The Deficit Myth: The Biggest Lie In Politics

Check out my podcast 1Dime Radio (on all podcast platforms)

The truth about inflation, money printing, taxes, fiat currency, and "the national debt." Debunking lies about what causes inflation and common misconceptions about government spending and "taxpayer money."

Does the national debt actually matter? Do budget deficits matter? Can governments ever run out of money? Can governments print money forever? Does printing money lead to hyperinflation? What causes inflation? What is the point of Taxes? Do we really need taxes? How did the government pay for all of it's big spending stimulus packages? In this video, we use Modern Monetary Theory and real world facts to debunk deficit hawks and pro-austerity taking points.

Timestamp:
0:00 The Myths We Believe
3:14 Contradictions in Deficit Hysteria
4:00 Modern Monetary Theory (MMT)
6:10 The National Debt and Budget Deficits
7:36 Governments are NOT like Households
8:32 Currency Sovereignty
9:57 The Gold Standard vs Fiat Currency
11:15 How Money is Created
13:34 How Government Spending works
17:37 The "Borrowed Money" Myth
19:03 What Government Bonds Actually Do
21:16 Inflation and What Causes It
25:50 The Real Economy
28:25 The Real Purpose of Taxes
32:13 How Will We Pay For it?

Credits:
Written, Narrated, and Directed by 1Dime
Music by:
Battleblock Theatre OST
Voodoo Vince OST
Conker's Bad Fur Day OST
Yoshi Story OST
Kevin MacLeod

Sources and further learning:

Books and Papers:
-The Deficit Myth by Stephanie Kelton
-Soft Currency Economics II by Warren Mosler
-Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems by L. Randall Wray
-Debt: The First 5,000 Years by David Graeber

Lectures and Podcasts:

Check out more 1Dime content:

About 1Dime (not One Dime):
1Dime is an educational channel dedicated to countering one dimensional thought by analyzing socio-political issues through the lens of theory, history, pop culture, and political economy.

[Dimee]

Most likely, every question or objection to the points being made will have been addressed already in the video, so I highly recommend watching the full thing to get the entire picture (For instance, there is an entire segment on the limits to government spending like Inflation and real resources at 20:41).
Video Timestamp:
0:00 The Myths We Believe
3:14 Contradictions in Deficit Hysteria
4:00 Modern Monetary Theory (MMT)
6:10 The National Debt and Budget Deficits
7:36 Governments are NOT like Households
8:32 Currency Sovereignty
9:57 The Gold Standard vs Fiat Currency
11:15 How Money is Created
13:34 How Government Spending works
17:37 The "Borrowed Money" Myth
21:16 Inflation and What Causes It
25:50 Limits to Spending: The Real Economy
28:25 The Real Purpose of Taxes
32:13 How Will We Pay For it?

[benjammin]

Before this video I questioned the idea that we live in a dictatorship of the bourgeoisie. I used to think that Capitalism treated everyone the same and that people got wealthy from rare chance or inheritance. But now I realize that money itself is an abstraction created by the government to justify violently withholding resources. This violent withholding (aka private property) is the defining feature of the bourgeoisie.

[tomweiss]

"It's not the deficit, it's whom the deficit benefits that matters".
Perfect summation of the real issue, thanks for this video.

[kenshultz]

With this system, the poor get poorer, and the rich get richer

[gregmark]

Governments always optimize monetary policy and taxation to benefit their people. Always, always, always. It's just that it's only the rich elite that are "their people".

[chrisdalton]

Finally someone said it. As a former econ student, i was taught a lot of things that didnt match reality. Like if wages = marginal labour productivity, how is it possible that wages stay the same when prices go up if there are not spending all the difference on capital? How tf does the gov purchasing long term securities raise my rent? How are we experiencing "inflationary pressure" if the profits of real estate firms, insurance companies, and grocery chains are rising disproportionate to their costs?

[LeEnnyFace]

'Minimizing deficit' is also imposed by IMF to keep the global south where it stands.

[KevinBalch-dtot]

Even FDR didn’t completely abandon the gold standard as gold still played a role in the Bretton Woods system which was created in 1944 while FDR was still president and his administration had a major influence over it during its negotiation. Ironically, Nixon abandoned it largely over the costs of the Vietnam War.

[peterkratoska]

One thing worth noting, is that while countries that have debt in a foreign currency are at a disadvantage - conversely the US has the benefit of being the world's default currency of trade, and since there is not enough of any other currency to take its place - there is no shortage of buyers of US bonds and treasuries.

[paprika_ame]

This video is 🔥! The leftist space badly needs these kinds of technical explanatory videos on places like economics, and I'm glad 1Dime is filling the niche perfectly.

[CitAllHearItAll]

I like that the conlusion asked the real question: How should we as a nation spend our resources (the real economy). It makes a strong argument for investment into infrastructure, and less into the military industrial complex. It does this, only to leave us with a cliff-hanger, encouraging us to watch his other videos to understand why this priotization is not happening. Nice.

[MechanicalRabbits]

I'm convinced all of this stuff is so hard to understand because it's been purposely made stupidly complex to obscure the fact that it's all made up bullshit.

[drhirise]

The US government is so stingy to the people. If we look at the economic policies of all the other developed countries during thepandemic. All of these governments provided far more support to their people. The economic hardships of all went to the people while the wealthy, and their corporations made a killing from bailouts, and subsidies.

[Gokanaru]

Haven't watched yet but I can already tell this is gonna be a banger :}

[bobchannell]

So deficit spending would only cause inflation if the supply of the purchased resources is constrained...

[fahqahsowl]

Once a person realizes that money is just a myth that almost everyone believes, you understand what this guy is saying. The only problem is, he actually doesn't go far enough. Once you realize that money is a myth that almost everyone believes, you realize it is just a control mechanism. Everything that can be accomplished in this world with money can be accomplished without money.

[jedimindtrix]

I just ran into someone complaining about the deficit on a video about the spending being passed. Dude said we should shut the government down and compared it to someones wife spending too much on credit cards.😂 I basically explained what this video is getting at in as shortform as possible. Then i run across this video today. Definitely going to save this one and link it to people. Unfortunately some people just don't care or want to learn something that goes against their predefined narrative. Imagine comparing the finances of a country with trillions and trillions of GDP a year to your wife or family debt. Absolutely divorced from any and all reality.

[CoffeeAndBusiness]

We do pay this debt in the form of inflation. MMT has already failed in a lot of countries. Zimbabwe, Venezuela, and Argentina to name a few.
Edit: and whenever other countries stop taking debt in dollars we are in trouble. We have already lost our deal with Saudi Arabia.

[Durgenheim]

I love how a shocking number of comments are along the lines of:

“hey 1Dime, you’re wrong because of this laughably simplistic and completely false thing I somehow convinced myself to believe.”

[crearley]

What a bunch of crap ! Governments can't run out of money, but they can print it until it has little to no value. Weimar Germany, Zimbabwe, & Hungary come to mind.