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Ersatz

January 12th, 2014 - 5:07 am

They said health rationing would never come, that if you liked your plan and doctor, you could keep it.  They lied, and now that that’s over let’s move on. Since it’s the government’s doctor not yours any more, Maryland has announced a bold deal with state and federal officials not to treat people unnecessarily.

Maryland officials have reached what analysts say is an unprecedented deal to limit medical spending and abandon decades of expensively paying hospitals for each extra procedure they perform. If the plan works, Maryland hospitals will be financially rewarded for keeping people out of the hospital — a once unimaginable arrangement.

“This is without any question the boldest proposal in the U.S. in the last half century to grab the problem of cost growth by the horns,” said Uwe Reinhardt, a healthcare economist at Princeton University.

Yes, progress is not treating people. Hospitals are preparing for this brave new world by firing employees.

“We’ve all been cutting staff, looking at our expenses aggressively over the last couple of years,” said Scott Furniss, chief financial officer for St. Agnes Hospital in Baltimore. “But we’ve done most of what we can do easily now.”

Carmela Coyle, CEO of the Maryland Hospital Association, called the plan “historic” and “a challenge,” adding: “We needed to move away from a fee-for-service-driven healthcare system, where the incentive was to do more to be paid more, and instead move to a system where the incentives are aligned to what we all feel needs to be done.”

The agreement had to be blessed by the U.S. Department of Health and Human Services, which runs the Medicare program offering coverage to seniors and helps fund Medicaid care for the poor.

Of course much of the problem of overtreatment is one of government’s own making. Think tort law. One of the major reasons why American treatments cost so much is defensive medicine.

Defensive medicine, also called defensive medical decision making, refers to the practice of recommending a diagnostic test or treatment that is not necessarily the best option for the patient, but an option that mainly serves the function to protect the physician against the patient as potential plaintiff. Defensive medicine is a reaction to the rising costs of malpractice insurance premiums and patients’ biases on suing for missed or delayed diagnosis or treatment but not for being overdiagnosed. U.S. physicians are at highest risk of being sued, and overtreatment is common. The number of lawsuits against physicians in the USA has increased within the last decades and has had a substantial impact on the behavior of physicians and medical practice. Physicians order tests and avoid treating high-risk patients in order to reduce their exposure to lawsuits, or are forced to discontinue practicing because of overly high insurance premiums. This behavior has become known as defensive medicine, “a deviation from sound medical practice that is indicated primarily by a threat of liability.

Defensive medicine comprises up to 34 cents on the health care dollar. If there are three doctors in the room one of them is a lawyer.

In a recent Gallup survey, physicians attributed 34 percent of overall healthcare costs to defensive medicine and 21 percent of their practice to be defensive in nature. Specifically, they estimated that 35 percent of diagnostic tests, 29 percent of lab tests, 19 percent of hospitalizations, 14 percent of prescriptions, and 8 percent of surgeries were performed to avoid lawsuits.

But since you can’t reform the system by getting rid of the lawyers, (you can’t ever get rid of lawyers) the only choice is to reform medicine instead by firing the hospital staffers.

One of the unanswered questions in the Maryland reform is whether the projected savings will be achieved by making individual procedures cheaper or just ordering fewer of the same overpriced services. Paul Abramson, MD was curious to know how much an X-Ray really cost. He did some digging and it turned out that a $517 X-Ray actually costs $73 bucks.  It  really cost 1/7th of the list price.

Why? Because prices are set, not by the market, but by what giant insurance companies and government agencies agree to pay the providers. Barry Werth, writing in the MIT Technology Review examined the case of two drugs, Kalydeco and Zaltrap. Treatment with Kalydeco costs $294,000 a year and Zaltrap costs $11,000 a month.  He asked himself, why so expensive?

The primary customers in the United States are not patients or even individual physicians, although physicians can drive demand for a drug; rather, the customers are the government (through Medicare and Medicaid) and private insurance companies. And since the insurer or government is picking up the check, companies can and do set prices that few individuals could pay. In the jargon of economics, the demand for therapeutic drugs is “price inelastic”: increasing the price doesn’t reduce how much the drugs are used. Prices are set and raised according to what the market will bear, and the parties who actually pay the drug companies will meet whatever price is charged for an effective drug to which there is no alternative. And so in determining the price for a drug, companies ask themselves questions that have next to nothing to do with the drugs’ costs. …

There are inherent problems with a system where the government is one of the biggest payers, and where doctors, hospitals, insurers, pharmacy benefit managers, drug companies, and investors all expect to profit handsomely from treating sick people, no matter how little real value they add to patients’ lives or to society. Drug companies insist that they need to make billions of dollars on their medicines because their failure rate is so high and because they need to convince investors it is wise to sink money into research. That’s true, but it’s also true that the United States, with less than 5 percent of the world’s population, buys more than 50 percent of its prescription drugs. And it buys them at prices designed to subsidize the rest of the industrial world, where the same drugs cost much less, although most poor governments can’t afford them at even those lower prices.

“Designed to subsidize the rest of the industrial world” has a nice ring to it. After all, subsidies are good. Why not have more of them?

“Negotiated prices” between mammoth pharmaceutical companies and equally mammoth insurance companies and government agencies produce mammoth prices. The don’t produce itty-bitty prices. And since the prices are so gigantic, is Maryland is going to pay for fewer of them? Does this mean the X-Rays will be charged at seventy three bucks? Or are they simply going to order only 1/7th the number of $517 X-Rays to stay within the budget?

The reason it’s important is because Obamacare officials are making Maryland the template for the national system. “A top official with the Centers for Medicare and Medicaid Services said Friday that a state plan to reduce hospital visits could serve as a national model for curbing costs while improving patient outcomes.”  Sarah Kliff of the Washington Post says: “State officials hope that the firm budget — combined with the state’s pre-existing power to dictate hospital prices — will put downward pressure on health spending, forcing hospitals to spend their limited dollars on the most cost-effective health care.”

Hope? Is that it? Is that all they got? That didn’t work so well at cutting costs in the Defense Industry, or for that matter with CGI Federal. Talk about a $517 X-ray. CGI gave the public a $300 million Error 404.

Stick around for the Victory Gin

Stick around for the Victory Gin

Nowhere in the landscape of reform is there hide or hair of market-price setting. Just what is going to bring the prices down or are they just going to serve up less of the same overpriced stuff?  Most of the Federal Bureaucracy is exempting itself from Obamacare. A great vote of confidence in the bold new Maryland experiment.


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Top Rated Comments   
"Richard, what you are saying is capitalism works. Socialist cartels do not work. Who knew?" -- OldSaltUSN

I would say that the list of consumer, including pharmaceuticals, developed under Communism would be a short one. The Guardian recently had an article saying that Soviet Products were not too bad. They were "sustainable"; that is to say they were so difficult to use and badly designed that they never got very far. Rocks are sustainable too.

But look around you. TV, refrigator, airconditioning, remote control, computer, cell phone, internet, GPS, the meds in your bathroom cabinet -- how many of them were invented by socialism? And why should you expect then, that medical innovation should come from socialism?

Yet people do. A recent article argues that Communism is the wave of the future. Why I don't know. But here's a challenge to all them hip commies: let he is without captalist sin cast the first cell phone.
13 weeks ago
13 weeks ago Link To Comment
This is the end goal, the conversion of dollar costs for those considered less worthy into costs paid in their lives and suffering. If the government is the sole source of monetary payment, AND THE GOVERNMENT HAS SOVEREIGN IMMUNITY AND CAN NEVER BE CALLED TO ACCOUNT FOR BAD RESULTS, then all costs will be borne by the victim class, the patients.

I read British papers daily. Primarily because they are the only English language source of news about the American Left that is not laudatory. Our state controlled media will not criticize anything the Left does.

A running story in all their papers has been the collapse of their National Health Service into an abattoir. I have previously documented my daughter's history in dealing with the NHS while a student in Britain. She witnessed what in this country would be charged as first degree murder while admitted to what was then literally the newest hospital in Britain in the wealthy Kensington area.

From their own papers, tens of thousands of patients annually, mostly elderly, are left to die of dehydration because of neglect. It is considered an unreasonable demand on the nursing staff to have them check once on each patient assigned to them on their shift. If you are elderly, or are incapacitated so that you cannot use your hands to eat; their responsibility to feed you ends with dropping off a tray by the bed. If you do not eat, that is your problem and they do not even chart that you are not eating. Charting in an imposition. Patient abuse by staff is rampant. The country where Lister figured out how to stop infection cannot now fight cross infection. Aside from an appalling lack of supplies like disposable gloves; the hand and arm washing that is part of proper sanitation causes Muslim nurses to expose their arms and violate their religion. So they are exempt.

And there is no effort to fix any of the problems, there is no holding anybody accountable, and there is no recourse for the patients.

Maryland is leading the way to the Left's ultimate nocturnal emission.

And we have done it to ourselves, and have no political voice who will stand for us lower caste victims of the State.

Subotai Bahadur
13 weeks ago
13 weeks ago Link To Comment
This is genuine Ersatz. Do you know how many Naugas you have to kill to make one Naugahyde? Lucky you can get this with rich Corinthian leather.

Michelle Obama's first job at the University of Chicago was as a Special Assistant to the Dean of the College. That was arranged by Trustee Penny Pritzker, who also had Barrack parachuted into an Adjunct Lectureship at the Law School. Neither were qualified for their jobs. Mooch was moved to the University Hospitals where her job was steering patients without money to other, smaller poorer and less qualified, hospitals. When Barry became a United States Senator Michelle's salary at the charitable institution increased to a mind numbing degree. To be clear Michelle Obama was a pioneer in the field of cutting costs and profiting from it by denying care to the poor.
13 weeks ago
13 weeks ago Link To Comment
All Comments   (67)
All Comments   (67)
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In the argument below Smoking Frog is wrong and Annoy Mouse is correct.

The unemployment rate is the calculated by dividing the total number of people listed as working by the total number listed as working plus the number listed as unemployed, UR=W/(W+U), expressed as a percentage. Other people, such as the retired, children, prisoners, long term hospitalized, non-working spouses, or those who simply "Left the labor force" are not counted. All of these numbers are to some extent guesstimates. That is why the professionals at the BLS are paid to use consistent and credible criteria to determine those numbers.

The number considered working each week is determined by taking all the people who are reported as working because paychecks were issued and the government informed that taxes were withheld, and then extrapolating the people paid biweekly and monthly in the prior period to include them unless they were since reported as having stopped work, and then adding a guesstimate for people working who do not get paid by a regular check that gets reported to the government. For example contractors may be paid and the government informed later by a 1099 so the BLS has to determine that the contractor concerned was in fact working during that time period. Other self employed business owners must be accounted for. Another group are paid in cash and not reported to the government but they still should be considered as working. For example illegals working in landscaping or agriculture are paid in cash off the books and are part of the work force. The BLS may not know for sure until after the fact the status of people in these groups but with large numbers small errors are usually lost in the wash. The BLS must guesstimate how many there are. All these people, known extrapolated and guessed at, must be listed every week as working.

The number of unemployed are determined by taking the number drawing benefits every week and adding the number self reporting as looking for work but not drawing benefits. That number is not guesstimated by counting the numbers using search engines or applying for jobs or by having the Census question a sample every week, although the last can be used as a check. The number considered as unemployed is only the number drawing benefits plus the number voluntarily self reporting as seeking work. Since there is no benefit to going to the trouble of self reporting once you no longer get benefits very few people do so.

It serves the government's purpose, or at least the politician's, to depress the unemployment rate number by depressing the number listed as unemployed. In a free society there is no way to force people to report every week that they are unemployed and seeking work. We the employed are less free because we are forced every week, or other pay period if we are an employee of a business or organization that reports our status to the government by withholding taxes. In a true police state people can be forced to report their work status on a regular basis. For example if you could not receive medical care unless your work status was on file then people would have an incentive to report that they were seeking work even if ineligible for benefits. In essence the status of citizens not drawing benefits is like that of illegal aliens. Unless forced to report their status, to get health care or education or some other government controlled function for yourself or your family, people will not do so. While the incentive to not self report is stronger in the case of illegals the effect is the same.

In conclusion Anny Mouse was correct and the ad hominem directed at him was uncalled for.
13 weeks ago
13 weeks ago Link To Comment
In the argument below Smoking Frog is wrong and Annoy Mouse is correct.

No, that's not true. Annoy Mouse's statements: (1) When an unemployment beneficiary stops being eligible for payments they stop being one of the work force unless they fill out some form saying they still are even without any further benefits. (2) 100 million work eligible Americans no longer seeking work, many who were brushed off into some temporary disability. are incorrect.

The unemployment rate is the calculated by dividing the total number of people listed as working by the total number listed as working plus the number listed as unemployed, UR=W/(W+U), expressed as a percentage.

That would give the "employment rate," not the unemployment rate.

"Listed" is misleading. The only list that would play any role in calculating the unemployment rate would be a list of people in about 40,000 households (the CPS sample size).

Other people, such as the retired, children, prisoners, long term hospitalized, non-working spouses, or those who simply "Left the labor force" are not counted.

Of course they're not counted in calculating the unemployment rate, but they are among the cited "100 million" (91.8 million), which is the number of people 16-65 years of age (or something like that) who are not in the labor force.

All of these numbers are to some extent guesstimates. That is why the professionals at the BLS are paid to use consistent and credible criteria to determine those numbers.

If you mean that the unemployment rate is calculated based on something other than, or in addition to, the CPS (Current Population Survey), you're wrong.

http://www.bls.gov/cps/cps_htgm.htm [http://www.bls.gov/cps/cps_htgm.htm]

The rest of your lengthy message is basically just making stuff up and talking about non-made up irrelevant stuff.

As for what you call ad hominem ("Try thinking," I suppose), Annoy Mouse had already likened me to a person who reacts to hearing the Communists killed 100 million people by correcting the speaker to 91.8 million, and said that this made him think "What an a**hole." I would think pretty much the same of such a person, but Annoy Mouse's idea that it applies in the case at hand is about as clueless as it comes.
13 weeks ago
13 weeks ago Link To Comment
Formerly Steve Smith:

Few poor countries get rich through free trade unless they “cheat”. Moreover, there are key industries that a great nation cannot outsource and remain a great nation. These include armaments, currency, and food. There are reasons why Japan subsidizes its domestic rice crop.

It is always wise to play to one's strengths; Argentina was a success story until Juan Peron imposed import substitution. Likewise, Japan paid for its rise as a great power through its natural advantage in industrialized silk manufacture. That said, undue reliance upon trade for strategic resources leaves any great nation vulnerable. Costa Rica can get away with playing to its natural strengths more than it otherwise would because it lives under the military umbrella of the United States.
13 weeks ago
13 weeks ago Link To Comment
I believe in free market capitalism as the best way to create wealth. According to the heritage Foundation only six countries in the world are economically free - Hong Kong, Singapore, Switzerland, Australia, New Zealand and Canada.

The U.S. in 12th place is designated "mostly free". The heritage foundation notes that "It's not hard to see why the U.S. is losing ground. Even marginal tax rates exceeding 43% cannot finance runaway government spending, which has caused the national debt to skyrocket. The Obama administration continues to shackle entire sectors of the economy with regulation, including health care, finance and energy. The intervention impedes both personal freedom and national prosperity.

But as the U.S. economy languishes, many countries are leaping ahead, thanks to policies that enhance economic freedom—the same ones that made the U.S. economy the most powerful in the world. Governments in 114 countries have taken steps in the past year to increase the economic freedom of their citizens. Forty-three countries, from every part of the world, have now reached their highest economic freedom ranking in the index's history. "

Did every one of these 114 countries do that by cheating?
13 weeks ago
13 weeks ago Link To Comment
"China Set to Seize South China Sea Island by Force"

http://www.infowars.com/china-set-to-seize-south-china-sea-island-by-force/

Leading from behind pays off! Happy New Year everybody.
13 weeks ago
13 weeks ago Link To Comment
In other Asia news, I caught wind of this Korean newscast video with a caption that says:
US Marine and SK Marine will do 2014 joint landing drill for aiming to push to Pyongyang.

http://www.youtube.com/watch?v=hgr9tNPScx0

I don't speak Korean, nor can I vouch for the source, so who knows if this is true. But it's an interesting data point to consider, and perhaps someone who monitors Asian affairs more closely can comment.
13 weeks ago
13 weeks ago Link To Comment
Think they're using this as a live fire Ex to rehearse for Taiwan?
13 weeks ago
13 weeks ago Link To Comment
Based on the excerpt from the linked article

"Strident rhetoric about Beijing’s ability to attack US military bases in the Western Pacific, as well as the release of a map showing the locations of major U.S. cities and how they would be impacted by a nuclear strike launched from the PLA’s strategic submarine force also turned heads.

Following discussion in state media about plans to to turn the moon into a Star Wars-style “death star” from which the PLA could launch missiles against any target on Earth, a display to promote China’s Jade Rabbit Moon rover also included a background photograph of a mushroom cloud over Europe http://static.prisonplanet.com/p/images/december2013/181213nuke.jpg ....

it seems they are more interested in intercontinental range targets, in Europe and North America.
13 weeks ago
13 weeks ago Link To Comment
Old Salt - While Alex Jones is like the proverbial blind squirrel he is so outright nuckin' futz that I can never take anything he says seriously. And yes, I have listened to and watched him. Watching him on Austin TV lets you see ALL of his ticks AND tocks.
13 weeks ago
13 weeks ago Link To Comment
Yeah, I sort of questioned the source, but I've seen other reports of aggressive Chinese behavior, and it's consistent. I'd ordinarily say that a potential aggressor wouldn't telegraph their punch, but this is China we're dealing with here. Propaganda and "face" means as much to the Chinese as the tactical action itself. China has blustered and maneuvered and prepared, plus they have millions of unhappy fledgling middle class job seekers while their economic growth has stalled - it's the right time for the PLA to find a war to justify their budget.

I think we'll see the shooting war start in East Asian this year.
13 weeks ago
13 weeks ago Link To Comment
So, in effect, the entire ACA is one great big Death Panel, since it would seem to all but guarantee that more people will die earlier.

Now, some nationalized healthcare systems have succeeded, for the time being, in increasing longevity a bit. However, we now see, from Richard's post, that the U.S. has been massivley "subsidizing" those other countries' healthcare systems, allowing them to make their preventive care robust. We will not have the same luxury.
13 weeks ago
13 weeks ago Link To Comment
The death panels are a given, and for that matter have already been a fact of life (and death) for years under Medicare. ACA will make it worse.

Interesting point about the drug costs, an opportunity for BIG savings, but Obamacare FIRST OF ALL takes care of insurance companies and big pharm. Hospitals and doctors not so much, and patients barely at all.

Just so we have our priorities straight.
13 weeks ago
13 weeks ago Link To Comment
I'm not sure how Maryland plans to do this, but this is exactly the kind of bureaucratic stupidity that has zero chance of working because it ignores the organic nature of the marketplace. Damming up one spot just creates eddies somewhere upstream.

Something like this was tried in Maine in the '90s, when they set revenue caps on hospitals based on numbers of discharges for the year. If the cap was 10 million, then anything brought in over that had to go back to the state. So a smart organization kept the low-cost items like bed rates and nursing on the books but spun off the higher end professionals, the docs, which then became separate corporations and not part of the revenue calculations.

This effort will die a slow death, too, but not before adding to the overall complexity of the tower and increasing its vulnerability to collapse.
13 weeks ago
13 weeks ago Link To Comment
I have posted this thought before, and I apologize to those who maybe are already looking in this direction: We must all of us learn more about self-care and caring for our families and neighbors.

For the present of course, it is illegal and there are heavy penalties for "practicing medicine without a license." That does not so much seem to apply to parents caring for their children, as long as they aren't attempting actual surgery.

But we have seen that the medical community gatekeepers have gradually recognized Nurse-Practitioners, and certified Doctor's assistants to perform procedures and write prescriptions. I expect this will expand greatly, especially as more people start falling dead in the waiting areas for Emergency Rooms.

Again, I recommend that people at least get Red Cross training in first response, CPR, wound management, or Wilderness Emergency Response. EMT training is usually available at community colleges, and many community fire departments offer training up to Paramedic.

It appears that our present government is for the time made up of MORAL LEPERS who regard the population outside of government as worthless except insofar as it can be pressed like so many grapes to yield some juice.
13 weeks ago
13 weeks ago Link To Comment
In a non-joking manner, I offer the name and history of Nadezhda Sergeevna Alliluyeva. With only a slight bit of snark, I note that Buraq Hussein is probably taking notes about the recent events in and around the Elysee Palace.

Subotai Bahadur
13 weeks ago
13 weeks ago Link To Comment
Daughter of Joseph Stalin, eh? Perhaps just as apt would be a reference to the widespread belief among the common folk that Stalin murdered his first wife when her behavior became a problem for him. As I see it, the point is not WHETHER he did it, but that his people took it for granted that he HAD killed her.

He was so worshipped by his people that it did not seem to diminish his stature detectably, that so many people believed him to be a wife-murderer.

Hmmm. Why does that sound familiar in American Politics? At least ONE of our leaders over the past few decades is widely thought to head an administration so corrupt that crime and violence, even the lethal variety, was ASSUMED to have played a role in their rise and securing of power. What was admitted and "proven" has been pretty horrifying. What I don't understand is why so many people are perfectly willing to assume that White Male Republicans can be evil, but NO ONE ELSE... Call it a form of madness.
13 weeks ago
13 weeks ago Link To Comment
Nadezhda Sergeevna Alliluyeva was the mother of Svetlana and was Stalin's wife. She apparently withdrew to her room after a banquet and was found shot in the head and declared a suicide. Reports were that the revolver found near the body was unfired.

When you control the investigation, the level of plausible deniability can be much lower.

Hmm. Just in passing you might want to take a look at the FBI website. Earlier this year they changed their posted official mission statement. It did have as #1 "The primary function of the FBI is law enforcement.". Now it reads "The primary function of the FBI is national security."

National Security increasingly is defined in the government as the political protection of the regime.

Subotai Bahadur
13 weeks ago
13 weeks ago Link To Comment
Thanks for the correction! I shoulda done the research!
13 weeks ago
13 weeks ago Link To Comment
Drudge is linking to rumors that the royal marriage is in trouble that being the real reason Michelle stayed on in Hawaii. Let the jokes begin ...
13 weeks ago
13 weeks ago Link To Comment
Suppose you are a third world country, and there is a general consensus that the country needs first world armaments, first world living standards, and first world technology. The question is how to get there from a state of abject poverty. There are many different routes.

The promise of Soviet-style Communism wasn't innovation, but rather its perceived ability to reverse engineer whatever the capitalists were able to do. From bombers to computers to nuclear weapons, Communists were able to keep pace with the United States – or at least create an illusion of keeping pace – for longer than its intrinsic weaknesses would suggest. The wonder of the Soviet Union is that it lasted as long as it did; it was able to keep its illusion going for most of the twentieth century.

Look at China – it doesn't need innovation so long as it can steal America's technology at will. The power of freedom comes from its ability to maintain a technological edge over tyranny; once tyranny attains technological parity, free societies are in trouble.
13 weeks ago
13 weeks ago Link To Comment
Steal? William Jefferson Clinton SOLD our military technology to the PRC. I think that's where the U.S. Treasury got those three magic beans...
13 weeks ago
13 weeks ago Link To Comment
"Suppose you are a third world country, and there is a general consensus that the country needs first world armaments, first world living standards, and first world technology. The question is how to get there from a state of abject poverty. "

There is a book that addresses that very problem. It is entitled "An Inquiry Into the Nature and Causes of the Wealth of Nations" by Adam Smith. It was first published in 1776.

It is well worth reading and although written a long time ago, even explains America's current economic problems without stooping to shift the blame onto evil foreign goblins.
13 weeks ago
13 weeks ago Link To Comment
GOODBYE GRAMPS

“Negotiated prices between mammoth pharmaceutical companies and equally mammoth insurance companies and government agencies produce mammoth prices.”

Well, at least we now know why the mammoth is extinct. Shakespeare once presciently advised us to get rid of the lawyers. Would that we had followed h is advice. Nationalized health care means rationed health care, which the government will spin as efficiency and savings. Nationalized health care means many will die who would otherwise have lived. Like grammom and grampop.

Savings and efficiency are all that we crave
Which is why we suggest you die now
And of course we will speed you to your waiting grave
And our doctors will tell you just how
Just lie down and be comfy and smile while we work
It’s all over in just little time
A needle, a pinch, you will find we don’t shirk
Just remember you’re not in your prime
And what is more sir please remember that you
Voted straight Democrat in the Fall
So needless to say you’re the head of the queue
With the line stretching far down the hall
We really don’t like offing gents of your age
But it’s for your own good, really, Dave
The road that you’re taking is now all the rage
And the signs will all read Burma Shave


13 weeks ago
13 weeks ago Link To Comment
So the ultimate Green program is Soylent Green ?
13 weeks ago
13 weeks ago Link To Comment
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