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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-01-10 11:40 PM
Original message
Top Economist James K. Galbraith's Withering Testimony to the Deficit Commission.
Edited on Thu Jul-01-10 11:47 PM by girl gone mad
(Mods, this is public testimony, not subject to copyright)

James K. Galbraith, one of the most respected economists in the world, gave a statement to the Fiscal Commission yesterday on behalf of Americans for Democratic Action. Galbraith very clearly believes that the commission lacks both the expertise and the legitimacy to be making recommendations on which Congress will vote. The entire piece is well worth reading, but the concluding paragraph, in particular, is fairly devastating (emphasis added). The commission requested Galbraith's testimony.

The full text is also available here (pdf)

Statement to the Commission on Deficit Reduction
James K. Galbraith, Lloyd M. Bentsen, jr., Chair in Government/Business
Relations, Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin
June 30, 2010

Mr. Chairmen, members of the commission, thank you for inviting this statement.

I am a professional economist, but I have served in a political role, as Executive Director of the Joint Economic Committee of the United States Congress. I am offering this statement on behalf of Americans for Democratic Action, an organization co-founded in 1949 by (among others) Eleanor Roosevelt, John Kenneth Galbraith, Arthur M. Schlesinger, jr., and Ronald Reagan. Accordingly I would like to begin with a political comment.

1. Clouds Over the Work of the Commission.

Your proceedings are clouded by illegitimacy. In this respect, there are four major issues.

First, most of your meetings are secret, apart from two open sessions before this one, which were plainly for show. There is no justification for secret meetings on deficit reduction. No secrets of any kind are involved. Nothing you say will affect financial markets. Congress long ago -- in 1975 -- reformed its procedures to hold far more sensitive and complicated meetings, notably legislative markups, in the broad light of day.

Secrecy breeds suspicion: first, that your discussions are at a level of discourse so low that you feel it would be embarrassing to disclose them. Second, that some members of the commission are proceeding from fixed, predetermined agendas. Third, that the purpose of the secrecy is to defer public discussion of cuts in Social Security and Medicare until after the 2010 elections. You could easily dispel these suspicions by publishing video transcripts of all of your meetings on the Internet, and by holding all future meetings in public. Please do so.

Second, there is a question of leadership. A bipartisan commission should approach its task in a judicious, open-minded and dispassionate way. For this, the attitude and temperament of the leadership are critical.

I first met Senator Simpson when we were both on Capitol Hill; at Harvard he became friends with my late parents. He is admirably frank in his views. But Senator Simpson has plainly shown that he lacks the temperament to do a fair and impartial job on this commission. This is very clear from the abusive response he made recently to Alex Lawson of Social Security Works, who was asking important questions about the substance of the commission's work, as well as calling attention to the illegitimate secrecy under which you are operating.

A general cannot speak of the President with contempt. Likewise the leader of a commission intended to sway the public cannot display contempt for the public. With due respect, Senator Simpson's conduct fails that test.

Third, most members of the Commission are political leaders, not economists. With all respect for Alice Rivlin, with just one economist on board you are denied access to the professional arguments surrounding this highly controversial issue. In general, it is impossible to have a fair discussion of any important question when the professional participants in that discussion have been picked, in advance, to represent a single point of view.

Conflicts of interest constitute the fourth major problem. The fact that the Commission has accepted support from Peter G. Peterson, a man who has for decades conducted a relentless campaign to cut Social Security and Medicare, raises the most serious questions. Quite apart from the merits of Mr. Peterson's arguments, this act must be condemned. A Commission serving public purpose cannot accept funds or other help from a private party with a strong interest in the outcome of that Commission's work. Your having done so is a disgrace.

In my view you also should not have accepted help from the Economic Policy Institute, even though EPI's positions on the merits are substantially closer to mine.

Let me now turn to the economic questions. A first economic question is, what caused the deficits and rising public debt? The answer comes in two parts: present deficits and projected future deficits.

2. Current Deficits and Rising Debt were Caused by the Financial Crisis.

Overwhelmingly, the present deficits are caused by the financial crisis. The financial crisis, the fall in asset (especially housing) values, and withdrawal of bank lending to business and households has meant a sharp decline in economic activity, and therefore a sharp decrease in tax revenues and an increase in automatic payments for unemployment insurance and the like. According to a new IMF staff analysis, fully half of the large increase in budget deficits in major economies around the world is due to collapsing tax revenues, and a further large share to low (often negative) growth in relation to interest payments on existing debt. Less than ten percent is due to increased discretionary public expenditure, as in stimulus packages.

This point is important because it shows that the claim that deficits have resulted from "overspending" is false, both in the United States and abroad.

3. Future Deficit Projections are Generally Based on Forecasts which Begin by Assuming Full Recovery, but this Assumption is Highly Unrealistic.

Unlike the present deficits, expected future deficits are not usually considered to be due to continued recession and high unemployment. To understand how the discussion of future deficits is being framed, it is necessary to grasp the work of the principal forecasting authority, the Congressional Budget Office. CBO's projections proceed in two steps. First, they wipe out the current deficits, over a very short time horizon, by assuming a full economic recovery. Second, they create an entirely new source of future deficits, essentially out of whole cloth. The critical near-term assumption in the CBO baseline concerns employment. CBO claims to expect a relatively rapid return, over five years, to high levels of employment, and the baseline incorporates a correspondingly high rate of real growth in the early recovery from the great crisis. If this were to happen, then tax revenues would recover, and ordinarily the projected deficits would disappear. This is what did happen under full employment in the late 1990s.

But under present financial conditions this scenario of a rapid return to high employment is highly unrealistic. It can only happen if the credit system finances economic growth, which implies a rising level of private (household and company) debt relative to GDP. And that clearly is not going to happen. On the contrary, de-leveraging in the private sector is sure to remain the rule for a long time, as mortgages and other debts default or are paid down, and as many households remain effectively insolvent due to their mortgage debt.

With high unemployment, high public deficits are inevitable. The only choice is between an active deficit, incurred by putting people to work or otherwise serving national needs -- such as providing a decent retirement and health care to the aged -- and a passive deficit, incurred because at high unemployment tax revenues necessarily fail to cover public spending. Cutting public spending or raising taxes, now or in the future, by any amount, cannot reduce a deficit due to high unemployment. The only fiscal effect is to convert an active deficit into a passive one -- with disastrous economic and social effects.

4. Having Cured the Deficits with an Unrealistic Forecast, CBO Recreates them with Another, Very Different, but Equally Unrealistic Forecast.

In the CBO models, high future deficits and rising debt relative to GDP are expected. But the source is not a weak economy. It is a set of assumptions describing an economy after full recovery from the present crisis. In the CBO forecasts, big future deficits arise from a combination of (a) rapidly rising health care costs and (b) rising short-term interest rates, in the context of (c) a rapid return to high employment and (d) continued low overall inflation. This combination produces, mechanically, a very large net interest payout and a rapidly rising public debt in relation to a slowly rising nominal GDP.

Even if CBO were right about recovery, which it is not, this projection is internally inconsistent and wholly implausible. It isn't going to happen. Low overall inflation (at two percent) is inconsistent with the projected rise of short-term interest rates to nearly five percent. Why would the central bank carry out such a policy when no threat of inflation justifies it? But the assumed rise in interest rates drives the projected debt-to-GDP dynamic.

Similarly, the rise in projected interest payments is inconsistent with low nominal inflation. Interest payments rising to over 20 percent of GDP by mid-century would constitute new federal spending similar in scale to the mobilization for World War II. Obviously this cannot happen with two percent inflation. And although a higher inflation rate is undesirable, arithmetically it means a lower debt-to-GDP ratio.

Finally, rapidly rising health care costs and low overall inflation are mutually consistent only if all prices except health care are rising at less than that low overall inflation rate -- including energy and food prices in a time of increasing scarcity. This too is extremely unlikely. Either overall health care costs will decelerate (relieving the so-called Medicare funding problem) or the overall inflation rate will accelerate -- reducing the debt-to-GDP ratio.

In sum: the economic forecasts on which you are being asked to develop a credible plan for reducing deficits over the medium term are a mess. The unemployment and growth forecasts are implausibly optimistic, while the inflation and interest rates projections are implausibly pessimistic and mutually inconsistent.

Good policy cannot be based on bad forecasts. As a first step in your work -- long overdue -- the Commission should require the development of internally consistent, and factually plausible, economic forecasts on which to base future deficit and debt projections.

5. The Only Way to Reduce Public Deficits is to Restore Private Credit.

The conclusion to draw from the above argument is that large deficits going forward are likely to have the same source as they do right now: stubbornly high unemployment.

The only way to reduce a deficit caused by unemployment is to reduce unemployment. And this must be done with a substantial component of private financing, which is to say by bank credit, if the public deficit is going to be reduced. This is a fact of accounting. It is not a matter of theory or ideology; it is merely a fact. The only way to grow out of our deficit is to cure the financial crisis.

To cure the financial crisis would require two comprehensive measures. The first is debt restructuring for the entire household sector, to restore private borrowing power. The second is a reconstruction of the banking system, effectively purging the toxic assets from bank balance sheets and also reforming the bank personnel and compensation and other practices that produced the financial crisis in the first place. To repeat: this is the only way to generate deficit-reducing, privately-funded growth and employment.

As a former top adviser in the Clinton White House, co-chairman Bowles no doubt knows that privately-funded economic growth produced the boom years of the late 1990s and the associated surplus in the federal budget. He must also know that the practices of banks and investment banks with which they were closely associated worked to destroy the financial system a decade later. But I would wager that the Commission has spent no time, so far, on a discussion of the relationship between deficit reduction and financial reform.

To be clear: unemployment can be cured without private-sector financing, if public deficits are large enough -- as was done during World War II. But if the objective is to reduce public deficits, for whatever reason, then a large contribution from private credit is essential.

One more time: without private credit, deficit reduction plans through fiscal austerity, now or in the future, will fail. They cannot succeed. If at the time the cuts take effect the economy is still relying on public expenditure to fund economic activity, then reducing expenditure (or increasing taxes) will simply reduce GDP and the deficits will not go away.

Further, if the finances of the private sector could be fixed, then an austerity program would be entirely unnecessary to reduce public debt. The entire national experience from 1946 to 1980, when public debt fell from 121 to about 33 percent of GDP and again from 1994 to 2000, proves this. In those years the debt-to-GDP ratio fell mainly because of creditdriven economic growth -- certainly not because of public-sector austerity programs. And this is why the deficits returned, in 1980-2 and in 2000, once the credit markets froze up and the private economy entered recession.

Thus until the private financial sector is fully reformed -- or supplemented by parallel financing institutions as was done in the New Deal -- high deficits and a high public-debt-to-GDP ratio are inevitable. In the limit, if there is no private financial recovery, debt-to-GDP will converge to some steady-state value, probably near 100 percent - a normal number in some countries - and at that point the public deficit will be the sole engine of new economic growth going forward. Only when the private sector steps up, will the debt-to-GDP ratio begin to decline.

For this reason, a Commission report focused on "entitlement reform" rather than "financial reform" would be entirely beside the point. Entitlement cuts, no matter how severe, cannot and will not achieve deficit reduction. They cannot "meaningfully improve the long-term fiscal outlook," as required by your charter. All they will accomplish is to impoverish vulnerable Americans, impairing the functioning of the private economy and the taxing capacity of the government.

6. Social Security and Medicare "Solvency" is not part of the Commission's Mandate.

I note from Chairman Simpson's conversation with Alex Lawson that the Commission has taken up the questions of the alleged "insolvency" of the Social Security system and of Medicare. If true, this is far outside any mandate of the Commission. Your mandate is strictly limited to matters relating to the deficit, debt-to-GDP ratio and fiscal stability of the U.S. Government as a whole. Social Security and Medicare are part of the government as a whole, so it is within your mandate to discuss those programs -- but only in that context.

To make recommendations about the matching of benefits to payroll taxes -- now or in the future -- would be totally inappropriate. Within your mandate, the levels of payroll taxes and of Social Security benefits are relevant only insofar as they influence the current and future fiscal position of the government as a whole. Their relationship to each other is not relevant. You are not a "Social Security Commission" and there is no provision in your Charter for a separate discussion of the alleged financial condition of either program taken on its own. Such discussions, if they are occurring, should be subjected to a point of order.

The usual "solvency" arguments directed at the Social Security system and at Medicare as separate entities are in any event complete nonsense. These programs are just programs, like any others, in the Federal Budget, and the Social Security and Medicare "systems" are thus fully solvent so long as the Federal Government is. Further, as explained below, under our monetary arrangements there is no "solvency" issue for the federal government as a whole. The federal government is "solvent" so long as U.S. banks are required to accept US. Government checks -- which is to say so long as there is a Federal authority in the Republic. This point has been demonstrated repeatedly in times of stress, notably during the Civil War and World War II.

7. As a Transfer Program, Social Security is Also Irrelevant to Deficit Economics.

Political discussions of "long-term fiscal sustainability" -- including in the Charter for this Commission -- make an economic error when they loosely use the word "entitlements" and suggest that supposed economic dangers of federal deficits (for instance, rising real interest rates) can be reduced by "entitlement reform." As a matter of economics, this is not true.

"Government Spending" -- as any textbook will verify -- is a component of GDP only insofar as the spending is directly on purchases of goods and services. That alone is what economists mean by the phrase "government spending." GDP is the final consumption of produced goods and services, and government is one of the major consuming sectors; the others being private business (investment) and households (consumption).

Social Security is a transfer program. It is not a spending program. A dollar "spent" on Social Security does not directly increase GDP. It merely reallocates a dollar from one potential final consumer (a taxpayer) to another (a retiree, a disabled person or a survivor). It also reallocates resources within both communities (taxpayers and beneficiaries). Specifically, benefits flow to the elderly and to survivors who do not have families that might otherwise support them, and costs are imposed on working people and other taxpayers who do not have dependents in their own families. Both types of transfer are fair and effective, greatly increasing security and reducing poverty -- which is why Social Security and Medicare are such successful programs.

Transfers of this kind are also indefinitely sustainable -- in fact there can intrinsically be no problem of sustainability with transfer programs. Apart from their effect on individual security, a true transfer program uses (by definition) no net economic resources. The only potential macroeconomic danger from "excessive" transfers is that the transfer function may be badly managed, leading to excessive total demand and to inflation. But there is no risk of this so long as the financial crisis remains uncured. Under present conditions Social Security and Medicare are bulwarks for stabilizing a total demand that would otherwise be highly deficient.

Similarly, cutting Social Security benefits, in particular, merely transfers real resources away from the elderly and toward taxpayers, and away from the poor toward those less poor. One can favor or oppose such a move on its own merits as social policy - but one cannot argue that it would save real resources that are otherwise being "consumed" by the government sector.

The conclusion to be drawn is that Social Security should in any event be off the agenda of your Commission, as it is a transfer program and not a program of public spending in the economic sense. In particular it does not use capital resources and will not drive up interest rates. This is true whether the "Social Security System" is in internal balance or not.

8. Markets are not calling for Deficit Reduction; Now or Later.

Let me turn next to a larger economic question. Do deficit projections matter? Are they important? Was the President well-advised to frame the mandate of the Commission as he did?

What, in short, are the economic consequences of a high public deficit and a rising debt-to-GDP ratio, and what (if any) benefits are to be expected from creating an expectation that deficits will come down and that the debt-to-GDP ratio will fall?

The idea that US economic policy should aim for a path of reduced deficits in the future, is shared by liberals and conservatives, and it is, from a political standpoint, a very powerful idea. The Commission's charter takes for granted that this goal is desirable. It specifies that your objective is to achieve a balanced "primary budget" -- net of interest payments, by 2015.

Yet your charter does say why this is an appropriate goal. It cites no study to which one might refer. It does not explain why 2015 is the right target date, as opposed to (say) 2025 or even 2050. It does not spell out the economic consequences -- if any -- of failing to meet the stated objective.

Does the requirement make economic sense? I shall tackle that question in two parts. The first accepts the view most people hold of the fiscal and financial world. The second reflects, from an operational standpoint, how that world actually works in practice.

Most informed laymen believe that the Federal government must borrow in order to spend. They believe that the interest rate on Treasury securities is set in a market for government bonds. The markets impose discipline on the government. Thus their idea is that "fiscal responsibility" will produce low long-term interest rates and tolerable borrowing conditions for the federal government, while "irresponsibility" will be punished by higher, and eventually intolerable, debt service costs.

Accepting this view for the moment, what does the present level of long-term interest rates tell us? As I write, thirty year Treasury bonds are yielding just over four percent -- or just a little more than half their yield a decade back. On the argument just given, this must be an extraordinary success of virtuous policy. It seems that Wall Street has made a strong vote of confidence in the fiscal probity of our current policies. This vote is unqualified, backed by money, contingent on nothing. It therefore represents a categorical rejection, by Wall Street itself, of the CBO's doomsday scenarios and all other deficit-scare stories.

On this theory, it follows that the mandate to reduce the primary deficit to zero by 2015 is unnecessary. Such an action can hardly reduce interest rates -- neither short nor long-term -- which are already historically low.

But wait a minute, some may say. Yes interest rates are low at the moment. But bond markets are fickle, they can turn on a dime. And what then?

Yes, it is possible that interest rates could rise. But the problem with this argument is that it takes us away from the premise of rationality. If bond markets are fickle and arbitrary, who is to say what they will do in response to any particular policy? In the face of irrational markets, the sensible policy is to borrow heavily for so long as they are offering a good deal. One may say that all good things end, and perhaps they will. But if markets are irrational, then by construction you cannot prevent this by "good behavior."

The conclusion from this section is that one cannot logically argue that markets insist on deficit reduction. Either the markets are rationally unworried about deficits, or they are acting irrationally right now, in which case they can hardly "insist" on anything.

9. In Reality, the US Government Spends First & Borrows Later; Public Spending Creates a Demand for Treasuries in the Private Sector.

As noted, the above argument is based on the common belief that the government must borrow in order to spend, and thus that the government faces "funding risks" in private markets. Such risks exist, of course, for private individuals, for companies, for state and local governments, and for national governments such as Greece that have ceded monetary sovereignty to a central bank. But the situation of the United States government is quite different.

The U.S. government spends (and the Federal Reserve lends) in a very simple way. It does so by writing checks -- in fact simply by marking up numbers in a computer. Those numbers then appear in the bank accounts of the payees, who may be government employees, private contractors, or the recipients of federal transfer programs.

The effect of government check-writing is to create a deposit in the banking system. This is a "free reserve." Banks of course prefer to earn interest on their reserves. Thus they demand a US Treasury bond, which pays more interest without incurring any form of credit or default risk. (This is like moving a deposit from a checking to a savings account.) The Treasury can meet that demand, or not, at its option -- it can permit, or not permit, the stock of US Treasury bonds in circulation to increase.

So long as U.S. banks are required to accept U.S. government checks -- which is to say so long as the Republic exists -- then the government can and does spend without borrowing, if it chooses to do so. And if it chooses to issue Treasuries to meet the demand, it can do that as well. There is never a shortfall of demand for Treasury bonds; Treasury auctions do not fail.

In the real world, the government creates demand for bonds by spending above the level drained by taxation from the system. The extent to which those bonds are held locally, or abroad (another common source of worry) depends on the US current account deficit. This also has nothing to do with approval or disapproval by foreign bankers, central bankers, or their governments of American deficit policy. A foreign country cannot acquire a US Treasury bond unless someone outside the United States has acquired dollars to pay for them, which is generally done by running a trade surplus with the United States. And when foreigners do acquire those dollars, then like domestic banks they prefer to earn interest, which is why they buy Treasury bonds.

Insolvency, bankruptcy, or even higher real interest rates are not among the actual risks to this system. The actual risks in this system are (to a minor degree) inflation, and to a larger degree, depreciation of the dollar. However at the moment there is wide agreement that a lower dollar would be a good thing -- against the Chinese RMB and now also the euro. So it is difficult to believe that the goal of deficit reduction per se serves any coherent, or presently desirable,
economic objective.

We can conclude that there is actually no economic justification for the target of reducing the primary deficit to zero by 2015 or any other date. The right economic objectives are to meet real problems, not those conjured from thin air by economists. Bringing about a rapid end to unemployment, caring properly for an aging population, cleaning up the Gulf of Mexico, coping with our energy insecurity and with climate change are all far more important objectives than reducing a projection of future budget deficits.

10. The Best Place in History (for this Commission) Would be No Place At All.

Most people assume that "bipartisan commissions" are designed to fail: they are given thorny (or even impossible) issues and told to make recommendations which Congress is free to ignore or reject. In many cases -- yours is no exception -- the goal is to defer recognition of the difficulties for as long as possible.

You are plainly not equipped by disposition or resources to take on the true cause of deficits now and in the future: the financial crisis. Recommendations based on CBO's unrealistic budget and economic outlooks are destined to collapse in failure. Specifically, if cuts are proposed and enacted in Social Security and Medicare, they will hurt millions, weaken the economy, and the deficits will not decline. It's a lose-lose proposition, with no gainers except a few predatory funds, insurance companies and such who would profit, for some time, from a chaotic private marketplace.

Thus the interesting twist in your situation is that the Republic would be better served by advancing no proposals at all.



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depakid Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-01-10 11:51 PM
Response to Original message
1. That was scathing
Why on earth a pack of ideologues are on this commission in the first place is a question the we all ought seriously to be asking.
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Skink Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-01-10 11:56 PM
Response to Reply #1
2. Obama has lost the prebervial barbles.
He will now enter the prreverbial funny farm.
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ThomWV Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:30 PM
Response to Reply #2
43. "Prebervial"?
Did you mean to say "proverbial", meaning well-known through frequent observation or mention, as in the sort of thing that would be mentioned in a proverb??
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Skink Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 05:01 PM
Response to Reply #43
64. Soory I was plastered when I wrote that,
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Selatius Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 02:51 AM
Response to Reply #1
16. More to the point, who chose the commission's members? nt
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liberation Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 12:18 PM
Response to Reply #16
30. Whatever the answer is...
Edited on Fri Jul-02-10 12:19 PM by liberation
... one thing will be clear by the time the pom pom squad gets here: it isn't Obama's fault.
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G_j Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:14 PM
Response to Reply #30
34. I meant to K&R the OP
Edited on Fri Jul-02-10 01:15 PM by G_j
oops
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Hell Hath No Fury Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:22 PM
Response to Reply #1
37. Blame the man who put them there.
He's the one who is sticking the knife in our backs.
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Enthusiast Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:25 PM
Response to Reply #1
38. "That was scathing"
And perfectly justified.
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Zhade Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 12:43 AM
Response to Reply #1
104. We already suspect the answer, don't we?
A commission predicated on false premises kind of already answers that question. It's not about the stated goals, it's about destroying Social Security -- a goal conservatives of both parties have wanted for decades.

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Dawson Leery Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jul-01-10 11:57 PM
Response to Original message
3. k/r
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jtuck004 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 12:09 AM
Response to Original message
4. kr
Edited on Fri Jul-02-10 12:11 AM by jtuck004

The Best Place In History (for this Commission) Would Be No Place At All.

LOL
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nilram Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 12:24 AM
Response to Reply #4
5. +1
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burnsei sensei Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 08:12 PM
Response to Reply #4
81. & Amen! nt
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Zhade Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 12:34 AM
Response to Original message
6. Kick/Rec for discussion
NT!

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Hawkowl Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 12:56 AM
Response to Original message
7. Spot on
Galbraith is outstanding. Period. He should have Summers job and Summers should be pushing a broom at his local Taco Bell.
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Enthusiast Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:27 PM
Response to Reply #7
39. +1 on the broom.
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Lilith Velkor Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:26 AM
Response to Original message
8. Yyyup.
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Overseas Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:34 AM
Response to Original message
9. K&R. I agree. This commission is way out of place
especially when $33 billion in additional funding was added to our ongoing war profiteering.

Paying billions extra for privatized military services when they could be done so much more reasonably in house and looking for ways to slash social safety nets to finance that?

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newspeak Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 10:18 AM
Response to Reply #9
112. Spot On!!!
Little Boots privatized more services that the military once performed-and I might add, the military did it better!!! Now our poor soldiers get more shoddy services, while war profiteers charge excessive fees that we, as taxpayers, wind up footing the bill.
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JackRiddler Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:52 AM
Response to Original message
10. SPECTACULAR!
This man is the hero of the day!

He did a better job on these fuckers - Peterson and Simpson by name - than a suicide bomber.

(I'm almost willing to excuse him for his oil profiteering brother, Peter.)
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 02:05 AM
Response to Original message
11. +100.
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bbgrunt Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 02:09 AM
Response to Original message
12. Wow!! that was great. thanks for posting!
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laughingliberal Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 02:17 AM
Response to Original message
13. I'm awestruck! Huge Rec for Gailbraith. nt
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avaistheone1 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 02:17 AM
Response to Original message
14. Gutsy and brutally true.
Edited on Fri Jul-02-10 02:18 AM by avaistheone1
Thanks for posting. I hope this piece gets wide exposure.

k&r


:kick:
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Zhade Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 01:56 AM
Response to Reply #14
105. Seriously. He straight-up told them "you're hiding, you're lying, you're unnecessary".
A thing of beauty to see such no-nonsense courage.

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wuvuj Donating Member (874 posts) Send PM | Profile | Ignore Fri Jul-02-10 02:18 AM
Response to Original message
15. Doesn't matter which party...
...what you see in this country is continuing incompetence and corruption? Occasionally somebody turns on the lights and the rats scurry about?

Special interests and think tanks....crazy people who have the almost sane scared sheetless half the time?
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jeanpalmer Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 02:51 AM
Response to Original message
17. Bravo for Galbraith
This commission is simply a front to cut entitlements. It's a right winger's dream. After Galbraith's testimony it should have voted to disband.

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Enthusiast Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:29 PM
Response to Reply #17
42. They can't wait to
get their hands on our social security - a true right wingers dream.
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KeepItReal Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 02:57 AM
Response to Original message
18. He spells it all out! Great read!
Thanks for posting!
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Subdivisions Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 03:14 AM
Response to Original message
19. Well it's about time someone spoke the plain, un-spun truth. Can't recommend this enough. n/t
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Greyhound Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 03:20 AM
Response to Original message
20. K&R for more sanity.
It's time to turn off the music and bring up the house lights so that we can really look at the mess. The members of this "commission", especially Simpson, are a core of establishment partisans that all share one thing in common, being wrong nearly all the time and bearing a great deal of responsibility for bringing us to this crisis, for crisis it has become.


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Agony Donating Member (865 posts) Send PM | Profile | Ignore Fri Jul-02-10 06:16 AM
Response to Original message
21. Nothing to see here.... move along, move along...
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 06:26 AM
Response to Original message
22. He should have also said
that this entire discussion is ideologically driven and is based on failed neo-liberal economic policies.


Must read. Rec
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On the Road Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 08:07 AM
Response to Original message
23. Missed This the First Time:
Even if CBO were right about recovery, which it is not, this projection is internally inconsistent and wholly implausible. It isn't going to happen. Low overall inflation (at two percent) is inconsistent with the projected rise of short-term interest rates to nearly five percent.

Like the SS shortfalls driven by 1.9% growth rates, this is beginning to sound like a model which is constructed to result in a certain prescription.

That is really, really good. And it's even better it was delivered as testimony rather than simply being published.
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whathehell Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 10:48 AM
Response to Original message
24. Fabulous!....Thanks for posting!.....JKG speaks truth to power!
Do you think the Prez will listen?...I have doubts but I'm hoping. :eyes:
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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:54 PM
Response to Reply #24
62. I think the commission was set up to expose the people on it, especially
the ones who want to cut social transfers. Remember congress does not have to listen to their recommendations. Give them enough rope to hang themselves. At least I hope that is the situation.
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whathehell Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 05:55 PM
Response to Reply #62
70. Interesting thought...I hope that's the case as well. n/t
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liberation Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 07:45 PM
Response to Reply #62
78. We can quit pretending all these checkers moves are 3D-chess any day now...
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joe black Donating Member (514 posts) Send PM | Profile | Ignore Fri Jul-02-10 09:25 PM
Response to Reply #62
89. Ah bullshit
I'm getting tired of the 3D chess excuse for Obamas ass kissing.
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Zhade Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 01:59 AM
Response to Reply #62
107. Yeah, right. And they're going to fix the HIR bill, too.
I'd love to be proven wrong.

I won't be.

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glitch Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-11-10 12:39 PM
Response to Reply #62
128. Even after HCR? nt
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Zhade Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 01:58 AM
Response to Reply #24
106. Considering he picked these fuckers, no. I doubt he will.
NT!

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NBachers Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 11:13 AM
Response to Original message
25. Gee Whiz, an actual Smart Guy
I wonder if he passed out the Cliff Notes or the Classic Comics version to the commission?
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valerief Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 11:28 AM
Response to Original message
26. Will our "news media" cover this? nt
Edited on Fri Jul-02-10 11:28 AM by valerief
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Octafish Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 11:39 AM
Response to Original message
27. JK Galbraith should be Secretary of the Treasury
If he doesn't want that job, I'd vote for him to serve as the next President.
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AikidoSoul Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:53 PM
Response to Reply #27
60. I'm with you on that. The man is brilliant and understands the big picture
in all of its complexity. Secy of Treasury would be an excellent post for him to fill.

Kick and rec
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glitch Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-11-10 12:38 PM
Response to Reply #27
127. +INFINITY
capitalized because I really am yelling.
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 11:55 AM
Response to Original message
28. *****BREAKING*****
GALBRAITH EATS CATFOOD COMMISSION!!!!
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Taitertots Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 12:16 PM
Response to Original message
29. There is ONE economist on the whole panel
This is a dog and pony show to roll out predetermined policies that are foolish at best, and likely malevolent.
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liberation Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 12:21 PM
Response to Reply #29
31. Which makes it different from all the previous "commissions" by this and previous admins how?
;-)
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whyverne Donating Member (734 posts) Send PM | Profile | Ignore Fri Jul-02-10 01:05 PM
Response to Reply #31
32. A beautiful mind!
The "debt got us in this mess to begin with" crowd will be screaming. But they're full of crap. Nothing happens without credit and debt. What got us into trouble was bullshit debt. Debt for debt sakes. Debt because I can make money off of it debt. I don't care if you pay it back debt. No credit, no debt = no growth = no recovery.
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fascisthunter Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 07:33 PM
Response to Reply #29
77. indeed
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westerebus Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:11 PM
Response to Original message
33. AMEN!
Who stole the economy?

Who allowed them to steal the economy?

Who are under indictment?


And WTF not?


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Enthusiast Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:31 PM
Response to Reply #33
44. +1000! nt
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emsimon33 Donating Member (904 posts) Send PM | Profile | Ignore Fri Jul-02-10 01:14 PM
Response to Original message
35. K&R
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emsimon33 Donating Member (904 posts) Send PM | Profile | Ignore Fri Jul-02-10 01:14 PM
Response to Original message
36. K&R
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DirkGently Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:27 PM
Response to Original message
40. I actually read the whole thing.
It's that good.

Thanks for posting. Wish everyone in the country would read it.
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Hell Hath No Fury Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:28 PM
Response to Original message
41. More, please!
That right there is the antidote we need. Straight talk, sunshine, accountability.
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BanTheGOP Donating Member (596 posts) Send PM | Profile | Ignore Fri Jul-02-10 01:33 PM
Response to Original message
45. Let's translate this for the gop lurkers...
We need to eliminate any bipartisan discussion in ANY matter of economics because the GOP has NO RATIONAL ECONOMIC ADVICE to give in the FIRST freakin' place!

Socialize the banks, repatriate the ill-gotten wealth of the republicanist billionaires, and tax the hell out of the rich, and we will NOT Have ANY problem whatsoever.

What is so hard about that?? Seriously...
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ThomWV Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:36 PM
Response to Original message
46. There is one large failure in his arguments
He makes several arguments, and they are well stated, however, one of them fails. It is the argument that Social Security is strictly a transfer not involving any actual new Government spending. In fact the Agencies "borrow" from the "Social Security trust fund" and then spend that money so it is not just a transfer with no net effect on GDP. In fact every "borrowed" dime is, according to his later argument, the result of spending by the Government that has already taken place and which then drives the demand for US bonds. He should account for this in his argument and he does not. Its not the biggest thing in the world, but its far from the smallest.
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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 03:14 PM
Response to Reply #46
50. He is talking from an economist's point of view
AS far as economists are concern, you have only three types of transactions:
1. Purchase of Goods
2. Purchase of Services
3. Transfers from one person to another who then buys goods and services with the money.

So what is Social Security? Social Security is a transfer of money from people who pay into Social Security to people who are recipients of Social Security (SS). There may be some delay as any excess Social Security Tax is sent to the Treasury Department to hold. The Treasury then uses that money to BUY other Goods and Services (including the Service that the Money will be paid back). Thus all Social Security (SS) Tax money is either a transfer OR is used to buy Goods and Services and the Commission wants to cut back on the TRANSFERS not the purchase of Goods and Services with the excess collected SS Taxes.

Furthermore, Social Security, when transferred to recipients, is used by Social Security (SS) recipients to buy Goods and Services. When the excess is transferred to the Treasury, it is used to buy Goods and Services.

The problem, as the writer points out, is NOT such transfers, it is NOT even taxation, the problem is private banks are NOT loaning money and no one wants to address that issue. What can we do to get banks to loan out money? North Dakota seems to have found a solution, it is the only state with its own bank, but no one wants to look or even study why that is working for they have already rejected that proposal for the Private Banks oppose such a solution.
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ThomWV Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:51 PM
Response to Reply #50
59. No kidding - I am an economist.
Edited on Fri Jul-02-10 04:52 PM by ThomWV
I understand his argument, all I'm saying is that he left out the borrowing from the "fund". He omitted that and acted like all SS is transfer, which it is not when the Agencies have access to that money, which they do. Maybe you missed that part. When the Agencies "borrow" money taken in it is not longer a transfer, it represents an expenditure (purchase of goods or services) which, as he so correctly points out, is actually not funds borrowed for future spending but funds borrowed to cover purchases already made. The failure of that little part of his argument is in calling it a transfer when in fact it is the purchase of goods and services.

Oh, on that Economist thing, I actually was trained as one - but never worked in the field and am retired today.
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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 05:02 PM
Response to Reply #46
65. But the answer is still not to cut Social Security but the stop the borrowing
from it. However, one of the needs of Social Security is to earn money to increase the money in the fund. This cannot be done without lending it - either privately or to the government. Vicious circle.
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ThomWV Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 06:07 PM
Response to Reply #65
117. Why and how would Social Security have to "earn" money
I have no idea what you are talking about with that statement. If Agencies owe the Social Security Administration funds taken in in SS taxes but spent elsewhere how does that then require the SSA to earn anything? What they need to do is collect, not earn.
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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-04-10 09:06 AM
Response to Reply #117
121. You are correct about the borrowed money not requiring earning but
wasn't the original idea of social security that we would pay in and the government would increase the money paid in to cover the extra cost of the program? I have always assumed that was the way it was from the beginning. Are you saying that after we pay in the money just sets there until we want it back? Never earning a cent of interest?
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kenny blankenship Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 01:36 PM
Response to Original message
47. Behold an economist without guile!
That is a thing of beauty, but way too honest. People who speak like this Galbraith fellow generally end up on a lonely hill nailed to a couple of sticks.
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DireStrike Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 02:35 PM
Response to Original message
48. "There is never a shortfall of demand for Treasury bonds; Treasury auctions do not fail."
Edited on Fri Jul-02-10 02:39 PM by DireStrike
The only sticking point in the entire article. (Edit: ThomWV points out a good criticism as well above: http://www.democraticunderground.com/discuss/duboard.ph... )

Now, to my point:

http://www.pimco.com/LeftNav/Featured+Market+Commentary...

Heres the problem that the U.S. Feds exit poses in simple English: Our fiscal 2009 deficit totaled nearly 12% of GDP and required over $1.5 trillion of new debt to finance it. The Chinese bought a little ($100 billion) of that, other sovereign wealth funds bought some more, but as shown in Chart 2, foreign investors as a group bought only 20% of the total perhaps $300 billion or so. The balance over the past 12 months was substantially purchased by the Federal Reserve.


Now this is not inherently a problem (as Galbraith puts it) "so long as U.S. banks are required to accept US. Government checks -- which is to say so long as there is a Federal authority in the Republic." The auctions do not fail because they can be bought out with imaginary money. The imaginary money will be accepted as long as there is a federal authority.

Can we really have bond auctions like this without eventual destabilization of the federal authority?
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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 03:17 PM
Response to Reply #48
51. The City of Florence did it for over 800 years
Only the Invasion of Italy by Napoleon ended the practice and the end had more to do with making Italy a United Country under his rule then anything inherently wrong with deficients
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DireStrike Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 05:36 PM
Response to Reply #51
69. To be clear, we are not talking about deficits per se
But deficits financed by fiat.

I don't know my Florencian history. You are saying that this is the case? Hrm. The scale involved is a major difference, but I find it shocking that a city managed it.
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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 01:51 PM
Response to Reply #69
116. Adam Smith pointed out that NO GOVERNMENT had ever paid its debts
Smith mentioned some governments went through the motion of paying off their debts, but most just roll them over till a time when the debts are inflated away. The problem with Germany in the 1920s was it could NOT inflate its debts away, the debt were in Dollars, Pounds and Francs NOT Marks. Thus the inflation quickly got out of hand, until the US worked out a compromise spreading out the payments (and those payments lead to Hitler's rise to power and his embrace of inflation to inflate the debt away, the subsequent reduction in the German standard of living lead to unrest in Germany by the late 1930s and his decision to cut off that growing resentment by his taking over of Austria, then Czechoslovakia and then WWII, at which the German Mark had no value until the US and Soviet Forces issued new Marks for the Western and Eastern Zones of Occupied Germany(.

The same happens in the third world today, third world countries borrow in Dollars which must be paid back in Dollars. Thus they can NOT inflate away their debt. What they can inflate away (Domestic Debts) they do by adopting hyperinflation (which is what Germany did in the 1920s). Thus only foreign debts are left. Since these third world countries are NOT as rich as Germany was in the 1920s (We are talking in relative terms to the US i.e. Germany and US in the 1920s, Third world countries and the US today) no one is willing to step in and work out a deal where they can inflate even the foreign debts away.

My points, and the point Adam Smith made, is countries do NOT pay their debts and never have. The US may be the sole exception to that rule, but it took a President Jackson (and a huge amount of revenue from selling land in the Mississippi drainage system, which was incurring at that time) to do so AND it resulted in the worse economic situation between the 1790s and the 1870s (The US has suffered four severe "Depressions", not including the present one, in its history, the late 1780s till about 1800, the 1830s, the 1870s and 1880s, and the Great depression from 1929-1938, please note the years given are guidelines not actual years, for example farming went into its Depression by 1927 and parts of the US did NOT recover till 1942 when the US entered WWII). Ever since Jackson the tendency has been to turn over the debt even in years when the US balanced its budget. The main reason for this is the reason Government borrow money is they did NOT want to raise taxes for some project (Which can include a war). At the end of the project Politicians still do not want to raise taxes so they just turn over the debt and hope its get paid some time in the future. The problem is at no time is they really any excess money going into the GOvernment to pay off the debt so the debt keeps being rolled over.

Now, Florence is the only Government I have ever heard that ran a deficient every year for decades let alone centuries. Sooner or later most Government balance budgets. The problem is the balance budgets are balance only as to adding no more debts, as oppose to paying off past debts. You can have balance budgets for decades as such long terms debts are just rolled over year to year. Thus Adam Smith's observation that no Government ever paid off its debts. Governments, when they borrow in their own currency, has no reason to pay off such debts AND when things get tight Governments then fall into (as oppose to actually planning to do so) one of two actions, either refuse to pay the debts OR goes through the motions of paying them off with inflated money (i.e. inflate the debt away so that a Million Dollar Debt is equal to the amount of money needed to buy a small candy bar).

Lets us NOT forget that you can have inflation even with Gold based money. For example, the Silver movement in the US in the late 1800s was to inflate the value of the Dollar so that farmers debts would FALL as opposed to having increased as the US Government returned the Dollar to its Gold Standard of $20 to an ounce of gold after the Civil War. The Silver movement died out as Australian and South African Gold Mines opened in the late 1890s and bring with it the inflation the Silver Movement had wanted. The huge expansion of the US in the 1850s can be contributed to the huge increase in the amount of Gold in World Circulation from the California Gold Rush of 1869 (Something like 1/3 of all gold in circulation after 1850 was from California, a huge inflation of gold based money). The Roman Empire Stood strong from the time of Julius Caesar till the troubles of the Third Century AD. The reason for the Trouble? The silver mines of Spain watered out and thus the inflation do to new silver entering the economy ended.

Remember the problem is Fiat money is NOT that it can be subject to inflation (so can Silver and Gold based Money AND a low rate of inflation has been found to be GOOD for the economy) but that it is easier to inflate it 100% away then Gold or Silver base money. Debts are just promises to pay, just like Fiat Money is promises to pay (and that is true of Silver and Gold Coins which tend to be minted with values MORE then the value of the Gold or Silver in the Coin, Gold and Silver coins VALUE are promises to pay, if the value is more then the value of the Gold and Silver in the Coins). As a promise to pay, sooner or later the Government will have to make a Decision, to pay the debt OR not. In almost all cases it will decide NOT to pay the debt, be the debt in the form of Paper, Gold or Silver. Given that choice, increase taxes, confiscate property of Citizens or just not pay the debt, the Government will do the later every time. In most years the cost to do so are to high, so the debts are rolled over, but over time the government will just give up going through the motion and just stop payments (Or inflate it away if it wants to go through the motion of actually paying the debt off).

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ThomWV Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 06:10 PM
Response to Reply #116
118. What???????
I am simply flabergasted, I just don't know where to begin.
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DireStrike Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 06:29 PM
Response to Reply #118
120. Can you try to find a starting place?
It seems reasonable to me, but I only took a handful of economics classes. I'm lost if you're completely objecting to all of that.
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DireStrike Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 06:18 PM
Response to Reply #116
119. delete
Edited on Sat Jul-03-10 06:27 PM by DireStrike
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OhioChick Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 02:35 PM
Response to Original message
49. K&R n/t
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sabrina 1 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:27 PM
Response to Original message
52. Excellent, but I doubt Obama will listen to HIM.
HE should have been on the Commission, why wasn't he?
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ThomWV Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:54 PM
Response to Reply #52
61. On Edit: Self Delete
Edited on Fri Jul-02-10 04:55 PM by ThomWV
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newspeak Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 10:27 AM
Response to Reply #52
113. you think KO will read this on his show?
It would be great if KO or Rachel read his words on their show--at least give it some media exposure.
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madrchsod Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:30 PM
Response to Original message
53. delete
Edited on Fri Jul-02-10 04:30 PM by madrchsod
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madrchsod Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:30 PM
Response to Original message
54. will obama take heed to mr galbraith`s words?
i doubt it
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gulfcoastliberal Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:31 PM
Response to Original message
55. Why in Gods name did Obama use an executive order to create this bullshit commission?!!
Obama clearly hates social security and is going even farther than GW Bush in an attempt to destroy the program & Medicare, too. For him to parrot extremist talking points to justify this farce of "deficit reduction" clearly shows the lengths he'll go to in supporting a very far-right agenda in this case. Clearly his wall street supporters can count on him to go to great lengths in support of even their most extreme agenda.
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burnsei sensei Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 08:16 PM
Response to Reply #55
82. Because he is a Third Way liberal
trying to create a consensus with people who hate and want to sabotage him.
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w4rma Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 09:54 PM
Response to Reply #82
93. Because Obama is a neo-liberal. (nt)
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johnaries Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:35 PM
Response to Original message
56. He makes some very valid points. nt.
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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:46 PM
Response to Original message
57. Wow! Telling it like it is and best of all in an understandable way. Will
they listen - probably not.
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JackRiddler Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:47 PM
Response to Original message
58. Let's keep this kicked until December!
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upi402 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 04:56 PM
Response to Original message
63. if it's GGM, it's the two-by-four of truth! ty n/t k/r
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 05:08 PM
Response to Original message
66. kik for truth.
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amborin Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 05:08 PM
Response to Original message
67. K&R
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upi402 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 05:24 PM
Response to Original message
68. "The Good Society" -John Kenneth Galbraith
That book made me view the crap my Econ professor spewed as invalid -even propaganda. He was a 'Free Market' tool drawing income from a publicly funded (socialist) institution. As phony as a modern teabagger on medicare.

John Kenneth Galbraith was an American giant, like Darrow and Marshall. We need more of them, and we need an opposition party to balance the corporatists running America now.
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Bozita Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 07:08 PM
Response to Original message
71. K&R
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Kat45 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 07:20 PM
Response to Original message
72. K&R
I'm going to bookmark this one.
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JackRiddler Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 07:26 PM
Response to Original message
73. IMPORTANT: Okay, did this really happen?
There is no evidence on C-SPAN or at the Commission site that Galbraith actually delivered this testimony to the Commission yesterday.

http://www.fiscalcommission.gov/meetings /

Furthermore, he's been organizing the counter-commission effort for months.

Did this really happen, or is this the testimony he would have delivered in person if allowed?

Can anyone find video or official confirmation?
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Sherman A1 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 07:28 PM
Response to Original message
74. +1, Agreed & Well Said!
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NorCalDem Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 07:29 PM
Response to Original message
75. Man, point #6 is on-point
well said Dr.!
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fascisthunter Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 07:32 PM
Response to Original message
76. K&R (nt)
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Solly Mack Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 08:01 PM
Response to Original message
79. K&R
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burnsei sensei Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 08:11 PM
Response to Original message
80. Withering? There's nothing withering here!
KICK ASS!
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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 09:32 PM
Response to Reply #80
90. Withering in the sense that he completely obliterated the clout of the commission.
Definitions of withering on the Web:

* annihilative: wreaking or capable of wreaking complete destruction; "possessing annihilative power"; "a devastating hurricane"; "the guns opened a withering fire"
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burnsei sensei Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 10:05 AM
Response to Reply #90
111. Well, they damn well deserve it.
nt
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bluzman63 Donating Member (19 posts) Send PM | Profile | Ignore Fri Jul-02-10 08:28 PM
Response to Original message
83. if only
this would make it go away
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Subdivisions Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 08:32 PM
Response to Original message
84. So, is there video of this smack down? What was the commission's reaction. I would
have loved to have seen the look on their faces! :bounce:
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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 09:39 PM
Response to Reply #84
91. edit..
Edited on Fri Jul-02-10 09:49 PM by girl gone mad
I am trying to find the answer for you.

I know the commission invited Galbraith's statement. Wonder if they had any second thoughts about that?

I did notice an attack on Galbraith making the rounds last week on some right wing economic blogs. An attempted pre-emptive strike, maybe?

http://conant.economicpolicyjournal.com/2010/06/is-utas...
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burnsei sensei Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 08:38 PM
Response to Original message
85. I also wanted to write a little about
Edited on Fri Jul-02-10 08:39 PM by burnsei sensei
this secrecy thing and the discussion of entitlements.
Have you ever been a black or outcast child on a playground or perhaps in a front yard, and two other children, with whom you have been playing, start whispering back and forth, with you watching from the outside?
Maybe it's about you. Maybe it's not. They try and assure you later that it's not.
But they still whisper to themselves.
Intuitively and from their body language, you know they don't mean well. They're not saying anything nice about you.
In fact, they could be planning some scheme to humiliate you-- it's too likely to dismiss.
That is how the government and the rich are treating the rest of the country. We are the outcast child, the black, the poor, the vulnerable.
Mr. Obama, Mr. Simpson et al, you're wrong. Your "proceedings" are illegitimate.
And YOU ALWAYS WERE WRONG!



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bonzotex Donating Member (740 posts) Send PM | Profile | Ignore Fri Jul-02-10 08:57 PM
Response to Original message
86. excellent stuff k/r..wish somebody besides us would listen.
James K Galbraith is brilliant.

Problem is, they haven't listened to him before and won't now. If you want you can read his testimony from Feb 2009. He was right then too and Congress implemented effectively zero of his recommendations.

http://www.house.gov/apps/list/hearing/financialsvcs_de...
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newspeak Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 10:34 AM
Response to Reply #86
114. so, if they are not listening
then do they really want the country to recover or are they attempting to put more money in the hands of certain people? Because, about right now, I'm thinking most of them on the hill could care less about main street. If they're not listening to economists like Gilbraith, then there listening to corporations and lobbyists-who have no interest or even patriotism-they'd see this country go down in a heartbeat if they could make an extra buck.
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bonzotex Donating Member (740 posts) Send PM | Profile | Ignore Sun Jul-04-10 02:09 PM
Response to Reply #114
122. I don't think it is in the interest of the elites to see the country...
...economically go down the shitter. I'm not sure they see their policies as doing that. There are deep levels of delusion in financial/economist circles. Unfortunately I think they really believe the lies they have been telling each other for 30 years. I don't think it is a conspiracy of super-genius greed-heads, but rather rich, over-privileged dunces.
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joe black Donating Member (514 posts) Send PM | Profile | Ignore Fri Jul-02-10 09:15 PM
Response to Original message
87. KA-POW!
Too bad Obama can't appoint guys like this.
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tavalon Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 12:06 AM
Response to Reply #87
100. He can
He doesn't.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 09:17 PM
Response to Original message
88. Shrewd, a paucity of words and rapier sharp
This is how brilliance asserts itself. Galbraith rocks!
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bertman Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 09:52 PM
Response to Original message
92. Who is this Communist so-called Economist, Galbraith anyway!!?? The man we
should be listening to is a REAL American, Secretary Hank "Drain the Treasury" Paulson.



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defendandprotect Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 10:40 PM
Response to Original message
94. K&R ... kick for tomorrow . . . !!
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bluestateboomer Donating Member (313 posts) Send PM | Profile | Ignore Fri Jul-02-10 10:40 PM
Response to Original message
95. K&R
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cameozalaznick Donating Member (624 posts) Send PM | Profile | Ignore Fri Jul-02-10 11:08 PM
Response to Original message
96. good stuff! nt
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Canuckistanian Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 11:19 PM
Response to Original message
97. K&R
Outstanding.

This should be required reading in schools.
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SILVER__FOX52 Donating Member (460 posts) Send PM | Profile | Ignore Fri Jul-02-10 11:22 PM
Response to Original message
98. Oh my God.....a moment of clarity.
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alfredo Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-02-10 11:37 PM
Response to Original message
99. Damn!!
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amborin Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 12:22 AM
Response to Original message
101. outstanding assessment by Galbraith; finally had time to read it; thanks for posting this!
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 12:30 AM
Response to Original message
102. Kick and Rec.
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Zhade Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 12:40 AM
Response to Original message
103. EVERYONE SHOULD READ THIS. I know, it's a lot of words, but still.
KICK

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bread_and_roses Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 07:11 AM
Response to Original message
108. Everyone should read at least the first section of this
I'm surprised that with 200 Recs it's not still on the front page. It certainly is critical that everyone be aware of the flaws in this commission. Did not Obama set it up? Can he not mandate public meetings at least?
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 08:31 AM
Response to Original message
109. kicking this again
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alterfurz Donating Member (723 posts) Send PM | Profile | Ignore Sat Jul-03-10 08:49 AM
Response to Original message
110. the polite version of the late great George Carlin's withering testimony
http://en.wikiquote.org/wiki/George_Carlin

"...you know what they want? Obedient workers--people who are just smart enough to run the machines and do the paperwork but just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it. And, now, they're coming for your Social Security. They want your fucking retirement money. They want it back, so they can give it to their criminal friends on Wall Street. And you know something? They'll get it. They'll get it all, sooner or later, because they own this fucking place. It's a big club, and you ain't in it. You and I are not in the big club."
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amborin Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-03-10 11:47 AM
Response to Original message
115. kicking
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txlibdem Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-04-10 03:49 PM
Response to Original message
123. the claim that deficits have resulted from "overspending" is false, both in the United States and ab
Edited on Sun Jul-04-10 03:50 PM by txlibdem
"the claim that deficits have resulted from "overspending" is false, both in the United States and abroad."

Love it. Let's bring the light of truth to these idiotic Rethuglican talking points.
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JackRiddler Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-04-10 03:51 PM
Response to Original message
124. HELLO? Anyone know if this was actually delivered as testimony in person to the Commission?
If so, where is the record of that? Any video?

I really want it to be so.
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Angry Dragon Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-04-10 08:55 PM
Response to Original message
125. kick
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mdmc Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jul-09-10 06:52 AM
Response to Original message
126. ..
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