Yep, basically everything he said that the debt isn't a problem unless is happening.

Mindblown! He is explaining what is happening now 11 years ago.

2024 checking in 😂

usdebtclock.org/

@@chibureacrat since trump came into power, budget deficit has climbed to almost $trillion a year. and is on an upward trend

2020

@Lyles music where's he wrong?

@Lyles music please explain

Hello from 2020!

Truth is more powerful than atomic bomb. - Plato

Let me try explaining. I'm a math prodigy. By cleaning up vocabulary words being missed used. Well. Vocabulary words in economics is either the name of math equations or the name of excomponents. "Defict spend" expands the economy. By loans. (Zero interest rates). Vs "Growth" is a ponzi scheme. (Banking changes interest rates). It would be bad grammar to say, "defict spending causes growth". "Defict spending causes the economy to expand", would be proper grammar. "Inflation" and "interest rates" are the same math equation. And for some reason, the one math formula has two different names. This leads to the confusion. This is why "defict spending" is thought as a bad thing. When loaning money to create jobs is a good thing. A cognitive dissonance present. (but future paying customers must be predicted correctly, to pay back the loan). This is why investors call themselves "the job creators". Because defict spending creates jobs. But they have a Cognitive Dissonance present. But interest rates are inflation. (A) So loans (defict spending) must be interest free. (B) And must predict paying customers correctly. (C) And must be paid back. Now, every loan on Earth can not be paid off in full, all at once. There will always be loans present. This is called the "national debt". We must have debt. Your car loan and mortgage is debt. This creates jobs. But predatory lenders free. The Cognitive dissonance.

10 years ago huh 😔

Uhohhotdog Gaming bruh I didn’t know how this works until right now... people need to know more about this.

A sensible voice! Thank you. I urge everyone, ask yourself who benefits from this big bogus "national debt" scare? Not you or I, that's for sure. Could it be...the people who want us to believe that money is a *privately* created thing?

@@TheBandFiles how is money not privately created?

Josh Beany They are all Keynesians so they do not accept economic reality.

@@zygi22 So it wasn't keynesianism that got the US out of the great depression? It wasn't infrastructure projects and spending? What was it then?

so why does the interest rates go up as the deficit does, this guy lives in fantasy landl

How has life turned out for u since u commented?

@@daraquesto2277 Doing just fine, thanks for asking! Just accepted a job with my dream company, have a banging fiance, and live a pretty sweet life all around. How's yours, randomly commenting on videos from 8 years ago?

His brother Hank is pretty great on explaining science as well.

Me too !

just have a look at japanese government, i don't see anyone Japanese people jumping ship and panicking at there debt, however they do fear De-flation which is fueling their need to save a massive amount and making people/business not want to even borrow at all.

Also, only _reducing_ deficit spending still increases debt! The budget has to actually be running a surplus to pay down any debt.

i dont mean to be offtopic but does anyone know of a trick to get back into an Instagram account..? I somehow lost the login password. I appreciate any help you can offer me!

Deez nuts

Anthony whoa

2020 Gang now...

@@Project-Masculinity 2020 gang rise up

Yang gang 2020..... oh wait

Mosler is as self-serving as Friedman.

It obvious you're either speaking of yourself or you've not read all the comments!

I know plenty about economics and you are undermining the fact that John Green attracts plenty of types of demographics.

Joe Ruzicka and what does john green attracting demographics have to do with the validity of his argument. that like saying that because the catholic church once declared the world to be flat and their audience covered plenty of types of demographics the catholic church must therefor be correct.

I do, (waving hand, madly). You lend money that doesn't exist & you charge the people & their government interest on it. Everything comes out of that. GOOD LUCK!

JohnG, the catholic church? Thanks for coming out from under the covers and showing the world who you are; Can't tell if you have your own agenda or just a BOT

Wrong. Inflation is at record levels.

@@xyzzy4567 You do know this comment is from over a year ago.

@@henrygustav7948Doesn’t matter

The Fed is a independent government entity, created by Congress who has oversight. Its structure is independent, but within the government. "Remember, the Fed exists to serve the payments system. This means it is a supporter of the US banking system. Before it can ever achieve its dual mandate on price stability and full employment the Fed must ensure the payments system is healthy. Therefore, the Fed is often viewed as a servant to the banking system while also trying to be a public purpose servant. It has, in effect, two masters by design."

But then how would we start conflicts over seas? I don't think you thought this through.

***** Using the billions already in the budget. Paying more for NASA, highways and more would create a need for engineers, welders and in general workers. Not to mention the need for facilities for these workers, workers at NASA needs grocery-store workers and agricultural workers among others.

***** It's okay, it's big enough that we can both go to Mars AND shell the Middle East with Democracy.

US ranked #6 in term of spending for scientific research as a percent of GDP, only 5 countries spent more than US for that.

And those defense budget are also directed toward military research & developments, you need to pay military scientists and engineers to develop the new technology. In fact, many important inventions in the 20th century is the result of military research, which includes microwaves and internet etc. And space travel will not be possible without invention of ballistic missile, war brings on bad things mostly, but don't overlook the indirect importance of war to scientific progress of mankind.

+Desmondo You forgot to add in how many of those 12960 competed against him in the decathlon. I actually couldn't tell whether he was joking or not during that part, because it sounds like "i won this thing in high school" which never amounts to anything in the real world.

vlogbrothers is still cool, tho

He was making a joke

thats still pretty good

Lighten up on the adderall bro

+wate nallace I don't know why, but pairing that with your icon makes me giggle.

+sargeantsimon1 haha all bronze and no brain

I was thinking the same thing.

+dirka dirkadirka Your comment is irony in its purest form. Thank you.

wate nallace I find it relaxing

exactly that was lollllll

+Green Achers He's a liberal. He'll point his fingers, yell and say yelling isn't the solution and say all is well when disaster is on the horizon.

What the hell are you even talking about

except... all of them... you know, the dollar, the euro, the yuan, the renminbi, the pound, the peso...

Microsizeme And the the value of the Dollar, Pound and Euro have ONLY been on the decline. So clearly those will fail in due time. Arguably have already failed as a currency, if they can't even maintain a stable value.

I agree he has talent in creating a good viewer experience, but unfortunately that hides his misleading economic reasoning. For example, the gov debt being largely owned by the American people, he uses that fact to dismiss the risk of defaulting!

***** The problems will be the same whoever owns the debt. The trigger will be the lenders becoming less willing to lend money, and then interest rates will rise sharply. Then the current levels of debt will be unaffordable, and the only way to not default will be huge tax increases.

That is the money we OWN not OWE.

the gold standard is crap because people end up want to buy the underlying product which is your gold ... and the govt says no here have a higher interest rate .. and the people say no we want gold ... then the govt says no here have higher interest.

isawaturtle It has more real values than a piece of paper...

+Muhammad Daffa it's not just paper, it has value because we believe it does

Daniel Allen Without any intrinsic value. Gold standard and bretton woods actually pretty stable

+Muhammad Daffa I'm not sure I agree that the value of gold is intrinsic. I don't think it makes much difference anyway. In a modern global economy I don't think the gold standard works well. I think this is well explained in the description.

Bob Radu I am sorry to tell you but this video is overly simplistic. There are consequences to this debt and insane monitory policy.

bighands69 Of course it is, but it is still more than most people understand when using debt and deficit interchangeably and assuming all debt is bad. Yes, the Fed Reserve stuff is slightly misleading, but if you have favorable interest rates, borrowing can make sense, even with personal finances.

Bob Radu I actually think this video does a horrible job of conflating debt and deficit. He talks about how the deficit goes up some years and down others, but this isn't the same as running a surplus. The debt just keeps piling up. But this is just a minor point in the video. The more important problem lies in the way he makes it sound like debt is a good thing and not a carefully weighed decision. Companies leverage themselves up to grow faster, but if they take on more debt than the growth it provides, they are losing money on the deal and risking bankruptcy. It's not a big deal if a company goes bankrupt, even for the CEO they'll probably just move on. Hank mentions how terrible it would be for the US to go bankrupt, but he completely glosses over the fact that the US Government is risking bankruptcy by making this decision. He also ignores the issue that adding debt is a complicated decision that can be made incorrectly, and that its completely possible that politicians have miscalculated and that the added debt and risk is not worth the return we will get in terms of growth. Finally, the idea that it is "relatively easy" to pay back this debt is simplistic at best, but more likely misleading.

+Bob Radu Short term debt can be used in crisis situations. Ironically that is what Keynesian economics proposes. But it was never about running constant deficit and having a debt that keeps increasing. We are not here talking about personal finances. We are talking about collective debt that we call government debt. Most people are not even aware of this debt and they have no clue to the actual mechanisms of debt. They understanding of the vectors, velocity or acceleration of debt nor of the large scale data problems needed to manage debt. But wait for this, wait for this. They are the ones paying for it.

bighands69 I'm not sure he is proposing running constant deficit, and he does state that deficit isn't ideal (at least that is the theme). We've had a surplus before and we'll have it again. Nor do I think he is proposing having a debt that is never paid off. I feel it is a bit of a strawman argument on your part. I totally agree this isn't personal finances, which is what most people freak out about when talking about debt/deficit. They see debt and thing it must be bad. Sometimes it is not. No doubt we should be fiscally responsible, money isn't free. I just think that John is trying to present a complex topic in relatively quick video in order to make people understand that isn't necessarily the "sky is falling" scenario that everybody thinks it is, and I think he succeeded.

Because deficit spending feels really good to the policy makers. It is stupid. But US and Japan enjoy very low interest rates. They can run deficit longer.

Shrinidhi Ghatpande Exactly. It's the exact same thing as a consumer perpetually running up credit card debt thinking that it makes them feel richer.

oterj0​ if the credit card company pays you for using it and you manage to no default on any single month, then it is good and you are richer. Just don't over extend yourself

Shrinidhi Ghatpande Correct, the problem is the Federal Reserve is giving loans at 0% and selling bonds with higher than 0% yield, in other words, they are net incurring interest with the sole purpose of taking the money that was otherwise in a savings acct or other investment to then turn around and pay someone to spend it now. If you're effectively paying people to spend their money, doesn't that imply that economic optimum would be for them to save/invest it instead of having govt find someone to squander it?

what will we do in 2050 when all the planet's nations debt will be 500% of their GDP? NOW we say "its ok to have debt growth as long as the GDP growth is higher than the deficit growth"..thats all cool but you ASSUME that the GDP growth will be ETERNAL and non-stopping but we all know that the planet has limited resources, we can't grow forever. This is the root problem.

Your stupid

That's not what he said at all

' the deficit is effectively a tax increase' Taxpayers do not pay for federal spending. The limit to federal deficit spending is an unacceptable level of inflation. However, the Fed has the necessary tools to control, even prevent too much inflation. Federal deficits-Net imports = Private income (an increase in a PORTION of private savings-a stimulus.) Reserve currency status is just a trade convenience. Many currencies once held reserve status. No other currency in the world is more desirable than US dollars (either by force or by availability.) Why would debt stop being cheap? The right question is, WHY would interest rates rise by 2, 3 , 4 or even 5%? The only plausible case for rates rising that much is if the US economy is BOOMING and the Fed is raising rates in an effort to slow the boom. (Rates up so the Fed can quickly prevent an unacceptable level of inflation). What if interest rates rose by 4%, what would the economic burden be? The average maturity on US government debt is roughly 5 years. 5 year notes pay about 1.3% today (mid 2016), which is about what the US government pays on average for its debt. If rates rose by 4% then it’s likely that 5 year notes would offer a slight premium. Let’s say 5%. What happens to the budget deficit? Interest payments would jump to about $950B per year which would bring the deficit to about 1.4T or 7.7% of GDP using current figures. That sounds uncomfortable, but it’s not even close to the 10% deficit we experienced during the "recent" financial crisis and nowhere near the 30% figure we saw during World War 2.

You say taxpayers do not pay for Federal spending. The reality is they do since taxes are collected to added to the Federal government coffers adding to the credit side of the federal accounts. Those moneys i the federal accounts are spent by government for a variety of things. If the yearly tax revenues do not equate to expenditure there is what is called a federal deficit (or a surplus if they exceed expenditure). That is the basics of what the Federal Deficit or Surplus is all about. I that sense it is like any budget by a person or any organisation. You have the deficit and trade deficits confused . They are separate concepts. Imports is normally a word used to describe goods coming into the country or economy from other economies. You also confuse a Booming economy from a bubble economy. A booming economy does not need a government to increase interest so it is controlled. The exact opposite is true. What happened in WW2 is a huge deficit and resulting loss of wealth from the community. There were big shortages and huge inflation of prices resulting from excessive government spending. Straight after WW2 the government cut spending by about 50% in one year and the economy Boomed with wealth rising and unemployment decreasing massively. You ignore the fact that the Fed cannot raise interest rates in the present climate since it's policy along with government policies of financing spending by issuing bonds has resulted in huge debt a lot of which is owed to other countries. You have only done half of the maths by saying that the deficit was 10% and also 30% during WW2. That figure of 30% was when the US was the world's biggest creditor and Now it is the world's biggest Debtor. If the Fed tried to raise the interest rates to even 5% which is traditionally rather low then the whole US economy would implode within a month or so due to it's inability to service that debt . When the deficit was 10% the money owed on treasury bonds as only a fraction of what it is today and the rate of 5% would cripple the economy . The value (purchasing power) of the US dollar would drop by at least half making the debt payments even harder to service.

"You say taxpayers do not pay for Federal spending. The reality is they do since taxes are collected to added to the Federal government coffers adding to the credit side of the federal accounts. " The US government creates money...Yes, it does it via a complex interaction with the Fed, but in essence, this is a true statement... Thus... When the government creates $1 and spends it accounts for it by going -$1. The private sector, in turn, benefits from that spending and goes +$1 So government -$1 and Priv Sec +$1 Now you believe when the government taxes that dollar back the Priv Sec is -$1 and the government is +$1? The math doesn't add up...Remember that in order to create the dollar the government had to go -$1, so when it taxes it reclaims the dollar, thus $1 (the dollar it taxed) + (-$1)

You have an important part of it confused. The US government and other sovereign governments do not even have to create any new money for thee economy to operate normally. Some governments operate with creating any money. They rely on another government's currency. That includes state and regional governments who operate every year without creating any new money. You have it wrong by saying the US government goes into debt which it reclaims when it taxes. There is no offset of taxes against newly created money. It does not reclaim those new dollars through taxation. If it did there would be no national debt. There would also be no problem in any institution creating and Spending those newly created dollars which when created do not represent cretion of goods or services in the economy. The fact is there IS a problem with that if any or all other institutions had the legal authority to create and spend as many of those new dollars as they wanted. The problem would be essentially the same as it is now between the sovereign governments of countries where the issuers of currency would all be in a race to the bottom with each other to create and spend as much as they think they can to keep up with each others spending. You have missed the point that all governments have a responsibility to account for their financial dealings including sovereign governments. There is no retirement of debt by sovereign government. If there were then the national debt would not have been growing. It would have shrunken. It doesn't because sovereign governments have not been retiring that debt. The 'reclaiming' of dollars that you say happens does not happen.

+Rob Mews Hey Rob, thanks for the reply....Let's see if we can straighten out some of the confusion between us.... _"The US government and other sovereign governments do not even have to create any new money for thee economy to operate normally. Some governments operate with creating any money. They rely on another government's currency. That includes state and regional governments who operate every year without creating any new money"_ Can you give me an example? Though I didn't specify it, I was talking about the US Federal government, not the state, not localities, because the US Federal Government is the _issuer_ of the currency (the US dollar) everyone else is the _user_ of dollars. So it's not only a sovereign nation, but a nation that creates a sovereign free floating currency, so what I've said only applies to nations like the US, Canada, England, and Australia to name just a few of the larger nations. The nations of European Economic Union (EEU) and China would not qualify to this distinction because they either don't create their own money (the EEU) or they peg their currency to the currency of another nation, in this case, China). _"You have it wrong by saying the US government goes into debt which it reclaims when it taxes. There is no offset of taxes against newly created money." Have to say, you have me confused here. The government spends new money into existence. The difference between spending and taxes is the deficit and that's an amount added to the private sector. This is "new money". The opposite would be true if the Federal government ran a surplus. The Federal government would tax more money out of the private sector that it spent causing the amount of money in the economy to decline. This graph (below) shows something called "sectoral balances". Basically whatever the government spends it goes into debt and the private sector receives as "assets". Notice they move equal and opposite. It is the foreign sector after about 1996 that has created the imbalance between the public and private sectors, but if you were to balance government sector against non-government, they would be in perfect balance. blogs.ft.com/gavyndavies/files/2010/12/ftblog52.gif When the government taxes it removes assets from the private sector. This means the government is "less in debt" and the private sector has fewer assets. Since the year 2000, the government has created and spent $45.7 trillion dollars and taxed $37.2 trillion. That's a difference of $8.5 trillion, which is money added to the economy, though much if that was spent to offset private debt, but we can get into that if you'd like me to explain why most of that money vanished. Here is a historical lising of US government outlays and taxes: www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/hist.pdf _"It does not reclaim those new dollars through taxation. If it did there would be no national debt. There would also be no problem in any institution creating and Spending those newly created dollars which when created do not represent cretion of goods or services in the economy. "_ I didn't say it reclaims _all_ the dollars it creates, but as I said above, it's reclaimed 82% of the dollars it's created since 2000, meaning that the government has _added_ money to the economy, not taken it away. Not sure I understand what you mean in the second sentence. _"The problem would be essentially the same as it is now between the sovereign governments of countries where the issuers of currency would all be in a race to the bottom with each other to create and spend as much as they think they can to keep up with each others spending."_ Explain what you mean, "race to the bottom"? The only "race" that would take place if countries understood fiat currencies the way I do, would be that they understand they no longer have to make a choice about _what_ to buy, but _how much_ to buy in order to achieve their political goals. If as close to full employment is a goal, then a nation should spend as much money as it needs to employ it's population without creating long-term inflation. Where is the problem there? _"You have missed the point that all governments have a responsibility to account for their financial dealings including sovereign governments"_ The US government does account for it's spending. That's what the debt _is_. It's an account of all the money created that hasn't been taxed back yet. Think about it like this. If tomorrow a sovereign nation was created somewhere, really doesn't matter where. And that nation announced that it would create a sovereign free-floating currency and that for every dollar it spent it would account for it as a debt. It would use taxes to regulate the amount of money in the economy, lowering taxes when the economy needs more, and raising taxes (to repay the debt) when the economy gets too hot. The debt a country creates _is_ the accounting of its spending. What kind of "accounting" would you like to see? _"There is no retirement of debt by sovereign government. If there were then the national debt would not have been growing. It would have shrunken. It doesn't because sovereign governments have not been retiring that debt. The 'reclaiming' of dollars that you say happens does not happen"_ Of course there is, as I showed you already, the government has retired $37 trillion of the $45 trillion dollars it's created since 2000. That's left just over 8 trillion that it has not been retired. If the confusion between us is that you think that I'm saying that all debt has been retired, I'm not. If the government didn't reclaim the dollars it created, we'd have a $72.5 trillion dollar debt, just since 1971. Rob, thanks for the conversation. Hopefully we can straighten out the possible misunderstandings between us.

World In A Nutshell what is pork?

Everyone’s version of pork tends to differ however. For example I feel a National Healthcare program would make us stronger as a country, others believe healthcare programs are pork :(

SkrootNissu Yoctomind Because English spelling does not make sense.

SkrootNissu Yoctomind Same reason "knife" is pronounced "nife", because people thought it was easier and started saying it that way.

SkrootNissu Yoctomind In short, the question is "why is it written 'debt' in the first place?" It started as latin "debitus" and was later simplified since it is indeed harder to pronunciate groups of consonants. The spoken language evolves much faster than the writing, so the way you write in English reflects the way it was spoken centuries ago. There is the interesting example of Portuguese which accepted a large ortography reform recently to adjust for the changing pronunciation including omited consonants (like ótimo instead of óptimo).

that is just like saying why "why " prounounced wy

Aristantropo doesn’t make sense to anyone that can’t use their brain

Mmmmm there are ways to make this scheme fail, and more than one I tell you.

Yeah but it's not in the government's best interest to create a volatile monetary situation. It's in the government's best interest to have a good economy. Your argument is a lot like saying "We can't give the government control of the fire department, then they might build them going off cliffs." They could theoretically, but they won't.

Mikaele Baker QE is literally creating volatility in money supply, under gold standard it would be almost zero. So not sure what you mean by _"they won't"._ The reason money supply volatility is in the governments interest, is because the more money they create (devaluing the dollar) then the less _real value_ in any given gov debt balance.

Mike Blain And in turn, the more money the government would have to spend. Deflation is never in the best interest of the debtor, only the one who holds the debt. An excellent example of why is during the Gilded Age. Because we switched to the gold standard from the silver-gold standard, money was worth more. Farmers found prices on their goods lowering, but their debt stayed the same, meaning they were paying more money but making less. Therefore, while runaway inflation is bad, so is the deflation that would occur if we switched to the gold standard. Thousands of Americans hold debt, and suddenly they would obligated to pay a lot more in real value while still making some of the lowest wages in US History. I think this is what you're driving at, but the logic doesn't follow, the US Government is not in a debt crisis. Economies should not be measured in deficits, the best indicator of an economy is unemployment, and conditions of the worker and consumer. If the government spends more money, even if it goes into a deficit, conditions for the average person improve, provided that the government uses Keynesian strategies of demand-side economics. We don't need less spending, we need more spending, and the debt is not a problem. There are conflicting interests within the government, because we are divided into two parties, one of trickle down (which basic economics show does not work, I can explain this if you need me to) and one of Keynesianism. It is in the best interests of the supply-side economists that government intervention be a clusterfuck, observe how they sabotaged ACA. They will sacrifice the American people if they think they can use it as leverage against government intervention, because less intervention means more profit for the wealthy. Are you following? Additionally, with almost everything, you have a basic dichotomy. Either it will be public, owned by a government that is ostensibly by the people for the people (though lately corporations have made great strides in their control of the government), or private, owned by a corporation for profit. While the government may be somewhat corrupt, and corporations have way too much power within it, I would still trust my elected government over a corporation. Politicians deserve a lot of the bad rap they get, but until the Corporations totally buy our government (they're getting close, the Surpreme Court is firmly in their control, it seems), they have to enact policy that will please a decent number of voters. Corporations don't have this incentive to be halfway decent, they just want to make a profit, and the idea that profit is tied to actual quality or quantity of a product is a social darwinist delusion. Social Darwinism actually just dictates that businesses can use any tatic to take each other down, and after only a few years it results in monopolies, after which with no competition, quality or cheapness of service doesn't matter. If MegaCorp is the only corporation providing a needed good, they can charge however much they like and make the crappiest product, people will have to buy it and they'll make a profit. The government however, if put in the same position, must still make a product cheap enough and abundantly enough to please the voter, or else they'll be out next election. That said, I'm no Communist, business has it's place. But so does government. Things like health care, roads, schools, bridges, the military, none of these should be shoddily made by a monopoly hoping to make a quick buck without competition. Also I think Corporations hold most of the money supply, so they should be taxed accordingly. Taxes are part of civilization, no one likes paying them, but you must understand their necessity. I will gladly pay pretty high taxes to provide for my countrymens' (and myself's) betterment. This is way off from the original topic, but I wanted to address Ron Paul Libertarianism, since their seems to be a lot of it in this comment section. Again for a time of no regulations, Ron Paul's dream, look at the Gilded Age, and look what happened. Or look again at the 1920s, and see how it ended in the worst Depression ever because government sat on it's lazy chair and failed to properly regulate. Or look at the 1990s leading up to 2008. Boom and Bust is not sustainable.

Mikaele Baker Only addressing the on-topic points of your rambling comment... You have an irrational fear of deflation, when it is the normal state in any economy which is developing new techniques and improving productivity. People benefit from lower cost of living, its the same as rising income, even a keynesian must see that. We have improved productivity since the industrial revolution resulting in decreasing real prices. But since money has been controlled by govmt (instead of gold), we have seen actual consumer prices increasing, by devaluing the money unit. That cannot benefit the consumer, who must then exceed that with wage increases. Governments keep prices increasing because they benefit *themselves* not the people. You seem to have an idealistic view of those people you vote into power. They act in their own interest, and only in the interest of the voters to the extent that it is also in their own interest. You also need to study the role of easy centralized credit in causing the great depression. That, and the 2008 crisis, simply could not happen in a free monetary system. Only centralized control can coordinate such huge crashes on international scale.

A democratically elected government will often act in it's own self interests, but definitely not more so than the private sector. One of hte biggest contributing factor to the 2008 crash (as well as e-con) was the repealing of Glass-Steagall, which would have kept investment banks separate from commercial banks. Crashes happen when there is not enough regulation to serve the interests of the common good. Economies are at their healthiest when regulated in the best interests of the common good, and when government facilitate a healthy demand through subsidies if need be. Economic booms can almost always be traced to an era of economic regulation, most notably World War II (and the connected New Deal) were times of unprecedented control by the government of the economy, and the post war years saw a massive subsidy to the working class in the form of the GI Bill and the few Fair Deal initiatives that made it past the conservative Congress of the time. The full employment of the war years, coupled with high salaries (the Federal Gov't was at this point incredibly union-friendly) but relative lack of consumer goods meant that the consumer had a lot of excess money. Inflation occurred because of the lack of consumer goods but excess of money, but government price controls curtailed this (Office of Price Administration). Returning GIs were subsidize for housing and education, putting more money from their salaries (in addition to a pension) into their pockets. This meant the consumer had enough disposable income to spend on consumer goods, like cars, washing machines, etc. This increased demand, allowing companies to grow to meet this demand. To do this, they hired workers, who in turn bought consumer goods. It's classic Keynesian economics. Thanks to the New Deal's reform programmes, the economy was remarkably stable, and it boomed. The 1950s were an affluent era in an economic sense (they were fundamentally flawed in nearly ever other area, especially when fear of communism allowed conservatism to take root and undo many reform programs, which resulted in the economy's eventual stagnation). If you are really interested in hearing my side, and are interested in a more in depth analysis, or just need to be convinced that I am indeed qualified to talk about US History, I can provide a link to my website, otherwise that's a basic summary. We are all Keynesian now. It's a fact of modern economics, there's no debate on the validity of demand-side economic theory, the only reason laissez faire isn't a fringe idea, is because massive corporations have huge interest in reducing regulation.

have a look at japan it got a worse economic spending, than the US and most of the spending is to buy votes. However i would argue that deficit spending are necessary!!! (in recession) Whether there productive or not will how the hell would you know i mean you don't you do setup a government to MAXIMIZE RETURNS (profits), what you get them to maintain a good law and public services (you can really measure that, although over the long term you may see the impacts). What i find almost retarded is that American's (US) can be against large spending on health care, because some how it interferes with there lives, when that is exactly what you have a government for to provide you with the public goods you want and needed. I also think that US should funding a lot more research cause that would generate more jobs over the long term!

Ryu Rwar First, if I misinterpret some of your points, it's because I honestly can't read half of your sentences. I'm not trying to discredit you because your grammar is bad, I'm just saying I genuinely had a hard time reading and comprehending your post, so if I get one of your ideas wrong just tell me. One of the fist major proponents of spending in a recession was John Keynes, after which Keynesian economics was named. Do you know why he said we should spend in a recession? TO BOOST THE ECONOMY! The entire point of deficit spending is to take the burden off of businesses so that they can get back on their feet faster, thereby helping the economy to recover faster. So the logical necessity of that is we spend with the intent to boost productivity, if we aren't then we are spending money with no return and it's basically throwing that money away. Do you wanna know who benefits from that? The guy getting the money, that's it. That's not sustainable by any measure, but that's what you seem to want. If we are going to spend people's money (which is literally taken from them by force since not paying taxes gets you sent to jail) then we need to spend it wisely, and make sure that the only reason the government is doing it is because a normal business can't. If a business can do it, the government should be stepping aside and letting the people spend that money themselves. But what I find most egregious in your comment was the idea that we have governments to supply goods and services. No, that's why businesses exist. A government exists to protect the rights of the people from other people, that's it. But if you want a government to provide the benefits of a business, how the HELL can you also demand that it doesn't manage its finances like one? Either it provides goods and services and therefor needs to be worried about making a return on investment so as to be sustainable, or it only worries about protecting the rights of the people and therefor doesn't need to worry about a return on investment (because protecting rights doesn't directly generate profits, you can't measure freedom with dollars). In short, you can't have your cake and eat it to. You can't demand that we spend flamboyantly and the we provide goods and services, that's blatantly ignoring your responsibility to future generations, piling them with debt so you can feel nice today.

You have proclaimed what a government does, or I guess should do, but a majority of American voters do not seem to agree with you or they would vote people into office whose opinions jibe with your own. Your definition of what government should be is subjective and open to debate. The key word is "subjective". If the majority of American voters voted on the side of libertarianism, then that's the form of government we would take, at the moment. But if they decided to vote communist,and it fell within the constraints of the Constitution, then that's the form of government we would have, insofar as the majority of us agreed to it, whether or not you shake your fist and declare that everyone else is wrong, .

Jonathan And you missed the point of my comment. Yes, I gave my opinion on what I think should be its role. I then spent the rest of that paragraph explaining why even your explanation doesn't make up for what people do today. And you just ignored the first one completely. And I fail to see what bringing in voting habits has to do with everything. I'm saying the trend we have now (more spending every year without looking for measurable returns) isn't sustainable in the long run. If people vote that in, I'll see about moving some place else and watch from a distance to see if my prediction comes true. People can vote however they want to, but all the people in the country can't make it work simply by believing it will. I'm just trying to get my ideas out there, and maybe get a couple more people see things from my perspective, it's not like I'm demanding you turn control of the government over to me.

***** The majority of charities are scams made by "non-profiters" who give themselves huge salaries/bonuses. For example, the NFL donates about 2% of its actual funds from cancer awareness to the cause of finding a cure for cancer...they claim the rest for pure profit. I despise most non-profits because they're completely fraudulent. Altruism is acting on your own accordance not to be looked at as good or be viewed as some holy patron. Lets face it, when most people donate to charity they do it to feel good about themselves like they're helping support a cause. In actuality you're just filling some greedy ignoramus's pockets.

+Illya Van Hoof NO!

Although I agree our military is too large the way you present this is a little misleading. Although the USA has the largest military spending there are multiple countries that spend a larger percentage of their gdp on their military including Russia.

Adam Miller Actually USA spends 3% of its GDP for military and Russia spends 3.7% which is almost the same, but Russia's GDP is nothing compared to USA's.

+Slobodan Milanov Military spending is actually one of the best investments the USA has made over the last 50 years.

+eric jolly I will tell you this though, most increases in military spending rarely go into the airmen/marine/seaman/soldiers paycheck, most of it goes to projects and upkeep.

Literally watching at half speed

www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html?_r=1 Read that article....