did someone muck with the backend here

Re: Debt

1

Krugman.


Posted by: Mossy Character | Link to this comment | 11-16-16 7:12 AM
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We're borrowing in our own currency so cases like what happened in Iceland and Greece can't happen here. I always assumed that hyperventilating about the debt is the result of rich Republicans wanting to find an issue to block spending on the poor without being seen directly to do so.


Posted by: Moby Hick | Link to this comment | 11-16-16 7:13 AM
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You could always try pointing out some of this:

- The debt has been higher as a percentage of GDP in the past, and the 1950s were pretty good

- Other countries had debt far higher still in the past (the UK post WW2) and they also did pretty well in the 50s and 60s

- The biggest single chunk of the US government's debt (by far) is owned by various bits of the US government (mainly Social Security) and by state and local governments (pension funds etc); this doesn't seem like an obvious reason to panic

- Yes, a lot of the rest is owned by foreign governments. This is because the US economy is so strong and reliable that buying into it is seen as about the safest investment you can make. It's not a cause of weakness, it's a symptom of strength. It also means

- that the interest payments on the debt are tiny, in both relative and absolute terms, because so many people want to buy US debt that the US can get away with paying virtually no interest.


Posted by: ajay | Link to this comment | 11-16-16 7:13 AM
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We're borrowing in our own currency so cases like what happened in Iceland and Greece can't happen here

This is also an excellent point.


Posted by: ajay | Link to this comment | 11-16-16 7:15 AM
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I've always found helpful the comparison between debt for families vs. debt for national governments, ie, they have different life cycles that affect the evaluation of how worried one should be.

If your friends are free-market types, then pointing out that bond rates should be the best possible signal of how scary the debt is might work. And now, you can watch our great experiment on how scaring the rest of the world affects bond prices as a demonstration of the principle.


Posted by: Swope FM | Link to this comment | 11-16-16 7:18 AM
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Super great lecture on this, covers the entire idea very thoroughly. Very dense though.


Posted by: Mossy Character | Link to this comment | 11-16-16 7:20 AM
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Worrying about the debt serves the same role as concerns about states' rights in American politics.


Posted by: peep | Link to this comment | 11-16-16 7:21 AM
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The comparison to the family debt goes like this: Did you go into debt to finance your college education? first (or every) car? house,? etc.

How much education, what kind of transportation, what kind of living arrangement would have if you never had any debt?

Whether you ever borrowed or not, would you be worried about your family debt if

(1) you were certain that you would never retire or become disabled;

(2) based on a 250 year track record, you were as close to certain as possible that in any time frame greater than a year or two, your future income would be higher than your current income;

(3) there was no possibility of foreclosure if you ever are short; and

(4) you could borrow at below the inflation rate?


Posted by: unimaginative | Link to this comment | 11-16-16 7:44 AM
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Debt is an ideological, rhetorical, socio-political tool like, oh, religion and race. Meaningless in itself, it can and will to drive entire nations into general immiseration. It has been used to justify slavery. Saying "debt is no problem" is like saying race and gender aren't "problems."

Socialized beliefs about debt provide tools of power usually for creditors, but in revolutionary times can create solidarity between debtors.

Krugman is irredeemably full of shit, useless, and pernicious if not malevolent. Saying "Debt doesn't scientifically matter at all" hasn't helped debtors. If he had a heart and was sincere he would call for jubilee, which like all speech-acts about debt, is a political act rather than economic.


Posted by: bob mcmanus | Link to this comment | 11-16-16 7:53 AM
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Also (5) you print your own currency.


Posted by: urple | Link to this comment | 11-16-16 7:54 AM
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10 to 8.


Posted by: urple | Link to this comment | 11-16-16 7:55 AM
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And Krugman has had little to no success at helping people with his scientific reasoned approach. That is because you cannot attack rhetorically power with science and reason.

Krugman's whole economic approach of ahistorical abstraction (are race and gender variables in IS/LM?) is racist sexist capitalist and neoliberal.

Fuck Krugman


Posted by: bob mcmanus | Link to this comment | 11-16-16 7:58 AM
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7 is right. Hardly anyone is genuinely concerned about the debt - it's a cipher for bullshit moral and racial prejudices. Any approach which focusses on technocratic arguments but doesn't address what's motivating the faux concern is unlikely to get very far with the people you want to reach.


Posted by: real ffeJ annaH | Link to this comment | 11-16-16 7:59 AM
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13: I don't know... you could have someone who's open to reason but just badly informed, rather than actually using it in the 7 sense. But yes, anyone who should know better but is worried about the national debt is basically 7.


Posted by: ajay | Link to this comment | 11-16-16 8:00 AM
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Obviously, you start attacking Trump on the debt as soon he he wants to spend on something evil, counterproductive, or pointless. There's no reason not to and it might help.


Posted by: Moby Hick | Link to this comment | 11-16-16 8:01 AM
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UK debt after the Napoleonic Wars was 250% of GDP. That seems to work out okay for the next 100 years.

How much debt do people who own a house have? 300% of income?


Posted by: Walt Someguy | Link to this comment | 11-16-16 8:02 AM
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10: That doesn't necessarily make me feel better, since that just means eventual inflation. But then that doesn't necessarily make me feel worse, since that helps creditors, which we probably still need. But yes, combined with the other stuff helps. I'll have to read up on this more, as my general intuition is that things are okay, but I don't know where the boundaries of okay are. Comparisons to countries recovering from a catastrophic war doesn't give me good intuition about what the debt/GDP ratio should look like in peacetime.

Of course, the people who stated that the debt is a concern and then voted poorly are chumps.


Posted by: dalriata | Link to this comment | 11-16-16 8:03 AM
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Schauble was wrong. Greeks starved.

Not that Tsipras or Varoufakis were worth a damn.

When their nation was condemned, Greeks should have emigrated to Brussels carrying enough Molotov cocktails to supply podemos etc.


Posted by: bob mcmanus | Link to this comment | 11-16-16 8:04 AM
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Worrying about the debt serves the same role as concerns about states' rights in American politics.

Maybe for politicians, but I know a fair number of people who have swallowed the concern.


Posted by: heebie-geebie | Link to this comment | 11-16-16 8:07 AM
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Fuck off, bob. Brussels is a nice place.


Posted by: real ffeJ annaH | Link to this comment | 11-16-16 8:07 AM
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UK debt after the Napoleonic Wars was 250% of GDP. That seems to work out okay for the next 100 years.

Did you read Piketty?

The political consequences of having to repay that debt, and ensure that bonds were safe and secure, committed the British gov't to a whole raft of policies, probably including the rapacious imperialism of the late 18th, and certainly the enduring class structure.


Posted by: bob mcmanus | Link to this comment | 11-16-16 8:08 AM
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Comparisons to countries recovering from a catastrophic war doesn't give me good intuition about what the debt/GDP ratio should look like in peacetime.

"Should look like" is probably the wrong way to look at it. It's more like "the debt was this high and higher for long periods, and this did not bring about the end of civilisation". The reason it got that high in the first place was war spending, true (though not catastrophic; the Napoleonic Wars weren't catastrophic in any sense for Britain) but that's not really relevant.


Posted by: ajay | Link to this comment | 11-16-16 8:08 AM
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later 19th of course.

Fucking off


Posted by: bob mcmanus | Link to this comment | 11-16-16 8:09 AM
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If you want to stake out the fiscally responsible position, claim that the debt is currently at manageable levels as long as it doesn't balloon significantly (for all the reasons stated above), BUT the critical analysis for any deficit spending (i.e. decision to add debt) is: what is the money being spent for? Is it being invested in a way that will grow the economy in the future, or is it being wasted? Debt incurred for long-term infrastructure is an investment in the future that will create GDP growth more than sufficient to repay the debt. Same with investments in education--this is the same analysis as a personal decision to borrow money to go to college. Or investments in healthcare, or stimulus support to keep the economy from crashing (and therefore preserve the tax base). IN CONTRAST, borrowing a bunch of money to destroy people and infrastructure (war) is just a waste of money. It's like a family borrowing money to buy a nice sports car, and then intentionally crashing it just for fun. That debt isn't helping the future in any way. Neither is incurring debt to finance tax cuts for the rich. That's not an investment in the future--it's literally taking money from future generations (who have to pay back that debt) to give it to rich people today.


Posted by: urple | Link to this comment | 11-16-16 8:11 AM
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committed the British gov't to a whole raft of policies, probably including the rapacious imperialism of the late 18th,

wow, you actually don't even know what century we're talking about here.


Posted by: ajay | Link to this comment | 11-16-16 8:11 AM
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Oh, Maurizio Lazzaroto, Making of Indebted Man, 2011 among other books, is the best guy on the social meaning of debt, rather than Graeber. There are others.


Posted by: bob mcmanus | Link to this comment | 11-16-16 8:13 AM
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The interest payment on the debt is larger than spending on all other categories of discretionary spending other than the military and Medicare/healthcare spending. To me it seems like getting that down would be a good thing and would free up funds down the line for spending on Good Things.

The main reason we are going to go into debt even more under Trump than under Obama is that the GOP wants to piss away shitloads of money on the military while cutting the top tax rate. Neither of those seems to me like a decent reason to borrow money at the expense of future taxpayers.

I'm opposed to deficit spending outside of special circumstances like getting the country out of a recession or fighting a major war in part because it's not sustainable in the long run and in part just because having your act together is good. We're spending our grandkids taxes here, and that seems unfair given that the things we are spending it on are for the most part not going to help anyone in the long term. It's not a crisis on the scale of climate change, but it's still a bad thing that we ought to try to fix along with all the other bad things that need fixing.

A fairly modest tax increase (about 16%) would balance the budget and end the practice of making future generations pay for present spending. That seems to me like a simple and sensible way to handle this. Not that it's going to happen.

I recognize that debt concerns are often simply right wing bullshit intended to facilitate the weakening of the welfare state, but making our kids and grandkids pay for spending that isn't crisis mitigation but just routine shit that we can't be bothered to pay for seems morally problematic to me.

None of this is responsive to the OP question but I just want to push back a bit against the idea that the debt is no biggie. It's not a top five issue for me but it makes the top ten based on the principle that you shouldn't make other people pay for shit you can damn well afford yourself. We are not currently in some crisis that requires deficit spending. We spend at a deficit because we are short-sighted selfish assholes.


Posted by: togolosh | Link to this comment | 11-16-16 8:17 AM
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One thing that I have tried to bring in to these conversations (unsuccesfully I admit) is the notion that there are also a lot of public assets. (See Figure 4.7 p153 in Piketty for instance which shows public wealth vs. debt.)


Posted by: JP Stormcrow | Link to this comment | 11-16-16 8:18 AM
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22: I was responding to the "Britain in the 1950s" comment, which I was then generalizing to Western Europe as a whole; I hadn't seen the Napoleonic Wars comment. And more generally, what I meant was: Model my emotional oh-god-the-sky-is-falling state as a function f : D x V_1 x ... x V_n -> {panic, don't panic}. where D is debt and the V's are a bunch of other variables. My point is that not only that the V's matter, but that f can't be broken up into a function of D and a function of everything else. There are states where more extreme levels of debt might be more manageable than others and I dunno if we're in one of those.

But if we go to 1800s UK: would it be fair to say that they managed that debt with relentless colonial expansion, combined with a historically unprecedented technological growth, or would they have been able to weather it otherwise? I'm not really worried that we're running out of the post-1800 technological revolution yet, but I don't think we have the will or focus to be an evil colonial power.


Posted by: dalriata | Link to this comment | 11-16-16 8:18 AM
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We borrow to buy homes and go to school because that builds up our prospects, our assets, our lives.

Borrowing at the national level is the same good deal - in fact better because it's a much lower interest rate.

We shouldn't borrow for indulgences or ongoing costs for the same reasons that a family shouldn't borrow for a big screen TV - and generally, we dont.

That concise enough? (The last elides recession deficit spending; call that the 201.)


Posted by: Minivet | Link to this comment | 11-16-16 8:19 AM
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25: Not to defend his general point, but I routinely make the off-by-one error where I don't correctly equate "the (N+1)th century" and "the N00s". It's annoying that it's something that requires thought.


Posted by: dalriata | Link to this comment | 11-16-16 8:21 AM
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30 b/r 24.


Posted by: Minivet | Link to this comment | 11-16-16 8:21 AM
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28 might not be actually important--I am not an expert. But to me it is at least something (similar to 16.last) to make it more relatable to people and their own situation. (But what I have found is that people I tired it on* are massively resistant and scornful of the notion that the government has any actual assets whatsoever.)

*Republican fuckheads, however, not people confused in good faith.


Posted by: JP Stormcrow | Link to this comment | 11-16-16 8:31 AM
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33: resistant to the is of it, or the ought?


Posted by: dalriata | Link to this comment | 11-16-16 8:36 AM
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would it be fair to say that they managed that debt with relentless colonial expansion, combined with a historically unprecedented technological growth, or would they have been able to weather it otherwise?

The UK was only able to run up that debt in the first place because it had a very strong and reliable economy (and government) that made its sovereign debt look like a good investment. Its economy had started to outperform the rest of Europe long before the Napoleonic Wars - back in the 17th century, in fact.

And growth was unprecedented, but it wasn't spectacular, certainly not by modern emerging-market standards.

TABLE 21: British GDP growth, 1700-1870 (% per annu
m)
1700-1760 0.54
1760-1780 0.92
1780-1801 1.64
1801-1830 1.85
1830-1870 2.46

1700-1870 1.33

borrowing a bunch of money to destroy people and infrastructure (war) is just a waste of money. It's like a family borrowing money to buy a nice sports car, and then intentionally crashing it just for fun. That debt isn't helping the future in any way.

Some might argue that "winning the Second World War" helped the future in some ways. Even in strictly economic terms, GDP for postwar Britain certainly performed better than would the GDP of the Reich Protectorate of England.


Posted by: ajay | Link to this comment | 11-16-16 8:37 AM
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the GOP wants to piss away shitloads of money on the military
Is this actually true? At this point obviously all bets are off, but the GOP didn't except defense at all in the sequester bullshit. Also, I submit there are excellent reasons* for the US to be increasing defense spending, and Obama has in fact done that, I think in every budget he could pass.
*Such as, for instance, a nuclear power actively interfering in your elections and invading neighboring countries.


Posted by: Mossy Character | Link to this comment | 11-16-16 8:38 AM
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In my case the "is" of it. Probably the "ought" as well, but didn't even get there the couple of time I tried.


Posted by: JP Stormcrow | Link to this comment | 11-16-16 8:38 AM
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Furthering 35, it's like a family borrowing money to buy a nice sports car, and then intentionally crashing it just for fun
isn't really accurate either, because a family buys a car from someone else, so the money leaves the family, whereas military purchases can be made domestically, moving the money from one part of the 'family' to another.


Posted by: Mossy Character | Link to this comment | 11-16-16 8:41 AM
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35: Thanks! (And I had no idea at all about Britain outperforming the rest of Europe that early.) That growth is roughly comparable to--or even on the low end of-- long-term expected growth for a well-managed developed nation today, no?

But could any modern government get away with the level of services provided by Victorian Britain?

37: Guh. Those are clear facts. I don't know what you can do about that.


Posted by: dalriata | Link to this comment | 11-16-16 8:42 AM
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36: but "Democrats cut defence spending and Republicans expand it" is so ingrained in the public mind (both sides) that it'll never be rooted out. The truth is much more complicated. http://dailysignal.com/2015/02/14/history-defense-spending-one-chart/

Obama expanded defence spending, but not as a share of GDP. Carter expanded it significantly, so did Reagan (though Reagan cut it back a lot in his second term). Bush I cut it massively. Clinton left it pretty much as he found it, Bush II expanded it hugely.

As a share of GDP it's been on a fairly steady downward slope since the 1950s, with occasional short-lived surges upwards in the 1980s and 2000s.


Posted by: ajay | Link to this comment | 11-16-16 8:46 AM
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Some might argue that "winning the Second World War" helped the future in some ways. Even in strictly economic terms, GDP for postwar Britain certainly performed better than would the GDP of the Reich Protectorate of England.

Yes quite obviously. "Never borrow to fight a war" wasn't my point--in certain situations there probably no better reason to borrow. The point is the money being spent isn't (mostly) building new useful infrastructure or otherwise investing in the future--it's being used to destroy things and to build things that destroy things. So the main "return" you're going to get on this borrowed money is winning the war itself. So... the idea is more "Never borrow to fight a war that your kids won't be glad you fought", or something like that. There needs to be a good purpose for spending all that money.


Posted by: urple | Link to this comment | 11-16-16 8:53 AM
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27: If the US didn't deficit-spend, the economy would be completely crushed. We would be in full-on violent revolution now, and not just cursing Trump.


Posted by: Walt Someguy | Link to this comment | 11-16-16 8:53 AM
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40: And further back, massive increases from Wilson, FDR, and Truman, cuts from Eisenhower. The Republicans aren't the party of defense, they're the party of masculine posturing.


Posted by: Mossy Character | Link to this comment | 11-16-16 8:54 AM
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That growth is roughly comparable to--or even on the low end of-- long-term expected growth for a well-managed developed nation today, no?

2.5% would be an OK-to-good long-term growth record for a modern developed nation, sure.

But could any modern government get away with the level of services provided by Victorian Britain?

Not even close. The late Victorian government managed on, very roughly, 10% of GDP (and four of those percentage points were for defence). Now it's more like 40%. The difference is healthcare (from 0.5% to 8%), education (1.5% to 6%) and above all pensions and welfare (0.7% up to 16%). Defence is down around 2%. I don't know of any modern state that has such a small budget compared to GDP.


Posted by: ajay | Link to this comment | 11-16-16 8:56 AM
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the money being spent isn't (mostly) building new useful infrastructure or otherwise investing in the future
We basically agree, but I want to push back on this. I think what military spending fundamentally does (excluding national apocalypse scenarios like 1945) is redistribute wealth and build public institutions, and that spending is really central to the development of the whole of modern civilization with all its benefits. Obviously one can do all that pacifically, but historically the most consistently successful motivator has been war.


Posted by: Mossy Character | Link to this comment | 11-16-16 9:02 AM
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44:That's what I figured. Given that, I'm not sure 19th-century Britain is at all useful for building intuition about this, unless I'm missing something else.


Posted by: dalriata | Link to this comment | 11-16-16 9:03 AM
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36: Trump has said he wants to increase military spending, so I suspect it will happen.


Posted by: togolosh | Link to this comment | 11-16-16 9:13 AM
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46: I think it is. The point is that the level of debt-to-GDP matters little, what matters is the ability, real and perceived, to service the debt reliably. 18th and 19th century Britain was able to do that, even at what we would consider recession level growth rates. Modern states are immeasurably stronger, therefore we have even less cause for concern.


Posted by: Mossy Character | Link to this comment | 11-16-16 9:14 AM
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I think what military spending fundamentally does (excluding national apocalypse scenarios like 1945) is redistribute wealth and build public institutions

I'm not exactly a rabid anti-militarist, but even to me this seems a rather over-optimistic view. The US military budget goes mainly to serving soldiers, retired soldiers, oil companies (IIRC the USAF is the single largest buyer of petroleum products in the world) and the manufacturers of military equipment. I don't think any of those are particularly redistributive, compared to other forms of government spending. It's probably redistributive on a state level because so much of the military is based in poor red states but funded by richer blue states. But for individuals?


Posted by: ajay | Link to this comment | 11-16-16 9:14 AM
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Yeah, I don't understand the relevance of the level of government service. Britain literally owed 2.5 times national income in debt. Not 2.5 times taxes, but 2.5 times all income.


Posted by: Walt Someguy | Link to this comment | 11-16-16 9:21 AM
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Did you borrow money for your new car or truck? If so, then bad you. Maybe you needed that vehicle to get to work and earn money, but debt is bad. Maybe you can make the payments, no sweat, but it's still debt. Maybe you'd be broke living on the street if you didn't go into debt. Did you pay cash for you house? Lucky you, but odds are owning means owing.

Debt isn't fun. It's about making a bet on your future. You need some confidence about the future to get on in life, but maybe the United States has a future too. Someone has to pay for those roads, those bridges, the ports and airports, the canals. Someone had to pay for the technology that turned us into manufacturing nation. Someone had to pay for the research that made our farmers the most efficient on earth. Someone had to fight wars to keep us safe. All of that cost money, borrowed money. Without debt the US wouldn't have been much of a country in the first place.

The thing is that Uncle Sam is different from you and me. You figure that someday you'll pay off your loans and own that vehicle or house free and clear. Then you'll retire. Some time after that, hopefully a long time, you're going to die. Maybe Uncle Sam needs to start thinking that way. Pay off the debts, retire and die. That's what being debt free is about, accepting that you've gone as far as you are going and that you aren't going to be around forever. Some of us aren't as keen about Uncle Sam thinking that way. The US has a future. The US has to build that future. Maybe the answer is higher taxes, but a good part of the answer is government debt. Government debt about the US having a future.

----

The practical argument, of course, is that if you are against debt why would you ever vote for a Republican president. Already interest rates are going up because Trump won and the markets know he's going to borrow a trillion dollars to pay for tax cuts for billionaires. He'll also set of a recession, because that's what Republicans do. It's not going to be fun in the blue states, but once again the red state are going to take the brunt of it. What can I say? Good luck?


Posted by: Kaleberg | Link to this comment | 11-16-16 9:47 AM
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49: It is simplistic, and agian I think we basically are in agreement, but I think bears thinking about. In the US in particular it does redistribute individually in that millions of people are on the public payroll, and getting significant benefits and educational support. The significance of those last of course arises from the broken US welfare state; but OTOH the non-broken welfare states only exist due to economic and political development inextricably bound up with past military spending. Redistribution maybe isn't the best term to use either; perhaps monetary velocity, or liquidity, the fact of significant money being spent rather than hoarded.


Posted by: Mossy Character | Link to this comment | 11-16-16 10:07 AM
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In the US in particular it does redistribute individually in that millions of people are on the public payroll, and getting significant benefits and educational support.

This may be a quarrel over definitions, but: redistribute compared to what alternative? No question it's redistributive compared to all 1.6 million of them being in poverty. But soldiers are, in general, above average in terms of employability; they're generally better educated than the average, they're more likely to be from wealthy backgrounds (11% are from the poorest quintile of the population; 25% are from the wealthiest quintile); they are, for obvious reasons, in better general physical and mental health. If they weren't in the military, they'd be pretty likely to have decent jobs.


Posted by: ajay | Link to this comment | 11-16-16 10:12 AM
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50: Here's where I would have to look at the numbers, but I guess I don't see how Hypothetical Welfare State Victorian Britain, with that pre-existing debt burden, could have also afforded another 30% (using ajay's number) of GDP going to actual services without even further deficit spending. Is the counterargument to that that HWSVB would be even more productive, so it'd work out? Or that it'll eventually be inflated away and that's not that big of a deal, especially given the actual increase in material wealth the UK was getting at the time?


Posted by: dalriata | Link to this comment | 11-16-16 10:15 AM
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53: You still have to figure that they're tightening the labor market for other workers, no?


Posted by: LizardBreath | Link to this comment | 11-16-16 10:19 AM
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17: Not sure if I'm misunderstanding or responding to a typo, but inflation sucks for for creditors.

It's wonderful for debtors. One reason (many of) the "greatest generation" seemed to have much more comfortable retirements, compared to what today's deadbeat kids can expect, was not inherent virtue or frugal living, but having fixed rate mortgage payments that dwindled to almost nothing in the 1960's and 70's inflationary period. But they still believe that inflation ruined America.


Posted by: unimaginative | Link to this comment | 11-16-16 10:21 AM
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I don't see how Hypothetical Welfare State Victorian Britain, with that pre-existing debt burden, could have also afforded another 30% (using ajay's number) of GDP going to actual services without even further deficit spending

Well, it was massively undertaxed by modern standards. Just raise taxes by 30% of GDP and there you go. In fact that's more or less what happened; taxation roughly kept pace with spending. The deficit was about 2% of GDP in 1900 when government spending was 10% of GDP and then government spending spiked (pensions, healthcare, education, welfare etc) and by 1950 government spending was 40% of GDP and the deficit was still about 2% of GDP.
The debt burden was big but the carrying cost wasn't crippling.


Posted by: ajay | Link to this comment | 11-16-16 10:26 AM
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55: I suppose? but that's a pretty roundabout form of redistribution, paying skilled people decent wages to take them out of the civilian labour pool, so that civilian employers have to be contented with slightly lower-skilled employees.


Posted by: ajay | Link to this comment | 11-16-16 10:28 AM
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I'm not exactly obsessed with the debt ceiling, but it's near the top things I'm worried about for early 2017. Maybe Republicans will determine it's ok to raise it when Republicans are in control.


Posted by: fake accent | Link to this comment | 11-16-16 10:30 AM
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53: Good points, and I didn't know about those quintiles. You still get some redistribution in terms of health benefits, if nothing else (assuming the VA works out better than private; don't now if it is). My major point is that defense has historically been a driver of expansionary fiscal policy, with major incidental benefits for the world. It's quite possible that that role has sunk into (relative, at least) insignificance in modern economies. Though the US specifically seriously lags the modern world in that regard.


Posted by: Mossy Character | Link to this comment | 11-16-16 10:30 AM
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Maybe Republicans will determine it's ok to raise it when Republicans are in control.

Most will. The Freedom Caucus might object but with the Democrats mostly on board there will be no problem getting past it.


Posted by: togolosh | Link to this comment | 11-16-16 10:31 AM
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56: Guh, yeah, sorry, was a think-o. I meant debtors. Caffeine apparently hasn't been working for me today.


Posted by: dalriata | Link to this comment | 11-16-16 10:31 AM
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+k


Posted by: Mossy Character | Link to this comment | 11-16-16 10:31 AM
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53:I think US /UK military demographics must be different. No way are 25 % of the US military from the top quintile. I wouldn't be surprised if veterans are better educated, as in the US a major benefit of service is a full scholarship,but that comes after discharge.


Posted by: foolishmortal | Link to this comment | 11-16-16 10:40 AM
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Interest payments as percent of GDP are less than half what they were throughout the 80s and 90s and are equivalent to what they were for the entire 1945-1980 period.


Posted by: F | Link to this comment | 11-16-16 10:45 AM
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If anyone is stuck on the whole misleading household budget/federal budget analogy, you can use it to point out that this is equivalent to their household mortgage payment being cut in more than half since 1996 (from roughly 15% of the budget to roughly 6%). I.e. if their household budget was $50000/yr, their mortgage payment has dropped from $600/month to $240/month.


Posted by: F | Link to this comment | 11-16-16 10:55 AM
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27

If growth is guaranteed, debt maximizes the benefits to all generations. The only future generation that gets screwed is the one where growth stops. If you want to argue that debt is bad, you are also arguing that future growth will stop within the next generation.


Posted by: F | Link to this comment | 11-16-16 10:57 AM
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Not implausible!


Posted by: Mossy Character | Link to this comment | 11-16-16 11:04 AM
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Agreed, but make it explicit. It's a pretty bold prediction. And even if you do predict that, it's still not a foregone conclusion. Japan is forecast to have negative growth for the next decade or two and their debt level is more than twice ours. Despite this, their interest payments are only slightly higher as a percent of GDP than the US (~2%), and they still seem to be fine.


Posted by: F | Link to this comment | 11-16-16 11:17 AM
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64: those are US demographics.


Posted by: ajay | Link to this comment | 11-16-16 11:39 AM
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70: There was a woman in a bar talking all about how she was going to join the Air Force. She'd been talking to the recruiter and all this stuff. Anyway, another guy, a veteran who had signed up after 9/11, told me there was no way she'd get in. I was very relieved, especially when it turned out he was right. I think maybe too many people are still thinking of Stripes or whatever.


Posted by: Moby Hick | Link to this comment | 11-16-16 12:37 PM
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There is literally no way to reduce the deficit without increasing private debt or reducing the trade deficit. (Or printing money), concerns about he debt are BS.


Posted by: Asteele | Link to this comment | 11-16-16 12:37 PM
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We could sell private assets like Trump Tower.


Posted by: Moby Hick | Link to this comment | 11-16-16 12:42 PM
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Or just, you know, raise taxes. Or cut spending. Lots of options, really.


Posted by: Mossy Character | Link to this comment | 11-16-16 12:44 PM
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74: Not really, unless you raised taxes or cut spending enough to reduce the trade deficit. The current account balance is a real thing.


Posted by: Moby Hick | Link to this comment | 11-16-16 12:46 PM
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Ah. I hadn't realized what 72 was talking about.


Posted by: Mossy Character | Link to this comment | 11-16-16 12:56 PM
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I guess 72 is true but it's stated in a way that encourages fallacious reasoning from accounting identities. If the government borrows less from overseas, the trade deficit decreases.


Posted by: Eggplant | Link to this comment | 11-16-16 12:57 PM
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Or wait, am I confused? Probably!


Posted by: Eggplant | Link to this comment | 11-16-16 12:58 PM
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No. Cutting spending reduces income, so that's going to show up as a deficit in someone's private accounts, seizing private assets or raising taxes does the same thing. It's not all going to show up as private debt, because presumably some of that loss passes on to foreigners by not buying their goods, but reduced domestic consumption is reduced domestic income, so also increases private debt.

Money only comes from banks issuing debt, the government issuing debt, or foreign countries. So if you reduce the government debt, one of the other two has to increase, or you have the same debt level and less income, which financially speaking is the same thing.


Posted by: Asteele | Link to this comment | 11-16-16 12:58 PM
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78: You won't be, after this week's Soap.


Posted by: Moby Hick | Link to this comment | 11-16-16 1:00 PM
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64, 70, 71: I think a lot of the dissonance there is the difference between the top quintile and the top decile. I'd have to google for the numbers, but even the top quintile isn't terribly high-income: middle-middle class people in high cost of living areas are going to be at the bottom end of the top quintile.

The people who you're thinking of as implausible candidates for the military -- people whose parents are doctors and lawyers and such -- are probably from families in the top decile, income-wise.


Posted by: LizardBreath | Link to this comment | 11-16-16 1:00 PM
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80: Nice one.


Posted by: Swope FM | Link to this comment | 11-16-16 1:01 PM
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i think it's useful to point out that a serious plan to reduce the deficit means worse private balance sheets unless we start selling more shit to the rest of the world.


Posted by: Asteele | Link to this comment | 11-16-16 1:02 PM
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Per bob, we could sell J.K. Rowling.


Posted by: Moby Hick | Link to this comment | 11-16-16 1:03 PM
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Private balance sheets will be worse, but Klan-robe sheets will be fine.


Posted by: Moby Hick | Link to this comment | 11-16-16 1:07 PM
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Money only comes from banks issuing debt, the government issuing debt, or foreign countries.
This isn't right. As you mentioned, the Treasury can always print money.
i think it's useful to point out that a serious plan to reduce the deficit means worse private balance sheets unless we start selling more shit to the rest of the world.
We have a maldistributed savings glut. Some private balance sheets could (and should) be made worse through taxation without reducing consumption. Government borrowing is ultimately regressive.


Posted by: Eggplant | Link to this comment | 11-16-16 1:35 PM
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You can squint just a little and look at foreign purchases of our treasury bonds as a form of tribute, particularly given where interest rates are.


Posted by: (gensym) | Link to this comment | 11-16-16 2:49 PM
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what matters is the ability, real and perceived, to service the debt reliably.

Not to be super dumb, but. This translates to "make regularly scheduled payments to the people we owe" even if those are partially financed by more debt?


Posted by: heebie-geebie | Link to this comment | 11-16-16 2:59 PM
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84. With difficulty, she lives in Scotland.


Posted by: chris y | Link to this comment | 11-16-16 3:26 PM
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Question for Britishers: in Northern speak, are "luck" and "look" homonyms, or is the vowel slightly different?


Posted by: Minivet | Link to this comment | 11-16-16 4:35 PM
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I think you waited just long enough for them to all go to sleep.


Posted by: Moby Hick | Link to this comment | 11-16-16 5:18 PM
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It's a trick question. "Look" and "luck" aren't homonyms anywhere.


Posted by: nosflow | Link to this comment | 11-16-16 5:27 PM
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I'm guessing Ms Rowling actually lives in Scotland quite easily.


Posted by: Mossy Character | Link to this comment | 11-16-16 7:09 PM
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88: Yes. Are you thinking this looks like paying off credit cards with other credit cards, or what? If so, the answer is, doing that is fine so long as you have the underlying ability to pay, which the US does. As pointed out upthread, everybody and his central bank are still very happy to buy Treasuries.


Posted by: Mossy Character | Link to this comment | 11-16-16 7:16 PM
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I have tried gravely suggesting that we reduce the debt by no longer subsidizing interest on mortgages. We'd get more money to pay off the national debt and discourage private debt at the same time, strengthening the nation twice.

Mostly people change the subject, sometimes they go away entirely, and once I hit someone who had entertaining ideas of which parts of the economy would collapse.


Posted by: Clew | Link to this comment | 11-16-16 11:43 PM
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When clew is driven to violence, thongs have gone far indeed.


Posted by: CharleyCarp | Link to this comment | 11-16-16 11:55 PM
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things, even


Posted by: CharleyCarp | Link to this comment | 11-16-16 11:56 PM
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90: the vowel is different in standard English and in most dialects, but in some northern English dialects they are homophones*.

*covert communications device used to relay updates to the Gay Agenda.


Posted by: ajay | Link to this comment | 11-16-16 11:59 PM
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61: I hope they can get together to raise the ceiling with minimal damage, but I worry it's going to be used as an opportunity to force through as many cuts as just enough Democrats will be willing to vote for to hold off default.


Posted by: fake accent | Link to this comment | 11-16-16 11:59 PM
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96: it was my cat, it was my cat, it was my catapult


Posted by: clew | Link to this comment | 11-17-16 12:20 AM
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Heebie, did you get a useful answer from this thread? I meant to participate, but I've been too depressed to do anything other than snark.


Posted by: Walt Someguy | Link to this comment | 11-17-16 1:14 AM
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I hope they can get together to raise the ceiling with minimal damage, but I worry it's going to be used as an opportunity to force through as many cuts as just enough Democrats will be willing to vote for to hold off default.

Nah, Republicans are in charge now. Fox News viewers will never hear a thing about the debt ceiling.


Posted by: teofilo | Link to this comment | 11-17-16 1:16 AM
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Did you notice that Paul Ryan wants to replace Medicare with Obamacare, under the guise of repealing Obamacare? These guys are the most craven and cynical assholes you can possibly imagine, and then some.


Posted by: teofilo | Link to this comment | 11-17-16 1:18 AM
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Are you sure about that?


Posted by: fake accent | Link to this comment | 11-17-16 1:20 AM
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104 to 102 because 103.last is obviously true.


Posted by: fake accent | Link to this comment | 11-17-16 1:21 AM
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I predict that Fox will conveniently forget about this by the time we get to the point where they actually have to do it, and so will their audience. The House GOP is doing the bidding of the plutocrats and they don't want any debt ceiling bullshit if it doesn't benefit the GOP electorally and improve their chances of getting tax cuts.

Feel free to refer back to this to shame me if I turn out to be wrong. I'm not going to eat a bug, though.


Posted by: teofilo | Link to this comment | 11-17-16 1:28 AM
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My only takeaway from this thread is that, at unfogged, cats are preferred to dogs.

Nothing against our feline companions, of course; but honestly, to feed and water a creature who looks at me with disdain, who only ever treats me with contempt? Don't we have enough red state voters to do that?!

My dog is true-blue and loyal. Yes, he's a bit goofy and sloppy, and he tends to drool on the furniture. But he's solid and reliable, and the best trail companion in the world. And he would never, ever indulge in a third-party protest vote: he's too sensible for that.


Posted by: Just Plain Jane | Link to this comment | 11-17-16 1:33 AM
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I'm not going to eat a bug, though.

What if eating a bug was the only thing standing between a recession and a Trump infrastructure project? Isn't eating a bug a small price to pay for making Trump fulfill his promises to make America great?


Posted by: fake accent | Link to this comment | 11-17-16 1:37 AM
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107. Dogs are domesticated, cats are symbiotic. I doubt if it's actually possible to fully domesticate an animal which is solitary in the wild, because a lot of domestication comes down to humans substituting for the animal's natural social group: there's a reason you can't herd cats.

I generally prefer cats precisely because I can't own them. They're decorative and playful and if they want to be tickled I'm happy to tickle them, but that's as far as it goes, apart from putting down food and letting them in and out. They just share my space, and if they want to go they will. Dogs are a huge emotional commitment, because you have to be their pack leader and be reliable and "successful" as a pack leader. That said, of course there are a ton of things you need a dog for, and many dogs are a lot of fun to have around.


Posted by: chris y | Link to this comment | 11-17-16 3:22 AM
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I'm firmly on the cat side of the dog/cat debate. I find dogs dirty and I can't stand slobber. Cats are self-cleaning like a vagina. Dogs you have to wash by hand like a penis. But nobody goes around grabbing you by the doggy, so there's that.


Posted by: togolosh | Link to this comment | 11-17-16 4:20 AM
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104: I did notice that. I wonder how you go about insuring 92 year olds once you get rid of guaranteed issue.


Posted by: foolishmortal | Link to this comment | 11-17-16 4:28 AM
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On the other hand, how do you sell insurance to 20 year olds in a world where both 90 year olds and guaranteed issue exist?


Posted by: foolishmortal | Link to this comment | 11-17-16 4:31 AM
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Picked up another dog on Tuesday. Rescue dog, we spend time looking at him and asking what the hell is this? 8 month puppy, we are hoping he exhausts the Anatolian enough to give old arthritic folk a rest.

Down thirty pounds since mid-Sept. Just an Atkins with 23 hour fasting. I think the pot helped a lot, as in do I really want to walk all the way to the kitchen?


Posted by: bob mcmanus | Link to this comment | 11-17-16 4:55 AM
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We have a maldistributed savings glut.

This is very true. We live in an era where there are massive pools of underutilized money, and at the same time, there remains serious poverty and social problems in need of funding. Sometimes the imbalance blows my mind.


Posted by: Spike | Link to this comment | 11-17-16 5:42 AM
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Cats are self-cleaning like a vagina. Dogs you have to wash by hand like a penis.

This is definitely making it into my next meatspace dog vs. cats conversation.

I lean cat but don't actively dislike dogs. Whether a dog is likeable depends mostly on the people it associates with.


Posted by: Swope FM | Link to this comment | 11-17-16 7:19 AM
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Poor pack leadership. Some people just shouldn't have dogs.


Posted by: chris y | Link to this comment | 11-17-16 7:32 AM
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Dogs bark. Dogs smell. Dogs have to be walked, which requires being home at specific times of the day. When you walk a dog, you have to pick up warm dog shit in a plastic bag and carry it around with you until you can dispose of it. Plus I'm allergic to a lot of them.

Cats, if unaffected by territorial issues, generally just pee and crap in a box you have to clean out once the pee/crap has dried out, using a shovel. If you're going to be out late or even gone for a few days, just leave out extra food/water. And they're affectionate, cute, soft, and don't smell like much.

If I lived on a farm where a dog could roam free and crap where I didn't have to pick it up, or if I was a bird hunter, I'd consider getting a dog. Otherwise, Team Cat all the way.


Posted by: Chopper | Link to this comment | 11-17-16 7:58 AM
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Hunting birds with dogs is much more fun than hunting birds without dogs.


Posted by: Moby Hick | Link to this comment | 11-17-16 8:00 AM
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We used to have a spaniel that was a natural-born bird killer. She would sit perfectly still until a bird forgot about her and got too close. It was my job to fling the dead bird over the fence.


Posted by: Moby Hick | Link to this comment | 11-17-16 8:04 AM
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What about hunting dogs with birds? Guess Barry might know about that.


Posted by: Tom Scudder | Link to this comment | 11-17-16 8:04 AM
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120. This sort of thing?


Posted by: chris y | Link to this comment | 11-17-16 8:11 AM
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Team cat all the way.


Posted by: Barry Freed | Link to this comment | 11-17-16 8:21 AM
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We have a local bird that hunts cats.


Posted by: Moby Hick | Link to this comment | 11-17-16 8:22 AM
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For the reasons togolosh and Chopper enumerated.


Posted by: Barry Freed | Link to this comment | 11-17-16 8:25 AM
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I don't like cats because they walk around in the box the shit in and they walk all over your counters/tables/etc.


Posted by: Moby Hick | Link to this comment | 11-17-16 8:27 AM
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Also, cats cause depression.


Posted by: Moby Hick | Link to this comment | 11-17-16 8:27 AM
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Cat parasites OTOH can make you more extroverted.


Posted by: Eggplant | Link to this comment | 11-17-16 8:49 AM
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127: I thought toxoplasmosis made men more aggressive and women more sexual, but I may have gotten wires crossed. Still a fascinating parasite.

125 is the biggest strike against cats, IMO. Little bits of cat litter can get trailed around and that's kind of gross. Not as gross as picking up warm poop, but gross nonetheless.


Posted by: togolosh | Link to this comment | 11-17-16 8:54 AM
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You could carry that spray stuff that janitors use to remove gum and thus pick up frozen poop.


Posted by: Moby Hick | Link to this comment | 11-17-16 8:58 AM
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127: I think that's right. People become less risk averse, but there are gender specific effects. Picking up warm poop is a lot less gross than cold poop. Honestly, it's a lot less an unsanitary pain in the ass than cleaning a litter box. I love my cats but they are objectively disgusting. My dog has never given me an eye infection, for instance. A corneal abrasion, yes, but no infections.


Posted by: Eggplant | Link to this comment | 11-17-16 8:59 AM
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I'll see your

I don't like cats because they walk around in the box the shit in and they walk all over your counters/tables/etc.

and raise you

I don't like dogs because they lick their assholes and then run right over and lick your face.

Cats can be trained off the counters, fwiw.


Posted by: Swope FM | Link to this comment | 11-17-16 9:01 AM
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Picking up warm poop is a lot less gross than cold poop.

Dogs and cats aside, this is objectively false. Warm poop? You kidding me, man?


Posted by: Swope FM | Link to this comment | 11-17-16 9:03 AM
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Cats must like their assholes. They clean themselves with their tongues and they never seem to have filthy butts.


Posted by: Moby Hick | Link to this comment | 11-17-16 9:06 AM
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Personality-wise, I think I might be more of a cat-person than a dog-person, but I'm extremely allergic to cats, so I've never lived with one. The pattern is that while I never choose to have an animal myself, whenever I find myself living with an animal I wind up becoming hopelessly devoted to them.


Posted by: peep | Link to this comment | 11-17-16 9:06 AM
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"like" s/b "lick". Maybe.


Posted by: Moby Hick | Link to this comment | 11-17-16 9:06 AM
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Cold poop feels wet through the plastic. Also, I handle it less frequently so there's a jarring unfamiliarity.


Posted by: Eggplant | Link to this comment | 11-17-16 9:07 AM
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Don't judge me.


Posted by: Eggplant | Link to this comment | 11-17-16 9:07 AM
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Cold dog poop is remarkably solid. I always used to wonder why we couldn't feed babies whatever we fed dogs to make diaper changes easier. But apparently that's really wrong for some reason nobody ever explained to me beyond a horrified look.


Posted by: Moby Hick | Link to this comment | 11-17-16 9:09 AM
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My poor sweet blind dog is also incontinent. I come home after work and there is almost always pee and sometimes poop on the floor. I made the genius discovery that I could pick up the poop with toilet paper and then put it all into the toilet and flush.


Posted by: peep | Link to this comment | 11-17-16 9:13 AM
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There are days when I'm strongly tempted to try training my dog to go in the bathtub.


Posted by: Eggplant | Link to this comment | 11-17-16 9:15 AM
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"like" s/b "lick". Maybe.

It stands to reason that if you can lick your own asshole, you probably have pretty positive associations with it. So I think 'like' would stand.


Posted by: Swope FM | Link to this comment | 11-17-16 9:23 AM
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The most important thing about the debt is that it is a another word for "Rich people's bond holdings"

spending and working/middle class tax rates affect the real economy, but debt levels are mostly a question of 'should really rich people be taxed this marginal bit of income, or should they be able to store it in a bond". We only have to fear 'how can we pay off/the interest on our debt' if you assume the 'we' to be the 99% and the 1% to be a separate, international elite outside the reach of 'our' IRS.

"Did you notice that Paul Ryan wants to replace Medicare with Obamacare, under the guise of repealing Obamacare? These guys are the most craven and cynical assholes you can possibly imagine, and then some."
Paul Ryan noticed this too, and called democrats hypocritical for it. And he is right. Who do you think would be president now if dems had done medicare-for-everyone(not on an employer health plan) instead of privatized crap?


Posted by: yoyo | Link to this comment | 11-18-16 9:46 AM
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If Paul Ryan is willing to put it through for everybody over 65 now and not grandfather anybody in, I'll grant him valuable intellectual consistency points on this issue.


Posted by: Moby Hick | Link to this comment | 11-18-16 9:50 AM
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% of GDP going to interest payments is completely ordinary.

https://fred.stlouisfed.org/series/FYOIGDA188S

Went up during Reagan and came down during Clinton. No big deal.


Posted by: cccccmmmmm | Link to this comment | 11-18-16 11:13 PM
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Cats can be trained off the counters, fwiw.

Any tips? Salvador and Pablo are terrible. Water has basically no effect.


Posted by: LizardBreath | Link to this comment | 11-19-16 8:39 AM
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Escalate to 7UP.


Posted by: Moby Hick | Link to this comment | 11-19-16 9:00 AM
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Or grape juice. I hear good things about spraying grape juice around.


Posted by: Moby Hick | Link to this comment | 11-19-16 9:20 AM
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