More fiscal cliff analysis | American civics | US government and civics | Khan Academy

A bit more in-depth analysis when thinking about the fiscal cliff. Created by Sal Khan.

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[mintoocool]

I got goosebumps listening to this. People used to me (a computer science guy who used to work on financial instruments etc), because I know this stuff a little bit. Probably not as well as Sal (I didn't go to MIT or Harvard). But Sal organized and presented this so well and in such a simplistic way! Bravo Sal! Well done!

[khanacademy]

That's almost right. Capital for investment comes from savings (assuming that you aren't just stuffing the money in a mattress). Even when you keep money in a savings account, the bank is lending that money out. Now the question is in this context whether there is a shortage of capital to be invested right now. Interest rates (short and long term) are at all time lows. Corporations are also sitting on a lot of cash. Not clear that adding more savings will lead to more investing.

[xpsgc]

Thank you Mr. Khan... i'm much happier getting my information from you than ANY other news program on television

[clark_crisp]

Sal, thank you for making this video. More people need to watch and understand this.

[yogiudo]

I'd love to see a video on peak oil and the possible relationship to the global recession.

[cheese]

Thanks, good video, I learned more watching your video than listening to talk radio hours.

[jacobm]

thank you so much for posting...so much better than CNBC.withh them having.so many commericals and so confusing too!!!...this is the kind of detail i love..THANK YOU

[wharrison]

Thank you for the straight talk...we are falling off the cliff by design...

[Pyrrhic.]

1. US does produce
2. Government does not finance spending through printed money, thats why we have budget deficits.
3. He criticize the Fed without understand anything about monetary policy
4. You dont hold money for its value, money is for medium of exchange. If you want to hold on to value, you buy gold, oil or other commodities.

The economy is so complicated, even the greatest economic minds cant even comprehend it. But atleast by understanding economci models, you can see partial pictures.

[gshooting]

It isn't just Keen saying this. There are economists (mostly Post-Keynesian) in America saying the same thing, the Modern Monetary Theorists (MMT) for example. If you just search on Google "loans create deposits" you'll come across some MMT sites saying that most people have the causation backwards.

[realdealio]

Thanks for the "Fiscal Cliff Notes"

[sandovalxY]

Hi, I have a question not related to the contents but to the software you use for the presentation/videos. It is excellent! can you share than program name(s)?

[astroboomboy]

The idea behind citizen wage is that when everybody get equal amount of money, then there is no need for a bloated bureaucracy to decide who gets what, and how it is divided, and how insurance, health care, schooling, etc, is taken care of. Some economists say that just by cutting the bureaucracy, we could hand out close to 1/4th of what is the minimum income in the US today to every citizen.

[lugankid]

Just watched the video and it was very interesting. I don't know if he's basing his bank double book keeping premise in australian banks, but its completely untrue for US banks that they can't lend out their own deposits. You look at a bank's balance sheet, and you can see that the level of loans directly responds to deposits. Any extra deposits are reinvested into money market funds. If there are not enough deposits, thats when banks borrow but they have to pay interest on those liabilities.

[CalvinLeman]

This helps me in my messages to Obama and to Congress. You give the only sensible explanation.

[mistersparkmeister]

Please Kahn, you really need to present this material accurately to students and the world. Deficits don't go down dramatically in any scenario since your debt numbers are 1/5 of actual!

[cwoclingensmith]

4:50 MISLEADING. We ran surpluses but we didn't "pay down" any debt. The drop in the line doesn't indicate a drop in debt. It indicates a drop in debt "relative to GDP."

[Darthreloy]

khanacademy, thank you. That was awesome.

[samalan]

This video is great!! Keep it up Sal:)

[marklee]

I say we go over the cliff. It may not be very fun short term, but long term it would really help us. Decreasing our debt to GDP percentage is the most important thing we can do for ourselves. Don't buy the hype. If you want to help the economy, increase our GDP by making more money. Work more, start a business, ask for a raise. More money moving around the economy equals more growth in GDP.