Republican Ryan for the Rebound

By Frank Hagan | Related entries in health care reform

While health care reform remains near the bottom of the list of the public’s concerns, with recent polling averaging at 53% opposed to the Democrat’s plans, policymakers realize the impact of future medical and Medicare costs still matter. They exert direct influence one of the biggest concerns Americans have: the ballooning deficit and burgeoning public debt.

The filibuster proof Democratic caucus failed to secure the left’s preferred vision of health care reform over the course of the last year. Now, President Obama is reaching out to Congressional members, even those on the Republican side of the aisle.

Ditching the straw man argument that the GOP wants to “do nothing”, the President has confirmed that some proposals have merit. Rep. Paul Ryan (R-WI) was engaged by the President regarding Ryan’s proposed Roadmap for America’s Future Act for 2010 at the February 1st Republican conference:

President Obama: I think Paul [Ryan], for example, the head of the Budget Committee, has looked at the budget and has made a serious proposal. I’ve read it. I can tell you what’s in it. And there’s some ideas in there that I would agree with but there’s some ideas we should have a healthy debate about because I don’t agree with them.” The major driver of our long-term liabilities, everybody here knows, is Medicare and Medicaid and our health care spending. Nothing comes close. That’s going to be what our children have to worry about. Now, Paul’s approach, and I want to be careful not to simplify this, I know you’ve got a lot of detail in your plan, but, if I understand it correctly, would say, we’re going to provide vouchers of some sort for current Medicare recipients at the current level – No?

Congressman Ryan: No – we protect the program for Americans 55 and above [those in and near retirement]…

Obama: I understand – there’s a grandfathering in….That’s why I said I wanted to make sure that I’m not being unfair to your proposal. I just want to point out that I’ve read it, and the basic idea would be that, at some point, we hold Medicare cost per recipient constant as a way of making sure that that doesn’t go way out of whack, and I’m sure there some details…

Ryan: We increase the Medicare payments with a blend of inflation and health inflation. The point of our plan is, because Medicare as you know is a $38 trillion unfunded liability.

Obama: Right.

Ryan: It has to be reformed for younger generations because it won’t exist. It’s going bankrupt. The premise of our idea is look, why not give people the same kind of health care plan we here have in Congress? That’s the kind of reform we’re proposing for Medicare. [applause]

The CBO scored Ryan’s proposal with some favorable findings:

The Roadmap, in the form that CBO analyzed, would result in less federal spending for Medicare and Medicaid as well as lower tax revenues than projected under CBO’s “alternative fiscal scenario” described in CBO’s June 2009 publication The Long-Term Budget Outlook. Federal spending for Social Security would be slightly higher than under CBO’s alternative fiscal scenario for much of the projection period, but the system would become sustainable as revenues increase and traditional benefits decline. The budget deficit would peak at 5 percent of GDP in 2034 and then decline. By 2080, the Roadmap would generate a budget surplus of about 5 percent of GDP. Under the Roadmap, the ratio of government debt held by the public to economic output (the ratio of debt to GDP) would be lower than that under the alternative fiscal scenario in every year. In particular, debt is projected to peak at 100 percent of GDP in 2043 and to decline thereafter, reaching zero by 2080. (Debt held by the public was about 53 percent of GDP at the end of fiscal year 2009.) The federal government would accumulate net financial assets equal to 17 percent of GDP by 2083. In contrast, under the alternative fiscal scenario, debt is projected to skyrocket over the next several decades.

The Roadmap accomplishes this by implementing notable reforms to Social Security and Medicare that should find bi-partisan agreement.

The Heritage Foundation analyzed the bill for its impact on non-seniors, and concluded:

The Ryan bill outlines clear, sound principles to reform entitlement spending and health care. The Roadmap’s health care provisions would bend the cost curve in health spending, make insurance more affordable and accessible, and create a consumer-driven, highly-competitive system.

The Roadmap addresses health insurance coverage for non-seniors in three ways. First, changing the tax treatment of health care insurance enables a transition from an employer-based tax exemption to individual tax credits to put the consumer back in the driver’s seat, a key component of reducing health care insurance costs. You pay more attention when you know the cost will impact you and your personal insurance rates (people are often more careful about filing a claim with their auto insurance company than they are with their employer’s health insurance policy).

Secondly, state based exchanges and reforms are encouraged through a Federal-state partnership, allowing our states, the “laboratories of democracy”, to find new and innovative ways to cover the uninsured.

Finally, allowing interstate purchases of insurance allows a wider national pool of consumers to be built by the insurers, lowering costs by spreading risks in an actuarilly sound manner.

Rep. Ryan is a thoughtful, smart guy who moves beyond rigid partisanship to find solutions worthy of consideration. It remains to be seen if the highly partisan atmosphere in Washington DC can accommodate his ideas.

Cross posted to FrankHagan.com


This entry was posted on Wednesday, February 10th, 2010 and is filed under health care reform. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

27 Responses to “Republican Ryan for the Rebound”

  1. frankhagan.com » Republican Ryan for the Rebound Says:

    [...] Cross posted to Donklephant [...]

  2. gerryf Says:

    Ryan’s proposal is interesting in many ways, but broken down to its basics it is still ridiculously dependent on the free market actually working. Ryan is saying privatize everything and somehow the market will save us.

    What didn’t the right learn about the last 30 years? There is no true free market which requires players and an engaged consumer who can make decisions and choices.

    You can toss around healthcare exchanges all you want, but they cannot work without a viable public option to compete with the private insurance industry.

    All markets eventually result in consolidation and once an industry is consolidated enough there is no competition. When the industry is sufficiently consolidated, the consumer of the service loses all leverage.

    Ryan’s plan is a budget plan, not a healthcare plan.

  3. JimS Says:

    I see gerryf beat me to it. That really is the essence of Ryan’s bill. Don’t worry, the market doesn’t fail. It won’t let us down. And no, it won’t give future Medicare beneficiaries care like Congress gets because it will almost certainly underfund it enough to make that impossible.

  4. Chris Says:

    “Rep. Ryan is a thoughtful, smart guy who moves beyond rigid partisanship to find solutions worthy of consideration. ”

    Being from WI, I haven’t seen much evidence of this. Not that he’s not smart, but that he moves beyond partisanship.

    And ditto on Jim and Gerry’s thoughts, every solution he’s offered up is depending on the “free market”, which apparently is some kind of supernatural being that is destined to save us all from the evils of the world. In a truly free market, there is no competition as whoever is the largest will end up winning all of the market share.

  5. Frank Hagan Says:

    The only place “free market” appears on this page is in your comments, and I think the point is missed about Ryan’s proposals. “Free market” seems to be one of those dismissive terms intended to squelch debate among like-minded people. Like “socialism” among the right, it poisons the well and prevents others from even looking at the content.

    He isn’t suggesting a free-market program without rules and regulations but, in Heritage’s words, a “consumer-driven, highly-competitive system”. There are other proposals to increase competition, but the worst plan of all is a subsidized government run plan that sucks the lifeblood out of the competitors. In the end, you end up with one provider because no one else can compete with a subsidized plan.

    The lack of competition in health care exists because the consumer isn’t in control of costs, who they choose as an insurer, or often who they choose as a doctor because of “preferred providers” or “in network” lists.

    The health care consumer doesn’t even know what the costs are, and one nearly universally recognized reform is to put the budgetary process back in the hands of the consumer. The decision about which tests to conduct, what procedures and methods to use can be made between the consumer and provider, rather than allowing the provider look up a list and order everything that is covered.

    Finally, on the bi-partisan front, ABC News’ Political Punch mentions his co-sponsorship of a bill with Sen. Russ Feingold (D-WI). So it sounds like he is open to bi-partisan solutions.

  6. gerryf Says:

    The only place “free market” appears on this page is in your comments. “Free market” seems to be one of those dismissive terms intended to squelch debate among like-minded people. Like “socialism” among the right, it poisons the well and prevents others from even looking at the content…..He isn’t suggesting a free-market program without rules and regulations but, in Heritage’s words, a “consumer-driven, highly-competitive system”.

    And a “consumer-driven, highly-competitive system” is not a free market system…how?

    I’m sorry, but your argument is a pile of steaming crap. That is exactly what he is proposing and I am not trying to squelch a debate. I am trying to avoid wasting time with someone who is not making a serious arguement.

    Do you honestly mean to say that the health insurance industry with a limited number of players, inadequate information, and uninformed consumers can in any way even be considered a “free market.”

    And please, don’t even propose with a straigtface that the right is proposing to set up rules and regulations for this “consumer-driven, highly-competitive system.”

    The right is all about reducing rules and regulations and letting the consumer-drive, highly competitive system” police itself. Even if something were set up, the next republican administration would cut hthe funds and strangle the life out of whatever department was supposed to be monitoring it.

    You know that or should know and if you’re not willing to admit it, then I am going to call you on it every single time.

    captcha: the smarmier

  7. gerryf Says:

    The only place “free market” is mentioned is in our comments, but a “consumer driven, highly competitive system” is….what? Not a free market?

    And you expect us to believe the GOP wants something with rules and regulations when it has done everything it can to remove rules and regulations and eviscerate any agency that applies rules or regulates for the last 30 years.

    Your entire post is disingenuous.

  8. rachel Says:

    The filibuster proof Democratic caucus…

    Just FYI, I stop reading whenever I see this phrase because 58 Dems is not a filibuster-proof caucus, and I have a hard time taking any political writer who doesn’t understand that fact seriously.

  9. Jim S Says:

    Thank you, Frank, for proving our point. Your entire reply was full of a blind faith in the free market system as embodied by classical economics. Just like Ryan and every other Republican proposal. Apparently you just don’t recognize it. And classical economics is crap. It’s beautiful theory that bears no resemblance to the real world.

  10. kranky kritter Says:

    Ryan’s approach to reforming health insurance for middle class consumers with jobs is IMO a very defensible approach. Clearly, it’s a very different approach from the kind favored by our resident liberals who have weighed in here.

    I don’t agree with them insofar as believing that a market-base approach can’t have positive effects. I think it can, and I think that de-coupling HC coverage from employment will have positive effects. (as would taxing subsidized HC as income) I do doubt that most people will like being placed in a position of choosing not to get healthcare treatment in iffy situations because of cost issues, but over-consumption is definitely a part of our overall problem. And it’s a part that must be faced if we are serious about cost containment.

    My question about Ryan’s ideas is what does he plan to do to provide coverage to poor and unemployed folks. We know that if legitimate competition and consumer choice can be harnessed, that can help to control future costs, at least somewhat. But all that would do is help keep HC affordable for people who have decent income in the first place. What about poor, unemployed, and borderline poor folks with incomes wholly insufficient to afford decent HC?

    IMO, any plan that focuses primarily on keeping prices manageable for folks who already have insurance that they can afford and ignores everyone else is tantamount to class warfare.

    Poor Americans deserve reasonable access to non-emergency care. Perhaps not extremely generous coverage, and perhaps coverage for which you must run some sort of tab that would require scaled payback if and when your circumstances change. But I think that establishing some sort of public provision for the currently uninsured and those who may become uninsured due to things like job loss or catastrophic accident or illness is a moral imperative. It is for me, anyway.

  11. Chris Says:

    I bring up free market at least, because I have read some of the legislation to come out of Ryan’s office, and it’s clear that he either believes, or is paid to believe that the free market trumps all. I’m inclined to believe it’s the latter, since his biggest contributors, iirc, last year, were health insurance companies.

  12. JimS Says:

    kk,

    The problem from my viewpoint is the reliance on applying classical economic models to health care, an area in which they are doomed to fail miserably. Those who push hard for using the markets to fix health care ignore the findings in the field of behavioral economics, which runs counter to much of what classical economics assumes about human behavior in an economic system.

  13. kranky kritter Says:

    Jim, where you say “doomed to fail miserably,” others would say something like “face problems.”

    I have no doubts that personal behavior related to health differs somewhat from other economic behavior, because the needs and the stakes are different. But I also doubt that this means that behavioral economics declares that market principles therefore cannot be applied at all.

    Personally, I don’t expect markets to “fix healthcare.” I do think that judicious application of market principles can help to control costs. Whatever market we end up with (and as long as people are making different choices and paying different prices, there’s some sort of market going on, good, bad, or indifferent), it has to be run in way that it recognizes the range of priorities that the people need, because the tail can’t wag the dog.

    I’m not interested in a HC market with improved freedom and efficiency if it doesn’t provide lifetime access at a lifetime affordable cost, and so on. But I’m not interested in less free market that provides such guarantees without truly controlling actual total costs.

  14. JimS Says:

    BTW, I have no problem with some of those proposals. I just think the expectations for them are seriously overblown. I like the ideas of eliminating interstate limitations on purchasing, “nationalizing” much of the regulation of those companies that function across state lines and eliminating the anti-trust exemption of the insurance companies. I also believe that any individual who has to buy their own insurance should be able to treat it the same for tax purposes as any company. Of course I’d also like to see incentives for the development of more medical centers that are run like the Cleveland Clinic and the Billings Clinic. Their model improves patient treatment while helping to control costs, IMO.

  15. gerryf Says:

    Here we go again, let’s dismiss the resident liberals because they don’t bow down to the market.

    Look, it’s really simple. A true free market could have a positive effect on restraining healthcare increases. If there was such a thing as a free market.

    A free market requires many players and consumers. The ensure that, players must be able to enter and leave the market. Consumers need to be engaged and informed.

    Everything about the healthcare industry precludes that, from the high cost of entry, to the deliberate attempts by the players to confuse the consumer, and the consumer’s general lack of knowledge.

    One of the best ideas to introduce market forces was to have a public option. Anyone who truly believes in the market’s ability to work should have been supporting the public option, which would provide real competition for the entrenched healthcare industry.

    Instead, they fought tooth and nail to prevent competition because—why.

    Anyone who is being honest knows the answer. The rest if hogwash.

  16. Frank Hagan Says:

    gerryf – how can anyone compete with a subsidized, tax-payer funded public option? Calling such a plan “competition” is a little like calling the lions in Rome’s coliseum “Christian challengers”. As soon as everyone else is driven out of the market, the rationing will have to begin. We have seen this in other government sponsored health plans across the globe, and we don’t want it here.

    The healthcare industry is anti-competitive now, and the current bill does nothing to stop that. In fact, it makes it worse with a sweetheart deal to the insurance companies. What would real competition look like?

    It would start with the reforms JimS has acknowledged are good ones, eliminating the anti-trust exemption, and nationalizing the standards so insurance can be sold across state lines.

    But further than that, breaking the monopoly of medical schools (same number today as in the 1970s) so more doctors can be produced, public listing of prices so consumers can choose services openly and without having to be shocked at what their co-insurance amount is, allowing more retail clinics for urgent care, etc. Putting the consumer in the driver’s seat will lead to many of these reforms. Right now, who cares what it costs if you are not paying for it?

  17. blackoutyears Says:

    Obama the liar. Straw man. Frank, try writing your column and then going back to remove the loaded words and phrases.

  18. gerryf Says:

    “Rationing is going on right now.”
    –Rep Paul Ryan

    See what I mean about that irony thing? The guy whose plan you are touting is the first to say rationing is already going on, but to defend his plan you trot out the argument that any other idea will result in rationing.

    And then there is

    how can anyone compete with a subsidized, tax-payer funded public option?

    Let me see. Within 50 miles of my house, we’ve got private companies running prisons, mass transit, school transportation, school maintenance, school lunch programs, public parks…

    All of these private enterprises have come in, offered a better price and squeezed out subsidized, tax-payer funded public options.

    Now, I would argue that at least some don’t offer the same quality (if my kid whose room most are afraid to enter looks at his school and say it’s not as clean as it was last year, well, some quality has dropped off).

    But now, suddenly private business cannot compete with a government plan? This is the same government that conservatives love to say is rife with waste and bureaucratic bloat?

    What cannot compete is a private system with bloated profits and CEOs with gold plated toilet seats that gladly take your monthly premiums and drop you the second you get sick.

    You’re not even making sense.

    It’s like your sitting there with a bowl of GOP cliche fortune cookies and you just pull one out and type in the results.

    Meanwhile, we have solid examples everywhere in the western world that work based on a single payer system. It’s simple. It works. And the level of outcome is superior for the majority of people and at far less of a cost. This is fact.

    And remember,

    “Rationing is going on right now.”
    –Rep Paul Ryan

  19. Chris Says:

    “It’s like your sitting there with a bowl of GOP cliche fortune cookies and you just pull one out and type in the results.”

    I don’t think that the method has even that much sense to it.

  20. Frank Hagan Says:

    Just FYI, I stop reading whenever I see this phrase because 58 Dems is not a filibuster-proof caucus, and I have a hard time taking any political writer who doesn’t understand that fact seriously.

    rachel, perhaps you should start reading more. The Democratic caucus is comprised of all Democratic senators and the two independents who “caucus with them”. Between July 7 and Aug. 26, the DC had 60 members; when Sen. Kennedy passed away, the number dropped to 59, and was restored to 60 when Kennedy’s replacement was sworn in on Sept. 24th. From that date until Feb. 4, 2010, the Democratic caucus had 60 members. See Wikipedia or any of the other references to it by using Google.

  21. Frank Hagan Says:

    blackoutyears: these are opinion pieces. I tend to have less opinion in some pieces, but in this one I do claim that Obama uses the straw man argument often. I did not … in this post … call the President a liar.

    gerryf – yes, a form of rationing goes on, mainly due to coverage limits, pre-existing condition exclusions, etc. However, that type of rationing is less serious than a political body deciding who lives and dies, if treatment is given because of lifestyle, which drugs will be approved based on which pharmaceutical company has the best lobbyists, etc. I am always surprised that the left, with its sharp edged criticism of America’s past policies, really believes that government can do a better job of deciding health issues than the individual. And yes, Ryan does state that, and his bill helps address that issue.

    I’m not sure how showing that government cannot even run a prison more economically than a state bolsters your case. Why give government a virtual monopoly in another area where it has even less experience than that of traditional government power: restricting freedom.

    As to fortune cookies, guys, if you want the usual echo chamber, go visit Huffpo. Donklephant is all about airing many views. We would do well with more libertarian and conservative voices here, not less.

  22. gerryf Says:

    Typical rightwing response:

    a) death panels, death panels, death panels–if I just keep lying about death panels, enough dumb schmucks will believe it.

    b) pluck out one piece of unproven statement (government cannot run prisons as well private sector–which is not proven, only that they can short term run them cheaper–but ignore the private sector cannot even clean a school, so maybe they cannot run it better)

    c) restrict freedom, restrict freedom, restrict freedom–if I just keep saying freedom, enough dumb schmucks will believe it.

    d) call the government a monopoly when the problem is the private industry in the debate–healthcare–is exercising near monopoly powers and that is the problem, and they want to continue that and will fight to the death to continue raping the middle class while the right wing cheers them on

    Airing right wing nonsense is not airing views. I welcome libertairan and conservative voices who are going to come here and present rationale, conservative ideas–leave the cliche’d sound bites and talking points at the door.

  23. Frank Hagan Says:

    gerryf – with all due respect, you do not determine the content of Donklephant. If you really want me banned, talk to Justin.

    Or, you could just skip the articles you see with my byline.

    You might like the DailyKos better. Might be less uncomfortable for you.

  24. gerryf Says:

    I don’t want you banned.

    I just want you to write some that isn’t a conservative cliche.

    I can respect a conservative argument. I am tired of “let the market solve the problem” when there is no such thing as a free market and the market we have has failed miserably at everything except enriching those who are already rich.

    You either don’t wish to address it, you are intentionally ignoring it, or you are blind to the reality that is the fatal flaw of all free market supporters.

    A free market requires many players, it requires the ability of players to easily enter or leave, it requires an engaged, informed consumer.

    The right–and by this I do not mean the libertarian segment you seem to lean toward, but the corporatist, greedy, power-hungry elite that preys on the libertarian leaners and the social conservatives who have been duped into thinking they are going to outlaw abortion–has made danged sure that the market will never work in the consumers’ favor.

    That group is laughing at you every time they see you and others like you post “free market” crap like this. That group owns Rep Paul Ryan. That group owns right wing propaganda machines like Faux News who feed the conservative base this nonsense and they laugh so hard they cry when some dumb schmuck stands up and says keep the government out of medicare, or stop socialized medicine.

    I don’t want you to leave, Frank. I want you to stop being a tool for the people who, if you are not one of them, hold you with such contempt that they think you’re a moron for espousing their lines.

    Heck, I know you don’t believe it, but I respect you more than they do.

  25. Frank Hagan Says:

    I can agree with you that medicine is not reacting to free market forces. That’s why there are reforms needed.

    (Note, the preview is bolding sections of the text, and I have no idea why — please ignore the bolding if its present when I click submit).

    The medical field is no longer adhering to free market principles in most areas precisely because of government interference. It hasn’t for a very long time. Wage controls in the post war era led to health insurance as a benefit to make one employer more attractive than another. While that seems like a normal market reaction (it is), it also has the end-result of insulating insurance from the most powerful cost control … choice by the individual. It wasn’t a problem at first because most health insurance was an indemnity plan … you paid the doctor and got reimbursed, usually at about 80% of the original charge. Consumers thought about the costs then, and doctors and other medical personnel reacted to the reality by
    keeping their costs in line.

    Subsequent reforms, such as HMOs implemented in the 1970s, “full payment deductible” plans, etc., have only exacerbated the problem. Consumers no longer care, or even ask, how many blood tests are conducted as long as “its covered” with their $15 co-pay.

    Where the medical field is truly exposed to market forces prices drop like a rock. Lasik surgery was $4,500 a few years ago, and today its $1,200. Its not “required” to be covered by insurance, and the prices keep going down. In order to attract customers, the practitioners have to be more efficient. They still meet all the necessary regulations for safety and effectiveness; they still have all the same malpractice insurance, etc. The only difference between this elective surgery and non-elective surgery is who is paying the bill.

    Advances in technology, a downward force in nearly every field, don’t reduce prices in medicine. Except in elective areas, where the consumer of the procedure is faced with the choice of what to do with the money.

    The same CAT scan ordered by your doctor for a problem will be billed to your insurance or Medicare at $2,400, but I can schedule a full body CAT scan … read by a radiologist … for about $800 on the competitive “preventative medicine” market. There is no difference in the scan itself, in the labor to provide (including radiologist report), or in any portion of the end result. But the fact that I control my wallet means the company providing the scans has to attract my business by providing more value for the dollar.

    For my wife’s medical issues this past year, I could not even obtain an estimate from the hospital about the anticipated charges. We were not entitled to see the contracted amount because we are not the consumers. So while the scalpel was used on the patient, the consumer was Aetna Insurance. It was only after the surgeries that we saw the bill, and alerted Aetna that “lateral” and “bi-lateral” mean two different things (there was double billing on the bill).

    Why did we care to see the bill? Because we’re responsible for a portion of the bill. Had we belonged to an HMO we would have never seen it.

    Government has proven it cannot control prices. The only thing that comes close, the only government medical program that has come in under CBO estimates, was the much-maligned Medicare Prescription Drug Plan that uses a pseudo market idea of competing insurance companies. When I examined the best plans for my mother, there were over 40 companies offering the coverage. Many of them were national plans, including the one she choose from AARP.

    So here’s a challenge: can you discuss this issue without cursing, personal attacks, guilt by association and other debating techniques? Or am I still a “tool” who is thought to be a “moron”, a “dumb schmuck”, who is “owned” by the same people who “own Rep Paul Ryan”, spouting “free market crap”?

  26. kranky kritter Says:

    The medical field is no longer adhering to free market principles in most areas precisely because of government interference. It hasn’t for a very long time.

    IMO this is substantively true. It may not be the only reason, but it’s a very big part of the problem. For whatever reasons, the system has evolved to the point where it constantly responds to incentives that we can’t discern or are even perverse.

    And amen to the part about how most folks stop caring about cost as soon as they discover a procedure is covered. That’s where a huge part of the disconnect lies. In the abstract, we care that our premiums keep rising at unsustainably high rates. But at the itemized level, we generally don’t care as long as its covered. That’s a big root exposed there. We feel that we care deeply in general about cost increases, but at NO particular specific instance do we care and act on it.

  27. Frank Hagan Says:

    And amen to the part about how most folks stop caring about cost as soon as they discover a procedure is covered. That’s where a huge part of the disconnect lies. In the abstract, we care that our premiums keep rising at unsustainably high rates. But at the itemized level, we generally don’t care as long as its covered. That’s a big root exposed there. We feel that we care deeply in general about cost increases, but at NO particular specific instance do we care and act on it.

    Kranky, its even worse than that. Consumers are usually prohibited from knowing the costs, so even the ones who care deeply cannot find out. At most you get an estimate of your “share of costs” because the contracted rate between the care provider and the REAL consumer (the insurance company) is a negotiated rate that is none of your business.

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