A Collection of Articles, Opinions, and Research on the Economy.
Overall I thought this video was very informative and helpful to explain the difference between debt and deficits. There were a couple points that stood out to me throughout the course of the video. I cannot believe that the debt in 2015 is $12.6 trillion without including the money that the government has paid. In addition to this, I agree that it is important for people like me to realize that debt is all relative to what our GDP is at the time. If our debt seems to be a great number, but our GDP is five times the size, then we probably don't have a lot to worry about. Another point that resonated with me in this video was when they said that in order for our economy in the long-run to not be in even greater debt, there must be something done now in the short-run. If nothing is done, then the problem of debt will not be solved, and we will be left with a problem that is too great to handle. This video definitely helped to put debt in perspective for me.
This video helped me to understand the relationship between deficits and debt. A deficit is the amount of money that a government borrows in one year while debt is the total amount borrowed from the years combined. Decreasing the deficit can help to decrease debt, but I agree with the video when it says that lowering the deficit is not enough. Although our deficit has decreased over the past several years, we will have increased expenses due to services like Medicare and Social Security and interest payments. We need to grow the economy now in order to secure our economic future and keep debt manageable for future generations. Also, like Chandler, I did not realize the important perspective that the size of debt is relative to GDP. This will be important in determining future government policies regarding deficit spending and debt.
Many of the points that this video touches on I had never considered or known about. I found it interesting to learn that America has only had government savings above spending twice, in 1935 and 1936. Also the debit and deficit are not the same thing. The deficit is what the government needs to borrow in one year, while the debit is the total owed throughout time, mostly from investors. In 2014 the deficit was $500 billion while the debit totaled $12.6 trillion. The measure that economists care about most is the debit compared to GDP which was $17 trillion per year. So the economy is still producing more than its taking out. But, if we maintain our current policy we will reach a debt that will be at a unsustainable level. Things such as the increasing number of elderly people out of the workforce, an increase to the cost of health care and an increase in interest payments as the national debt grows resulting in higher interest rates. The best way to solve these issues is to increase spending and taxes.
Once again, I thoroughly enjoyed how this website that makes these videos presented this video. I feel as though there is much more meaning for the fact they put the cat video at the beginning and end of the video. I feel as though when our society sees the 12.6 trillion dollars, but actually in a sense 17 trillion dollars, individuals see there being no hope for a recovery. They much rather see a pleasing picture in their life such as a video of adorable cats than be informed on the difference between debt and deficit and the amount of GDP we are encountering. Should our society as a whole take a class on economics before they can even vote? And are we ever going to fix the economic turmoil with the current policies? This video opened my eyes even more to the debt within our society.
this video did a great job on clearing the difference between the debt and the deficit. however i still wonder that with our current debt still rising will one of the solutions in the video be enough to reduce the debt for our future generations. or has our debt as a country grown so large that we will have to grow our economy and also raise taxes in order to work our way out of this debt? i personally hope that as a country we can grow are economy enough and cut back on the government spending to reduce our debt and not have to raise taxes.
Looking at this video leaves me a bit worried due to the three areas projected to grow. The AARP isn't likely to give any ground in decreasing Social Security payments, we are obligated to pay the interest rates, and, assuming our contemporary health care system continues forward unchanged, health care costs may very well rise as the population of those who need it most rises. And to even suggest most of the necessary cuts or tax hikes would be political suicide. But then again, I'm a bit of a pessimist. Perhaps there may be a bipartisan effort to cajole voters to the correct course of cutting spending and increasing taxes.
This video was useful in the sense that I feel like more of an informed voter on fiscal issues. Knowing the difference between between debt and deficit however, made my outcome on America's debt crisis a little bleaker. I've known our deficit has been decreasing since about halfway through Obama's first term which made me think "cool, my grandma's harbingering about the debt isnt as bad after all" but decreasing the deficit isnt enough because regardless of how low it becomes, if we are still in a deficit we are still adding to our already frighteningly large outstanding debt, especially if GDP growth continues at a rate comparative to the past several years.
The intro was too true when the guy said , "Everything is fun when it is a cartoon!" This video helped clear up my confusion between the deficit and debt. It's definitely a bit scary to hear that if our policies stay the same, the debt will increase in the decades ahead to unsustainable levels. One can only be confident that our economy can find a way to grow positively and slow down the debt.
But is slowing down the debt ultimately the solution we want? Logically, that certainly would be an ideal option, but we descend into the territory of game theory quickly. Reducing the debt requires everyone to make a sacrifice, but as everyone looks out predominantly for themselves, we instead end up back in Nash Equilibrium. It seems like the solution that this will eventually result in is a collapse of the dollar and a default on all international loans, which would likely (hopefully not, but probably) result in world-wide armed conflict. Either we find a solution or we take our chances in with WWIII.
The biggest paradigm shift for me here was simply the realization that even though our government is 17 trillion dollars deep in debt; that's what we make every year in GDP. It's obviously still a problem, it just doesn't seem quite as bad when that little factoid at the end is known. Ultimately, I think it will all ultimately obliterate itself into chaos. At this point, we've reached such an impasse in ideology across partisan lines that any compromise simply will not happen. Our current quality of life cannot be sustained.
Once again, I love these fun and simple takes on economic subjects. The football field analogy certainly put our substantial debt amount into perspective. Most of us would look at this debt amount and fall into panic mode, similar to when I realize how many loans I have to pay off after college. We all have our own bills to pay, but we must realize how much we are in debt as a country, and in order to stop this debt from gradually increasing we must make some sacrifices, which may involve higher taxes. So, the ultimate question is: Which is scarier? Higher debt or higher taxes?
Then again, I think lowering taxes might be the smartest thing to do. Lowering taxes will allow consumers to spend more money on goods and services, stimulating our economy and expanding our GDP. This will reduce the percentage of GDP that debt represents.
I agree with Chloe, wouldn't higher taxes encourage people to hold on to the little money they do have, lowering consumer spending and GDP? This video made the national debt a lot clearer to me, I always thought such a gigantic number was unfathomable, but relating the debt to GDP makes a lot more sense. Still, I agree with the video that a change is necessary, as a debt that large can be dangerous and surely unsustainable. I think a lot of spending cuts are in order and soon, if only we could ever get any decisions made in the political sphere to do that, and at the rate we are going, no party will ever agree on how to save us while simultaneously driving the nation off a cliff.
I had never really taken the time to think about exactly how much debt our government is in until this video pointed out how it would look on a football field. I am not sure how exactly we should go about solving the amount of debt we have, but I think it isn't good to be 17 trillion dollars in debt! I know that we are a large economy, but that is still a very high amount of debt to have. I really enjoyed how this video summed things up in a simple easy to follow manner.
I had never really thought about how much our government is in debt. This video made it pretty clear at how significant the problem was with the use of the football field analogy. I also think that perhaps a way to help lower the debt would be to decrease taxes. If taxes decreased, then people would more likely to spend their money on consumer products and goods. This would cause the government to decrease the amount of money they gain for each transaction, but as more transactions occur, the government would slowly be able to pay off debt. Higher taxes would cause people to not want to spend their money, but for necessary transactions, such as groceries, gas, etc., the government would be able to make a size-able revenue off each of those transactions.
I always thought the government's debt and deficit were the same thing until this class. Now I understand the difference. Like the others, the football field analogy really opened my eyes to how much money we actually owe. But on the flipside, by relating it to the GDP it doesn't seem quite as bad (but still pretty bad). I don't know what the answer is to solve this huge problem. I'd like to think that it was as simple as lowering taxes, but I think there's more to it than that. After World War II we had the highest deficit that this country had ever seen and we've been in debt almost constantly since this country began so it's obviously not just one simple solution that could change everything, otherwise I think somebody a whole lot smarter than me would've figured it out by now.