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Thread: Why not debtors' prison?

  1. #91

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    I think you guys are unfairly attacking Tpoints. Assuming you're not an anarchist, jailing debtors is an interesting question. There's a fine line between theft and not paying back a loan, correct? What if someone borrowed money with no intention of ever paying it back? What if you pay cash for car and they never give it to you? Is that theft? Ultimately however I agree that a debtors prison would be a bad idea from a practical standpoint. I think a good compromise is to strengthen bankruptcy laws.



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  3. #92

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    Also isn't it interesting that you can't be put in jail for not paying another private party but if you owe the government it's a whole nuther story!

  4. #93

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    Quote Originally Posted by Madison320 View Post
    I think you guys are unfairly attacking Tpoints. Assuming you're not an anarchist, jailing debtors is an interesting question. There's a fine line between theft and not paying back a loan, correct? What if someone borrowed money with no intention of ever paying it back? What if you pay cash for car and they never give it to you? Is that theft? Ultimately however I agree that a debtors prison would be a bad idea from a practical standpoint. I think a good compromise is to strengthen bankruptcy laws.
    Advocating the unconstitutional is not something that tend to get treated with kid gloves on this forum. And one can never attack Tpoints, it's impossible. One can only counterattack.
    The only way--the only way--the Republicans could possibly fail to capitalize on the Obamacare debacle and fail to win the White House in 2016 is by being stubborn and stupid enough to nominate someone besides Rand Paul.

    That's the only way they could possibly blow it. If we nominate Paul the presidency is a lock for the G.O.P. I guarantee it.

  5. #94

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    Good point acptulsa--isn't bankruptcy written into the Constitution? If the gov't/citizens want to change it, there should be a Constitutional amendment--don't recall one for the student loans exception.

    Anyways, bankruptcy is now something pretty much only for the rich, it costs quite a bit to file for it since Bush II from what a friend told me.

  6. #95

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    Quote Originally Posted by The Gold Standard View Post
    If you didn't pick up the tickets then no, of course not. If you were sent the tickets with the agreement to pay for them, and then never did, then I can absolutely use force to get my money from you. I can't use force to take your car, or $100, but I can to get the $50 owed me.
    I find this interesting. If it was fraud - when I told you that I would pay you I had no intention of doing so - I agree that you can use as much force as is needed to recover the money stolen from you.

    But let's assume the harder case - that I fully intended to pay you but disaster struck and I could not. Under common law it would be a breach of contract but not a fraud. Can you use force to recover your money from me? Enter my home by force and take something at gunpoint? Where do we draw the line and why?
    Last edited by Acala; 02-04-2013 at 01:21 PM.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  7. #96

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    Quote Originally Posted by Acala View Post
    I find this interesting. If it was fraud - when I told you that I would pay you I had no intention of doing so - I agree that you can use as much force as is needed to recover the money stolen from you.

    But let's assume the harder case - that I fully intended to pay you but disaster struck and I could not. Under common law it would be a breech of contract but not a fraud. Can you use force to recover your money from me? Enter my home by force and take something at gunpoint? Where do we draw the line and why?
    Well, I'm no expert on common law, but I would think the two would involve different amounts of force. It is was proven fraud maybe I should be able to kick in your door and take my $50 back. If you intended to repay but couldn't due to hardship, maybe I could put a lien on your property that would guarantee I'm paid back if you ever sold it. That is still force, but to a varying degree. Either way I don't think it is disputed that I have a right to claim the $50 I am owed.

  8. #97

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    Quote Originally Posted by The Gold Standard View Post
    If you didn't pick up the tickets then no, of course not. If you were sent the tickets with the agreement to pay for them, and then never did, then I can absolutely use force to get my money from you. I can't use force to take your car, or $100, but I can to get the $50 owed me.
    There are more possible nuances that may matter.

    It is possible to have a breach of contract where the aggrieved party is not worse off than he was before the contract, but lost the benefit of the bargain. For example, suppose I am selling widgets for 10% above my cost. You agree to buy some, then later back out BEFORE I have delivered them. I am not out of pocket any money but have lost the benefit of the bargain we made. And you gained nothing in the transaction. Under the common law of contracts, I would be entitled to recover the benefit of my bargain - my 10% - from you.

    Now suppose I delivered the goods, you used them, and you never paid me. I am out of pocket 90% of the purchase price and did not gain the 10% benefit of the bargain. This time you gained by the transaction and I lost.

    Yet a third possibility, we make a deal and I prepare to deliver a custom-monogramed widget to you. You refuse delivery and refuse to pay. I can't sell the mongramed widget to someone else so I am out my cost plus the markup I would have gotten. But you gained nothing in the transaction.

    In which scenarios can you recover by force and how much? And why? (Libertarian law school exam)
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  9. #98

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    Quote Originally Posted by The Gold Standard View Post
    Well, I'm no expert on common law, but I would think the two would involve different amounts of force. It is was proven fraud maybe I should be able to kick in your door and take my $50 back. If you intended to repay but couldn't due to hardship, maybe I could put a lien on your property that would guarantee I'm paid back if you ever sold it. That is still force, but to a varying degree. Either way I don't think it is disputed that I have a right to claim the $50 I am owed.
    Consider how a pure market might handle it. With no government to intervene, people might require third-party performance bonds so that in a breach situation you simply make a claim on the bond. Or, and this just hit me, the contract itself could include remedies. For example, the contract could say "if either party fails to perform, the non-performing party consents to the aggrieved party or his agent entering upon the other party's property to recover goods or specie equal in value to X". Now you have consent to a self-help remedy for breach.
    Last edited by Acala; 02-04-2013 at 01:21 PM.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  10. #99

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    Quote Originally Posted by The Gold Standard View Post
    Well, I'm no expert on common law, .
    Chances are that just the fact that you are here means you have a better legal mind than most lawyers.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton

  11. #100

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    Debtor's prison? Not a good idea. Indentured servitude would be more feasible.
    Indianensis Universitatis Alumnus

  12. #101

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    Quote Originally Posted by Acala View Post
    There are more possible nuances that may matter.

    It is possible to have a breach of contract where the aggrieved party is not worse off than he was before the contract, but lost the benefit of the bargain. For example, suppose I am selling widgets for 10% above my cost. You agree to buy some, then later back out BEFORE I have delivered them. I am not out of pocket any money but have lost the benefit of the bargain we made. And you gained nothing in the transaction. Under the common law of contracts, I would be entitled to recover the benefit of my bargain - my 10% - from you.

    Now suppose I delivered the goods, you used them, and you never paid me. I am out of pocket 90% of the purchase price and did not gain the 10% benefit of the bargain. This time you gained by the transaction and I lost.

    Yet a third possibility, we make a deal and I prepare to deliver a custom-monogramed widget to you. You refuse delivery and refuse to pay. I can't sell the mongramed widget to someone else so I am out my cost plus the markup I would have gotten. But you gained nothing in the transaction.

    In which scenarios can you recover by force and how much? And why? (Libertarian law school exam)
    Well, in the first scenario I wouldn't consider that a situation where you can recover by force. I doubt you really even have a claim if you weren't out any money yet ordering the widgets. Even so, most people wouldn't turn off a customer trying to recover that anyway I don't think.

    The second one is a scenario like we were talking about with the tickets. You would be owed the agreed upon price, regardless if your markup was 10% or 1000%. If the intent all along was not to pay for the widgets then you can forcefully go get the money from them or property where the value adds up to that price (used widgets are worth less than new ones, so you would be entitled to more than just getting the widgets back). If some other situation came up and they couldn't pay, then maybe they have a performance bond like you mentioned or maybe an arbitrator would rule and place a lien on their property or something.

    The third scenario I would think you would only have a claim to the cost of the widget and not the mark up, since they didn't benefit from the transaction either. You would have to have a solid agreement to purchase the item though. If you just ordered it hoping they would buy it then you don't have a claim to anything.

    Regardless, to answer the OP, there is no scenario where you can lock someone in a cage in lieu of repayment.
    Last edited by The Gold Standard; 02-04-2013 at 01:42 PM.

  13. #102

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    Quote Originally Posted by acptulsa View Post
    Huh, ya think?

    This nation was founded with no debtors' prison being a basic principle. Why? Because it gets abused. How? Well, at the time, the slippery slope went like this: People get locked up because borrowing money they couldn't repay was considered fraudulent, then the lenders complained that this didn't help them recover their money, then those in debtors' prison were forced to work and the proceeds went to the lenders, then the lenders were motivated to make bad loans and put as many people as possible into debtors' prison, then people finally started asking how this system of slavery got started in the first place.

    There's a garden path I won't be led down. I not only don't see the benefit (free men can pay their debts, men in prison can't unless it's forced labor a.k.a. slavery) but I do clearly see the risks. No thanks.



    Fail. Are you arguing that those who are raped or murdered are 'asking for it'? Or do you seriously believe that a lender that negotiates a loan with someone has as little to do with his situation as someone who is a victim of random violence? Under your system, getting a loan wouldn't be illegal, not repaying it would be. So, you're not a criminal until you miss a payment. At what point do rape and murder go from being legal to being illegal? They don't. They're illegal from the moment the perp goes from impulse to action. Therefore, the comparison is a major failure of logic.

    Take your propaganda down the hall.



    And do they borrow by force? Or does someone willingly lend to them? Left and right? And how does everyone benefit? Because this makes getting credit easier? What about those people who never borrow? They do exist, you know.

    + rep

    Excellent reply. The idea that society benefits from having debtors prison or any prison that requires outside funding is the most ridiculous thing I have heard in a while. I understand if someone see it as a necessary evil but to the vast majority of us, I say let the bankers and financial corporations pay for the debtors prison and let em add it into the cost of running their business and pass it down to their customers. Just as long as the idea of going to prison when the debt goes unpaid is plainly spelled out in the contract document.

    Also, I do not want to be forced to pay for prisons for rapists and murders. I prefer a system of compensations and restitution instead of imprisonment and capital punishment.

  14. #103

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    Collateral system still works for pay day loans.

    +rep

  15. #104

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    One good reason for not having debtor's prisons is that lending money has risk, as do all businesses. Using public resources to reduce entrepreneurial risk is just like bailing out the bankers. Many well intended projects involving moral and competent borrowers and lenders still ultimately fail. This is the nature of the free market. This is priced into the business model of the lender. I believe debtor prisons would exacerbate moral hazard.
    Last edited by anaconda; 02-04-2013 at 04:02 PM.

  16. #105
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    Quote Originally Posted by Tpoints View Post
    My prediction : people here will say because there's a system wide conspiracy to either bait stupid people into debt, or fraudulently force people into debt they'd never incur voluntarily. But hopefully people agree that if debts were voluntarily created, then prisons would be an appropriate punishment when debts can't be expected to be paid back (and bankruptcy discharging debts makes a mockery of responsibility)

    http://www.nytimes.com/2012/09/26/op...ison.html?_r=0
    You are apparently not familiar with the nature of business and risk. Voluntary engagement in business agreements, all business agreements carries with it risk. Risk should be entered into only after having been given its due consideration. Given that, any and all business ventures are prone to the risk of failure, often through no fault of the parties involved. This is par for the course and all parties to such agreements understand and accept this. When such endeavors fail "organically", no crime has occurred and therefore there exists no basis for charges, much less imprisonment.

    Normal business risk, whether low or high, is fundamentally different from criminal activity such as fraud, which is​ a crime and should be addressed accordingly.
    --

    http://freedomisobvious.blogspot.com
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    ignominia et contemptum tyrannis

    Habeo excelsum artem; afflixerim cum crudelitate illis qui laedas me

    Shelley's thinly veiled warning to tyrants:

    The monster saw my determination in my face and gnashed his teeth in the impotence of anger. "Shall each man," cried he, "find a wife for his bosom, and each beast have his mate, and I be alone? I had feelings of affection, and they were requited by detestation and scorn. Man! You may hate, but beware! Your hours will pass in dread and misery, and soon the bolt will fall which must ravish from you your happiness forever. Are you to be happy while I grovel in the intensity of my wretchedness? You can blast my other passions, but revenge remains--revenge, henceforth dearer than light or food! I may die, but first you, my tyrant and tormentor, shall curse the sun that gazes on your misery. Beware, for I am fearless and therefore powerful. I will watch with the wiliness of a snake, that I may sting with its venom. Man, you shall repent of the injuries you inflict.

  17. #106

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    Quote Originally Posted by amy31416 View Post
    Good point acptulsa--isn't bankruptcy written into the Constitution? If the gov't/citizens want to change it, there should be a Constitutional amendment--don't recall one for the student loans exception.

    Anyways, bankruptcy is now something pretty much only for the rich, it costs quite a bit to file for it since Bush II from what a friend told me.
    I think it depends, I have a friend who told me she only had to pay $2000 (includes attorney flat fee and court filing fee). Her problem is probably less than $500K.

  18. #107

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    I see no reason why debtor's prison shouldn't be allowed as a consequence of a loan that can't be paid back. However, only if it's part of the original lending contract that both parties, the debtor as well as the creditor, signed. And I predict that this way of making contracts wouldn't be very likely to succeed on the free market.

    Let's say there are three banks, A, B, and C. A loans out money to everybody without any consequence if the debtor goes bankrupt, with B you have to agree that the bank can seize your property for damages if you can't pay back and C only makes loans with you if agree to go to prison (funded by the bank) in case you default on your debt. What's morally wrong with having those options? Obviously bank A won't last very long, so be it. But B and C could compete on the market. I wouldn't loan money from C, knowing what could happen. But if others like to take that risk, go for it.

    I don't see the benefit of the state being involved in the whole money lending business at all. None of what I described would necessarily need a state. But certainly a mininarchist state enforcing contracts and offering arbitration would be enough. No governmental regulation regarding debt default required at all.

  19. #108

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    Quote Originally Posted by Danan View Post
    I see no reason why debtor's prison shouldn't be allowed as a consequence of a loan that can't be paid back.
    Thank you. I trust I didn't quote you out of context and I didn't delete the "but" part.

    Can I ask, do you agree that the bankruptcy system, essentially is the state subsidizing to encourage, if not activity supporting debtors and hurting creditors?

  20. #109

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    Quote Originally Posted by amy31416 View Post
    How in the hell does someone in prison ever have a chance of paying off a debt?

    Not a very well thought out question.
    it's last resort, when you are convinced paying back on their own volition is impossible or not worth the wait.

  21. #110

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    Quote Originally Posted by The Gold Standard View Post
    Regardless, to answer the OP, there is no scenario where you can lock someone in a cage in lieu of repayment.
    then how do we, or should we, ever punish and discourage fraudulent loans, or loans people purposely don't pay back even if they're able?

  22. #111

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    Quote Originally Posted by otherone View Post
    The amount of investigation required to find mens rea (criminal intent) prior to a loan agreement would be too onerous (if possible at all) for the DAs office to even attempt. Where would the funds come from to saddle the criminal justice system with the additional role of debt collector? How much scratch are you willing to put out, Mr. Points, so BoA doesn't lose out? Wait...haven't we bailed out the banks enough?
    yeah, only big rich banks are ever creditors.

  23. #112

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    Quote Originally Posted by Tpoints View Post
    then how do we, or should we, ever punish and discourage fraudulent loans, or loans people purposely don't pay back even if they're able?
    What part of fraud is punishable by terms in regular, plain ol' prison are you pretending not to understand? The major differences are that regular prison doesn't reward lenders for refusing to work with debtors, and requires proof of criminal intent prior to incarceration. Neither of which can be said of debtors' prisons.

    Why, when the dangers and undesirable effects of maintaining debtors' prisons have been well known for about two hundred fifty years, do you want to throw this knowledge away? Could we be turning liberal..?

    Quote Originally Posted by acptulsa View Post
    "A liberal is a man who wants to use his own ideas on things in preference to generations who he knows know more than he does."--Will Rogers 1923
    Last edited by acptulsa; 02-04-2013 at 08:23 PM.
    The only way--the only way--the Republicans could possibly fail to capitalize on the Obamacare debacle and fail to win the White House in 2016 is by being stubborn and stupid enough to nominate someone besides Rand Paul.

    That's the only way they could possibly blow it. If we nominate Paul the presidency is a lock for the G.O.P. I guarantee it.

  24. #113

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    Quote Originally Posted by otherone View Post
    Why must the state be accountable for a business' failure of due diligence? If you make bad loans, you should fail as a business.
    why must the state let people off just because they can't or won't pay back?

  25. #114

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    Quote Originally Posted by Tpoints View Post
    Thank you. I trust I didn't quote you out of context and I didn't delete the "but" part.
    There is a fundamental difference between debtors' prison as an involuntary consequence for default enforced by the state and voluntarily signing a contract specifying the consequences of your failure to fulfill it. One is totally and completely illegitimate and also probably economically stupid, the latter is fine with me. You should be allowed to do with your property whatever you want to, including giving up your right to control your body under specifically mentioned circumstances. If you can't do that, you don't really own yourself to begin with.

    Allowing people the option to make contracts specifying debtors' prison as a consequence of not fulfilling it does not harm any single individual. If you don't want to sign such a contract, don't do it. That's the beauty of the free market and of libertarianism.

    Can I ask, do you agree that the bankruptcy system, essentially is the state subsidizing to encourage, if not activity supporting debtors and hurting creditors?
    I don't know the US bankruptcy system very well, but I suppose it's quite the same as here and I agree with you. However, creditors know very well about your legal ability to file for bankruptcy and take that into account. So they don't give out loans to someone whom they would give a loan to, would they have the right to specify that bankruptcy is not an option. In a way it's like taking away countless other possible voluntary ways of loaning money and replacing it with a one-size-fits-all approach created and enforced by the state.

  26. #115

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    Quote Originally Posted by Tpoints View Post
    then how do we, or should we, ever punish and discourage fraudulent loans, or loans people purposely don't pay back even if they're able?
    The creditors should do that. It's them who lose if their debtors default on the debt. And the best way for them to do that is via the loaning contract. Unfortunately, voluntary contracts aren't as respected as they should be. They are the solutions to almost all the problems today's society believes to need government for.

  27. #116

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    Quote Originally Posted by Danan View Post
    The creditors should do that. It's them who lose if their debtors default on the debt. And the best way for them to do that is via the loaning contract. Unfortunately, voluntary contracts aren't as respected as they should be. They are the solutions to almost all the problems today's society believes to need government for.
    just like the victims of rape and robbery should seek justice on their own too. because its none of your business who he harms, right? all loans ARE already voluntary contracts, but what do you do to a breacher?

  28. #117

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    Quote Originally Posted by Danan View Post
    There is a fundamental difference between debtors' prison as an involuntary consequence for default enforced by the state and voluntarily signing a contract specifying the consequences of your failure to fulfill it. One is totally and completely illegitimate and also probably economically stupid, the latter is fine with me. You should be allowed to do with your property whatever you want to, including giving up your right to control your body under specifically mentioned circumstances. If you can't do that, you don't really own yourself to begin with.

    Allowing people the option to make contracts specifying debtors' prison as a consequence of not fulfilling it does not harm any single individual. If you don't want to sign such a contract, don't do it. That's the beauty of the free market and of libertarianism.


    I don't know the US bankruptcy system very well, but I suppose it's quite the same as here and I agree with you. However, creditors know very well about your legal ability to file for bankruptcy and take that into account. So they don't give out loans to someone whom they would give a loan to, would they have the right to specify that bankruptcy is not an option. In a way it's like taking away countless other possible voluntary ways of loaning money and replacing it with a one-size-fits-all approach created and enforced by the state.
    basically what you're saying is, you're ok with debtors being in prison, or even killed, as long as they agree in advance to it?

  29. #118

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    Quote Originally Posted by acptulsa View Post
    What part of fraud is punishable by terms in regular, plain ol' prison are you pretending not to understand?
    why are you OK with punishing fraud? why should I be any more OK with punishing fraud and rape on my dime by taxes than you should be about punishing default?

  30. #119

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    Quote Originally Posted by acptulsa View Post
    The major differences are that regular prison doesn't reward lenders for refusing to work with debtors, and requires proof of criminal intent prior to incarceration. Neither of which can be said of debtors' prisons.
    No, it absolutely CAN be said. What if the creditor HAS tried to work with the debtor and the debtor PURPOSELY ADMITS HE HAS MONEY AND WON'T PAY? OR PURPOSELY BURNED HIS MONEY TO REFUSE PAYING? Or has the ability to earn it, but chooses not to?

    Criminal intent is merely the intent to commit the crime, so if not paying debt is a crime, then intention to not pay would be easy to prove (just ask the debtor if he intends to pay, and how)

    I'm confused now, do you want to reward lenders who are cheated or not? If not, is it fair to say you want to cheat creditors?

  31. #120

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    As I told you and told you and told you and told you, it is not tenable to encourage lenders to refuse to work with creditors or default their loans for the purpose of gaining the services of slaves. Were you paying attention this time?

    Quote Originally Posted by Tpoints View Post
    basically what you're saying is, you're ok with debtors being in prison, or even killed, as long as they agree in advance to it?
    I know you aren't seriously proposing the death penalty for fraud...
    The only way--the only way--the Republicans could possibly fail to capitalize on the Obamacare debacle and fail to win the White House in 2016 is by being stubborn and stupid enough to nominate someone besides Rand Paul.

    That's the only way they could possibly blow it. If we nominate Paul the presidency is a lock for the G.O.P. I guarantee it.

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