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Sofa King said on April 21st, 2011 at 11:10 am

You can buy snakes on Amazon?

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Cespinarve said on April 21st, 2011 at 11:50 am

Okay, having learned what a debt ceiling is, my question is thus:

If the American debt is at 14 trillion, the means they have borrowed at least 14 trillion dollars. So WHO is lending them money, and WHY? I mean, Once someone’s debt passed a trillion dollars, I’d be thinking that their not finically responsible, and probably not give them any more money without reasonable cause.

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Once someone’s debt passed a trillion dollars, I’d be thinking that their not finically responsible, and probably not give them any more money without reasonable cause.

Argh.

You are making the idiotic comparison of a nation to a person.

People do this all the fucking time and it’s incredibly irritating because people who make it have no comprehension of the orders of magnitude of difference in dollar amounts we’re talking about here. The USA has a GDP of 14 trillion dollars per year – to make my own use of the irritating comparison of a nation to a person, this is like saying it’s irresponsible to loan a person who makes $100K per year a loan of $100K to buy a house – especially when that person has never missed a payment on any of their previous debt EVER in the entire history of them borrowing. No banker would pass that up.

(And to make the analogy even worse – it’s simpler than that. It’s generally more like the US asking someone to float them a couple thousand bucks until payday and they’ll pay them back with a good interest rate. That’s the orders of magnitude of lending and borrowing we’re talking about here – even after Bush ramped things up with his expensive wars he didn’t want to pay for.)

Now that’s an incredibly simplistic analogy and I hate it because it’s basically wrong on every level (like the electron shell model for an atom – instructive but wrong) but you need to get the numbers into perspective. A nation is not a person, and the assets of the USA are immense. Expecting the USA to eventually be able to pay off its debt (with interest) is not an irresponsible thing to do. But if the US decides to voluntarily commit economic suicide, suddenly things don’t look so good.

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The Dems are right: we need to raise taxes. The Repubs are right: we need to cut spending. Nobody wants to do either though, because both hurt the American people during times of economic hardship. Both need to be done though, unless America wants to keep running by borrowing money to pay for everything it can’t afford.

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I wonder what the Chinese are thinking of these shenanigans.

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Die Macher said on April 21st, 2011 at 12:40 pm

The trickier part is, raises taxes on whom? And cut spending on what? If people could agree on those answers, then it would get done right quick, I should think.

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The Chinese want the debt ceiling increased very badly, both because they don’t want their dollar holdings devalued and because if the dollar collapses a lot of their export strategy for the Chinese economy collapses.

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The Chinese have also been deliberately undervaluing the yuan to give them a competitive edge in foreign markets, figuring volume will serve them in the long run. A world wide recession gives them no place to retreat to.

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@Jer-

I agree with absolutely everything you said, but I will note in passing that I have spoken with a lot of people who should really know better that using GDP to calculate a governments potential assets is not only wrong, but an example of immoral thinking.

I kid you not. When asked to unpack that, the rationale I get is that GDP belongs to private citizens, not to the government, and to treat this private wealth as an example of potential government assets is like regarding a bank robber as a good credit risk because he can just go steal a million dollars to pay you back.

That actually worries me a lot more than people who simply don’t know what the debt ceiling is, but think debt is bad in general.

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MGK, looks like you meant to write reserve currency, not community. Good point though; the debt ceiling is not understood. The debt ceiling is constantly raised, by both parties, but it sure makes for awesome, I mean stupid, political theatre.

dirge93: Cutting spending at this time is actually not a good idea. In the long run, yes, health care costs have to be reigned in to prevent a growing, burden, and that’s what all the Health Care reform was about. But cutting government spending now, when demand is low and private businesses have no incentive to produce, is shooting yourself in the foot, since only the government can fill the demand gap (because only the government has the money and long-term incentives that make this possible). Furthermore, cutting spending means cutting social safety nets, cutting education, cutting services ie. jobs, which would all make the suffering worse, not better.

This is why what makes sense to a family makes no sense to a country, in terms of finance.

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Robert Reich had an interesting piece on APM’s Marketplace last night, stating that although all the sufficiently educated parties agree that this is suicide to not do, the parties are dragging this out and playing politics with it. He goes on to underline that traditional political process is where this should be done, but his biggest point was to inquire why there have been no representatives from America’s corporate citizens to complain about this.

It’s a good question to me too, because it’s one thing when the members of the world’s biggest/stupidest reality show (hint: Congress) are throwing bitch-fits at each other, but when there’s money on the line, why aren’t we hearing anything from thoes who are focused on profit to the ignorance of all else. Shares will only drop if this happens.

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Or I could just link it

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Cookie McCool said on April 21st, 2011 at 2:35 pm

I shall save all the Canadian coin which the dirty rat bastard Coke machine spits back at you but refuses to accept in turn, because I obsessive-compulsively plan for ALL apocalypses, even the ones I don’t understand.

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The Chinese have also been deliberately undervaluing the yuan to give them a competitive edge in foreign markets, figuring volume will serve them in the long run. A world wide recession gives them no place to retreat to.

would someone care to explain this to the economically ignorant (ME)

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Kid Kyoto said on April 21st, 2011 at 3:19 pm

As a native NYer living in exile in the south…

“In economic terms, this is like four-fifths of the United States wanting, say, New York City to be blown up with a nuclear bomb; ”

I think that sounds about right. It’s hard to understand for people outside the US but the rest of the country HATES us with GR8 H8. Sort of the way the rest of the world feels about America, that’s how Americans feel about NY.

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It’s hard to understand for people outside the US

Excuse me, I live in Toronto. We have it worse than you do.

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would someone care to explain this to the economically ignorant (ME)

China’s pegged the value of the yuan to the dollar. Dollar goes up, yuan goes up; dollar goes down, yuan goes down. (China can do this because it’s a totalitarian dictatorship when you get right to it.)

This means the yuan is artificially kept low against the dollar – and by virtue of that most other currencies as well – which means that China exports profitably (which it wants) and imports cheaply (which it also mostly wants).

However, the result of this is that a surplus of dollars is created. Which China takes care of easily by buying Treasury bills.

However, if the world has a big recession – say, because the dollar crashes because Republicans are idiots and don’t want to raise the debt ceiling – suddenly China is in trouble.

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Cookie McCool said on April 21st, 2011 at 5:02 pm

People hate Toronto?

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Kid Kyoto said on April 21st, 2011 at 5:39 pm

“would someone care to explain this to the economically ignorant”

To add to MGK’s answer. Usually when a country exports way more than it imports (like China does and Japan did) the value of the country’scurrency goes up.

IE Japan sells a million Toyotas, walkmans, etc to the US, and are paid in dollars. Well they need to turn those dollars into Yen to pay their bills. When lots of people are selling dollars and buying Yen the price of the Yen goes up, the dollar goes down. Which means back in the US the price of a Toyota or a Walkman goes up so we buy fewer of them, Japan exports less and there’s more balance (in theory, in fact Japan was able to keep exporting be keeping up quality and innovation and cutting costs).

China however simply never cashes in its dollars. Rather than convert them to Yuan/Ren min bi (same thing) they keep their profits in dollars and use them to buy US bonds. This does 2 things, it keeps the RMB from going up the way the yen did in the 80s, AND it gives the US a chance to borrow back all the money its been spending on China. So both gain in the short run.

But now things are way out of balance, Chinese prices are lower than they should be, the Chinese people aren’t gaining from their prosperity (since most profits are not cashed in) and Chinese growth depends on the US spending more than it earns.

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Kid Kyoto – I am a New England native (RI, woo!) and a die-hard Red Sox fan… and I *don’t* hate NYC.

As much as I hate to admit it, New York is an incredible city. Admittedly, it can be incredibly full of itself, and it’s certainly not without its flaws, but when I want to point to a dynamic engine of American culture and an occasional beacon of American ideals, I point to the Big Apple.

Just not to those rotten ****ers in pinstripes, because they are bad people who eat babies, feast on the suffering of innocents, and wash their uniforms in unicorn blood.

Of course, I don’t why the folks around you doing their hating. Politics? Perception of arrogance? Something else?

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This means the yuan is artificially kept low against the dollar – and by virtue of that most other currencies as well – which means that China exports profitably (which it wants) and imports cheaply (which it also mostly wants).

Wait wait wait, this doesn’t make sense to me at all. If their currency is artificially low, then exports are actually less profitable, and imports more expensive. What I thought made up for it is that everyone wants to do business from China because it’s so cheap, so China keeps up it’s economic output, even if the margins aren’t great.

Correct me if I’m wrong.

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Kid Kyoto – native Californian here, and to my knowledge we hold no special animosity towards New York City or her natives. Save for the Yankees, but we can all agree that’s to be expected – as noted above, they do eat babies.

For my part, I envy you guys for the amazing food you have. I have to drive an hour and a half to San Francisco to get a good cannoli, whereas you can probably walk five minutes in any direction.

I think that the hatred of places like New York have been subsumed somewhat into a more general hatred of blue or red states, actually.

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Darth Paradox said on April 21st, 2011 at 6:22 pm

Every time I see someone comparing Toronto and New York, I get Three Dead Trolls in a Baggie stuck in my head.

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@Cookie McCool-

Not a native Torontonian here, but basically all my Canadian friends are from there, and it’s not so much that other Canadians hate Toronto (although some do, and for ugly reasons having to do with Toronto being maybe the least white city in Canada) as that Toronto consistently gets the shit kicked out of it by the federal and ESPECIALLY the provincial governments.

Running implicitly against the city is a time-honored tactic at the Ontario provincial level.

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MGK is right. Toronto is the New Jersey of Canada, if New Jersey thought it was hipper than new york.

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Pantsless Pete said on April 22nd, 2011 at 1:39 am

Speaking for Australia, I think I would like to have some Americans dance around for my amusement using my money that is actually worth something for a change.

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HonestObserver said on April 22nd, 2011 at 2:57 am

I’m sure that President Trump will be able to handle this much like he handled his business ventures.

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I’m a native Torontonian, and people in BC were total assholes to me when they asked where I was from and I cheerfully responded. My friend from Edmonton hated Ontario in general and Toronto in particular (she still came out to study in southern Ontario anyway, and we had some interesting arguments).

I now live in Kitchener-Waterloo, and don’t see much anti-Toronto animosity here. But then a fair amount of people commute to the city for work.

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Peztopiary said on April 22nd, 2011 at 6:10 am

I’m really not sure people understand just how ready Americans (think they) are to live in a post-apocalyptic hellscape. I live in Idaho. The vast majority of the people here have stockpiles. Of everything. Everything. People here don’t know who to blame for the collapse of well, everything. Because mostly they got their values from their parents, and those values? They’re fucked in the head. Theocracy as a way of life, except we replaced God with suppply side economics. As a state we get $1.63 (maybe $1.43, sorry been a while since I looked) for every dollar we pay in federal taxes. We still overwhelmingly vote for rich old dudes who basically just want to fuck the poor 24/7. So the economy collapses, and everybody is out of work. (Of my peer group (28 year olds with no college) more than 1/2 the people in my area are unemployed, or since we’ve got messed up priorities wrt to drugs, unemployable.) The thinking goes “Why not fuck everyone else?” Seriously. Nihilistic? You’ve no idea.

To be fair though, the rest of the world should probably have done a better job of preparing for the inevitable meltdown of the U.S.A. We’ve been fighting the Culture War since the North beat the South for fuck’s sake. Y’all couldn’t see this coming?

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Lawnmower Boy said on April 22nd, 2011 at 11:29 am

Just to clear things up, other Canadians don’t hate Toronto. We just love Vancouver* and realise that Toronto is hateful. And that the Leafs suck. And the Annex. And …I feel a song coming on.

*It’s possible that Canadians who aren’t from Vancouver have opinions, too. You go right ahead and care about that while I wander around the streets in a shell waving a gigantic non-chain organic takeout coffee like a magic wand of coolness.

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Eric S. Smith said on April 22nd, 2011 at 1:51 pm

Radio Free Vestibule covered the case against Toronto from a Montrealer’s perspective.

Re: President Trump: he will, of course, declare bankruptcy and then buy out the United States’ assets for pennies on the dollar through a shell country that he also controls.

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Kid Kyoto: Native Missourian here, and I agree with the others, we don’t really hate New Yorkers (collectively, I’m sure individually there are exceptions). I dunno what makes you think we all hate you guys.

HUG IT OUT.

Also, Yankees are evil. That is all.

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Dan Carlson said on April 22nd, 2011 at 3:17 pm

I would really like to see the question the poll asked. The way I see it is that most Americans don’t want to raise the debt limit, but also understand that it is necessary. It’s like a second mortgage, you don’t want it, but you do need it.

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Notintheface said on April 22nd, 2011 at 4:41 pm

If we don’t raise the ceiling, the Great Depression will look like a day at Disneyworld in comparison.

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sgt pepper said on April 22nd, 2011 at 11:59 pm

I love the Hobos of the Midwest ride. And Mr. Speculator’s Wild Ride. And the teacups, of course.

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it’s not so much that other Canadians hate Toronto (although some do, and for ugly reasons having to do with Toronto being maybe the least white city in Canada)

Holy cow, that’s completely not true at all.

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As a native of Philadelphia and a resident of CT I have to say I love NYC, even if there is zero sky there. It’s covered completely by buildings. I don’t have an opinion one way or the other regarding the Yankees as all baseball is icky and boring.

The only thing I know about Toronto is that Michael Moore thinks you guys are all really nice and friendly and you never lock your doors. It seemed pretty in his movie, though.

Most of the Canadians I know are from Nova Scotia and they *are* nice and friendly and I get the feeling they actually don’t lock their doors.

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Nial Fossjet said on April 27th, 2011 at 7:28 pm

Hey, MGK, look at who has a measured opinion on this very important issue!

http://www.thecypresstimes.com/article/News/National_News/CONGRESSMAN_ALLEN_WEST_SOME_THOUGHTS_ON_THE_DEBT_CEILING/44193

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Ok, so this happened. Enjoy our amazon product line!

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