money they get from taxes. When spending outstrips revenue, the government is “in the hole.” Right now, the hole is $17 trillion dollars deep.
This is an incomprehensible number. What is a trillion dollars, let alone $17 or 20 trillion? Common analogies like “you’d have to stack $1 bills 67,000 miles high to reach the current debt,” though impressive-sounding, don’t help much, if it all. So, let’s bring the problem down to earth.
Right now, most investors believe the United States is a safe bet. They believe, in other words, that they’ll get the money they loan to the US back with interest. But this can’t go on indefinitely.
At some point investors are going to say, “you have too much debt; you’re a bad risk. No more money.” What happens then?
We don’t have to guess. We can look at Europe, specifically Greece. Investors were happy to loan Greece money until 2010, when it finally dawned on them that Greece couldn’t possibly pay them back. Almost overnight, Greece became a very bad credit risk and the economy went into a death spiral. Businesses failed. Thousands were thrown out of work. The government couldn’t pay its bills. Germany and the other European economies had to step in and bail Greece out. But the Greeks suffered terribly. The same thing happened in Portugal and Spain.
Yes, the United States is much, much bigger than Greece and has a much more dynamic economy. That’s true. But the principle doesn’t change. We can borrow more money than Greece, but sooner or later, investors will say “no more.” And if they ever do, our economy will go into the same downward spiral the Greek economy did.
Here’s another point. At the time I am giving this course, the interest on our debt is very low, around 2%. But what happens when the interest rate rises from 2% to the much more normal 5% — as it inevitably will? Where is the U.S. going to get the money to pay the higher interest on its enormous debt? Do we borrow even more? Well, that just gets us deeper in debt. Raise taxes? Well, that cuts economic growth.
Then there’s the question of who these investors are who are loaning us all this money.
The biggest investor right now is China, not exactly a trusted ally. The more money they loan us, the more influence they have over us. Maybe they’ll never exercise this power, but do we really want to give them the option?
For the complete script, visit https://www.prageru.com/videos/americas-debt-crisis-explained
source
It's now $36 trillion gang
To save America we must stop taxing billionaires and BIG BUSINESS, end the welfare state, and reduce the national wage to $5.00 ph for everyone but CEOs Then tell our creditors,especially China to F… off.
Si lees este comentario, tus padres morirán dentro de los próximos 5 años. Para deshacerse de esta bronca, tienes que copiarlo y pegarlo en otros cinco videos
Soy una víctima, lo siento 💀
We need term limits, so that lawmakers aren't incessantly buying votes with taxpayers' debt and so that lawmakers have to go back home and live under what they've produced.
I've said for years that the biggest difference between the two political parties is how fast they'll make us Greece.
Great video
Well, here is the time of borrowing money with 5+% interest and guess what, he was right!!!
The annual sum of money that has to be paid for interest is reaching 1 billion!!!
It's more money than Medicare or even the defence budget!!!
Well done America, keep spending, now Greece is playing less interest rates, 3,25% for a 10years bond instead of 4% for US bond, 34 trillions and keep counting….
Now the national debt is over $33 trillion and still growing.
The USA is powerful enough to say NO to giving the money back
The baby boom generation that have run the country for the last 20 years will be remembered as the ones that destroyed America.
We have always had debt but from Obama on it has sky rocketed thanks to folks like Pelosi and McConnel.
The government can write up a bill for students debt forgiveness so the government can do the same with their debt. There’s nothing to worry about. Some people need to think instead of scaring people.
I'm going to invest in toilet paper manufacturing it's in demand in faltering countries.
I, a 21 year old in 2023, want to know where the idea came about that government spending endlessly was actually good for the economy 🤔
100% truth…. the government is fiscally insane!
Well young ppl think that there are more than two genders so they can suck it, and pay off the country's dept
The older I get, the less I care.
Superbowl betting
We hit the ceiling
8 years after this video was put out and we’ve almost doubled the debt to 31.5 trillion dollars! Our politicians let this happen and stole our kid’s future!
Plus interest
32 trillion!
32 Trillion 🎉
Corporations that don't pay their taxes billionaires that don't pay their full share understaffed IRS making it difficult to make collections. Maybe if we stop giving snap program coupons to little old ladies starving in run down apartments we can save the country.
2x that😅
What did nobody complain about the debt When Donald Trump introduced his massive tax cuts.
When we have a demented douche bag in the white house that's hell bent on destroying this country ! And democrats that spend trillions on garbage bills that seem to hurt the country more than help it ! And give money to country's that we shouldn't ! And allow 5 million + Illegal aliens across our southern boarder that we have to support ! And the just plain WASTE ! It's no wonder why we are in trouble !
Aren't we also paying the debt now via inflation?
can u really compare greece with us tho? US owes the money in currency it prints
Well that was comforting
Is there an update to this video in 2022? I feel like we need one lol
I look forward to the logical followup, "Is it moral to saddle future generations with climate change?"
Now the national debt has passed $30 trillion.