Reform in Health Reform? Maybe Not So Much...
Sigh.
So yesterday, I wrote this post saying that the new version of the Senate bill does more to "bend the curve" of health care costs. I based that in large measure on the Congressional Budget Office analysis of the how effective a new independent board to regulate Medicare would be.
Except CBO got it wrong, at least partly. The independent board would still act as a brake on health care costs--but not as strong a one as CBO initially estimated, not over the long run. Today, CBO Director Douglas Elmendorf put out a new analysis:
The Congressional Budget Office (CBO) has discovered an error in the cost estimate released on December 19, 2009, related to the longer-term effects on direct spending of the manager's amendment to the Patient Protection and Affordable Care Act (PPACA), Senate Amendment 2786 in the nature of a substitute to H.R. 3590 (as printed in the Congressional Record on November 19, 2009).
Correcting that error has no impact on the estimated effects of the legislation during the 2010–2019 period. However, the correction reduces the degree to which the legislation would lower federal deficits in the decade after 2019.
The confusion centers on what would trigger the independent board to act to bring down spending. It turns out that, after 2019, it isn't as much of a hair trigger as CBO thought it was :
In its original estimate, CBO wrote that: “Such recommendations would be required if the Chief Actuary for the Medicare program projected that the program's spending per beneficiary would grow more rapidly than a measure of inflation (the average of the growth rates of the consumer price index for medical services and the overall index for all urban consumers).” That statement is correct for fiscal years 2015 through 2019. After 2019, however, the threshold for Medicare spending growth that would trigger recommendations for spending reductions would be higher—specifically, the rate of increase in gross domestic product (GDP) per capita plus 1 percentage point.
Originally, CBO thought the legislation would produce savings of 15% a year in the Medicare program. Now, it says that the savings are likely to be somewhere between 10% and 15% a year. (Although it also noted that even this is "somewhat larger" than the savings projected under Reid's initial version.)
CBO also cautioned, as it has in the past, that any projections a decade and more into the future have an "even greater degree of uncertainty that attends to them, compared with CBO's 10-year budget estimates."
No kidding. It does make you wonder what else they are going to find in the bill.
UPDATE: It's probably worth reminding our readers that this is not the first time that CBO has found itself out of the loop regarding provisions of this bill. Interestingly enough, this earlier episode involved the same commission. Which raises a more worrisome question: If CBO can't keep up with what is getting slipped into this bill, what hope is there for the rest of us?
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1
Page 1546 entitles retired Senators to both hookers and blow.
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Wait a minute.. a trigger that will never be pulled? That's just crazy.
And by crazy I mean utterly predictable.
Medicare Part D ver.2.0
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[...] Putting Some of the Reform Back Into Health Reform Posted by Karen Tumulty Saturday, December 19, 2009 at 5:40 pm 46 Comments • Trackback (1) • Related Topics: barack obama, congress, harry reid, health care, republicans, bending the curve, cost containment, douglas elmendorf, health costs, mitch mcconnell NOTE: On Sunday, CBO changed its long-term estimates of cost savings, which it said were based on a misunderstanding of this bill. Please see this update.) [...]
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Karen, has anyone ever done a detailed analysis about how accurate the CBO's long-term predictions actually are? I have a hard time getting worked up over cost estimates for 2019. They have no idea what the world will be like then.
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4.1
How accurate are CBO's economic forecasts?
CBO regularly evaluates the accuracy of its economic forecasts and publishes the track record. Those evaluations help guide the agency's efforts to improve its forecasts and help Members of Congress and others in their use of CBO's estimates. Historically, the accuracy of CBO's two-year forecasts and five-year projections has been very similar to the accuracy of those by the Blue Chip consensus (an average of private-sector forecasters) and the Administration. For a related discussion, see What Is a Current-Law Economic Baseline and CBO's Economic Forecasting Record: 2007 Update.How accurate are CBO's budget projections?
By statute, CBO's baseline projections must estimate the future paths of federal spending and revenues under current law and policies. The baseline is therefore not intended to be a prediction of future budgetary outcomes; instead, it is meant to serve as a neutral benchmark that lawmakers can use to measure the effects of proposed changes to spending and taxes. So for that reason and others, actual budgetary outcomes are almost certain to differ from CBO's baseline projections. For a related discussion, see Chapter 1 of CBO's Budget and Economic Outlook; see also The Uncertainty of Budget Projections: A Discussion of Data and Methods for supplemental information. -
4.2
i think the numbers themselves aren't so important here. what is significant is the fact that CBO was giving Reid more credit than he deserved to get for strengthening a commission that economists see as a "game changer," but one that is opposed by a whole host of interest groups.
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this may have been just an error, but this isn't the first time that CBO has been surprised at things that have been slipped into this bill. and if they can't keep up with it, what hope is there for the rest of us? -
4.3
Well Karen and Paul No Not That One: you both rock. Happy holidays!
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Here's an earlier example of cbo getting caught out of the loop. one that, interestingly enough, involves the same commission:
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http://www.medicalnewstoday.com/articles/165982.php -
6
I was waiting for your post on this new CBO analysis. I continued to follow up on the older one there...
This is not directly related to what was discussed in your earlier post or comments thereof. But as you ended your post here, this does raise an issue about adequacy of CBO analysis itself.
Some on GOP side are already out with charges of 'corruption'. Clearly that is hyperbola. However, this clearly demonstrates that there is need of an independent 'audit' of these CBO estimates in order for we tax payers to get full information of what is happening. Legislation can not and should not stop for that. But all this does open the possibility of 'lot of things which might have fallen through the cracks...'.
CBO has been under enormous pressure to get things done in short time. They have been on hook for past 6 months or so (pretty sure without holidays in many cases) and resources for sure must be limited too. Add to that potential political biases at work as well. (Current CBO chief I guess was appointed by Pelosi and he is Democrat.) I should not be going there, but what I am worried is the partisan tones the debate and CBO score may take in near future.
Already our 'Congressional well' is poisoned enough and we want to avoid such 'CBO corrections' as much as possible. How to achieve that? I do not know how.
But I sense that, time has come for President Obama to come out and guide this 'nation' from the quagmire called Health Care Reforms. He needs to demonstrate Leadership in urging the nation to back these reforms while acknowledging specific shortcomings which all have surfaced in the frenzy of last days. Yes, we have traveled that road too often where the President gives a big speech or gives a presser on the topic to move the needle. But now we probably have reached the point of 'core democratic credibility' itself. So I feel it is warranted that he comes forward with more upfront information and helps to calm down the high tempers. The tempers may not calm down, but at the end I guess it becomes his responsibility to make honest efforts to render a coherent story out of all this - CBO errors and corrections, games played by Senators, compromises and buy-ins of Senators and above all intra-party 'fight to death' erupted.
We need 'kool-aid' here or if you pardon me for the cliche - we need Leadership here....
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AFTER 2019?
Did anyone predict 2009 in 1999? CBO long term analysis seems rather silly.
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7.1
I totally knew 2009 was going to happen.
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“This Bill is an insurance company's dream” – Howard Dean
link to Dr. Dean's comments: http://abcnews.go.com/GMA/HealthCare/howard-dean-health-care-bill-bigger-bailout-insurance/story?id=9349392
This disgrace of a bill is a boondoggle for special insurance industry interests, not for our citizens! - Andy Jacksonian
A Brutal Truth Message from Andy Jacksonian:
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If you believe a national healthcare program is as important as the Federal government's maintaining our military and our national transportation programs, and if you really give a damn about the subject of Healthcare, you'll read the following:
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The majority of Congressional politicians have apparently become completely corrupted by the insurance industry's gravy train. Interestingly, but not surprisingly, the House and Senate Dems' convoluted crappy healthcare reform proposals are currently causing the insurance companies' stock prices to rise very indicatively ... as the health reform bill actually doesn't reform anything at all and instead brings over 30 million more insurance customers to them whose insurance premiums US tax payers will be subsidizing. Why wouldn't the insurance industry be blissfully ecstatic about this?
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The Solution - The Andy Jacksonian National Healthcare Doctrine:
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The Brutal Truth about how the health industry ought to be reformed if we are to expect any practical benefits form Federal intervention and taxpayers underwriting it:
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1) immediate implementation of a Federal government take over of all medical schools in the nation to remove the lack of accessibility (currently intended to perpetuate this profession's income and incestual network propagation) for so many students, and instead opening the medical schools' doors to all applicants meeting a universal standard… which will ensure there will be an adequate number of medical professionals everywhere in the nation.
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2) implement tuition free medical schools for all admitted, removing the rational for ridiculously expensive medical billings imposed by doctors claiming they are too deeply in debt to do otherwise.
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3) Federal price fixing for all medical charges, thereby COMPLETELY ELIMINATING THE NEED FOR THE HEALTH INSURANCE INDUSTRY AND THEIR EXTRA LAYER OF COSTS AND PROFITS TO BE INVOLVED IN OUR HEALTH CARE AT ALL
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4) The savings realized as a result of implementing the 1, 2 and 3 steps above would generate the affordability of a Federally funded universal national healthcare program … with a surplus left over compared to our total current collective medical and insurance expenses.
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Andy Jacksonian
New Hickory -
9
Thanks, KT.
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...CBO got it wrong, at least partly. The independent board would still act as a brake on health care costs--but not as strong a one as CBO initially estimated, not over the long run
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F*ck.
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I was really, really hoping that this was the cavalry that we're getting promised will happen "in the future."
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I'm back to not supporting the passage of the Senate bill. -
10
Some questions for you Karen:
1, Since when has the CBO become the "decider" in budget/costs issues?
2. Why is the CBO so important when it comes to health care? Have we had the CBO play a crucial role in funding our two wars? Were they asked to cost that out? If not, why not?
3. I get the impression that the CBO is trotted out when it is politically expedient to do so. What other budget measures have had to rely on CBO scores? Farm subsidies?
4. When Bush was on a roll heading for Iraq did anyone one of you and your colleagues raise the question of what the CBO thought of that exercise? Any cost estimates?
5. Is the CBO only important when there is a Democratic administration in place?
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10.1
CBO was pretty crucial in health care debate in 94. their negative assessment helped kill it. as for wars, my vague memory is that they costed it out, but congress voted for it anyway. war (as we are seeing now) is not considered a budgetary issue.
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the thing about cbo is that they are considered a far more unbiased arbiter of costs than, say, omb. -
10.2
Here's a story that recounts their role in 94:
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http://www.nytimes.com/2000/10/21/nyregion/for-mrs-clinton-health-plan-left-lessons-and-questions.html?pagewanted=all
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//In February 1994, the White House suffered a damaging blow when the Congressional Budget Office said that the Clintons had understated the cost of their proposal and the premiums needed to pay for it.// -
10.3
"war (as we are seeing now) is not considered a budgetary issue"
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Thanks for that frank observation, KT. Vices never are budgetary issues IMO. The waning American empire is nothing if not addicted to war, but like other dependencies (nicotine, booze, the girls), when one balances the books at the end of the month, these are never considered luxuries. And this is not to mention the obvious impacts on the health ... of the body/politic. -
10.4
Here's orszag's testimony on the iraq war:
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http://www.cbo.gov/ftpdocs/86xx/doc8690/10-24-CostOfWar_Testimony.pdf
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as you may recall, one of the issues that democrats have often raised is that war spending was done "off budget," with a series of emergency supplemental spending bills.
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http://www.thenation.com/blogs/thebeat/176130/for_anti_war_democrats_the_toughest_choice
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nancy pelosi promised members of her caucus, in getting them to vote for another one this year, that they would never have to do it again. however, they will indeed have to do it with the troop escalation in afghanistan.
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11
The CBO analysis will be wrong by far more than the original blip. Every entitlement program has never come anywhere near the original estimate. There is no reason to believe this one will be any different.
You will never "bend the cost curve" by adding 20-30-40 million uninsured to a pool without any restrictions. If you cannot exclude pre-existing conditions or differentiate premiums costs skyrocket without being able to offset with higher revenues.
It is foolish and naive to think that taxing the rich or removing the profit motive from insurance companies will fill this gap.
What we will have is a tax and entitlement program that elected officials will have no fortitude to restrain or halt an expansion of services. As a percent of GDP, HC will rise to nearly 25%.
What has been ignored to date is the analysis by the Medicare Chief Actuary that shows doing nothing will cost less than the bills presented. While the left may be happy with this Pyrrhic victory, it should not be long before the agitation begins when all of the other "social" programs will need to be gutted since the deficit is already enormous.
It may be a case of be careful of what you ask for!
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11.1
They'll have to find the fortitude if they want to be able to do just about anything else. Between Medicare, expanded Medicaid, and whatever snappy name conservatives eventually stick on the batch of subsidies the government will be giving out to help sell insurance to people who can't afford it, health care is going to become a tremendous weight on the federal budget. I don't know if this is the strategy behind this bill, but it's almost certainly the effect. The bill might not lower insurance costs for the people, but it does make those costs as much a strain on the government's budget as the individual's.
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If the costs of Medicare, the newly expanded Medicaid, and subsidies under the bill rise at the same 10% a year that our premiums are rising, eventually the government will have to choose between a lot of very unpopular choices (raising taxes and trimming the defense budget come to mind) or one choice that almost nobody outside the insurance or medical fields really opposes, namely, strong government intervention to reduce costs. I'm pretty sure I can guess which of those three things scares senators the least.
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12
The problem with "health care reform" is it really isn't health care reform at all, it is "insurance reform" that really does not deal with the problem of rising health care costs.
The problem is that consumers are divorced from the costs. If patients had to pay the full price of a regular visit to their primary care physician instead of paying a cheap "co-pay" which is divorced from reality, then you would really see a bend in the price curb.
Unfortunately, the vast majority of people want something for nothing and so no one wants to change the way Americans pay for health care. What is really needed is catastrauphic coverage for big medical bills and people paying their own for regular visits, or even visits to specialists. If this was done, with real competition between insurance companies then we would see insurance prices fall and health care prices fall.
The problem is we really don't have market based health care. As long as the consumer is divorced from the costs, we will never really reform health care.
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12.1
"Unfortunately, the vast majority of people want something for nothing and so no one wants to change the way Americans pay for health care."
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Yes, Americans pay almost nothing for health insurance and thus no one wants to change the way we pay.
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That's a novel argument.
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13
It's grimly amusing that we get a series of posts about the inadequacies of the bill, and a parallel series of posts about how we had all better shut up and like it.
The argument seems to be: In America, you really can't expect Congress to fight the corporate lobbies, and anyone who thought (or hoped) otherwise is hopelessly naive and therefore not deserving of Serious Consideration by the Serious People.
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Makes me wish I was an insurance industry lobbyist or an insurance company exec. That's where the money's at these days.
Well, that and being a moderate/centrist Dem U.S. Senator.
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And the first motion passes 60-40.
As expected.
Dr. No and company continue on their merry way to oblivion.
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Sen Coburn inserted language allowing for prayer in girl's locker rooms in Oklahoma during a sports injury evaluation.
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Despite fumbling the expectations game, this is still a major victory for the president. He promised a health care bill and he delivered. That's an aspect that cannot be understated.
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17.1
...not yet, this isn't the final bill on his desk (or in his waste basket).
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17.2
See that's sort of the rub-BHO's motivation of passing a health care bill (any health care bill) and others of passing a good health care bill aren't exactly aligned.
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18
Early this year, 60% of the public supported healthcare reform. The latest polls show that support for the current proposals is now below 40%. Among those who are more informed on the subject, the level of support is even lower. Why is public support falling and why does Congress persist in trying to pass an unpopular proposal?
http://www.medpie.com/politics/featured-articles/122109-healthcare-reform-part-8.html
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I send mail (my paper) *appeal to your people*, for you, so you know.
History of Ukraine contains all roads which pass through its state is the state of the Black and Caspian Sea states of Europe and the Russian Federation and Belarus and the Baltic States. In this environment, Ukraine was and will be, but you should know about the many communities of national minorities in Ukraine, which should assist the indigenous population to win the victory over Russian chauvinism and cynicism.
Many professors from the science of physics know what the torsion fields, which affect the human brain, and at different frequencies program commands to perform the person will be in it in the brain. This experiment was prepared and holding extensive amount in Ukraine during the Orange Revolution, the square of the capital and major cities of Ukraine. During the Orange Revolution, where I took part in rallies, I was surprised by the behavior of a video camera operator, who runs a video camera on the faces of people actively speakers for Yushchenko and Ukraine's future. Why people who participated in the election of President Yushchenko and the future of Ukraine, located in a large garden and joy (remember the first speech by President of Czechia) after the election. I am a former journalist was surprised not competent operator, because the video camera does not include dae signal on a video shoot. To me, at my invitation arriving Jaroslav Ksonzhek, Consul of Poland, where our conversation and confirmed abuse of the Moscow government. It turns out that Moscow is continuing research to control and possess the human brain. It turns out that Putin is in this regard will have the state not only Europe and America but to solve their business programs. Carrying gas pipe through the Baltic States. I want to thank the many Jew for their help when I conducted an investigation, rabbi warned their communities do not come to the square, then be bad for health and psychological disorder. In order to save not only the state president, people, foreign embassies are located in Ukraine, I send the mail letters and telegrams to the President, but in the presidential administration or the children sit or bureaucrats. I understand that Ukraine is very far from your country and therefore should be realistic and simple plan for withdrawal from such situations. You may be surprised by my feeling high torsion fields "But I believe in God and constantly attend Protestant church Evangelicals, Bible study, psychology, folklore, cultural studies, analytics, folk music and songs. Second great experience to travel by military enterprises of when I worked in a factory where assembly consisted of turbines in Krivoy Rog. So I like the saying: The wisdom of man checks only way direction and goals. To convey to the President of Ukraine is a question I have for the first time in its life wrote a letter to the USА Embassy Vil'yamu Taylor, knowing that letters to foreign embassies can check (I wrote the text of the letter to enter a deadlock that people check messages on Post Office in Kiev ) counting on professional psychologists embassy. Maybe my innocence and romanticism great kindness not give me a quiet life, so I thought that everything will be like in the movies. For example, Come from Kiev or the USА embassy good man, and on home phone inviting meeting in Dnipropetrovsk administration and great pity it is all fairy tale, which shows in the film. How can I feel a major role analysis on various issues when I sent a fax wife Ekaterina Yushchenko president and then president's wife appealed to the USА Ambassador (because her aides have not read Catherine fax). So no one sees me as an expert, thinking that I am working with the USА Embassy, President of Ukraine in 2006, invited himself to the USА Ambassador and the Ambassador of Poland. Unfortunately there is not securing for copyrights. Very please note the danger, that Russia may give your country, and protect my copyright on intellectual property, to realize their potential to the benefit of our good relations. Now, please imagine if Russia can use the torsion field during military operations as well as in public (panic, revolution, rebellion and what you want) to be a civil war and chaos in the elections and other companies. If Russia will send a torsion field in the brain of miners from the city of Donetsk, what then will be in Kiev?. Why do I appeal to you Your Majesty, for help! Because you are a patriot of the United States Americas and the state can imagine that a person before the rally (The action darling) can drink tea or coffee active liquid, the influence of torsion fields resulting in a mutation of the body!. This is a question that I have studied, we save lives and you and the President of the United States Americas and many people! And the main thing that Ms. Catherine Chumachenko was born in the United States and was the square with the children. With great respect to you and hope for your tolerance and kindness, Your Majesty. And for me there will be enormous gladness when any man will arrive to me in guests that could make sure in veracity of my moral principles.Valeriy Kharchenko, son of Mary Chumachenko father Vladimir Kharchenko. Kirovograd region, Dolinsky district, village Vasylivka.
city DNIPROPETROVSK 49029
Street. Заміська 39-1
phone mobile 380985052947
home 38056 7166470UKRAINE xarchenko2009@meta.ua
Р.R.
In the Regional State Administration in the archives of Х26148 is evidence and the failure of the President of Career and many officials where the main role played Kyslynskyi (Moskal know) and sent by fax to the fund Ekaterina Yushchenko 2006, no one know who saved the life of the President and the citizens of Ukraine.
Therefore for us and to the nemae securing for intellectual property, but I Gorbulinu in did in kar'eru. In Evropi above all things bachut' man so as I was seen by the consul of Pol'shi Yaroslav Ksenzhik. To god that I did not write script clip where passage-way on elections of dae 90 percents of beautiful result! To Ukraine! I can not arrive in KYIV and be as a cadger near a baba Paraski! On the large failing such for us are skilled questions!
Р.Р.
Only the huge sponsor for dictators and a victory to a bad mode of authority, is our indifference, a negligence, egoism and a sluggishness in decisions of questions! What sense of living by the example to uphold moral principles of trust and increase of intellectual level of our society is in.Valery Harchenko, the culturologist of Ukraine.
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