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" IS SOCIAL SECURITY A PONZI SCHEME ? "
MCNBC Tv | September 8, 2011 | Rick Santelli

Posted on 09/08/2011 6:23:38 AM PDT by Graewoulf

At 7:33 AM CDT Rick Santelli asked guest host Thomas L. Friedman, New York Times foreign Affairs Columnist, and author of his new book " That Used to be Us, " the following question: " Is Social Security a Ponzi Scheme ? " Tom replied, " Your question is idiotic ! " Rick then replied: " Your answer is idiotic! "

GAME ON !


TOPICS: Business/Economy; Constitution/Conservatism; Crime/Corruption; Front Page News; Government
KEYWORDS: debt; friedman; grandchildren; ponzi; ponzischeme; responsibility; santelli; stewardship
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Is this question a litmus test for those who wish to cut entitlements? ( Clue: The question was repeated ten minutes later on the same program and Senator Orin Hatch replied: " I would never call it a Ponzi Scheme.") What say you?
1 posted on 09/08/2011 6:23:45 AM PDT by Graewoulf
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To: Graewoulf

Look up the definition of “Ponzi Scheme” and tell me how it is NOT one.


2 posted on 09/08/2011 6:24:49 AM PDT by Grunthor
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To: Graewoulf

Beck is defending Perry’s response re: social security last night...ponzi scheme...deal with it.


3 posted on 09/08/2011 6:26:59 AM PDT by who knows what evil? (G-d saved more animals than people on the ark...www.siameserescue.org.)
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To: Graewoulf

Got to hand it to Rick Perry for being bold enough to bring it up!


4 posted on 09/08/2011 6:27:01 AM PDT by Saundra Duffy (For victory & freedom!!!)
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To: Grunthor
“Look up the definition of “Ponzi Scheme” and tell me how it is NOT one.”

The Feds can print more money, that is the only difference.
I love Santelli!

5 posted on 09/08/2011 6:27:20 AM PDT by outofsalt ("If History teaches us anything it's that history rarely teaches us anything")
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To: Grunthor

A Ponzi Scheme is voluntary. If you are smart or cautious, you can avoid them completely. SS is enforced by the law, thus no amount of caution can allow you to avoid getting scammed.

SS is worse.


6 posted on 09/08/2011 6:27:31 AM PDT by jjsheridan5
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To: Grunthor

It is not a Ponzi scheme in the same way that the AFL-CIO is not an organized crime syndicate.


7 posted on 09/08/2011 6:27:40 AM PDT by wideawake
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To: Graewoulf

—it is worse than a “Ponzi” scheme because it is collected at the point of the government gun—Ponzi schemes are voluntary scams, invested in by fools-—


8 posted on 09/08/2011 6:27:44 AM PDT by rellimpank (--don't believe anything the media or government says about firearms or explosives--)
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To: Graewoulf

Of course it is. The problem for the “progressives” is that THEY killed the scheme by aborting 50 million contributors.

As with all ponzi schemes it collapses when you lose new suckers to invest.

Classic Ponzi scheme.


9 posted on 09/08/2011 6:29:01 AM PDT by Marty62 (Marty60)
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To: Grunthor
Exactly. From Wikipedia:

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

That might as well have been an entry for "Social Security System," except for the short term part. But returns, at least for older Americans, have been far in excess of what they put into the system.

10 posted on 09/08/2011 6:29:28 AM PDT by giotto
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To: Saundra Duffy

I’d like to hear more about the Chilean retirement system that Cain mentioned last night...


11 posted on 09/08/2011 6:29:28 AM PDT by who knows what evil? (G-d saved more animals than people on the ark...www.siameserescue.org.)
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To: Graewoulf

forget the Criminal elements, SS depends on an ever expanding group of new members to pay out to the old members. Problem is demographically there is not an ever expanding base comming down the age line. Add in 25% teenage unemployment amoung the reduced population base, and you have a “collapsed” pyramid scheme.


12 posted on 09/08/2011 6:29:28 AM PDT by swamprebel ( proud SOB!)
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To: Graewoulf

Hey Tommy... What’s the current account balance in the Social Security “lockbox”, you ignorant, socialist-loving a$$ clown.


13 posted on 09/08/2011 6:29:50 AM PDT by Common Sense 101 (Hey libs... If your theories fly in the face of reality, it's not reality that's wrong.)
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To: Graewoulf

Social security is a government run PONZI scheme with a printing press! Carlo Ponzi didn’t have one of those and as faras I know he didn’t FORCE his victims in either!


14 posted on 09/08/2011 6:31:27 AM PDT by Bigun ("The most fearsome words in the English language are I'm from the government and I'm here to help!")
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To: Graewoulf

It’s every bit a Ponzi Scheme, but most politicians don’t want to be associated with a negative discussion of Social Security for fear of the lie machine the Democrats keep so well lubricated, maintained, and functioning.


15 posted on 09/08/2011 6:31:27 AM PDT by rockinqsranch (Dems, Libs, Socialists, call 'em what you will, they ALL have fairies livin' in their trees.)
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To: Graewoulf
It has been a PONZI SCHEME since day one. SS was designed for the majority to die before receiving any benefits. As life expectancy rose the politicians kept raising the age one could put in for benefits.
They want to raise the age again.
16 posted on 09/08/2011 6:31:28 AM PDT by DeaconRed (To the idiots that didn't believe us about ZERO: Hope you enjoy your less than a dollar in change.)
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To: Graewoulf
Republicans need to hit a few definite points when discussing this topic:

1) No one is going to wave a wand and make Social Security disappear overnight, reducing all of our seniors to abject poverty.
2) People who are close to retirement are not going to be abandoned.
3) Young people will be transitioned to something that is sustainable.

Yes, Social Security is a ponzi scheme. It had to fail sometime: that's what ponzi schemes do. We can recognize that it was a terrible program, while still aknowledging that we have a commitment to some people. No one is going to just throw them all under the bus.

17 posted on 09/08/2011 6:32:11 AM PDT by ClearCase_guy (The USSR spent itself into bankruptcy and collapsed -- and aren't we on the same path now?)
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To: Graewoulf
It is, more or less, a Ponzi Scheme," but Perry could have made his point a lot better last night by showing the audience why it was so, rather than just telling the audience it was so. Show, don't tell.
18 posted on 09/08/2011 6:33:04 AM PDT by Hemingway's Ghost (Spirit of '75)
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To: Graewoulf

Of course SS is a Ponzi scheme and this shows the boldness of Perry to call a spade a spade. The problem is the country is likely to reject the truth but someone had to say it.


19 posted on 09/08/2011 6:33:58 AM PDT by Conservativegreatgrandma ( You cannot elevate Palin by tearing down Perry)
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To: Graewoulf

Kudos to Santelli.

Again!


20 posted on 09/08/2011 6:34:13 AM PDT by Travis McGee (www.EnemiesForeignAndDomestic.com)
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To: Graewoulf

Yes.


21 posted on 09/08/2011 6:35:15 AM PDT by WayneS (Enlightened statesmen will not always be at the helm. -- James Madison)
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To: ClearCase_guy

Anyone who is intelligent understands that it is a Ponzi Scheme, but unfortunately a lot of people are not intelligent. They need to be spoon fed the info to understand it.


22 posted on 09/08/2011 6:36:21 AM PDT by w1andsodidwe (Barrak has now won the contest. He is even worse than Jimmah.)
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To: jjsheridan5

Good point.


23 posted on 09/08/2011 6:36:39 AM PDT by WayneS (Enlightened statesmen will not always be at the helm. -- James Madison)
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To: who knows what evil?
Wife and I are old duffers, we are at the pyramid level where we are benefiting from SS. But our children, very iffy, our grandchildren, not a chance in Hades if not restructured.
24 posted on 09/08/2011 6:37:53 AM PDT by Sea Parrot (Democrats creation of the entitlement class will prove out to be their very own Frankenstein monster)
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To: swamprebel

The Ponzi scheme that is SS will continue to get worse, the numbers for the coming years will bring about a Madoff moment. I hope Freidman is not counting on his SS.


25 posted on 09/08/2011 6:38:06 AM PDT by Lets Roll NOW (Game On)
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To: Graewoulf

Of course it is. The Government is doing the exact same thing Bernie Madoff is in prison for.


26 posted on 09/08/2011 6:38:09 AM PDT by eyedigress ((Old storm chaser from the west)?)
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To: Graewoulf

Santelli was brilliant. Friedman was moronic and shocked that his put down to Santelli was return with full force and more.


27 posted on 09/08/2011 6:39:15 AM PDT by WashingtonSource
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To: ClearCase_guy

You mean like the Paul RYAN plan?


28 posted on 09/08/2011 6:40:09 AM PDT by Marty62 (Marty60)
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To: Graewoulf

It is worse than a Ponzi scheme. Nobody is forced to invest in a Ponzi scheme, and in most cases, greed leads most investors/victims to invest in deals that clearly seem dodgy.

With Social Security we have no choice.


29 posted on 09/08/2011 6:40:21 AM PDT by Above My Pay Grade
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To: Graewoulf
Why Social Security is a Ponzi Scheme
30 posted on 09/08/2011 6:40:23 AM PDT by kabar
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To: swamprebel
"SS depends on an ever expanding group of new members to pay out to the old members. Problem is demographically there is not an ever expanding base comming down the age line. Add in 25% teenage unemployment amoung the reduced population base, and you have a “collapsed” pyramid scheme."

Problem is we'll have 1/3 of the population expecting $20,000 in annual social security benefit checks supported by the other 2/3 where the median annual earned income is $44,410. (Then there is all that other gov't spending like defense and the interest on the mountains of debt that Zero has accumulated on his spending binge.) It is basic arithmetic. This is not possible. Denial is not just a river in Egypt.

31 posted on 09/08/2011 6:40:27 AM PDT by Sooth2222 ("Suppose you were an idiot. And suppose you were a member of congress. But I repeat myself." M.Twain)
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To: Graewoulf

YES!


32 posted on 09/08/2011 6:41:55 AM PDT by 2001convSVT (Going Galt as fast as I can.)
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To: Graewoulf

Well, sort of.

I think when it was thought up, the premise was each generation would produce more and more Social Security paying wage earners who would outnumber prior generations and so sustain the system. Also, the average lifespan pst retirement was pretty low back then. It has exploded recently.

However, under Johnson, Carter and Clinton the system was distorted by using the fund for non-Social Security purposes, and the population dynamics changed. The number of collecting, non-paying raiders increased with the explosion of under the table earning illegals.

So it wasn’t a Ponzi scheme when it originated, but has now become one. Never trust the government to run anything, especially with your money.


33 posted on 09/08/2011 6:44:14 AM PDT by ZULU ( Non nobis, non nobis, Domine, sed nomini tuo da gloriam)
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To: WayneS

While off topic, I hope Santelli goes after Cramer today. Cramer is arguing that deficit reduction shouldn’t be a priority because treasury yields are so low right now. This is so dangerous, because while it sounds credible, this line of thinking will end disastrously.

T’s a low because no one wants out of cash (and big money can’t just be parked in a bank), and shows how fiscal and monetary “stimulation” is doing nothing (and is actually acting as a depressant). No business expansion, no increase in spending — just everyone holding onto cash. But when T’s go up, which they eventually will, there will be no way to reign in our debt, and servicing that debt will completely destroy our economy.


34 posted on 09/08/2011 6:44:36 AM PDT by jjsheridan5
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To: Graewoulf
It's worse than a Ponzi Scheme when Social Security benefits are paid out to people who have never worked.
Example: Friend died in a plane crash. He worked for the Forest Service. His lucrative retirement went to his widow who never worked. She also received SS benefits for her three young children until they turned 18yrs. After his death she went to work, but the SS continued.
This is unsustainable....and in the end retirees who spent years paying in will end up with nothing.
Want to discuss SS payments going to foreign countries to persons previously married to Americans...?
The American worker is not a bottomless money pit.
35 posted on 09/08/2011 6:44:57 AM PDT by WestwardHo
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To: wideawake

That was clever ;-)


36 posted on 09/08/2011 6:48:14 AM PDT by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: Graewoulf

It’s a Ponzi scheme. Of course, the Dim’s will try and use this as a scare tactic to Granny, against Perry and Pubs. Pubbies MUST control the dialogue on this with basic explanations of exactly why/how SS is a Ponzi scheme - and how/why it must be fixed.


37 posted on 09/08/2011 6:49:00 AM PDT by Jane Long (Soli Deo Gloria!)
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To: Hemingway's Ghost

The format wouldn’t allow that long an answer.


38 posted on 09/08/2011 6:49:30 AM PDT by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: Sea Parrot
In 1950 there were 16 workers for every retiree; today there are 3.3; and by 2030 there will be two. We are an aging society. In just 20 years, one in every five Americans will be 65 or older--about twice what it is today.

SS is a pay as you go system. Today's workers pay the benefits for today's retirees. SS has been in the red (benefit payments exceed revenue) since May 2009, which is why SS is cashing in its IOUs in the SSTF to make up the shortfall.

Obama's 2% reduction in the payroll tax just decreases revenue and increases the shortfall. And the General Fund must borrow the money to redeem the SS IOUs, thereby increasing the deficit. Moreover, the law that authorized the 2% reduction says that the SSTF must be reimbursed for the loss of revenue caused by that reduction at some future date. In essence, we are using the SSTF IOUs as a stimulus.

39 posted on 09/08/2011 6:49:46 AM PDT by kabar
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To: Grunthor

It will be until they come clean and take concrete steps to fix it out in the open.


40 posted on 09/08/2011 6:50:29 AM PDT by ImJustAnotherOkie (zerogottago)
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To: WestwardHo
SS is also not an "investment" scheme, because if someone has paid into the system for years, but dies before retirement age (or shortly thereafter) with no eligible heirs (a surviving spouse or minor children), the money is absorbed into the system to pay someone else.
41 posted on 09/08/2011 6:52:10 AM PDT by rightwingintelligentsia (Be careful of believing something just because you want it to be true.)
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To: Graewoulf
Is Social Security a Ponzi Scheme ?

No, it's a pseudo-Ponzi scheme.

The government does not claim, nor does it promise, that your FICA taxes belong to you. If they did, it would be a Ponzi scheme.

If you want to BELIEVE that your "contributions" belong to you, that's fine with the Feds. But their actual position, both as to law and as to fact, is not difficult to discover.

42 posted on 09/08/2011 6:52:30 AM PDT by Jim Noble (To live peacefully with credit-based consumption and fiat money, men would have to be angels.)
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To: jjsheridan5
A Ponzi Scheme is voluntary. If you are smart or cautious, you can avoid them completely. SS is enforced by the law, thus no amount of caution can allow you to avoid getting scammed.

SS is worse.

Beautifully stated.

43 posted on 09/08/2011 6:53:00 AM PDT by Hodar ( Who needs laws; when this FEELS so right?)
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To: ZULU

No, it was clear from the beginning what SS was. Go read the Jacoby piece on SS that has been posted today.

And the demographics were bad in in the 30s when the law was enacted. The Post-War Baby Boom put off the crisis for a while, but in the 30s no one could forsee that temporary reprieve.


44 posted on 09/08/2011 6:53:00 AM PDT by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: who knows what evil?

http://www.cato.org/pubs/policy_report/pr-ja-jp.html

We decided that the minimum contribution should be 10 percent of wages. But workers may contribute up to 20 percent. The money contributed is deducted from the worker’s taxable income. The money is invested by a private institution, and the returns are untaxed. By the time a worker reaches retirement age—65 for men, 60 for women—a sizable sum of capital has accumulated in the account. At retirement the worker transforms that lump sum into an annuity with an insurance company. He can shop among different insurance companies to find the plan that best suits his personal and family situation. (He pays taxes when the money is withdrawn but usually at a lower rate than he would have paid when he was working.)

As I said, a worker can contribute more than 10 percent if he wants a higher pension or if he wants to retire early. Individuals have different preferences: some want to work until they are 85; others want to go fishing at 55, or 50, or 45, if they can. The uniform pay-as-you-go social security system does not recognize differences in individual preferences. In my country, those differences had led to pressure on the congress to legislate different retirement ages for different groups. As a result, we had a discriminatory retirement-age system. Blue-collar workers could retire at 65; white-collar workers could retire more or less at 55; bank employees could retire after 25 years of work; and the most powerful group of all, those who make the laws, the congressmen, were able to retire after 15 years of work.

Under our new system, you don’t have to pressure anyone. If you want to retire at 55, you go to one of the pension-fund companies and sit in front of a user-friendly computer. It asks you at what age you want to retire. You answer 55. The computer then does some calculations and says that you must contribute 12.1 percent of your income to carry out your plan. You then go back to your employer and instruct him to deduct the appropriate amount. Workers thus translate their personal preferences into tailored pension plans. If a worker’s pension savings are not enough at the legal retirement age, the government makes up the difference from general tax revenue.


45 posted on 09/08/2011 6:54:41 AM PDT by pitviper68
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To: ZULU
Myth 4: President Roosevelt promised that the money the participants paid would be put into the independent "Trust Fund," rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement program, and no other Government program

The idea here is basically correct. However, this statement is usually joined to a second statement to the effect that this principle was violated by subsequent Administrations. However, there has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government.

The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."

Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no affect on the actual operations of the Trust Fund itself.

46 posted on 09/08/2011 6:55:48 AM PDT by kabar
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To: jjsheridan5

you can avoid SS either by not working or working for the federal government which for the most part is the same thing as far as I can see.


47 posted on 09/08/2011 6:58:44 AM PDT by urbanpovertylawcenter (where the law and poverty collide in an urban setting and sparks fly)
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To: pitviper68

Thanks!


48 posted on 09/08/2011 6:58:46 AM PDT by who knows what evil? (G-d saved more animals than people on the ark...www.siameserescue.org.)
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To: Voter#537

That is why they wanted control of Health care. Now they can offer the Old people an easy way out (Death Panel)and the S.S. problem is solved.


49 posted on 09/08/2011 6:59:38 AM PDT by Chancelot
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To: Grunthor
You hit the nail on the head!
Grunthor wrote:
Look up the definition of “Ponzi Scheme” and tell me how it is NOT one.
That's it.

Of course, if the question is ever turned around, or if a candidate ever reads the dictionary definition of Ponzi scheme in a debate, it's game over.

Which is why candidates can speak no longer than one minute in public debate (on the major networks or news networks) and candidates aren't allowed to bring any reference materials/props to the debate (like a dictionary).

The truth can not be spoken or demonstrated in public. The Party Propaganda Ministry will not allow that. Only emotionally charged (though true) phrases and angry emotions can be shown to the great unwashed.

50 posted on 09/08/2011 6:59:43 AM PDT by cc2k ( If having an "R" makes you conservative, does walking into a barn make you a horse's (_*_)?)
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