I like how he tries to sound bipartisan, but the upshot of what he said is that we need to eliminate Medicare and Social Security immediately or the whole world is going to hell in a handbasket.

That's a pretty minority viewpoint, even among rightwing economists.

The main thing that would cause a US default was if a) you needed 60 vote supermajority in the Senate to pass any laws in the US, and b) one political party was doggedly committed to filibustering any and all attempts by the majority party to raise taxes, or cut entitlements.

That sort of thing would be a good sign to investors that we can no longer manage our fiscal situation, unlike us running up a high debt/GDP ratio in an economic crisis which is completely normal.

This doesn't really explain how the Greek debt crises came about. This article does a pretty good job though:

http://www.economist.com/blogs/charlemagne/2010/03/empathy_short_supply

He wasn't saying that you need to get rid of Medicare and Social Security at all.

He did use Social Security (and Defence) - the top expenses the US has - as an example that the budget isn't even close to balanced, but he also said that a balanced budget isn't an issue as long as there is cheap credit. If Greece is bailed out and the first world countries are able to get cheap credit then there is no issue with the unbalanced budget. As long as banks etc. loan confidently to first world countries then there isn't a problem and no government programs have to be eliminated.

That also means it would be very good for the economy (though not necessarily the safest bet personally) to buy US Bonds right now, which are effectively personal loans to the government. If the government has access to money then everything will continue as it should.

>> ^NetRunner:

I like how he tries to sound bipartisan, but the upshot of what he said is that we need to eliminate Medicare and Social Security immediately or the whole world is going to hell in a handbasket.

I'm not sure if I'd agree with the basic premise that borrowing money is actually cheaper than paying for everything up front. We are a very rich nation, paying for everything the government currently does would not be a problem, if we were willing. The reason we don't pay for the cost of government services up front is because politicians are generally weasels, and it's much easier to give a great deal to your constituents, while charging future generations who obviously have no say in it.

Even if the increase in our GDP actually outstrips the interest rate on our loans, that doesn't mean it's a good idea to borrow as much as possible. That would only be true if our increasing GDP is CAUSED by the investments we make with all that borrowed money. If not, then we're just screwing ourselves out of a lot of the benefit of our work since so much of it is going to make the minimum monthly payment on our China credit card.

But I could be wrong.

*promote

Self promoting this video back to the front page; last published Saturday, May 1st, 2010 3:46am PDT - promote requested by original submitter Skeeve.

..this cat just wants to hug hot, poor, Greek chicks
*nerd

The other part of the problem with the Greek economy is that very few citizens pay taxes. There is such widespread mistrust of the government due to corruption that they just don't bother.
http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/8509244.stm

Just throwing money at Greece is probably not going to be a long term solution, they have bigger fish to fry.

>> ^Skeeve:

He wasn't saying that you need to get rid of Medicare and Social Security at all.
He did use Social Security (and Defence) - the top expenses the US has - as an example that the budget isn't even close to balanced, but he also said that a balanced budget isn't an issue as long as there is cheap credit. If Greece is bailed out and the first world countries are able to get cheap credit then there is no issue with the unbalanced budget. As long as banks etc. loan confidently to first world countries then there isn't a problem and no government programs have to be eliminated.

I guess I spend too much time inside the heads of conservative zealots. I agree, bailing out Greece is kinda necessary or we're all screwed, and rewatching the clip I did see that he did slip that in fairly quick at the end.

It's just that I zeroed in on his general theme of "debt is bad" coupled with the admonition that we couldn't balance our budget without eliminating Social Security and Defense. I think he assumes that everyone out there hears that and thinks "oh, well, we can't do that" when in reality about a quarter of the US hears that and says "yeah, we need to do that, socialism sucks!"

I'm more used to people addressing irrational right-wing bromides directly, not assuming the audience has a reasonable grasp on reality.

Ugh, this is retarded.

He doesn't understand the current situation in Greece, its public sector is full of inefficiency and lots of phantom job posts, corruption and misleading economic data is rife. It has no relation to the US.

He doesn't understand the current situation in Greece, its public sector is full of inefficiency and lots of phantom job posts, corruption and misleading economic data is rife. It has no relation to the US.

So the US government ISN'T full of inefficiency, phantom jobs, corruption, and misleading economic data? I rather think that Greece's economic failure is very much related to many of the current U.S. economic issues. Greece's economy failed for very simple reasons... It has too many public sector workers who aren't producing anything, and not enough private sector workers to pay the taxes to support the social system. The U.S. is headed that way.

If Greece is bailed out and the first world countries are able to get cheap credit then there is no issue with the unbalanced budget.

The U.S. Housing bubble collapse disagrees... Borrowing money that can't or won't be paid back is horrible economic policy for citizens and governments.

Tags for this video have been changed from 'Greek, debt, economy, vlogbrothers' to 'Greek, debt, economy, vlogbrothers, John Green' - edited by RFlagg

Understanding the Financial Crisis in Greece has been added as a related post - related requested by RFlagg on that post.

Tags for this video have been changed from 'Greek, debt, economy, vlogbrothers, John Green' to 'Greek, debt, economy, vlogbrothers, John Green, Greece' - edited by RFlagg