How the debt-ceiling debate is clouding the economy

While the nation worries about the debt-ceiling debate in Washington, Paddy Hirsch breaks down what the debate is doing to the economy. #MarketplaceAPM #DebtCeiling #EconomicExplainers

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[claus]

from benmotorheadrules:
For those that are confused:
airport = economy
cloud/storm = debt debate
planes = investors
passengers = consumers
control tower = American government

thumbs up to get it in top comments!

[hrschp]

@energyparticle @kgtrains I'm sorry this confused you more (it's certainly not what I meant to do!). Essentially I'm trying to say that the debt ceiling debate is like a cloud over the economy, and until it clears, and companies get a better idea of what the economic climate will be like, those companies won't do business. Or at least, they certainly won't expand. That means we're risking a contraction in the economy, and if the situation persists through the election, some business failures.

[Radjabov]

Not so clear as past videos. Please re-make!! Thumbs up for him to see this.

[richXPT]

Pilot: "So is your instrument landing system operational?"
Tower: "No, we needed to pay for the heated parking garage."
Pilot: "I'm not seeing any runway lights either."
Tower: "Shut up and go through the fucking cloud!"

[daveking]

i must say you are the only person i have seen that can actually explain credit default swaps clearly so i can understand !!! what is your background ?

[kgtrains]

Not your best, cause I still don't get it, but very glad your back making videos!!!

[neanderslob]

I don't quite get it. What variable represents the debt?

[hrschp]

@MrCheckitout123 I agree that the debt ceiling is just one of a whole bunch of clouds overhanging the economy. I'd also argue that it's the noisiest and the closest of all the clouds, and until it passes, evaporates or burns off, businesses have no idea how to estimate what the economy will be like going forward, and how they're going to position themselves to do more business and grow.

[ErwinSchrodinger]

Paddy, I like how you always end with the commentary, "needing a drink". What kind of cocktail does Paddy have at the end of the day?

[preciousmetals]

if u look closely at the end, u can see a little leprechaun running to fetch the marker he just threw

[davidmarkfay]

My guess would be the cloud hanging over the airport represents the uncertainty of the debt ceiling being raised. The planes represent firms. If they make the emergency landing, they fail and the passengers (workers) have no money for the crappy airport goods. I am guessing the firms would fail due to buyer uncertainty of what congress decides on the debt ceiling. If they screw up and they land, they fail just like an emergency landing. So they wait to invest or expand. This is one muddy analogy

[beelonzz]

@neanderslob

The cloud represents the debate. The process of debating is causing uncertainty throughout the economy just as the cloud is causing uncertainty for the plane pilots, the people at the airport, etc.

[MrCheckitout]

@h1rschp per Steve Winn, CEO of UPS and many others it is not the debt ceiling. the clouds are the regulation, economoic uncertianty of the entire national outlook. "We want to grow jobs in this country. We want to grow the economy. We need a better economy to get it going. It's a kind of a chicken and an egg situation." Davis CEO of UPS 12/2010

[nemsics]

until we don't understand that this DEBT IS A CREDIT we will be really flying in about who gives value to the money....who prints it or who spends it?

[hrschp]

@daveking777 What you say may be true, Dave. But that's not what's affecting the economy right now. Right now the economy's stalled because businesses don't want to do business until the uncertainty over the debt ceiling debate is dealt with.

[yutuboslaven]

@lordennis01

I am a graduate of electrical engineering at the elite German university therefore I claim the right to call the modern macro economics pseudo sciences. I have to admit that I was a little bit harsh when I said 'analogies are only for the stupid people', because one might regard mathematics also as a kind of an analogy.

With regard to macro economics I endorse the model of Silvio Gesell (unfortunately we don't have that anywhere).

[theflorgeormix]

going to put my own analogy in - Obama & Co. like a Good Confederacy, looking to preserve & protect their own people(the Disenfranchised in this case), Boehner looking to protect all like the North..flat out Civil War, bye bye Stability

[dummspast]

So without a "debt ceiling cloud" everything is fine?? How about noone wants to buy american debt for low interest rates anyway? How about the FED was buying the stuff for the last 3 years? How about they monetise the debt or default? That's some great certanty for businesses right there... I guess you have to revise this video. I would also like you to talk about creating money out of debt with compound interest attached to it and the sustainability of forced exponential growth. thanks

[daveking]

@h1rschp any uncertainty has and will always effect the market, this h`s always been true i agree. Though i feel congress are fully aware of the situation regarding the federal reserve is destroying America. The time to get out of the dollar is now or is indeed very close. China is left holding the so to be worthless dollar paper, so i can see there concern right now. Really you dont need to be a mathematician to work out the trillion dollar debt can never be paid back by any means of cuts, tax

[firefoxmoll]

5 dislikes, they watched die hard 2 last night.