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Restructuring America's Economic Mobility
Imprimis ^ | 10.06.16 | Frank Buckley

Posted on 10/16/2016 5:14:15 PM PDT by Chickensoup

The following is adapted from a speech delivered on July 11, 2016, at Hillsdale College’s Allan P. Kirby, Jr. Center for Constitutional Studies and Citizenship in Washington, D.C., as part of the AWC Family Foundation Lecture Series.

In the Communist Manifesto, Marx and Engels wrote that “the history of all hitherto existing societies is the history of class struggles.” Today the story of American politics is the story of class struggles. It wasn’t supposed to be that way. We didn’t think we were divided into different classes. Neither did Marx.

America was an exception to Marx’s theory of social progress. By that theory, societies were supposed to move from feudalism to capitalism to communism. But the America of the 1850s, the most capitalist society around, was not turning communist. Marx had an explanation for that. “True enough, the classes already exist,” he wrote of the United States, but they “are in constant flux and reflux, constantly changing their elements and yielding them up to one another.” In other words, when you have economic and social mobility, you don’t go communist.

That is the country in which some imagine we still live, Horatio Alger’s America—a country defined by the promise that whoever you are, you have the same chance as anyone else to rise, with pluck, industry, and talent. But they imagine wrong. The U.S. today lags behind many of its First World rivals in terms of mobility. A class society has inserted itself within the folds of what was once a classless country, and a dominant New Class—as social critic Christopher Lasch called it—has pulled up the ladder of social advancement behind it.

One can measure these things empirically by comparing the correlation between the earnings of fathers and sons. Pew’s Economic Mobility Project ranks Britain at 0.5, which means that if a father earns £100,000 more than the median, his son will earn £50,000 more than the average member of his cohort. That’s pretty aristocratic. On the other end of the scale, the most economically mobile society is Denmark, with a correlation of 0.15. The U.S. is at 0.47, almost as immobile as Britain.

A complacent Republican establishment denies this change has occurred. If they don’t get it, however, American voters do. For the first time, Americans don’t believe their children will be as well off as they have been. They see an economy that’s stalled, one in which jobs are moving offshore. In the first decade of this century, U.S. multinationals shed 2.9 million U.S. jobs while increasing employment overseas by 2.4 million. General Electric provides a striking example. Jeffrey Immelt became the company’s CEO in 2001, with a mission to advance stock price. He did this in part by reducing GE’s U.S. workforce by 34,000 jobs. During the same period, the company added 25,000 jobs overseas. Ironically, President Obama chose Immelt to head his Jobs Council.

According to establishment Repub­licans, none of this can be helped. We are losing middle-class jobs because of the move to a high-tech world that creates jobs for a cognitive elite and destroys them for everyone else. But that doesn’t describe what’s happening. We are losing middle-class jobs, but lower-class jobs are expanding. Automation is changing the way we make cars, but the rich still need their maids and gardeners. Middle-class jobs are also lost as a result of regulatory and environmental barriers, especially in the energy sector. And the skills-based technological change argument is entirely implausible: countries that beat us hands down on mobility are just as technologically advanced. Folks in Denmark aren’t exactly living in the Stone Age.

This is why voters across the spectrum began to demand radical change. What did the Republican elite offer in response? At a time of maximal crisis they have been content with minimal goals, like Mitt Romney’s 59-point plan in 2012. How many Americans remember even one of those points? What we remember instead is Romney’s remark about 47 percent of Americans being takers. That was Romney’s way of recognizing the class divide—and in the election, Americans took notice and paid him back with interest.

Since 2012, establishment Republicans have continued to be less than concerned for the plight of ordinary Americans. Sure, they want economic growth, but it doesn’t seem to matter into whose pockets the money flows. There are even the “conservative” pundits who offer the pious hope that drug-addicted Trump supporters will hurry up and die. That’s one way to ameliorate the class struggle, but it doesn’t exactly endear anyone to the establishment. The southern writer Flannery O’Connor once attended a dinner party in New York given for her and liberal intellectual Mary McCarthy. At one point the issue of Catholicism came up, and McCarthy offered the opinion that the Eucharist is “just a symbol,” albeit “a pretty one.” O’Connor, a pious Catholic, bristled: “Well, if it’s just a symbol, to Hell with it.” Likewise, the principles held up as sacrosanct by establishment Republicans might be logically unassailable, derived like theorems from a set of axioms based on a pure theory of natural rights. But if I don’t see them making people better off, I say to Hell with them. And so do the voters this year. What the establishment Republicans should ask themselves is Anton Chigurh’s question in No Country for Old Men: If you followed your principles, and your principles brought you to this, what good are your principles?

Had Marx been asked what would happen to America if it ever became economically immobile, we know what his answer would be: Bernie Sanders and Hillary Clinton. And also Donald Trump. The anger expressed by the voters in 2016—their support for candidates from far outside the traditional political class—has little parallel in American history. We are accustomed to protest movements on the Left, but the wholesale repudiation of the establishment on the Right is something new. All that was solid has melted into air, and what has taken its place is a kind of right-wing Marxism, scornful of Washington power brokers and sneering pundits and repelled by America’s immobile, class-ridden society.

Establishment Republicans came up with the “right-wing Marxist” label when House Speaker John Boehner was deposed, and labels stick when they have the ring of truth. So it is with the right-wing Marxist. He is right-wing because he seeks to return to an America of economic mobility. He has seen how broken education and immigration systems, the decline of the rule of law, and the rise of a supercharged regulatory state serve as barriers to economic improvement. And he is a Marxist to the extent that he sees our current politics as the politics of class struggle, with an insurgent middle class that seeks to surmount the barriers to mobility erected by an aristocratic New Class. In his passion, he is also a revolutionary. He has little time for a Republican elite that smirks at his heroes—heroes who communicate through their brashness and rudeness the fact that our country is in a crisis. To his more polite critics, the right-wing Marxist says: We are not so nice as you!

The right-wing Marxist notes that establishment Republicans who decry crony capitalism are often surrounded by lobbyists and funded by the Chamber of Commerce. He is unpersuaded when they argue that government subsidies are needed for their friends. He does not believe that the federal bailouts of the 2008-2012 TARP program and the Federal Reserve’s zero-interest and quantitative easing policies were justified. He sees that they doubled the size of public debt over an eight-year period, and that our experiment in consumer protection for billionaires took the oxygen out of the economy and produced a jobless Wall Street recovery.

The right-wing Marxist’s vision of the good society is not so very different from that of the JFK-era liberal; it is a vision of a society where all have the opportunity to rise, where people are judged by the content of their character, and where class distinctions are a thing of the past. But for the right wing Marxist, the best way to reach the goal of a good society is through free markets, open competition, and the removal of wasteful government barriers.

Readers of Umberto Eco’s The Name of the Rose will have encountered the word palimpsest, used to describe a manuscript in which one text has been written over another, and in which traces of the original remain. So it is with Canada, a country that beats the U.S. hands down on economic mobility. Canada has the reputation of being more liberal than the U.S., but in reality it is more conservative because its liberal policies are written over a page of deep conservatism.

Mobility Rank Chart

Whereas the U.S. comes in at a highly immobile 0.47 on the Pew mobility scale, Canada is at 0.19, very close to Denmark’s 0.15. What is further remarkable about Canada is that the difference is mostly at the top and bottom of the distribution. Between the tenth and 90th deciles there isn’t much difference between the two countries. The difference is in the bottom and top ten percent, where the poorest parents raise the poorest kids and the richest parents raise the richest kids.

For parents in the top U.S. decile, 46 percent of their kids will end up in the top two deciles and only 2 percent in the bottom decile. The members of the top decile comprise a New Class of lawyers, academics, trust-fund babies, and media types—a group that wields undue influence in both political parties and dominates our culture. These are the people who said yes, there is an immigration crisis—but it’s caused by our failure to give illegals a pathway to citizenship!

There’s a top ten percent in Canada, of course, but its children are far more likely to descend into the middle or lower classes. There’s also a bottom ten percent, but its children are far more likely to rise to the top. The country of opportunity, the country we’ve imagined ourselves to be, isn’t dead—it moved to Canada, a country that ranks higher than the U.S. on measures of economic freedom. Yes, Canada has its much-vaunted Medicare system, but cross-border differences in health care don’t explain the mobility levels. And when you add it all up, America has a more generous welfare system than Canada or just about anywhere else. To explain Canada’s higher mobility levels, one has to turn to differences in education systems, immigration laws, regulatory burdens, the rule of law, and corruption—on all of which counts, Canada is a more conservative country.

America’s K-12 public schools perform poorly, relative to the rest of the First World. Its universities are great fun for the kids, but many students emerge on graduation no better educated than when they arrived. What should be an elevator to the upper class is stalled on the ground floor. One study has concluded that if American public school students were magically raised to Canadian levels, the economic gain would amount to a 20 percent annual pay increase for the average American worker.

The U.S. has a two-tiered educational system: a superb set of schools and colleges for the upper classes and a mediocre set for everyone else. The best of our colleges are the best anywhere, but the average Canadian school is better than the average American one. At both the K-12 and college levels, Canadian schools have adhered more closely to a traditional, conservative set of offerings. For K-12, a principal reason for the difference is the greater competition offered in Canada, with its publicly-supported church-affiliated schools. With barriers like America’s Blaine Amendments—state laws preventing public funding of religious schools—lower-class students in the U.S. must enjoy the dubious blessing of a public school education.

What about immigration? Canada doesn’t have a problem with illegal aliens—it deports them. As for the legal intake, Canadian policies have a strong bias towards admitting immigrants who will confer a benefit on Canadian citizens. Even in absolute numbers, Canada admits more immigrants under economic categories than the U.S., where most legal immigrants qualify instead under family preference categories. As a result, on average, immigrants to the U.S. are less educated than U.S. natives, and unlike in Canada, second- and third-generation U.S. immigrants earn less than their native-born counterparts. In short, the U.S. immigration system imports inequality and immobility. If immigration isn’t an issue in Canada, that’s because it’s a system Trump voters would love.

For those at the bottom of the social and economic ladder who seek to rise, nothing is more important than the rule of law, property rights, and the sanctity of contract provided by a mature and efficient legal system. The alternative—in place today in America—is a network of elites whose personal bonds supply the trust that is needed before deals can be done and promises relied on. With its more traditional legal system, Canada better respects the sanctity of contract and is less likely to weaken property rights with an American-style civil justice system which at times resembles a slot machine of judicially-sanctioned theft. Americans are great at talking about the rule of law, but in reality we don’t have much standing to do so.

Then there’s corruption. As ranked by Transparency International’s Corruption Perceptions Index, America is considerably more corrupt than most of the rest of the First World. With our K Street lobbyists and our donor class, we’ve spawned the greatest concentration of money and influence ever. And corruption costs. In a regression model, the average family’s earnings would increase from $55,000 to $60,000 were we to ascend to Canada’s level of non-corruption, and to $68,000 if we moved to Denmark’s level.

In a corrupt country, trust is a rare commodity. That’s America today. Only 19 percent of Americans say they trust the government most of the time, down from 73 percent in 1958 according to the Pew Research Center. Sadly, that is a rational response to the way things are. America is a different country today, and a much nastier one. For politically engaged Republicans, the figure is six percent. That in a nutshell explains the Trump phenomenon and the disintegration of the Republican establishment. If the people don’t trust the government, tinkering with entitlement reform is like rearranging deck chairs on the Titanic.

American legal institutions are consistently more liberal than those in Canada, and they are biased towards a privileged class of insiders who are better educated and wealthier than the average American. That’s why America has become an aristocracy. By contrast, Canadian legal institutions aren’t slanted to an aristocracy.

The paradox is that Canadians employ conservative, free market means to achieve the liberal end of economic mobility. And that points to America’s way back: acknowledge that the promise of America has diminished, then emulate Canada.

Frank Buckley is a Foundation Professor at Scalia Law School at George Mason University, where he has taught since 1989. Previously he was a visiting Olin Fellow at the University of Chicago Law School, and he has also taught at McGill Law School, the Sorbonne, and Sciences Po in Paris. He received his B.A. from McGill University and his LL.M. from Harvard University. He is a senior editor of The American Spectator and the author of several books, including The Once and Future King: The Rise of Crown Government in America and The Way Back: Restoring the Promise of America.


TOPICS: Constitution/Conservatism; Culture/Society; Government
KEYWORDS: economic
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To: exDemMom
Actually, I have no clue what the history books say. History as taught in school was so horrible that it was all I could do to pass the class; without history to pull down my grades, my GPA would have been closer to 3.7 than 3.5. So everything I said about the Mongolian third empire is what I learned in the museums over there. And I think I did not explain well the lesson I took away from that. The lesson was not about the Mongolian Khan empire so much as it was about our own future.

It's a shame you feel that way about history as it tells us WHO we are and WHY we are the way we are.
I don't really focus on "our" future as a country as only God knows what that will be. WE do the best we can and let our good Lord worry about the future of His human creations. This life is a blink of an eye fast and this time is for us to worship our Maker. We do that by loving Him and loving others.
BTW: I minored in history in college, especially U.S. history. I had a FABULOUS instructor and loved every minute of it.

=============================================

We are at a crossroads here. We have been a nation for nearly 250 years. Our media is set on destroying America, and subversive elements (e.g. Soviet plants in schools, universities, the media, etc., throughout the 1900s) have made sure that people do not receive proper educations, that they receive a steady diet of propaganda exactly as described in the novel 1984. They have conditioned a large part of the population to have no critical thinking skills whatsoever, and to substitute the state for God. The situation is so dire now that we are on the verge of electing Hillary--a woman who is motivated by unmitigated greed and lust for power, who has a history of working to destroy America and who has openly said that if elected, she will import even more jihadists (many of whom she created with her Middle East policies) and uneducated third worlders whose only "contribution" would be to increase her political power, while becoming a burden to the minority of us who still work. I am terrified that she might win the election; I do not think the country we know as America will survive.

No crossroads with this election. She is just ONE person and she can't do much with our system of government.
Plus she has to deal with CONGRESS. THAT is a bigger deal because they make the laws.
I believe every word you say about Shrillary but you really are giving her too much credit. I remember WELL the exact same rhetoric when Bill Clinton was running. The anti-Clinton pundits said that the world would end. It didn't.
Clinton was a giant SLEAZE-bucket but our world didn't end.

=============================================

They elected communists because they remember Communism as a time when everyone had jobs. Unemployment right now is quite high. During the Communist era, the government made sure the nomads all had animals and were able to continue their lifestyle. Nowadays, all it takes is one rough winter (common in Mongolia, where it begins snowing in October) for a rich nomad family to lose their herd and become poor overnight. When that happens, they move into the city hoping to find a job--but the only skill they have is raising animals, and they end up in the ger district, where all the poor people live. Despite their nostalgia for the Soviet era, it is easy to see that the Soviets never improved their infrastructure (other than building power plants for the city, which are old and polluting); they had no paved roads or indoor plumbing during the Soviet era. But they had jobs. Now, they are struggling to develop. Their current system of democracy is riddled with corruption and cronyism. If the only political systems you have known were Communism (where everyone was equal and had a job) or a corrupt democracy (where corruption runs rampant and how well you do depends on who you know in high places), which would you think is a better system? People who do not have a long history of democracy and no history of having a republic cannot be expected to understand these systems of government, much less implement them effectively. (This, btw, is why we have not had success in the Middle East--the best we can do there is make sure the dictators are benign.)

The Mongolians weren't too bright to bring back the communists on the nostalgia thinking. Not smart at all. But, it's THEIR country and they can vote for whomever they want.

As for the middle east, my husband and I LIVED and WORKED in the Kingdom of Saudi Arabia for five YEARS. One reason to go there , besides the HUGE salaries ARAMCO paid, was to travel. It was FABULOUS and I learned about the middle east.
When we returned home we realized that trying to explain the middle east to Americans was impossible. The media here fill the pages and airwaves with nothing but anti-middle east things. This country is DEEPLY entailed with the Saudi Kingdom because of the petroleum and natural gas that we NEED to run our comfortable lives.
According to the geologists the Saudi government has another 200 years of petroleum and natural gas, so we won't be leaving there soon.

=============================================

Going to live in another country is not that easy, or I would have done it decades ago. I learned eons ago, when I lived in Europe for a few years, that I absolutely love being an American overseas. But now, as I approach retirement, I realize that I made the wrong life decisions along the way and steered myself away from life as an expat. Perhaps, after I retire, I will have more time to visit the world. Every people I have visited is different, and I always want to learn more about them.

Sorry about your wrong decisions. My husband and I made the right decisions. Well, HE made the BIG decisions because he was so smart! [My sister introduced us as they worked together. She picked me a GOOD one.]

We had an argument once over there. Apparently I had the habit of NOT closing kitchen drawers and it annoyed him. One day he started in on me about it, scolding me.
However, he didn't let me answer. HE continued the argument doing BOTH SIDES, HIS AND MINE. I listened carefully to make sure that he got MY side right...and he did.
At the end I just had to LAUGH! I said: "Hah! You don't even need me to ARGUE anymore."
After that I always closed kitchen drawers and SMILED every time, remembering our "argument" about it.

I retired and LOST my desire to travel. I can't even THINK about packing (I take only carry-ons now, the sizes that the pilots and flight attendants carry), taxis to the airport, waiting, security checks, waiting, the flight, more taxis, hotels, restaurants...and reverse to come home.
Maybe I'll feel like traveling again someday...but I LOVE my home and city and life!

Start planning your trips now! :o)

21 posted on 10/17/2016 6:18:12 PM PDT by cloudmountain
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To: cloudmountain
No crossroads with this election. She is just ONE person and she can't do much with our system of government.

Plus she has to deal with CONGRESS. THAT is a bigger deal because they make the laws.

I believe every word you say about Shrillary but you really are giving her too much credit. I remember WELL the exact same rhetoric when Bill Clinton was running. The anti-Clinton pundits said that the world would end.

It didn't.

Clinton was a giant SLEAZE-bucket but our world didn't end.

I wish I could have that level of faith.

However, I am a scientist, and one concept that I have come to understand very well is that systems work according to a logarithmic function. The best way to visualize this is through looking at a growth curve or dose-response curve. A tiny bit of perturbation to a system has no visible effect. But when that perturbation grows, it reaches a point where, seemingly suddenly, the perturbation and its effects have a linear relationship. Then there comes a time when the perturbation has had the maximum effect on the system, such that adding more does not make much of a difference.

Bill Clinton did a lot of damage, but the system is huge; thus, the damage was mostly hidden during his term. The housing/mortgage crisis that erupted in the latter part of Bush 43's presidency was the direct result of Bill Clinton's policies. The system was able to absorb a small number of bad mortgages. But the policy of coercing banks to make these bad loans continued over several years steadily increased the number of bad loans to the point where the system broke under the pressure. We are still dealing with that. Add to that the other pressures the left puts on our system--the race wars that Obama has tirelessly promoted, the stress on the healthcare system, the suppression of education in schools and even universities, the massive increase of national debt--there are too many stressors in the system, and they are growing. Hillary will double down on the destructive policies of Bill and Obama--that is the entire point of her campaign. Thus, she will accelerate the effects of those stressors. To avoid system breakdown, those stressors have to be negated ASAP. Trump seems to understand the danger, and is (I think) the only person who is willing to try to fix the problems before they reach critical levels.

Argentina did not collapse overnight when it went full socialist. It took years. The US, being larger, has more built-in resilience, but it is reaching the breaking point.

Now, back to Mongolia and their vote for communists when they had their first election. You need to try to understand that from their point of view, free from American bias. Communism, to them, represents equality, full employment, and--yes--freedom, while democracy represents cronyism, corruption and high unemployment. They do not have a republican option. Many Mongolians do not like cronyism or corruption any more than conservative Americans. And when they vote for Communists, they are not voting for a communist dictator-they are voting for communists to sit in a parliament, who will--regardless of their party affiliation--support the efforts of international companies (Toyota, Coca-Cola, Pizza Hut, Louis Vuitton, etc.) to set up shop in Mongolia because that creates jobs, which is completely compatible with the view that (some) Mongolians have of communism. The important point is that Communism in Mongolia has to be understood in context--it is NOT the American interpretation of Communism.

When I first arrived in Mongolia, my guide asked about the election, and who I support. I told her that I am voting for Trump, because he is a businessman and I think that is good for America. In later conversations, we talked about corruption, and I told her that Hillary is very corrupt but that the people voting for her do not care. She brought up the point that she heard that Trump cannot be corrupted, and I pointed out that Trump is so rich that it is impossible to offer him something he does not already have.

22 posted on 10/18/2016 4:09:32 AM PDT by exDemMom (Current visual of the hole the US continues to dig itself into: http://www.usdebtclock.org/)
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To: exDemMom

In accounting, you look ahead, and unfortunately, the Repeal of Glass-Steagal was not a good move, regardless of how great the economy was at time.


23 posted on 10/18/2016 4:20:09 AM PDT by Morpheus2009
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To: cloudmountain

Dang—I meant Venezuela, not Argentina. (Same thing, I suppose.)


24 posted on 10/18/2016 4:27:09 AM PDT by exDemMom (Current visual of the hole the US continues to dig itself into: http://www.usdebtclock.org/)
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To: exDemMom

I did great in history, but still, Mongolia under Communism was hardly discussed and the time frame where I was on that course was the winter 2010 semester, a few years ago. The details weren’t gotten into. Now maybe I could have found the option for one of the papers, but it didn’t appear common. I couldn’t extrapolate and say that my course reflects on what the history courses in general cover. But it just appeared that way.


25 posted on 10/18/2016 4:27:09 AM PDT by Morpheus2009
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To: exDemMom
You DON'T know corruption if you think THIS president is corrupt. The third world, everywhere but the USA, Canada, Australia and Europe, is corruption nationalized. Any president of ours, Democrat or GOP, looks like the saint of the day in comparison.

Countries like Mongolia undoubtedly think that we are NAIVE, rich but naive. It's isn't naiveté at all.
It's the Judaic/Christian ethic.
Christians believe in education of ALL, not a privileged few.
Education is the source of our wealth.
We also have the gift of LARGE open spaces for farms so WE can feed ourselves. Many nations cannot.
We have LARGE oceans between us and the rest of the world, minus Mexico and Canada. That gives us the "room" to be independent of most of the planet, a good thing.
We truly are blessed by our Maker to live HERE.
As women we are truly blessed to live HERE and NOW.

I count my many blessings EVERY, SINGLE day. I attend Mass every day (except Saturdays) to show my gratitude to our good Lord.

Lol. Sorry, I was ON A ROLL! Thanks for reading.
FREEgards.

26 posted on 10/18/2016 1:44:58 PM PDT by cloudmountain
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To: Morpheus2009
I did great in history, but still, Mongolia under Communism was hardly discussed and the time frame where I was on that course was the winter 2010 semester, a few years ago. The details weren’t gotten into. Now maybe I could have found the option for one of the papers, but it didn’t appear common. I couldn’t extrapolate and say that my course reflects on what the history courses in general cover. But it just appeared that way.

The only thing I ever remember learning about Mongolia was that Chinggis (Ghengis) Khan was a Mongolian who conquered much of the known world, and that many people trace their ancestry back to him. Because I had a Russian student several years ago who told me that many Russians would visit Mongolia, I suspected that it might have been a member of the Soviet bloc, but I had to verify that suspicion with further research.

During the 300 years that China occupied Mongolia, the Chinese were brutal about putting down any kind of rebellion, using torture and murder to enforce their rule. In 1921, Sukhbator visited the USSR and asked for help against the Chinese. The USSR sent soldiers, and with that help, Mongolians managed to free the northern provinces, the area now known as Outer Mongolia. They remain grateful to the Soviets to this day. And that is despite the purges in the 1930s, where the Soviets destroyed almost all of the Buddhist monasteries and murdered hundreds of monks.

My guide asked about the relationship between South Korea and America, because she sees Korean TV shows where the characters often talk about America. After I explained to her how we helped South Korea when North Korea invaded, she said, "Oh, so it's because you helped South Korea the way the Soviets helped us!" I could not disagree with that assessment.

When I went to school, history was about ancient Greece and Rome, America, California, and Japan, as well as Japanese culture (we spent a whole school year studying Japan). Either the rest of the world did not exist, or I slept through it (I hated history).

27 posted on 10/18/2016 5:54:26 PM PDT by exDemMom (Current visual of the hole the US continues to dig itself into: http://www.usdebtclock.org/)
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