Lets discuss the ever growing national debt, whether or not this is a concern, if it’s a bubble, and how this affects your money and investing for the future - enjoy! Add me on Instagram: GPStephan
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The United States is, at its core…kind of like a business. It has what’s called a GDP, which stands for Gross Domestic Product - and that’s the entire market value of all the goods and services produced within the United States..the purpose of this is to measure the economic output of our country, see if we’re GROWING as a society, and when that number goes up - it tells us that incomes are increasing, and people are spending more.
Now, this is important because - ALONGSIDE that GPS - includes all of that revenue that the country makes to keep itself running. After all, roads need to be built, the military needs to continue running, police and firefighters need to get paid, like buttons need to be smashed…and so on. Now, a lot of those types of services are all paid for through our tax dollars - and, just with any business, there are going to be times where there isn’t enough tax revenue to pay for all the services that we get.
Typically, this is done through issuing bonds and treasury bills - which is just a fancy way of saying: The government will pay people interest if they loan it money. And that loan is guaranteed by the United States, which - lets be real - it’s pretty much guaranteed to pay it back, so people see this as a really, REALLY safe investment.
But - in terms of who actually BUYS and OWNS this debt: here you go:
https://www.marketwatch.com/story/heres-who-owns-a-record-2121-trillion-of-us-debt-2018-08-21
So, here are a few concerns that frequently get brought up:
One: If interest rates begin to rise, the cost of holding on to that debt become more expensive. Right now, since interest rates are next to nothing…the United States holding on to $25 trillion worth of debt isn’t much of a concern. If anything, it’s BETTER to hold more debt at a time where interest rates are low…than it is to hold LESS debt when interest rates are high - just because, with low rates, that debt is cheaper to keep.
BUT…if interest rates were to be at 4%…that debt would begin draining money from other resources, and when the United States needs to figure out how to raise more cash - the worry is that they’ll do it through higher taxation.
Two: The other concern is we just carry on as usual…and then leave it up to future generations to worry about. Maybe THEY’LL be the ones that are taxed higher, maybe THEY’LL be the ones with less money spent on public services…or, we can leave it to them to keep kicking the can down a little further until our Grandkids do something about it.
In terms of whether or not we should be worried about our debt…the answer is, PROBABLY NOT.
When we look at our debt in relation to how much money we make…we’re actually a LOT lower than quite a few other countries. You can see here that, sure, we might OWE the most amount of money…but, we also MAKE quite a lot of money, as well:
https://en.wikipedia.org/wiki/List_of_countries_by_external_debt
Secondly, I think it’s assumed that the plan of action here is to keep interest rates low, and then let inflation do its thing - as long as our economy continues to grow, and innovate…that debt will just sit there, whittling away, assuming we don’t keep adding to it.
And really…because of that there’s no REASON to pay off the debt early. Why would they?
HOWEVER…where I see the biggest obstacle, is IF people stop investing in the United States, and we stop growing as fast as we have been…then the United States will be forced to pay higher interest in their debts to entice more people to lend money, and THAT - in turn - would almost certainly mean higher taxes in the future.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
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NEW: JOIN THE WEEKLY MENTORSHIP - https://the-real-estate-agent-academy.teachable.com/p/graham-stephan-mentorship-program/
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
The United States is, at its core…kind of like a business. It has what’s called a GDP, which stands for Gross Domestic Product - and that’s the entire market value of all the goods and services produced within the United States..the purpose of this is to measure the economic output of our country, see if we’re GROWING as a society, and when that number goes up - it tells us that incomes are increasing, and people are spending more.
Now, this is important because - ALONGSIDE that GPS - includes all of that revenue that the country makes to keep itself running. After all, roads need to be built, the military needs to continue running, police and firefighters need to get paid, like buttons need to be smashed…and so on. Now, a lot of those types of services are all paid for through our tax dollars - and, just with any business, there are going to be times where there isn’t enough tax revenue to pay for all the services that we get.
Typically, this is done through issuing bonds and treasury bills - which is just a fancy way of saying: The government will pay people interest if they loan it money. And that loan is guaranteed by the United States, which - lets be real - it’s pretty much guaranteed to pay it back, so people see this as a really, REALLY safe investment.
But - in terms of who actually BUYS and OWNS this debt: here you go:
https://www.marketwatch.com/story/heres-who-owns-a-record-2121-trillion-of-us-debt-2018-08-21
So, here are a few concerns that frequently get brought up:
One: If interest rates begin to rise, the cost of holding on to that debt become more expensive. Right now, since interest rates are next to nothing…the United States holding on to $25 trillion worth of debt isn’t much of a concern. If anything, it’s BETTER to hold more debt at a time where interest rates are low…than it is to hold LESS debt when interest rates are high - just because, with low rates, that debt is cheaper to keep.
BUT…if interest rates were to be at 4%…that debt would begin draining money from other resources, and when the United States needs to figure out how to raise more cash - the worry is that they’ll do it through higher taxation.
Two: The other concern is we just carry on as usual…and then leave it up to future generations to worry about. Maybe THEY’LL be the ones that are taxed higher, maybe THEY’LL be the ones with less money spent on public services…or, we can leave it to them to keep kicking the can down a little further until our Grandkids do something about it.
In terms of whether or not we should be worried about our debt…the answer is, PROBABLY NOT.
When we look at our debt in relation to how much money we make…we’re actually a LOT lower than quite a few other countries. You can see here that, sure, we might OWE the most amount of money…but, we also MAKE quite a lot of money, as well:
https://en.wikipedia.org/wiki/List_of_countries_by_external_debt
Secondly, I think it’s assumed that the plan of action here is to keep interest rates low, and then let inflation do its thing - as long as our economy continues to grow, and innovate…that debt will just sit there, whittling away, assuming we don’t keep adding to it.
And really…because of that there’s no REASON to pay off the debt early. Why would they?
HOWEVER…where I see the biggest obstacle, is IF people stop investing in the United States, and we stop growing as fast as we have been…then the United States will be forced to pay higher interest in their debts to entice more people to lend money, and THAT - in turn - would almost certainly mean higher taxes in the future.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
Somebody finally watched Tiger King.
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It is waaaaaay to much commercial interuption lately. I get it, you gotta earn money too, but even a cow can't be milked too much. People are going to be feed up too.
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Yeah! 👍
Every time I'm reminded of this I just feel like money is a social construct and nothing really matters
I’ve never heard this point of view concerning the national debt. I’ve heard so many people talk about how the US is trillions of dollars in debt and how evil debt is. This video truly showed a new perspective for me.
if we have hyperinflation, should I invest instead of putting extra money to pay more than the minimum payment on credit cards? Hyperinflation makes it easier to pay off debt right?
Do a quick google search for ECOM BAZZOID someone posted your courses Graham
Do a quick google search for ECOM BAZZOID someone posted your courses Graham
Using the citizens tax money, doesn't really feel like "spending out of nothing/thin air"
If that's what it really is, because I'm just a tad bit confused.
Doesn't mean I'll never understand it though.
Lol. thumbs down to the haters.
I wish Graham was around when I sucked do bad at Sim City…. it was always Taxes vs Dept….damn resources for infrastructure and riots all the time….
This is wrong because we don't "make" much money. GDP is 70% consumption and not production. Also, low interest rates create low confidence in the dollar, thus less people willing to lend and so the Fed will have to monetize the debt further via money printing and devaluing the dollar even more. They cannot raise taxes to make up for the shortfall, they will just print more – then we pay back our debts in worthless currency. It's all part of the plan as the World Reserve Currency.. it's known as Triffin's Paradox. We have to have trade imbalance, print money to make up for it until an eventual collapse of the currency. One does not need to worry about it unless you own dollars at the time when hyperinflation hits.
OMG I just like everything that is explained, thank you Stephan
love your enthusiasm!
Hey Graham let me hold a $1
The real issue isn't that the US has an income problem. It has a spending problem. The amount of actual critical services is a lot lower than the amount of extraneous services that are out there. And another pile of "stimulus" money goes right onto that second pile. They need to get the economy going again, not hand people tax money for sitting at home.
Ugh. The problem with the US GDP picture is that it is essentially due to a handful of industries. Tech….health. I'm sure Google accounts for a huge amount. Makes the US extremely strong and powerful and made Obama look great while he did absolutely nothing but the middle class is suffering.
You didn't need to add all the adds and say "SMASH THE LIKE BUTTON" so many times. You almost sounded like Dave Ramsey with the financially shaming lecture speech. Why did you not mention the fact that our savings are taking a big hit with these stupid low-interest rate environment? Inflation = purchasing power being broken into smaller and smaller units. I'll leave it at that.
You are a fool concerning the national debt which will soon top 30 trillion plus more. The debt will crush this nation in time.
Just seeing if you are smashing old video likes
I personally don’t believe the government will ever raise taxes to pay down the debt.
What I see happening first, is the government defaulting on some of the loans it took out lower the national debt to a manageable level. And this will continue forever.
Great video, I have been watching them for some time. One comment, what you said about the 94% tax rate isn't actually true and is quite misleading. You would only get taxed at 94% for every dollar you would earn above the $200,000. So, your example of making $3 million and only receiving $174,000 is absolutely ridiculous, if that was the case, there would be no upper class in the US as everyone would try to stay below that limit. for every dollar you make above that ~3million you would pay 94 cents, which I agree is a lot, but for an income that high, and with the need to raise taxes, it makes sense. Keep up the good work!
liked for the tiger king comment
This is a very educational video. Thank you.
Smash this graham
Wow too much Commercials. This clip is not 14 minutes, it's more like hour and a half. Just by this book, and do this, and do that, and your life will be better, and will become millionaire. Nothing more. I forgot what was about in the clip. 🙂