Can Presidents "Make or Break" an Economy?: Government Debt and the Presidency

The video discusses the impact of a minor human error on government borrowing costs, leading to a significant increase in interest expenses. It highlights the US credit downgrade from AAA to AA Plus and the political implications of debt ceiling negotiations. The potential global economic impact of a US debt default is analyzed, emphasizing the importance of US bonds as a stable investment. The video concludes with a satirical guide on how to destroy an economy by undermining currency, industry, and skilled labor.

What was the impact of a minor human error on government borrowing costs?

• It doubled the borrowing costs

• It increased borrowing costs by 0.6%

• It decreased borrowing costs by 0.6%

• It had no impact on borrowing costs

What is a pocket veto?

• A veto where the president refuses to sign a bill

• A veto that can be overridden by a simple majority

• A veto that is automatically enacted after 10 days

• A veto that requires a 3/4 majority to override

Why are US government treasuries considered cash equivalents?

• They are not backed by the government

• They have a fixed interest rate

• They are stored in regular bank accounts

• They are as stable and liquid as cash

What could happen if US bonds are perceived as unstable?

• Their interest rates would decrease

• They would be guaranteed by foreign governments

• Institutions would seek more stable alternatives

• They would become more valuable

What is one way to undermine a country's currency?

• Run up massive debt and default

• Increase infrastructure spending

• Enhance skilled labor migration

• Strengthen the national industry

How can a country lose its industrial capacity?

• By enhancing educational funding

• By increasing military spending

• By adopting foreign currency

• By underfunding infrastructure

What is a consequence of reducing funding for education?

• Growth in industrial capacity

• Stability in the economy

• Decrease in skilled labor

• Increase in skilled labor