USA's Out of Control Deficit Spending

No video

USA's Out of Control Deficit Spending

Рет қаралды 588

2 ай бұрын

Lets talk about US deficit spending since the year 2000. For the first time at the turn of the millennium we had a budget surplus. After 9/11 and getting involved in 2 wars in the middle east the US quickly lost that budget surplus and racked up deficits every year since. The deficits slowed down as we exited the Iraq war before the 2008 financial crisis. With the advent of the 2008 financial crisis though government spending shot up and a huge deficit was recorded after the extensive TARP spending took place and government bailouts were handed out. After the 2008 crisis recovery began we still saw high levels of spending that gradually increased year after year. In 2020 with the country shut down the US government again spent like crazy to try and advert economic disaster. After the recovery the trend line of continually increased spending and deficits have continued as we support conflicts through the world.
The only way for the US to avoid these deficits is:
1. Stay out of foreign wars and conflicts
2. Take advantage of Technological advances for productive means.
3. Make the hard decision to Cut spending and/or increase taxes.
Our gold investments are a hedge against US market swings. No matter what the US dollar denominated value of our gold is it should keep up with inflation at the least and also will capture any advances in productivity.

Пікірлер: 10

@colonel__klink7548 2 ай бұрын

Listening to this your solution to the problem is... Austerity. I'm glad you mentioned wars as a spending reduction option (it's an option but may not be a good choice.) But when you start mentioning "entitlements" (payments to poor people.) I realized what the point is. The problem is... Austerity doesn't improve tax revenue, as we have seen in the austerity experiments in the UK it actually reduces tax revenue. How? It reduces the volume of traded goods reducing taxes, the reduced volume of traded goods (because people are poorer and can't buy as much) there's less labor to tax, and because there's less labor working you have more poor people who can't afford to spend than before causing an economic activity fall spiral. So to make up for this the government will privatize the services it hasn't cut. So now foreign companies own your power grid. The grid is not one unified entity it's split, someone upcharges 20-40% for transmission fees because that's what they own, packing in their profit. Someone else upcharges for the contracting and sales 20-40% to pack in their profit. Someone else owning the production does the same. So suddenly your electricity is FAR more expensive, and the money flies overseas into someone's investment account so they can buy more assets to bleed yet more out instead of investing in the economy. Your people are being drained of all their financial resources and all of that money is leaving your economy and going to non productive methods of rent seeking. And no, giving those people money doesn't mean that they will invest it in the economy. We saw that after 2008. We ran that experiment. We gave a lot of money to industrial leaders and they realized quite correctly that the average person had nothing so they didn't invest it in production to produce cars that nobody would buy. No major companies like GM and BMW took that money and bought assets like property and stocks, driving up the prices causing the crisis now. We've run the austerity experiment for 50 years and it's only really made us poorer and reduced tax revenue by being part of a formula to reduce the value of labor and goods, the easiest to tax things in our society. Taxing "profits" are hard because profit is like a cockroach infestation. You only admit to it to the government when you can't hide it anymore. Hell you only admit to your partners when you can't hide it anymore, which is why royalties are based on revenue not profit.

@TacticalTimmyGoldandSilver 2 ай бұрын

Great analysis, I hadn’t heard of European term Austerity. After some research it seems it would mean harsher budget cuts than even I’d be comfortable with (loss of public libraries and such). As discussed at the end of the video it really will take a combination of: some budget cuts, some tax increases, staying out of wars, and the us taking advantage productively of all the recent technological advances. Thank you again for commenting you taught me a new term and I love seeing the European and UK perspective!

@colonel__klink7548 2 ай бұрын

@@TacticalTimmyGoldandSilver The response was really endearing actually! My biggest two concerns really are the tax cuts (We already waive Walmart's largest tax obligations until they pay off their buildings, then they just move and sell their old one. This has enriched nobody but Walmart and bankrupted cities. Walmart is not the only one who benefits from this. The largest companies all rely on it. ) and the mentioned social cuts. The social cuts I think produce that death spiral. I can agree with a lot of the rest, though financing for Ukraine is sort of a gamble. It's geographically one of the richest plots of land on the planet.... and US corporations will.... "rebuild it" if Ukraine manages to maintain independence. I confess I stumbled on this video. It's the first one I've seen of yours. I'm not bullish on gold. It's a safe store of value, but it is an investment in nothing. So while you hold gold it's like... removing your money from the economy. Not a big deal if a little guy does it, big deal if billions or trillions disappear and are no longer invested. Investment incentive is why inflation is targeted at above zero. The fed basically says "use it or lose it." lol.

@TacticalTimmyGoldandSilver 2 ай бұрын

@@colonel__klink7548 So sorry, I mistyped in my quick reply. I edited it to say some tax increases. That should put us on the same page there. You hit the nail on the head; gold is like having reserve capital temporarily removed from the economy. I tend to disagree with the higher fed inflation target (especially when they are failing to even hit the 2% target) but we'll leave that discussion for another video. Cheers and thank you for the thoughtful replies, I always enjoy hearing from people and thinking about different perspectives!

@christophermccormick8670 Ай бұрын

Enjoy the content.

@TacticalTimmyGoldandSilver Ай бұрын

Thank you for watching; I have enjoy making these videos and hearing from people around the country and world!

@BioHazardCL4 Ай бұрын

Why is a deficit bad if the economy is growing?

@TacticalTimmyGoldandSilver Ай бұрын

Great thought! Yes, it isn’t much of a problem as long as the economy is growing faster as a proportion than the deficits. The issue is when deficit spending increases relative to GDP. In those cases the federal deficit soars and in the long run more of the economies resources must be spent on debt financing.