What If The US Paid Off Its Debt?


All countries flirt with a national deficit
at one time or another. But the USA, with more than $21 trillion in
debt as of March 2018, is having a relationship with debt so close they’re practically in
bed together. This mega figure is greater than its economic
output (1-7% of GDP) and, yes, it seems to keep on rising as a general trend. But how did the debt grow that high? And is there any way to bring the balance
sheet back to zero? Why do countries get themselves into debt,
and what are the methods for paying off the deficit? Today we take a look at the events leading
up to the accumulation of this gigantic debt, and we determine if there is any way for the
US to turn this massive deficit around, in this episode of the infographics show – What
if the US Paid off its Debt? Debt is created by either excessive spending
or deep tax cuts. Sometimes tax cuts are justified in order
to spur the economy out of a recession. In 1939 the US debt was at $40 billion and
by the end of the Second World War this rose to $271 billion. After some fluctuations it was still at $271
billion in 1957. But by 1977 it had risen to $699 billion. The US has a long and rich history of spending
heavily on military. Since the nation’s existence since 1776
it has spent 225 years at war and just 21 years in peace. That’s 94% of the countries time at war
and just 6% at peace. US debt spiked after the 9/11 attacks when
America increased military spending to launch its well organized War on Terror campaign. Between 2001 and 2017 the War on Terror cost
$1.9 trillion dollars, so it appears that much of the US debt is incurred by massive
spending in an aggressive defense policy over a long sustained period of time. While some argue that jobs would be lost by
a reduced expenditure on defense a counter argument is that other industries could be
created. Other factors, besides war, contributing to
the rise in debt include the $24.7 billion hurricane Katrina disaster and a $350 billion
bank bailout. The current financial situation is, however
you look at it, a bit of a mess. The country hasn’t always been broke. In January of 1835, the US government succeeded
in paying off its entire national debt – in full for the first time in its history – but
slipped back into the red again shortly thereafter. In the January of 1836 the national debt was
sitting at a comparatively tiny $37,000. From then on the American debt fluctuated
a bit for several years but remained relatively low until around 1863. Shortly after 1948 America began to pay down
the massive debt incurred in the 1930s and 1940s but shortly after 1982 the debt began
to build. From 1992 to 2000 the debt began to be paid
back again only for that huge spike after 2001, and 2008, and the rest as they say,
is history. So just what is national debt? Government debt is money that has not been
raised by taxes and has been spent on goods and services. This money has been borrowed. When a government runs a budget deficit it
costs them more to administer the country than it receives in revenue. To make good this shortfall the government
has two choices. 1 – It prints more money or 2 – It borrows
more money. Although printing more money sounds simple
enough to do, doing so would lead to galloping or hyperinflation. Galloping inflation is when the price of goods
and service rise more than 10 percent per month and hyperinflation is when the price
of services or goods rise more than 50 percent in a month. To print and distribute more money leads to
inflation if there is no corresponding economic growth to justify the surplus cash. Instead governments issue bonds that investors
invest in. The government then gets the money from the
investors and the investors receive an interest on the funds borrowed over a period of time. Just over half of the current $21 trillion
US debt is owed to US investors with the remainder half owed to investors outside the United
States. The more the debt grows the more is spent
on interest repayments and less is allocated to what the government should really be doing
with taxpayers money – investing in local public services. Over time governments risk running into bankruptcy
and seeing their economy collapsing. The US has declared itself bankrupt five times
since its formation. Once when it could not meet foreign debts,
and 4 times due to internal debts. The first time the US became bankrupt was
in 1790 and the last occasion was in 1933. But America is not alone. A total of 83 countries have become bankrupt
in the last 200 years. Debt can be reduced in one of two ways. Debt is forgiven or debt is paid back. Most of the people, countries, and organizations
who are owed money by the States are unlikely to forgive the debt so the US will probably
have to pay it back at some point if it is to reduce the deficit to zero. For a government to start paying back its
debt it will need to spend less than it earns or receives in taxation and run a budget surplus. Seems simple enough, but the problem is that
society becomes accustomed to the level of government spending especially if they directly
benefit from it. Nobody wants to give up what they already
have and nobody wants to pay more taxes. Society in general wouldn’t wish to see
a cut in spending on healthcare, schools, and other essential services. Cutting back on spending leads to less votes,
and a loss of power to the next politician who promises more spending. This is how the problem escalates. So if the American government somehow paid
back its debt then the taxpayer would see more of their tax dollars spent on local government
services and less of that dollar paid back to investors in interest. The overall standard of living should also
rise for most Americans. Voters would need to accept short term financial
pain for long term gain. But with the American political system set
up as it is, a new president could come along and put all of those good years to waste in
a manic spending frenzy. It has happened in the past and will probably
happen again in the unlikely event that America managed to reduce its debt to zero. But who could pay off this rising national
debt? Really you have two choices. The lower and middle class taxpayers could
pay off the debt through tax increases or by inflation or the big business monopolies,
high class politicians and corporations could settle it through targeted taxation. Of course politicians are like everybody else. They don’t want to pay taxes and they don’t
want the corporations, lobbyists, and high net worth individuals who put them where they
are to pay taxes either. To heavily tax the poor normally leads to
sharp rises in inflation and a shrinking economy which is bad for everyone. Paying the debt in full today wouldn’t actually
make too much of a difference in the economy itself but it would speak volumes for US creditworthiness
should a crisis such as the 2008 financial crisis occur once more. So what would happen if the US paid off all
of its debt? The simple answer is – not much. The country would function as it does now
and will probably put in action plans to increase its debts once again. Countries function normally while in debt
as long as the debt is kept to a manageable level and it keeps up with its repayments. So what do you think about the US Debt? Should it be paid off and if so who should
do the paying? Do countries really function better when they
are in debt? Let us know your thoughts in the comments. Also, be sure to watch our other video called
Japan’s Population Problem. Thanks for watching, and as always, don’t
forget to like, share and subscribe, see you next time!

100 comments on “What If The US Paid Off Its Debt?”

  1. The Infographics Show says:

    Is debt logic hard to understand? There's a lot of good comments on what debt is. Do you think you are good at balancing your finances?

  2. Jtrays 101 says:

    What would you do if you had the amount of money that America has?? Comment down below 🤫🤭

  3. Lukeland says:

    China Would Die If It Was Paid

  4. Khondker Rifat Hossain says:

    The Debt is a Myth…The real Debt is net trade Deficit

  5. Ismael Freytes says:

    Cut war addition in usa goverment

  6. James Tucker says:

    I just watch these videos just to see how smoothly you transition into an advertisement.

  7. Willie Lee says:

    23 trillion dollar right now. 2 trillion are from students loans

  8. priyansh daga says:

    Lol, think about british people then , they have to pay 45 trillion dollars just to india 😂

  9. Joe Me says:

    The debt during the civil war should be a big indicator of what that war was really about and considering the emancipation proclamation that was signed near "the end" of the war. Believe what you want tho.

  10. COMMANDER FLAME Gaming says:

    I love the show and very informative I've told some of my co-workers to watch this show as well.

  11. NAME S!!! says:

    Look all this other countries have deaths I don't think they're going to pay them off either

  12. jjellis09 says:

    Inflation… it is a governments way of stealing money (value) from the people('s labor).

  13. Invader Zim says:

    06:51 is the answer and you're welcome. : )

  14. Epocalyps says:

    You put a cartoon of trump when Obama doubled our debt during his term, shows how much people actually pay attention

  15. John Boudreaux says:

    The thumbnail has 2 hawaii`s

  16. OctoSenpai says:

    6:53. You welcome

  17. SN1P3RW01F says:

    It would actually lower our GDP

  18. TS175 says:

    If the us debt was paid off, we wouldn't have a money supply, each dollar is a unit of debt. Without debt, we wouldn't have money. We need a non debt based monetary system to safely eliminate the national debt.

  19. Mitchell Best says:

    But we want to implement healthcare for all and have open borders and let them have access to social programs 🤫

  20. Daniel Peterson says:

    I think I could make the det go down to zero. And I could make it so the government can change the 98% interest go down to 29% for every dollar that is made but live the cost of what they change for making the dollar. This way the price of the dollar stays the price that it is. But this way we would get the price that muffins change for loans. Which one sentencer did when every one else was on vacation. Which became law when it passed and became law. And made it so the internets could not be changed on tell the loans are paid off. But after it gets paid off I would keep the taxes coming in to make high or a very large saving account of some sort to make it so the government could use that interest to send money and ownly the internets in it. This way the government could lower taxes and help the country out. But their is a lot of things that has to be done first. Which our precedent is trying to do but the Congress is trying to stop. We need to do something that would help him out. Thin vote his sons in after so we can keep it going and maybe they would get it started but it can be done. I would tell you more but this is getting to long.

  21. sp1nrx says:

    Debt can be paid off or reduced by using inflation, as a policy, to decrease the value of the debt (think of your parents buying a house 30 years ago and how much that mortgage is worth today) thereby making it cheaper as time goes on. That's why The Federal Reserve targets inflation at about 3% because it is killing the value of the US Dollar 3% per year. It helps devalue the debt.

  22. Matta's Account says:

    they will get more debt from tom nook

  23. Gregor Jefferson says:

    If a country separates or splits, will its debt also split? If not what will happen to the debt?

  24. Colin Fennessey says:

    If our wonderful president Donald Trump would address it would go down

  25. Billy Bob Joe says:

    i for one am happy that this is where our tax money is going to

  26. King Eris says:

    1.9 trillion from 2001-2017. That’s not even close. Your dead wrong. Between Iraq and Afghanistan it’s cost approx 5.7 trillion.

  27. King_L says:

    👍🏼👍🏼👍🏼

  28. Mark Correspondent says:

    The reason why most people are poor is…………………

    Because the US never paid its debts.

  29. witty smitty says:

    It would become a third world country

  30. Bacon Shreds says:

    Welcome to america, if you ask us to pay our debt…W E W I L L N U K E Y O U

  31. Mirou eler says:

    Get rid of welfare which takes up at least 60% of government spending

  32. Arlie Ferguson says:

    People forget so easily that the bailout money for the banks was eventually repaid years later with the profit to the federal government. Maybe we should do it again.

  33. Pat W says:

    Thanks for letting us know

  34. Zach Daniels says:

    Printing more money will just lead to more inflation.

  35. Frze says:

    Easy, through devaluation of the currency, there is no way to pay it so the only way to is by making the 20+ Trillion dollars worthless and then happily paying it, its no longer worth anything but its still the right amount.

  36. BlueMusket_ 101 says:

    Yeah, Now King.Louis Died….BECAUSE AMERICA DIDN'T PAY ITS DEBT, (I'm On £100 Debt)

  37. Orlando Carrillo says:

    Response to the question in the title: Nothing.

  38. TheRossManCoolMan says:

    So I guess we are just gonna forget about the 10 trillion incurred between 2008-2016 okay cool yeah let’s not go over why

  39. California Dreaming says:

    The US had about one trillion in debt when Reagan took office, but he tripled it during his two terms. After that, almost every president since at least doubled the debt during his two terms — exponential growth. Most people assume this is linear because they never took enough math. But this is very bad because financing the debt keeps getting harder and harder as time goes on. Eventually we will default because, yes, we have our own currency. But eventually “investors” will lose faith in that currency and so we won’t be able to print our way out of it since our dollar won’t have value.

  40. Mic says:

    Hey, get the facts straight about military spending! The U.S. brought in $4.1 Trillion dollars In 2018 and the U.S.defense was 15%, 15.9% on non-defense (education,law enforcement,transportation etc…), 7.6% interest and 61.5% on mandatory (medicare,medicare and social security). Now, what spending is killing us the most? Medicare, medicare and social security! Not military spending!!! That's barely a fraction.

  41. Inoksa Dr Oz says:

    If United States can borrow money and be in debt instead of printing money which devalue the rate of dollar, then why can't the other countries like Venezuela and Zimbabwe not be able to borrow money but instead they resort to print more money which leads to hyperinflation and makes themselves more poorer? While US keeps on borrowing money and always stay rich while being in huge debts? How so?

  42. David Adams says:

    Everyone should be paying on the national debt. I think a small sales tax should be applied to literally everything sold in this country and a small tax on all import items based on the price of the product. The government should work to reduce spending where ever possible by eliminating waste and reducing costs in the long run like installing solar on or a ppa to procure renewable energies for government buildings, installing battery systems in all gov buildings and pass a law that mandates electric companies compensate for consumers generating electricity for the grid so the gov can offset further electricity costs while helping to stabilize the grid and reduce carbon emissions, maybe have more federal prisons grow and package food to reduce the cost of feeding the military and schools while also giving inmates more things to do and more experience for when they get out to reenter society. There should also be a small tax paid by everyone each year that depends on your income bracket and the funds by law should only be able to be applied to the national debt upon receipt. These taxes should automatically expire after a predetermined amount of years, how ever long we estimated it would take to pay off the debt, unless the debt has not yet been paid off yet in which case it would be renewed once a year. These taxes would not be eligible for any re-appropriations or extentions if the debt has been paid.

  43. Joseph Stalin says:

    Greece: I WOULD HAVE MONIES!!!!!

  44. Greg M says:

    The problem here is that Your numbers are wrong! You've set a totally FALSE foundation

  45. Darren Ó hAirtnéide says:

    Why can’t they just print more money secretly and say nothing to no one and slowly use it??? Shur who’d know??

  46. lakumdiinukumwaaliadin says:

    Debt to whom?

  47. Deathrayed Gaming says:

    How about they print the Danm money 🤦🏼‍♂️

  48. Ana Ly says:

    0:13 Hawaii not part of USA yessah

  49. adolf hitler says:

    U want your money back, come take it yeahhhhh that's what I thought we don't owe nothin😂😂😂😂

  50. Jesus From Hyrule says:

    The rich should be taxed to help relieve this debt
    Having debt is bad
    Taxing the poor is unfair because they thrive on the little they have
    The rich have an abundance and will probs still have it after tax so get them
    I know they earned their money but every human being has an obligation to support eachother the best they can and the rich definitely have more capacity
    If the poor randomly got rich I’d make the same claim

  51. Dustin Shear says:

    Basically skips over the elephant in the room. Entitlement Programs. FDR is honestly one of the worst presidents in history. He’s the founder of The New Deal which lengthened the Great Depression by another ten years. 60% of the federal budget is allocated to Social Security, Medicare and Medicare. The federal government has no business in operating in these arenas. These programs are headed for insolvency. I will never collect on these programs. I would be better served by keeping my own money because I am clearly a much better steward

  52. Salty SaladYT says:

    The USA is a giant college student

  53. LePrEcHaUn_R6 says:

    So after a couple decades, the USA could pay off the debt while feeling very little consequences.

  54. lostInSpace 1 says:

    USA must sell drugs to other countries..

  55. Eduardo Martinez says:

    Maybe the US Gov should sign up for Skillshare

  56. Sean Post says:

    In every government video he takes small shots at trump yet in this video hes the one fixing it

  57. Fast FoxTTR says:

    Stop bumping the microphone

  58. Dylan Sims says:

    We can't afford Democrat policies because of all the hand outs they are willing to give people instead of having people earn what they have

  59. qtNahsty - says:

    That’s a pretty big “what if”

  60. REALVIOLETSAREVIOLET says:

    Apple: I ain’t helping.

  61. REALVIOLETSAREVIOLET says:

    Okay first of all we’re not doing that.

  62. Matthew Stout says:

    After the debt pay off in 19th the US suffered major catastrophic economic decline. Debt is what keeps the machine moving. People are relying on the full faith and credit

  63. Jacob DeMarsh says:

    You can't get outta debt when every bailout dollar has debt attached to it. Paid to the Fed…who creates the money.

  64. Preston Pfeil says:

    They dont me today i have a bullet with my name on it. So what

  65. Lykos says:

    Why are there two Hawaiis in the thumbnail?

  66. BeatDropz says:

    how the us owe money for hurricane catrina

  67. Jb Joe Sisusa says:

    This is better than my history class 😂 like if you feel the same way

  68. canaleszz says:

    i would like this show if it wasn’t politically biased.

  69. PK Blader says:

    Tax the ceos and universities

  70. I’m Bigmam says:

    I think the government should put a $2 tax on Americans. Then they can use half the money earned to keep the normal spreading America does and use the other half to try to pay back the debt

  71. Cody Townsend says:

    The healthcare system increases our debt..and does nothing

  72. Ani Mationz says:

    Who are we in debt to ?!

  73. Freddy R says:

    What if, yea right. That will never happen.

  74. Alexander Georgiev says:

    The real question is: why are there two Hawaii's in the thumbnail?

  75. buster117 says:

    They need OIL!

  76. Matt Wright says:

    Entitlement spending is 2/3 of the national budget. The military and everything else makse up the other 1/3. Your solution? Cut the military. The creators of this video apparently dont know what we spend money on to begin with.

  77. Hippity Hoppity says:

    How does an investor call the US national debt? The Bermuda triangle.

  78. jello v-e says:

    Texas cant spend more than it makes dont even think texans need to pay off that debt

  79. James Yorizzo says:

    Just put a tax on tattoos. Problem solved.

  80. Ipan Bontang says:

    Its okay American Family is a part of Freemason

    Freemason are the richest organization,a lot of gold in the safe,they will pay the debt

    Lannister always pay his debt

    Wait what?

  81. Rhye Lince says:

    Tbh the extremely wealthy should be taxed more

  82. Gregory Heeren says:

    Obama is to blame for most of it!!!!

  83. tawonga munyanduri says:

    How did the debt grow that high?, Obama

  84. Christopher Ramsey says:

    You mentioned Hurricane Katrina but didn’t even mention Social Security?

  85. Andrew Copple says:

    I completely disagree. Though I couldn't watch the whole video because the audio is so janky, debt payments slowly take over the budget when you let it get out of control. If we're only paying the interest while increasing our debt, eventually it will become too massive to pay off, and destroy the country.

  86. Darrell Tallman says:

    Or we could not bail out banks and big companies… that would help alot.

  87. Timothy Weststrate says:

    Hmmm, so they want more of my money that I’m responsible with, but they have no intent of being responsible with it. Nice.

  88. Spectical Z3 says:

    5:18 is that the yt demonitization symbol

  89. Sayyar Awais says:

    Question is
    Whom does the US owes that debt anyways
    Is it those 🏦 families who lend them money and architected the wars ? 🤔

  90. Petroleum Crypt says:

    Last time we paid off our debt we were put in an economic depression. Shouldn't have left that out. That's crucial information.

  91. Jordan Slack says:

    A country's money originally comes from a bank that wants it back with intrest. And how can u pay back more than exists

  92. Greg Owens says:

    HOW ARE WE IN DEBT WHEN WE PRINT MONEY!!! WAKE UP!!!!

  93. Águila701 says:

    When Clinton left office the U.S had a surplus. When Bush came into office he used that surplus to launch the Afghan war. Now year after year the deficit only grows. Afghanistan really is the graveyard of empires….

  94. BAN-MONEY says:

    when you reach the hard part….PAY YOUR DEBT….you start on adds? Kinda….

  95. Matthew Parker says:

    No mention of discretionary vs mandatory spending, and no mention of Social Security, Medicare, or Medicaid which together comprise roughly 50% of the U.S. Federal budget, but specifically mentions military and defense spending which makes up just 15%. Unsubscribed.

  96. Trey Coopamn says:

    Why would you show Trump when talking about creating debt? Obama more than doubled our national debt from ~5t to ~14t, while Trump in 3.5 years has added only ~1t? This is blatant disinformation.

  97. 9/11 did bush says:

    Thanks obama

  98. REALVIOLETSAREVIOLET says:

    HAHAHAHAHAHA no

  99. REALVIOLETSAREVIOLET says:

    The thumbnail.

  100. ClashAround Coc says:

    Infographics:US has 21 trillion dollar in debt

    Also infographics:as long as debt is kept at a manageable amount

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