COLLECTIVE MADNESS


“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Saturday, November 15, 2008

Why Deflation Must be Stopped


Deflation is sometimes likened to Dante's Inferno. "Abandon all hope" once you step into that Hellfire.


There is an underlying implication from many that the current financial crisis was caused by deadbeats and that they alone should suffer from their transgressions. That may be good politics or sound morality but it is bad and possibly fatal economics.

Intuitively, we all feel that falling prices are a good thing. That may be so for a short season but if it takes hold on a secular basis it can cause a pernicious and corrosive breakdown in unexpected parts of modern society.

Deflation is an avoidable consequence of bad policy, as an epidemic can be a result of bad hygiene. All will suffer needlessly. The Telegraph explains:

_____________________________

Abandon all hope once you enter deflation

The price of white truffles has fallen 84pc. Fines wines have dropped 65pc. Lobsters are off 52pc. Deflation has reached the City. It has engulfed housing and now threatens to spread through the broader economy, lodging like a virus in the British and global monetary systems.

By Ambrose Evans-Pritchard Telegraph
Last Updated: 7:27AM GMT 13 Nov 2008



We are not there yet but Mervyn King, the Governor of the Bank of England, says it is now "very likely" that the UK retail price index will turn negative next year. This is a drastic reversal of the oil and food spike that played such havoc with monetary policy over the summer. "The world changed in September," said the Governor.
The Bank's fan charts point to zero inflation at current interest rates of 3pc, but the startling new feature is that price falls could gather pace. This is a clear signal that the Monetary Policy Committee will cut rates again in December – perhaps by a full point to the historic low of 2pc, last seen in the Great Depression.
Mr King let slip yesterday that there is "obviously" a risk of deflation, although he remains sure it can be averted by a pre-emptive monetary blitz. Let us hope he is right.

The curse of deflation is that it increases the burden of debts. Incomes fall: debts stay the same. This way lies suffocation. It was bad enough in the early 1930s when US farmers faced a Sisyphean Task trying to meet mortgage payments on their land as crop prices kept sliding. They suffered mass foreclosure and fled West, as recounted in John Steinbeck's Grapes of Wrath.

We forget, however, that overall borrowing was modest in the 1930s. The great credit bubble of the last 20 years has pushed debt levels in Britain, the US and other Western societies to unprecedented highs. UK household debt reached a record 165pc of personal income last year. This is almost 50pc higher than the burden at the onset of the recession in the early 1990s. Our sensitivity to debt deflation is therefore greater.

"It is going to be absolute murder in Britain if inflation turns negative," said Professor Peter Spencer from York University. "The big difference with past episodes is that we are now much more heavily indebted. Few people owned their own houses in 1930s. Debts were miniscule."

Deflation has other insidious traits. It causes shoppers to hold back. They wait for lower prices. Once this psychology gains a grip, it can gradually set off a self-feeding spiral that is hard to stop.

It also redistributes wealth – the wrong way. Savings appreciate, which is nice for the "rentiers" with capital. The effect is a large transfer of income from working people with mortgages to bondholders. (These may be pension funds, of course).
The modern warning to us all is the "Lost Decade" in Japan, a loose term for the on-again, off-again slump that ultimately led to zero interest rates and – when that failed – to the printing of money. After 18 years, the Nikkei stock index is now trading at 8,700 – down from a peak of nearly 40,000. House prices have fallen by half. Yet after all the stimulus, the country is once again tipping back into deflation.
Governor King said Britain was likely to avoid this fate. "We've taken action much earlier than was the case in Japan," he said.

Not everybody agrees, even after the shock and awe cut of 1.5 percentage points by the MPC. Albert Edwards, global strategist at Société Générale, has long warned that central banks in the Anglo-Saxon countries have stored up trouble by stoking credit booms, and may find it harder than they think to engineer a soft-landing.

"This could easily go the way of Japan. It is true that Bank of England has moved faster, but Japan was a local bubble. This time it is the 'great unwind' on a global scale with leverage spaghetti everywhere," he said.

"The monetary authorities don't have foggiest idea themselves whether this is going to work. They're crossing their fingers and hoping," he said.

Nor is it clear whether rate cuts are gaining much traction. The average rate of tracker mortgages has risen 72 basis points since last month, and credit card rates have been rocketing. The Bank's transmission mechanism is not working properly. This a variant of the 1930s struggle when the central banks found themselves "pushing on a string", in the words of John Maynard Keynes. He called for public works to lift the economy out of its liquidity trap. This is more or less what the US, Japan, China, and parts of Europe are now doing – with more in store after the G20 this weekend. Britain has pitifully limited scope on this front. We had a budget deficit of 3pc of GDP at the top of the cycle – when we should have been in surplus – and we are heading for over 8pc. This is already nearing the danger level. If the Government now lets rip on fiscal policy, we could face a 'gilts strike' as foreign investors retreat from UK debt.
The Bank of England has not run out of ammo yet. It can cut rates to zero if necessary and then escalate to direct infusions of money by purchasing bonds – or indeed by buying a vast range of securities, assets and even houses if necessary. Ultimately it can print money to cover the budget deficit.

As the late Milton Friedman put it, governments can drop bundles of banknotes from helicopters. If they really want to defeat to deflation, they can. Mr Friedman may have overlooked the fact that gunmen can shoot down the helicopter – the Bank of France in October 1931, when it ditched the dollar; perhaps Asian bond investors today? – but that is to quibble.

Professor Spencer says the Bank of England has learned the hard lessons. Without the constraints of the ERM, Gold Standard, or any other fixed exchange system, it retains great freedom of action.

"They are very aware of the deflation risk. They are cutting rates very fast, and if necessary they too will turn to helicopters. But in the end they will keep the wolf from the door," he said.



131 comments:

  1. Here we go again, is the planet warming or cooling? Will the next specter be inflation or deflation?

    Trillions of dollars and other currencies poured into the various economies of the world would seem to have an opposite effect. Ordinarily, loose monetary policy leads to inflation. In any case, the almost hysteric speculation about the coming economic collapse has yet to reach a crescendo.

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  2. If only we were under this system, we wouldn't be in the fix we're in:

    Islamic Finance May be on to Something

    Expect to see lots more articles like this one as we're gradually introduced to the "beauty" of Sharia.

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  3. Expect to see lots more articles like this one as we're gradually introduced to the "beauty" of Sharia.

    Sat Nov 15, 09:50:00 AM EST

    It's early yet, but I'm laying odds that this will be the goofiest statement of the day, whit.

    Let's call it a sharply goofier opening and anticipate a significant intra-day recovery.

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  4. Lest anyone think I'm partisan, my prediction has nothing to do with the election of Barack Obama. More to do with growing Muslim communities throughout the world. And is it so goofy or far-fetched to think that some of the newly acquired Arab wealth won't find it's way into the news media?

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  5. Expect to see lots more articles like this one as we're gradually introduced to the "beauty" of Sharia.

    On the contrary, expect to see Sharia rejected wholesale since there's no longer a Bush nose to tweak. The whole flirtation with Sharia was like when girls get their tongue pierced in retaliation for Dad's rule that she has to be in by 9pm.

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  6. Lest anyone think I'm partisan, my prediction has nothing to do with the election of Barack Obama.

    - whit

    Why would I think it does, given that we heard a lot more of it during the crazy heydays of the present administration and Daniel Pipes's glue-sniffing period?

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  7. Speaking of which, somewhat, poor old Woo Wei ought to be comforted in knowing that it wasn't the Islamic horde that stood ready to overpower us, but credit default swaps - about which that loser Richard Clarke said squat. And Iceland, apparently, was the real target of opportunity.

    What did Forrest Gump say? Life is like a box of chocolates.

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  8. On a more serious note: Don't miss Packer interview of Kilcullen on Afghanistan, avail at RCP today. Overall, a worthy read.

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  9. You’re right. Pakistan is extremely important; indeed, Pakistan (rather than either Afghanistan or Iraq) is the central front of world terrorism.

    THX, trish

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  10. Seems to be the Packer interview echoes/parallels much of what we, the unwashed, here at the EB have been noting.

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  11. Speaking of the unwashed here at the EB, I am really counting on someone to today come up with a goofier statement...

    Anyone?

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  12. It's not the central front, Rat. It's a refuge. You have to look at those places that are being actively targeted - and there are many, widespread - while being ambidextrous enough to act in the refuge.

    The military is better at looking beyond borders in this case than the rest of the community.

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  13. The central front is not a location. It's an idea.

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  14. As it always has been for us.

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  15. Toyota has stopped construction on it's new Ms Plant. The "Scary" part of this is that the plant is/was going to produce the hottest-selling car on earth, the Prius.

    Why are they doing this? And, why is it important?

    CARD-CHECK!

    This is the Snowball that can roll us into world-wide protectionism, and DEFLATION.

    I know, I know, the immediate result will be "inflation." However, as Japanese/German factories close, and move "offshore" the inevitable reaction will be "Tariffs" against these self-same "traitors," paying lower Mexican, and Caribbean, Chinese wages.

    This will quickly lead to counter-tariffs, and "Trade War." Twenty Percent Unemployment, and Deflation will be only months down the road.

    This is the part of the Democratic agenda that has had me praying for 43, or 44 "Good" Republicans. I don't think we'll get there. And, even if we do, the Dems will, in my mind, simply rescind the "rule of 60." They're not like a bunch of wimpy-assed republicans; they play for keeps.

    I think we might be "well and truly" screwed on this one.

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  16. I'm not so sure the Obama administration will sink into protectionism rufus. It could, however, be wishful thinking on my part. The general consensus, the best I can see, aside from the hard core right, is that deflation is a big worry and the fed's ability to do much is constrained by the fact that they have little rate cutting left that they can do. So, the consensus seems to be forming, that inflation can be tamed if it rears it's ugly head though rate increases so the spending taps must be opened, and opened wide. Public spending - infrastructure, health care - loads of things the money can be spent on but spend it they will. What I think will help keep inflation at bay, at least in the short term, will be the fact that much of the new money put into circulation is simply replacing the 'old' money that's been disappearing. In any case the fed can weigh in and raise rates if necessary. The problem in this scenario is will folks step up and buy T bills. If they don't, and this is a question I've yet to find an answer for, is there a law that states the Fed. Gov. must balance it's books at the some point? Does the spending of the gov. need be covered by the issuance of Treasuries?

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  17. I'll post this in the competition of most absurd post of the day.

    Since the American 'Empire' is so darned bad, and the Mexican "Empire' too, we should just let it go back to the way it was, the heck with the cars and the suburban homes, and the district court, let's get back to the stepped pyramid and human sacrifice down south, and the buffalo hunt on foot, the buffalo jump, none of this hunting from horseback, because there weren't any horses in the Americas before some got loose from the Spaniards, and dig for camus roots too. And the heck with any concept of law, let's just get back to whoever is the physically strongest wins, and that is that.

    Our population will shrink to practically zero, but at least we won't be an 'Empire' anymore, and no one will remember any sense of what the word might have meant in the far past, there being no dictionaries now.

    I think an argument can be made that the central front on the war on terror was our last election. What happens now I have no idea, but I fell less safe.

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  18. Either the "American" Automobile Manufacurers have to figure out a way to Cut Wages, or the "Other" American Auto Manufacturers have to be forced to "Raise" Wages.

    There is just NO way, regardless of how many helicopters of money you drop on their heads, the American-branded manufacturers can compete with the "Others" while paying Double the Wages. It just can't be done.

    It's, either, Bankruptcy for the "Americans," or Card-check, and Tariffs for the Japanese/Korean/Germans. Period. Either/Or. One, or the Other. No Middle Ground. End of Story.

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  19. are you talking simply wages rufus, or the pension and health care obligations as well? It's been my impression that it is the pensions and health care obligations that is the prime drag on the expense side of the ledger. They've really got to address their product line issues though.

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  20. Ash, I'm in agreement with your General Premise. A "Depression" won't come about from Executive (Fiscal) Policy.

    Depressins have to be "Legislated." Only a "Congress" can legislate the Protectionism, and Trade Wars necessary for a good Depression. It's true, Obama would have to "Sign" the legislation enacting "Card Check," but he will, Certainly, do so.

    I have to admit, my scenario will take a while to "play out," and many things could come to pass to prevent it. Here's hoping.

    BTW, the Bond "Market" is telling us that this is all, basically, a six month to two year brouhaha (with, GREAT emphasis on the next "six" months. So, Maybe, I'm being entirely too squeamish.

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  21. It's, Really, current wages/health care, Ash. They can manage around "past" costs; but, they HAVE to show investors a "Way Forward."

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  22. Look, somebody somewhere has to pay for things.

    This talk of a 'single payer' health care plan just means Uncle Sam is the payer, but we're all going to be paying Uncle Sam to pay for it.

    Medical care costs are really high, that's a fact. I think we might be better off putting some real money into creating some new medical schools and educating a whole other layer of new doctors, rather than taxing ourselves, sending the money to Washington, and having them pay, recycling the money.

    I pay an astounding amount to insure my family through Blue Cross, and never ever get a dime back. It's tempting to say let's just have a 'single payer', who would be Uncle Sam, and get these Blue Cross payments off my back, but, I really think I'll end up paying, all the same, and maybe more.

    More doctors is what we need.

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  23. We need more Doctors, for sure, Bob. They've got a Heck of a "Union." It's easier to declare Nuclear War than it is to get a new "Medical" school.

    Our Health Care is totally "FUBAR"ed. The Best Hospitals/Doctors, and Equpment in the World, and a totally screwed-up system of access/payment.

    The Republicans really should have jumped on Romney's Massachusetts System. It's "free-market," totally logical, and, more important, seems to be working extremely well.

    And, I'll betcha Rat's donuts to Ameros bet that the taxpayers, when all is said and done, won't end up paying any more than they were before (when you factor in ALL expenses, ie. taxes, health care "premiums," days missed at work, etc.)

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  24. Here in my state, and I think it's the same all over, if you go to the emergency room, they have to try to take care of you, because that's what the law says. But a lot of these people never pay the bills.
    So how are we to create a system that takes care of everybody, and is fair? If we have a single payer, it will be the same thing, some people will pay, others won't.

    Create more doctors I'd say.

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  25. One problem with the current system, Bob, is that the "emergency" room treats the "Immediate" symptom with a prescription, and, maybe, a shot. They don't do ANYTHING about the underlying problem. They simply say, "You need to go see a Specialist," or, "your Own Doctor."

    Nothing ever gets healed.

    The "Working Poor" get caught in the never-ending trap of 8-hr emergency room visits, missed work, temporary relief, rinse, repeat.

    It's just a truly, crappy, and super-expensive system, wherein, no one ever gets Healed.

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  26. I agree, Ruf.

    I don't know what the answer is.

    We're trying and talking about creating a new medical shool in Boise. We're big enough to have one now. And that new nuclear reactor out in the desert.

    I'm all for both these things, both make a lot of sense to me.

    The nuclear reactor is tied up in lawsuits, but the medical school has a lot of popular support.

    It takes doctors to educate a new generation of doctors. None of these things are simple.

    You got to kind of grow the country.

    Our doctors are really good, I think. And the technology is great.

    I think we'd be better off investing our medical money in 'medical infrastructure'. Rather than a whole new program out of Washington.


    But, that is coming, I can see that.

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  27. So how are we to create a system that takes care of everybody, and is fair?

    Fair?

    Since when did "fair" become a factor? Where does "fair" appear in "to each according to his needs, from each according to his abilities"?

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  28. forget health care. worry about food. at least that's the gist of what that fellow on the radio was saying. says, there might even be a revolution brewing against washington. says he predicted the last 2 recessions, and that this will be a depression.

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  29. It's a Democracy, LT. A party that's not perceived as "being fair" won't be in power long. As we have just seen.

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  30. Fair doesn't appear in the Constitution.

    Not a problem, though. It probably should be there, somewhere, don't you think? In a living document? Let's fix it. Time for change.

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  31. I feel we can't have people needlessly suffering, maybe 'fair' isn't the right word. I just don't really know how to do it best.

    I'm all for this new medical school in Boise. I hope they get it built. I don't mind paying taxes for that. I think we will, sooner or later.

    We're going to have some kind of national health care. I think we should pour the money into creating more docs and hospitals. But, I've already said that.

    I'm against 'Comfort Room' though.

    A little baby that survives an abortion shouldn't have a 'Comfort Room' to die in. He or she should get some real medical help.

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  32. The oil we eat
    http://www.harpers.org/archive/2004/02/0079915

    The secret of great wealth with no obvious source is some forgotten crime, forgotten because it was done neatly.
    —Balzac

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  33. The sarcasm marker got left out at 03:40:00 PM EST.

    I don't disagree with you, Bob.

    It's a Democracy, LT. A party that's not perceived as "being fair" won't be in power long. As we have just seen.

    Nor do I disagree with you, Rufus. Except it's not supposed to be a Democracy, which I take to be rule by the mob. That's what we're getting to, though.

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  34. The secret of great wealth with no obvious source is some forgotten crime, forgotten because it was done neatly.
    —Balzac


    Cute.

    Go peddle that shit in Russia, Mat.

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  35. I'm not the mood to subsidize some screwup who made bad decisions and sat on his or her ass their entire life.

    "Thinking" universal health care won't cost any more than our current system will not convince me. A plurality of the country pays little if any taxes already. Adding such a huge entitlement as "free" health care is going to cost lots and lots of tax dollars. Someone or some other government programs will have to pay. Who do you think that will be. The other guy? I don't think so.

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  36. Hell, I don't know what to do.

    We can't have dead people on the streets.

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  37. Whit, it may cost even more than you imagine. When it's free, it's abused.

    Abused may be too strong a word there. Try over-indulged. When there's payment to be made, there's personal judgment entering the equation.

    The unwashed masses will get their universal health care, by hook or crook. What we'll all see is a diminishing of the quality and availability over all.

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  38. One of the most ridiculous proposals I ever heard was reimporting prescription drugs. Which, I believe both Senators Biden and McCain jumped on.

    A problem which no one wants to address is the fact that US consumers subsidize the pharma research and development costs for the socialized medicine countries. Countries such as France and Canada impose price restrictions on pharmaceuticals which only cover the actual production costs. Reimporting low cost medicines is a policy guaranteed to kill the development of new drugs. If the US government wants to get serious about reducing the costs of medicines, it can start with serious discussions with the socialists.

    Another talking point concerning lowering health care costs is a centralized medical records and payment processing center or system. In other words, a gigantic federal BC/BS. Whether that would make a difference, I can't say. The big problems are overhead, malpractice insurance, million dollar salaries, and extensive use of expensive technologies.

    Universal Health Care will inevitably lead to rationed health care. Pooh, pooh this all you want but for proof, look at the countries that already have UHC.

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  39. What we'll all see is a diminishing of the quality and availability over all.

    I agree with that.
    That's how I think it is going to work out.

    But, in this new age, there might be other avenues. There is so much info available on the Internet now, that perhaps a new kind of medicine might spring up, a kind of information sharing, right at home care. For instance, I used to go to the doctor for my gout, which was really painful, and Teresita cleared it right up, with some black cherry juice. For which, if she is reading, she gets a free trip up the Snake.

    I don't know if the doctor was just playing with me, for the hundred dollar visit, and the indomethicin, or whether he just didn't know about black cherry juice.
    But I can tell you it works.

    But for some things you have to have facilities for.


    One thing I'll say about my old Lutheran Church is we have tried to help create a system of good rest homes, here and there.

    We have a great one in Moscow, for instance.

    Ah, heck, the Hampton Jazz Fest is coming up. That's something to look forward to.

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  40. Whit, and LT, it's "Free," now. It's just that it's not effective. You are paying NOW for the emergency rooms to do the same things, to the same people, over, and over, again. And, you're Paying "Big."

    My contention is, simply, that it would be less expensive (to "Society" as a whole, and to taxpayers/premium payers in particular) to Treat the Illness, and get it over with.

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  41. There's an interesting contradiction clouding this health care issue in my mind.

    Take the VA health benefits program.

    From experience, my friends and I hold it up to be among the best health care systems in the world. But, what would you call it if not socialized medicine?

    Here's my predicament. I entered the program after an arbitrary cutoff date, January 16, 2003. If I'm destitute, meaning I meet their means test criteria, I can continue to receive benefits for free. Since I'm just a smidge over the means test criteria, I get absolutely nothing, and am forced out into the "private" healthcare market, which is supposed to be the superior system. From experience, I can tell you it's not.

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  42. I'll never have to go back to the doctor for my gout.

    Teresita cleared it up.

    Pure Black Cherry Juice.

    Right at home medical care, over the Internet.

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  43. ...and Teresita cleared it right up, with some black cherry juice. For which, if she is reading, she gets a free trip up the Snake.

    Seems she'd be more apt to accept her reward if it was a free trip down a canyon.

    :-)

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  44. :)

    And Teresita would laugh too.

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  45. However we pay for health care is should be by the pound:

    "Saturday November 15, 2008 (foodconsumer.org) -- Belly fat is a factor not only for increased risk of heart disease and diabetes, but also for premature death, according to a new study of about 360,000 Europeans.

    Tobias Pischon, MD, MPH and colleagues at the Department of Epidemiology, German Institute of Human Nutrition reported their study in the Nov. 12 issue of The New England Journal of Medicine saying that people with the most belly fat were almost twice as likely to die prematurely as people with the least amount.

    They found the increased risk was seen even in those who had a large waist circumstance, but no overweight. The finding again suggests that the body mass index may not be an adequate measure for assessing the risk of excess body weight.

    It has been known for long that people with excess weight around their middles have a higher risk of heart attacks and strokes."

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  46. I'm actually not sure I agree with that.

    Thought it's hard to argue with a study.

    I've known lots of thin people that have died early, and some fat asses linger on.

    But, a study is a study.

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  47. LT, methinks you need a better "tax" lawyer. :)

    I get some things, free; some, I have to co-pay, some I can't get.

    When I applied they asked my "income." They never requested "verification." I guess, being "retired," helped.

    VA isn't the "Cadillac." For instance, you don't get Crestor. But, you can get 80mg Zocor (with co-pay.) You can't get "glasses," but you can get a vision test. etc.

    I can't visualize a VA type system for the country at large. It seems impossible. A system of compulsory Health "Insurance" such as Massachusetts', though, seems imminently, doable. After all, all statess now have "mandatory" auto insurance. Works just fine. Why wouldn't SR-22 health insurance?

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  48. Maybe Black Cherry Juice is the secret to longevity.

    It's worked for me, so far.

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  49. For anyone with "risk factors," ie. family history, smoking, boozing, overweight, etc.) it's now been shown that Statin Drugs reduce your risk of death by heart attack by 50% (even if you have Low Cholesterol!)

    Guys, you're crazy if you don't get on the generic Zocor, at the least.

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  50. The conservative senator, (DeMint, R. SC), speaking to a group of GOP officials gathered in Myrtle Beach at a conference on the future of the Republican Party, described how the party had strayed from its own "brand," which, according to DeMint, should represent freedom, religious-based values and limited government.

    "We have to be honest, and there's a lot of blame to go around, but I have to mention George Bush, and I have to mention Ted Stevens, and I'm afraid I even have to mention John McCain," he said.

    DeMint offered a long list of complaints about McCain's record in the Senate and on the campaign trail.

    "McCain, who is proponent of campaign finance reform that weakened party organizations and basically put George Soros in the driver's seat," DeMint said. "His proposal for amnesty for illegals. His support of global warming, cap-and-trade programs that will put another burden on our economy. And of course, his embrace of the bailout right before the election was probably the nail in our coffin this last election. And he has been an opponent of drilling in ANWR, at a time when energy is so important. It really didn't fit the label, but he was our package."

    Bush and Stevens, he said, had corrupted the party brand by expanding the size of government and engaging in wasteful government spending. Had Republicans not strayed from their core beliefs in recent years, DeMint argued, the election results might have been different. - American Thinker

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  51. Rufus, I have to applaud you, of all who post here, word for word, you provide more useful and practical information than the next two combined.

    I have to get a Lipitor.

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  52. Wherever you are, chihuahua, my husband is taking that song with him.

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  53. LT, methinks you need a better "tax" lawyer. :)

    You got that right, Rufus.

    They caught up with me after the first tax year. For instance, alimony doesn't count as a reduction in income for their calculations. Also, they figured gross value of sale of some mutual funds, not basis value, into the same calculations. The only reductions to gross income they allow are your out-of-pocket medical and insurance costs.

    My predicament outlined above is more due to political gaming of the system than any real economic or health care delivery issue. I have, and had when I was briefly eligible, my own good health care insurance. It was primary, and so VA got those compensations before having to cover other costs, and I still made copayments. Because of that damned arbitrary cutoff date, inserted in the legislation, I wound up forced out of the system while friends who's situations are similar to mine continue to receive essentially full benefits, with no primary insurance needed to offset costs to the government. It's not VA that I have a beef with. It's the feckless Congressional sellouts, pandering to the trial lawyers and the AMA.

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  54. That may have a connotation I did not intend. It is hardly a put down on anyone else. You all know what I mean.

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  55. "Wherever you are, chihuahua, my husband is taking that song with him."

    -say what?

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  56. No sweat, Deuce.

    [ditto the chihuahua]

    :-)

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  57. Yeah, and I'm a Danged Good-Lookin Feller, too. :)

    But, why do them wimmin keep divorcin me?

    It' a "puzzlement." :(

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  58. Trish, it's looking like Bush might, actually, be able to tie the Colombia FTA in with the Detroit Bailout package.

    It's interesting that even the EU is doing a FTA with Colombia. I wonder if it might have something to do with the fact that they could produce enough Biodiesel (castor oil, for starters) to run all of Europe? OR, the U.S.

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  59. Empire and "evil" bob, they are not always one and the same.

    But an empire is an empire, evil or not.

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  60. Rufus,

    At this point, I'll be floored if we pass that.

    Europe is seeking every opportunity here.

    But the unions...

    the unions.

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  61. The "Smart" guys have to be going nutz trying to figure out what to do about "Diesel."

    Here's the thing: When you refine a barrel of crude you get out about 22 gallons of gasoline, 12 gallons of diesel, and about 10, or 11 gallons of other stuff (asphalt, bunker oil, propane, etc.) Yes, you get a two or three gallon "refinery gain" from the 42 gallon barrel of oil.

    Anyhoo, those numbers can be jiggled a little bit, but not much. What has happened is the world has reached an equilibrium where 12 gallons of diesel was used for every 22 gallons of gasoline, approx.

    Now comes Ethanol. It's replacing, worldwide, somewhere over a million barrels/day of gasoline. Now what? You produce the right amount of gasoline, you don't get enough diesel. You produce the correct amount of diesel, you overproduce gasoline.

    Another Freakin Puzzlement.

    We need "Bio"Diesel. We don't have a good biodiesel crop. Colombia can produce a "Ton" of it.

    Oh, and Europe HAS TO HAVE a biodiesel source. HAS TO HAVE. Colombia is "perfect."

    Go Co.

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  62. Oh, back to the post (and, a danged good one, I might add,) the Scariest Scenario we could possibly envision would be Card-Check, leading to Protectionism/Trade War, leading to Global Depression.

    DEFLATION is the "Scariest Beast" of all.

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  63. Things is, about health care, you have to ration it, just no two ways about it. The question then becomes HOW you ration it.

    And, no, single payer health care or any other should not be considered free health care.

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  64. "DEFLATION is the "Scariest Beast" of all."

    unless you are sitting on wads of cash ready ready to shop.

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  65. Do not be too sanguine about sitting on cash. The heavy hand of government will fight deflation with the printing press. Governments are good at multiples of zero.

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  66. Empire and "evil" bob, they are not always one and the same.
    ==

    Yes they is. Balzac said it right.

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  67. As for health care, no treatment to those that have not purchased a health card. Hospitals and emergency doctors want to treat charity cases, let them do so on their own dime. Health card would entitle recipients to a 75% rebate.

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  68. Things is, about health care, you have to ration it, just no two ways about it. The question then becomes HOW you ration it.

    There's a point there, Ash. Why do we have to ration it?

    Why not make more of it so we don't have to ration it?

    Why not put tax money into building a lot more health centers, and educating a lot more doctors?

    just askin'

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  69. Why do we have to ration it?

    Ash might be right ultimately, Bob.

    Whenever it's free, it's overused.

    WalMart might provide an insight. When they were first entering the health care system for employees, the plan was quite generous. They found out that employees were essentially overusing it. They cut back, and made the employee's share higher. Now they have a system where most employees are covered for what would otherwise be financially catastrophic costs, but they're made to realize nothing is free. It seems to be working, from anecdotal accounts from a friend.

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  70. This comment has been removed by the author.

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  71. Boise State Broncos 38

    Idaho Ineptitude(Vandals) 10

    Boise has the ball again.

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  72. Walmart will, eventually (kind of like America,) get most things "right."

    They may have to wobble around, and bounce off a few walls, first, though.

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  73. My wife worked for Wal-Mart two or three times. On and off between other jobs, here and in Ohio.

    What they did to her, everytime, was keep the hours per week just under full time. No medical policy for her from Wal-Mart. Most of the checkers at Wal-Mart aren't full time employees, from what she tells me.

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  74. I'll never have to go back to the doctor for my gout.

    Teresita cleared it up.

    Pure Black Cherry Juice.

    Right at home medical care, over the Internet.


    I'm glad it worked for you this time. I had a case that put me on the Disabled List for two weeks, I could barely drive. Missed about four days of work. Cherry juice wouldn't touch it. I went to a rhematology specialist, he drew some fluid from my knee to figure out what is going on, and gave me an injection in my knee of whatever they give football players when they're down for the count. And some heavy drugs. It worked, so I was able to have my current picture taken in my new boots without a big fat swollen leg to ruin the shot.

    Bottom line, cherry juice really works to reverse and prevent run-of-the-mill gout, keep some handy for any flare ups, but if you got a deeper issue, you might need to go to a specialist.

    ...and Teresita cleared it right up, with some black cherry juice. For which, if she is reading, she gets a free trip up the Snake.

    Seems she'd be more apt to accept her reward if it was a free trip down a canyon.

    That way I can talk to the canoe driver.

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  75. If anybody wants to be the new football coach at the University of Idaho, just put in your application now. Only requirement is that you can draw breathe.

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  76. You must have something other than regular old gout going on there, Teresita. Also, gout is mostly a guy thing, from what I read. Grand dad had it, but none of his daughters.

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  77. I can't tell what that blue bag is, by your right arm. It's not Doritos, it's not any kind of potato chips I know of....

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  78. bobal wrote:

    "Why not make more of it so we don't have to ration it?"

    We all eventually die and on the path to the great beyond we require 'health care'. There is an inifinite number of things that can be done, researched, tried, to ease one on the path and to "make more of it" requires much effort. We can ration that effort by providing it to only those that can pay and provide more to those that pay more.

    On the battlefield how do you ration the health care? Does the richest soldier get the best care? The most warrior like get better care?




    Nope!!






    Triage is the method.

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  79. Ash, I've read that post three times now, and still can't make any sense out of it.

    What do you mean?

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  80. Bobal, the blue bag is generic cereal. You've heard of beer beer? Aspirin aspirin? Smokes smokes? That's cereal cereal.

    Bobal, you're right about the gout not being normal for womenfolk. In fact, kidney stones are a kind of gout in a worse place, it's one thing to take out a joint, but you really NEED your kidneys. Some say God created kidney stones to give men a taste of the pain of childbirth in women. I missed out on all that fun too, thanks to that funny thing where I ended up preferring the Dixie Chicks to Billy Ray Cyrus. But I will go back next week and find out what the doctor has to say.

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  81. I still ask, why not build more medical schools and educate more people to be doctors?

    And the answer I get is something I can't decipher about battlefields and triage.

    At least you didn't mention "Comfort Rooms".

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  82. Look at the battlefield as a microcosm of the US in general.



    Folks get injured and they get health care. Not every injured soldier can immediately be attended to by a qualified doctor. When the soldiers are being transported to the health care facilities they get assessed and treated based on severity of injury and the efficacy of timely attention. Whether they can pay for it or are a general does not factor into who gets the care. That basic approach is referred to as triage and it is a form of rationing health care.

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  83. bobal said...
    I still ask, why not build more medical schools and educate more people to be doctors?




    Because of the cost. Who is going to pay for it - the taxpayer?

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  84. Some say God created kidney stones to give men a taste of the pain of childbirth in women.

    Lord, kidney stones are another horror. Dad had them. I remember when it first happened. Excrutiating.

    My brother, the doc, told
    Dad it was best not to try and zap them, which can be done now, but it might make it worse. But, Dad really suffered from them. He had an operation to try and remove some in Spokane.

    Luther suffered from them too.

    I think we need more good doctors and more good medical facilities. I'll vote for that and pay the taxes.

    After poor old Dad had the operation, he started to gas up, in his stomach area, and that hurt like hell. Doctor Jensen, a guy with an ancestory from down here, had forgot to put in the little gas letter off tube dealy in his gut, and apologized. Dad the lawyer, didn't sue him.

    Life is tough.

    Spend the tax money on making more doctors and medical centers.

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  85. Ash, if we are going to spend billions on a new national health program, don't you think it might make some sense to create more doctors and health care centers?

    You really haven't answered, yet.

    Yes, yes, we know the taxpayers are going to pay for it, who else?

    But on what?

    Triage?

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  86. "Triage and Comfort Rooms"--

    The new Obama National Health Care Plan.

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  87. When my wife had her children, she said it was just like taking a big shit.

    But sometimes it can get really bad.

    That's why you need good doctors around.

    Which we should create more of, if we are going into the National Health Care Business.

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  88. My wife has wide hips, made for giving birth.

    But sometimes it can get really really bad.

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  89. Bob,

    What I see coming is a National Health Department elevated to the same status as the DoD. Defense as a national priority soon to be joined by Universal Health Care.

    I'm not advocating it. Just predicting it. Won't happen over night, but look at the attitudes and trends.

    When the dumbed down population can't even understand the words catastrophic loss or thinks that insurance is supposed to cover everything, that's what the politicians will give them. Except for the medical care reserved for themselves and their cohorts among the elites.

    We won't have big pharma to kick around anymore. They'll only be doing the research approved by their masters in government.

    I hope someone can show me where I'm wrong.

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  90. What are you going to do, Ash, if the baby doesn't come out?

    And the woman is in agony?

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  91. I think good doctors shouldn't be forced into a National Health Care Program. Maybe it should be voluntary, and those that what to go that way, fine, but those that want a private practice, let them do that.

    Why don't we just leave it up to the states? Let all 57 of us make up our own minds?

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  92. Why don't we just leave it up to the states? Let all 57 of us make up our own minds?

    Noblesse Oblige, Bob.

    From each according to his ability...

    They need you, Bob. Don't you feel proud? It's a patriotic duty. Haven't ya been listenin'?

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  93. We won't have National Health "Care." We'll have National Health "Insurance." Expect it to look a lot like "Romneycare."

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  94. Expect it to look a lot like "Romneycare."

    Optimist.

    I'd like to agree.

    But,I don't trust the new powers that be to do anything sensible. Not when it's easier to just redistribute. All that takes is some leadership, and a little community organizin'.

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  95. They need my brother, and more like him, not me. He's the doc, I'm the farmer.

    But I think if we are going to pour federal money into medicine, we ought to pour it into excellance.

    You don't want bob as your doctor, I can tell you that. As your farmer, maybe.

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  96. Teresita,

    Isn't it hazardous to distract the canoe driver? Or, maybe you just like to live dangerously?

    Thrills and spills, and all that.

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  97. Yeah, it could look like expanded Medicare, also, I guess.

    Well, we Can hope.

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  98. Out here, the canoe drivers have to be licensed, and pass a test, and know to take that canoe right upstream.

    This was a rule passed by The Idaho Fish and Game Department.

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  99. The problem with a national "health insurance" model is you have private companies inserted in the middle interested in turning a profit. The profit motive of the insurer then limits who gets insured and what gets paid all the while increasing costs.

    With a single payer system you cut out the middle company which is just skimming profits. Doctors and Hospitals can still be private businesses competing for dollars but the government has some control in setting rates, determining who moves to the front of the que (triage) and collecting the payments (insurance payments through taxation). Currently, in the US, the person who has the most money moves to the front of the line, gets to choose the best doctors and hospitals. Those with insurance are next in line as dictated by the HMO's and those without insurance are last in line - it doesn't matter much how sick they are (unless they show up at Emerg)

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  100. hence the notion you can ration by who has money or use other criteria.

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  101. This was a rule passed by The Idaho Fish and Game Department.

    Damned intrusive if ya ask me.

    Spoil sports.

    I've always like livin' dangerously. Never needed no damned licensed and certified canoe drivers.

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  102. Linearthinker: Isn't it hazardous to distract the canoe driver? Or, maybe you just like to live dangerously?

    "Talking to the canoe driver" is a very nice way of referring to a very naughty thing that you and I have both done, unless you're a black guy. They don't usually go in for that sort of thing, I hear.

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  103. Currently, in the US, the person who has the most money moves to the front of the line, gets to choose the best doctors and hospitals.

    But, I don't think that is so. At our hospitals here, and I know three or four of them, the docs, and I know three or four emergency room docs, if they aren't in some really special field, the docs take turns manning the emergency rooms.

    They will do their best for whoever comes, and send them out, to the wider medical community.

    I don't think it is true that there is any kind of elitist list here. It just doesn't work like that.

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  104. It's a myth that the doctors play favorites.

    It's rather like a medical factory.

    Try it sometime Ash, then report back.

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  105. I don't need no damned 'license' for my canoe driver, T.

    Idaho F&G can go to hell.

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  106. I think what accually happens, according to my brother in the gas passing business, is, you have a hell of busy schedule, almost overwhelmed, and your secretary tells you what's up for the day. Then, you go do your task.

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  107. They don't usually go in for that sort of thing, I hear.

    I heard that too, once upon a time when I lived up near you. I didn't believe it then, and still don't.

    Maybe it's a myth of the Great North West. Never thought I'd be chatting with you about it, though. Small world.

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  108. Idaho F&G can go to hell.

    Which has heen my very position, all along.

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  109. Currently, in the US, the person who has the most money moves to the front of the line, gets to choose the best doctors and hospitals.

    Bob, you were quoting somebody, probably Ash, but...

    That's just patently wrong. Wrong!

    I'll spare the details, but in my experiences, that's an absolutely wrong way to generalize the system.
    (I know that didn't come from you, Bob.)

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  110. Ash, think SR-22 Automobile insurance. If everyone has "insurance," everyone is a "millionaire."

    The only difference being "Everyone" must have Insurance. That, of course, means that those that can't afford it will be helped. But, Hell, we're "helping" them now. We're just not "Curing" them. And, we're paying a hell of a lot of money to watch a pretty sad show.

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  111. Rufus,

    If you haven't already gone to bed, do you have some objective links on Romneycare? I get a real confusing mix of opinions with a lot of bluster, but not much late proven data. Admitting I haven't had time to digest a lot of it.

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  112. The doctors work, the people come in.

    They treat them the best they can.

    Maybe Marilynn Monroe can get a little break in Los Angeles, but that sure isn't the way it is here.

    The people come, the doctors treat them, the best they can.

    That's just the way it is.

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  113. LT, I do Not. I'll tell you how I know (or, at least, think I know) it's working. I've read absolutely Nothing Negative about it for a year. There was a lot of people against it; and, if I've read Nothing negative about it it's Got to be working.

    Personally, I never could see how it "wouldn't work."

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  114. Well, I guess That was kind of a dumb statement, with Politicians involved. However, . . . . . .

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  115. Currently, in the US, the person who has the most money moves to the front of the line, gets to choose the best doctors and hospitals.

    If that was true, which it's not, so what?

    They're paying for it, and for everybody else in the damned line!

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  116. LOL

    Try this one, Rufus.

    I haven't had time to finish it, what with Bob's canoe trips and Teresita's distractions, but there's information for both sides of the arguments.

    Between Bob, and Teresita, I've burned my chicken and boiled the corn dry. I call it Cajun Chicken...blackened. It's an acquired taste.

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  117. If anyone doesn't like the medical system, let them apply to medical school, and, if they get acccpted, let them go through medical school, and, years and years of it later, let them then come back, and bitch.

    Then, I will listen to them.

    I don't think any of them will..

    My brother took me through the autopsy room at the University of Oregon Medical School.

    Christ.

    I almost threw up.

    Drunks, whose brains were like mush.

    That they had picked up from the street, and cut up, to find out what a human body was like.

    Do it your damned self.

    Let Ash be a doctor.

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  118. But, I wouldn't recommend that he be your doctor.

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  119. Great Link, LT. Looks like 40 Million people would run about $100 Billion/Yr. We could do that easy enough.

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  120. Looks like 40 Million people would run about $100 Billion/Yr. We could do that easy enough.


    Hell, yeah.

    Just bump it up to $800 billion and cover everbody. Give the bill to Barack and Paulson.

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  121. Anybody remember when $1 million was a lot of money?

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  122. What exactly was accomplished domestically by the Republicans in the last 28 years?

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  123. Limiting Democrats to two terms has to count for something.

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  124. Massive deflation is caused by western banks shrinking their debt to equity ratio from the superheated 30+ to 1 to the historical averages of 12 to 1.

    As far as I know banks in the east did not do this.

    Massive inflation is caused by governments all over the world massively loosening fiscal and monetary policies.

    So what's happening. Prices right now are declining as economic activity is shrinking. However, the cause of the collapse of economic activity has been the massive rise in LIBR rates and the TED spread. Both are now falling quite rapidly. This rapid fall is a predictor of better times ahead.

    However, central banks will have to respond pretty decively when economies turn --by siphoning out extra money they have injected into the system -- lest inflation comes roaring back in a big way

    So while the current worry legitimately may be price deflation -- in the future the reverse may be the case.

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