I wish my debt ceiling worked like that.

I'm gonna call my bank and tell them that I voted to raise my debt ceiling to my credit card.

US debt is like a giant snow ball rolling down a mountain. The longer it rolls, the bigger it gets. Finally, it will crush everyone at the end of the road.

debt certainly has flexible ceiling when you're the one printing the money.

A currency is only viable as long as it is trusted and used by the masses. The power of the currency isn’t with the government it’s with the people.

i just find it absurd that the debt ceiling seems so redundant. if the government is determined to spend more they will; why bother going through all the red tape of writing laws to raise it

This is really interesting. The WSJ claims that the highest deficit spending in history was down to CV19 related spending on funding for the "american people". Yet about 2/3rds of that spending bill DID NOT go to individual Americans. The $1.4T stimulus spending bill is also dwarfed by the 2008-2013 quantitative easing (which to a certain degree is still going on), which involved in part effectively printing some $60-85Bn per MONTH over a multi year period. This money was used almost exclusively to fund wall street operations and recapitalize the banks which created the 2008 financial crisis while ordinary Americans lost their homes. Yet the WSJ does not bother to mention any of that spending. Interesting.

"It's economically feasible for the U.S. to keep borrowing, as long as interest rates stay low". It might be feasible for purposes of funding spending above revenues, but it is a tax on savers. We have negative real interest rates, folks!

Everyone just wants to make as much as possible and leave. The debt will increase

There are many economists who believe that adding to our debt is not a crisis because the debt really does not need to be paid back, but they are ignoring certain negative consequences a large debt causes in the economy that hurt poor, working class and middle class people. Our debt does not have to be paid back. We only need to roll it over and pay the interest. So, indeed it can increase forever. Politicians know that, and they also know the debt ceiling WILL be raised, so they are not concerned about borrowing more money and going beyond that debt ceiling. They also are not concerned about high interest rates because they know the Fed can and will print more money. This scenario has been going on full steam since 2000. The Fed printing money makes our monetary supply open not closed. Open means that the money supply expands. Expanding the money supply causes inflation. In the 19th century, except for commercial fraction reserve loans, we had a closed money gold standard. It was an era of lower prices as the economy expanded using a limited supply of dollars. Today, with our large debt, if the Fed did not increase the money supply and the government continued to borrow more, interest rates would have to skyrocket due to what is called the Crowding Out effect. That is when the private sector and public sector compete for the same number of dollars in a closed monetary system. The crowding out effect would increase interest rates. So, the Fed comes to the rescue by printing more money increasing the supply of money in the economy to keep interest rates low. The Fed when printing money, uses it also to buy the debt! Today, the Fed owns about 9 trillion dollars worth of U.S. treasuries. In 2008 it only owned 800 billion dollars of debt. The new money goes into the economy and causes both asset and consumer inflation. It is why we have seen real estate prices, bonds prices and stock prices soar since 2008. Now we have very high consumer inflation. So, the problem with the debt is not the debt itself because we don't have to pay back the principle. The problem is that it causes inflation and hurts many people who don’t own assets. We cannot afford to have high interest rates due to our large debt, so the Fed prints money to increase the supply of money to keep those interest rates low and to give the government the opportunity to borrow more of the new money. So, the debt forces an open monetary system which insures asset and consumer inflation each year. People with assets love asset inflation but consumer goods inflation hurts people who don't own assets and people on fixed incomes. It causes a larger gap between the haves and the have nots. So, the problem with a large debt is that it encourages money printing and more borrowing by the government. The new money then causes asset and consumer inflation and hurts people struggling in life. Simple as that. Peter de Luca: Economist

I love how they gloss over cutting back on spending. We don't have a revenue problem, we have a spending problem

They think we are dumb and they are correct

it is not a debt ceiling; it is a bottomless pit.

If we have to raise debt ceiling to pay the bills, we're already insolvent.

Low interest rates = retirees lose. Inflation = retirees lose.

Debt today is used to spend the wealth of the unrepresented future. It's feasting on your children's lives.

It's insane to think that the debt ceiling has never decreased from it's conception. I would assume that this needs to be addressed from a global standpoint and exchange rate stand point.

US doesn't have debt problem, has spending problem.

Stopping kidding yourself! Borrow from social security did not court. Who said so? Actually US debt is over 100 percentage, more like 140 %. Hello check you debt clock currently satting in 28.8 trillion.

Personal debt should also work like this 😂

Secretary Yellen sold 20 million barrels of oil in August of this year. When Harding’s Secretary of the Interior Albert Fall raided the Strategic Oil Reserves it brought down Harding’s presidency.

Am i having deja vu or do i see this video every like 8 years too

"They could cut spending, which no one likes." There used to be this political party and that was one of their main priorities.

2:40: The government can keep borrowing because interest rates are low". Here's the rub.....the Fed is artificially pushing rates down to lower the Treasury's borrowing costs. The result is grossly underfunded pensions, underfunded social security, retirement savers forced into equities and negative real returns on bonds.

Brandon is going for hyperinflation.

42% of our annual spending is on Social Security and Medicare. That's more than twice as much as our military. The only way to solve this crisis is to raise the retirment age. When Social Security started out, the life expectancy was 64.

Yes, for they have no choice. They've already past the point of no return. No way they can afford for their current loans.

Imagine this: A Light-year is the distance light travels in one year. A very great quantity, in deed! As Light streams through space at 186,000 miles per second, that means that it travels 5.88 trillion miles in a year. Needless to say, "5,88 Trillion" is a number very difficult for anyone to even visualize. Now try to imagine 30 Trillion! This is the number of Dollars the United States Government currently owes the International Banking System!

It seems to be in the DNA of politicians that they are allergic to cutting spending.

Why not cut some spending and pay the debt back, that’s the logical thing to do. The government spends so much money on stupid things.

The Fed doesn't just print money for the US Treasury. The Fed prints money to buy up the debt issued by the US Treasury. That debt still needs to be paid off by US Treasury in the future. There is no action the Fed can take to erase US debt (issued by the US Treasury).

Politicians need to be incentivized to cut spending. Bonus for achievements, pay cut for failure.

Fun fact: In my country there is somebody who would never believe you if you told them the U.S has a debt. We grew knowing America has all the monies out there.

No one would like reducing the debt in the USA. It would involve cutting US defense spending by, like 1/3rd, cutting Medicare (ok y’all gotta be 75 to qualify now), education (alright states and towns, you’re on your own), Veterans (sorry guys, we can only help y’all so much), and so forth. And who likes higher taxes, right?

I finally understand the whole picture! Thank you WSJ!!

"There are some limitations though on how much they can ultimately borrow, and those have to do with inflation and interest rates." -- Greg Ip; Yes, "inflation and interest rate".

Today I learned the Wall Street Journal is totally ignorant of Betteridge's Law of Headlines. This is a massive indictment against the WSJ, for being deeply ignorant of an important aspect of journalism.

Debt is a tricky business

So when inflation is at 25% and interest rates are at 1%, who will lend money to establish new businesses or to build new factories and equipment?

also inflation isnt just lots of money chasing few products, that might cause acute inflation to those things, but the added money in the economy without GDP growth is where you have issues, if the US dollar is tied to the economy, and the economy grows 1% and you add 40% more currency supply, the economy has not changed, the value is the same, but the prices rise because the actual currency value has dropped.

The short answer is no. The long answer is no.

It also very much depends on whether the ROW is willing to lend to the US. Right now the demand is dwindling as countries like China, Russia, Iran.... are dollarising.. It will accelerate when CBDC goes mainstream as the dollar function as a worldwide settlement currency for goods and services severely marginised. .

Adding debt = hyper inflation

Yes

They have been since their inception nothing will ever change until they are forced to an Audit and charges are filed .

The Government does not finance anything by "borrowing aka issuing Treasuries". Where did the USD come from to buy those Treasuries if not from previous Government spending? Issuance of US treasuries is not a borrowing operation but a monetary policy operation to affect interest rates.

Yes. As long as it remains the strongest military in the world.

it seems insane, but apparently, it worked. They can raise it forever!

Ahh yes increase the debt to 30 trillion while the government only makes 4 trillion

Any pyramid will fall eventually

None of this makes sense who is the government getting loans from and how does an individual or company have enough money to loan the US government

I’m watching Maryland Senator Christopher Van Hollen on Fox News and our national debt was a topic. I heard Senator Van Hollen talk about a plant to lessen our national debt by three trillion dollars. Google says as of today our debt is 31.6 trillion dollars. So getting it down to 28 trillion would be considered an accomplishment? I can’t be the only American numb to that huge tally. It almost cartoonish large.

If WSJ is asking... you know it's on.

The funny part is the government does not have a FICO score to stop them from borrowing 😂

Richest nation in human history and we are broke because we have been robbed from within

Sixty years of tax cuts and the debt skyrocketed. Didn't see that coming.

Three word solution. Modern monitary policy

Nice video.

The government needs a Total Money Makeover. 😭

I think the US is seeing if there is a coding underflow glitch on the Debt. Maybe in a a few years, it will hit a limit and turn positive

I'm a little confused about the explanation of inflation and what they means by temporary. If prices are going to go up, are they saying at some point in the future we would have negative inflation i.e prices will fall, I highly doubt that.

what is debt? Is that a number?

This aged well

Debt is not an issue for US. They are the richest Nation on earth. Keep printing more, we love it. Must be Dumb not to have free $$$.

I know all of these economics as I am with JP Morgan.Thanks!

I am aghast that somehow the WSJ seems to have zero understanding of Modern Monetary Theory, but most politicians don’t either and their supposed expert in this is the worst of all of them.

Who doesn't love free money!

Debt-ceiling-increase day! My favorite holiday!

Half the people have no idea what the help is going on!

yes

US finance works like Amazon initially. Keep raising money with the promise that one day they will make money

Why should I pay my debts if the USA isn't paying

This aged well. So much for "transitory"

The US government borrows money from current creditors/investors so it can pay interest to past creditors/investors. Just like what Charles Ponzi did in the 1920s. The only difference is that when the US government does this it is completely legal. But when a person does this it is totally illegal. Hmm…

Yes.

The Capitol Building in the evening looks really beautiful.

So you can borrow debt as long as there is no hyper-inflation. As the debt level has surpass 1945 debt ratio, US could possibly surpass Japan and become the most in-debt country in the world.

All this while politicians getting rich. Can someone explain that?

Right now there's ways to offset the debt. Taxing a dollar every time an electronic transfer of cash occurs could raise billions daily sent straight to the US Treasury for debt

The only time one should worry about US debt is when Congress cuts military spending. Other than that, it’s business as usual.

debt limit is not for us and it should be removed. Borrowing will automatically stop when lending stops.

Not once in this video did they explain the simple fact that all money is created as debt. If the money supply is going to increase, debt must increase. MONEY IS DEBT.

Spending ,printing,and borrowing is america. - it represents the quality of our people.

This is debt 101 and not what I expected from WSJ

The issue they miss is that you can’t keep printing money when a lot of your citizens have lost their jobs due to the pandemic. If you do that the banks, companies and employees of big companies end up getting more and more money while the rest of the people stagnate. You have to put the money towards industry’s that is going to get people back into jobs. So your factory workers, miners, construction workers and domestic workers should be the first to get the money. The rest of us upper middle class are all good, we don’t need the money.

Printing money is a backhanded way for government to collect money from the people. Instead of raises taxes, the public loses their money when the extra money printed causes inflation devaluing what we have. At the same time, government gets the money without raising taxes.

It’s like a sick game of musical chairs.

The big flaw in the reasoning is the phrase "borrowing money." We are not borrowing money at this point. We are printing money = big difference.

There are so many people aware of the debt ceiling so why is it so hard for congress and the President to figure out a leaner budget?

It's possibly time credit card companies begin to limit the spending of people in government like congress and the senate so they are aware what it means to control spending.

Even if the interest rate is 0% how can the government keep burrowing money forever? they need to pay what that owe already, and if they're spending more than they make that's never going to happen. How can the bond buyers be so sure they'r egetting paid if the goverment never stays out of the red?

Law makers say yes middle class says no

Gudluck raising rates mr.Powell

Left out this part: The Federal Reserve, a privately owned bank with powers separate from and superseding the federal government, decides what the interest rates are. They have for 12 years kept saying over and over again that they would raise interest rates, which would have crashed markets and allowed for deflation in rent, housing, electricity, food, water, etc..., but when they raise it a little bit they kept finding excuse after excuse to lower the interest rates again, which is what they're even doing today and why rent is so high for so many people. The solution for the common person would be to raise interest rates and de-regulate, so the economy will crash. Production of goods and services needs to be highly ramped up, which means you need massive deregulation, for example: No masks required, no jabs required, highly limit HOAs, cutting specific building codes to be more general, de-regulate drivers licenses so a trip to the DMV is like 20 times faster and half the cost, de-regulate laws on allowing people to live in RVs and tiny houses all they want, wherever they want, cut codes on people building their own alternative energy sources. It's the rule book, over-regulation of society that needs to be highly highly highly decreased and you'll have deflation and a healthier economy based on people's production of goods and services, and you'll have a happier populace that'll thank you as well.

Just cut military spending.

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Excessive debt cannot be good for any Economy, if your debt to GDP ratio > 2 then economy will collapse due to high interest rates and reduced demand and ultimately it will lead to increase in unemployment and increased poverty

Can you keep stacking Jenga blocks forever?

Just get rid of the debt ceiling, it's just another political weapon to blame the other side.

Interesting