016: Borrow, Spend, Repeat: The Cycle of U.S. Debt and What’s Next (Part 1 of 2)

In this eye-opening episode, we originally set out to discuss how presidents inherit economies from their predecessors. But as we dug deeper, we realized the bigger story lay in how the U.S. government borrows money, who holds this debt and what that means for us as citizens. Along the way, we uncover startling facts about national spending, the Federal Reserve and the disproportionate power held by the ultra-wealthy and large institutions.

 

Understanding how the government functions, how money flows through its systems and the massive levels of debt it has accumulated is crucial for every citizen. These issues impact policy decisions, economic stability and especially our daily lives. This isn’t a Republican or Democrat issue—it’s an American issue that affects us all, no matter who is in office. Before we dive into Part 2, we lay the groundwork by breaking down these fundamental aspects of government debt—buckle up!

 

10,000-Foot View of this Episode:

• The Pivot to Government Debt: Our original plan was to analyze how presidents inherit economic conditions, but as we researched further, we saw a much larger and more pressing issue—the rising debt crisis and its long-term implications.
• Who Owns the Debt? The national debt isn’t just a number; it’s owed to specific entities. We break down the biggest debt holders, including foreign nations, private institutions and even internal U.S. government programs.
• Understanding Treasury Securities: The government doesn’t just print money—it borrows it through complex financial instruments like bonds, notes and bills. We explain what these mean, who buys them and how they shape economic policy.
• The Role of the Federal Reserve: The Fed isn’t just a bank—it plays a crucial role in setting interest rates, controlling inflation and even holding a significant portion of U.S. debt. We discuss how it operates, its decision-making process and its impact on everyday Americans.
• Mind-Blowing Debt Comparisons: A trillion dollars is an unfathomable amount, but we put it into perspective with real-world comparisons. If you spent $1,000 a day, how long would it take to reach just one trillion? The answer might shock you.
• Government Spending vs. Revenue: The U.S. government consistently spends more than it earns. We analyze budget reports, highlight major expenditure categories and discuss whether deficit spending is sustainable.
• The True Cost of Interest on Debt: The debt itself is one issue, but paying the interest on it is becoming an even larger problem. We break down how much of the federal budget goes toward simply servicing existing debt rather than funding new programs.
• Corporate Tax Avoidance: While individuals shoulder a tax burden, many corporations manage to legally pay far less. We explore how tax loopholes and recent policy changes have shifted the tax burden away from the wealthiest companies and onto the rest of us.
• Strange Laws Still on the Books: We take a humorous detour to discuss some of the weirdest and most outdated laws still technically enforceable in various states. From bizarre restrictions on attire to unusual rules about hunting and public behavior, these laws make us wonder—who wrote these, and why are they still around?

 

Memorable Quotes:

• "Monetary policy determines how much money there is. Fiscal policy determines how much of it gets spent by the US government." – Cole
• "What if our government used ChatGPT to figure out how to cut wasteful spending?" – Mecca
• "the intent of capitalism at the start was not to create entities whose sole purpose is to generate profit, but it was to generate profit through innovation." – Cole
• “Peanut brittle is damn good.” – Mecca
• “This country does a horrible job of educating people on financial literacy. Maybe it's because they don't freaking know!” – Callie
• "Our entire economy is built on a foundation of debt." – Cole
• "We need to be able to differentiate between fact and opinion." – Callie
• "They're spending more on interest to debt than assistance to individuals." – Cole

 

Resources Mentioned:

• National Debt Year by Year from the US Department of Treasury via ABC News
• To Whom Does the US Government Owe Money? as of September 2022 from the US Department of Treasury via Political Calculations
• 2024 US Government Revenue and Spending from the US Department of Treasury via USAFacts
• Federal Government Finances over time using data from the Office of Management and Budget (OMB), Census Bureau, Department of Treasury and Bureau of Economic Analysis (BEA) via USAFacts
• Government Debt Ranking as of October 2023 from Visual Capitalist
• G20 GDP Comparison Chart via Visual Capitalist
• A World of Debt Comparison Chart via Visual Capitalist
• Years of Federal Government Finances Per Person, by Category from the Office of Management and Budget (OMB), Census Bureau, Department of Treasury and Bureau of Economic Analysis (BEA) via USAFacts
• Corporate Profits of the US, by Industry via Statista
• The 35 Percent Corporate Tax Myth Study by the Institute on Taxation and Economic Policy on corporate taxation

 

Call to Action:

What are your thoughts on government debt and corporate taxation? Should corporations be paying more? Should spending be cut? Let us know your thoughts! Comment on YouTube or our social media, send us a message or an email with your thoughts. We want to hear you takes!

 

And don’t forget to tune in next week for Part 2, where we tackle the word no one wants to talk about—oligarchies. We’re diving into who really holds the power, how wealth influences policy, and what this means for the future of our democracy. Plus, we promise there will be FAR less math! Don't miss it!