No need to wonder what that would turn our nation in to - the example is already there:
In Italy, as in Greece, Spain and Portugal and eventually France, the welfare-entitlement state has hit a wall. Successive governments on the Continent, right and left, have financed generous entitlements with high taxes and towering piles of debt. Their economies have failed to grow fast enough to keep up, and last year the money started to run out. The reckoning has arrived.Heck - a few decades of work and we are almost there. We are just 5-10 years behind them if we don't change course. Remember that.
If the first step in curing an addiction is to acknowledge it, there is little sign of that in Europe. The solutions on offer are to spend still more money, to have the Germans bail out everybody else, or to ditch the euro so bankrupt countries can again devalue their own currencies. France's latest debt solution includes raising corporate, capitals gains and sales taxes.
Yet Europe's problem isn't the euro. If it were, Hungary, Iceland and Latvia—none of which use the euro—would have been spared their painful days of reckoning. The same applies for Britain. Europe is in a debt spiral brought about by spendthrift, overweening and inefficient governments.
This is a crisis of the welfare state, and Italy is a model basket case. Mario Monti, who is tipped to lead a new government of technocrats, once described the Italian economy as a case of "self-inflicted strangulation." Government debt is 120% of GDP, making Italy the world's third largest borrower after the U.S. and Japan. Its economy last grew at more than 2% a year in 2000.
An aging and shrinking population is a symptom, but not a leading cause, of the eurosclerosis. A fifth of Italy's 60 million people are 65 or older and make increasingly expensive claims on state-paid pensions and other benefits. In fast-growing Turkey, only 6.3% fit that demographic. Italian women have on average 1.2 children, putting the country's birth rate at 207th out of 221 countries.
But the bulk of the responsibility lies with politicians.
48 comments:
Well, makes me proud to have 55% GDP debt limit enshrined in the constitution here in Poland. And we get steady growth in 3-4% range which resulted in 2007-2011 rise of GDP from 57% to 64% of average EU GDP.
"Hare and the Turtle" anyone? Germans must be trying to find a new meaning for the "Polnische Wirtschaft"...
What's that quote, again?
"The problem with socialism is that eventually you run out of other people's money to spend..."
GIMF. It was the Iron Lady of 10 Downing (more or less).
...and the problem with capitalism is that eventually people rebel against being cheap workforce to fund the lifestyles of Paris Hilton and co.
8-)
Poland is doing a very fine job as is wee little Estonia and other former Communist countries. Keep it up.
Youre paying for her (and her ancestors) tax breaks since, erm, 1981?
"Cheap workforce"? Not hardly. The average American family owns a home, more than one car, two and a half televisions, spends in excess of $1,000 a month on personal entertainment, and is in danger of obesity and not malnutrition.
How'd that happen?
It happened along the same timeline that the definition of "poor" came to include people who own a fancier cell phone than I do and who eat better than I do.
DB,
Indeed. The "obesity is a sign of poverty" nonsense is a prime example. Obesity seems not to be a problem in Bangladesh, sub-Saharan Africa, the hills of Afghanistan, etc.
My favorite "poor" are the ones with four gold teeth, ornate tattoos, $200 Air Jordans, Oakland Raiders jacket, a pack or two of cigarettes and a six-pack a day. They have more money to burn than I do, yet I still pay for their kids' formula. And if I object, I am heartless. If I don't, I am penniless.
Hope and Change.
But the average "middle class" familes are shrinking, with minuscule percentage rising up into millionaires, and large percentage dropping into low income. Blue collar workforce shrinked with deindustrialization, and then next wave of internet-powered outsourcing saw white collar jobs move to India or Eastern Europe. Entire factories and data centers are springing around here, that growth isn't coming from thin air. Though, remember, thanks to all this tv sets are so cheap average family can own a quite few of them.
US wealth was built on freely moving and relatively well paid quality workforce. All the machinery US inventors were churning off in late XIX century was needed because there were too few people to work all that land and its resources. You couldnt risk apying too low wages, because your worker could have moved elsewhere or just use the homestead act and become farmer. And then came the genius of Ford who managed to produce car cheap enough, and pay his workers good enough to buy those cars.
Look at US trade deficit - all of this sums down to 2 items: oil and china trade. Getting your priorites here right would kickstart the economy in a big way. What was it Sal used to say, drill now, drill here, and drill fast? Add to this tax on yuan/USD exchange mirroring artificial undervalue of the yuan and we get billions upon billions $$$ both to the budget and in spending power staying at home...
So, ewok, the running offshore of manufacturing jobs because of extreme, capricious, costly, and oppressive environmental regulation, the bloating of wages by union strongarming in government-sponsored collective bargaining, and the deterioration of the US education system commensurate with the establishment of the Federal Department of Education... what has that to do with capitalism and Paris Hilton?
Err, Ewok....I like you, and generally like what you have to say, but iif you are assuming that MSNBC and CNN are providing honest pictures of the US you are making a huge mistake.
Come here, spend a few months, THEN spout their drivel. At least then you might have a toe in the reality-pool.
We are closer than 10 years... we can collapse faster than we thought possible. We are already Balkanized. We have massive immigration and these newcomers are not assimilating into our society. We are not going to be able to sustain the economy with a massive welfare class and a group of people who do not identify themselves as Americans.
We are doomed.
The "extreme etc." was the same since 1950s. In fact it was started being deregulated since Reagan. The real deal is wanting to have your workforce cheaper and better profit margin. And education system here is 99% state run, regulated-to-minuscule and producing seemingly better educated workforce. And dont get me started on say, South Korea where teachers are treated as state servants on par with policemen, corporeal punishment is norm, and children are sacrificed to the evil gods of Algebra, Trigonometria and Geometria. 8-)
All the while US schools tend to either try to teach bible-conforming biology and geology - or gender/minority studies, depending on what side of the cold civil war is the school.
Germany has twice the unions level than US and is exporting twice betteer. Why? Maybe because unions and CEO's actually tend to care about their firms, and try to get their respective goals in cooperation and compromise. Both understand that capital and workforce need to work together, lest they destabilize fragile equilibrium of social order.
Ewok,
You are absolutely mistaken in your contentions. Research the voluminous environmental regulations that have sprung forth in the last thirty years.
As for our education system, our teachers are very well-paid. A starting salary of $37,000 at age 23 for nine months' work? As for your contention of bible-conforming AHYTHING, you are simply wrong in that. The schools have become a place for far-left secular anti-clerical indoctrination.
On the assimilation front, there's mixed data. Some good, some bad. But here's one bad anecdote.
The UFC had a heavyweight title fight this past weekend. The champ Cain Velasquez vs Junior Dos Santos.
Velasquez is the sone of an illegal Mexican immigrant, born and raised in the USA, high school wrestling star, gets athletic scholarship to wrestle at Arizona State. Becomes All-American college wrestler and now makes big money as UFC HW champ. Dos Santos is Brazilian from small town Brazil.
So Velasquez is classic immigrant feel good story, right?
Yes and no. Yes, in that Velasquez is English-dominant (he speaks Spanish, but poorly).
But Velasquez sports a giant "Brown Pride" tattoo across his chest. And in the pre-fight press conference he vowed, as he usually does, to win the fight for "La Raza".
Typically, immigrant fighters do the two flag deal -- they wave the US flag plus the home country flag. Everybody likes this..
But not Velasquez. He wears Mexican colors only (down to his mouthguard) and is pretty much Viva La Raza al the time. (It's possible this is mainly a PR thing. Velasquez is a quiet, stoic dude. So it's possible his handlers and the UFC have told him to do this for marketing purposes.)
BTW, Velasquez got knocked out a minute into the first round by Dos Santos, who is the new HW champ. Kind of classic boxer vs wrestler fight, and the boxer won easily.
Assimilation matters because corruption is rising in the US. And diversity=corruption. Lack of assimilation means more people are willing to screw over each other because they don't feel any sense of kinship or connection.
And once corruption hits a tipping point it's really hard to stop. Cause then everybody thinks everybody else is screwing them over, so only suckers don't try to screw people back. Nobody wants to get screwed, and nobody wants to be a sucker. The quaity of governance in America is trending down sharply. And I don't just mean left vs right ideology. I just mean politicos and bureaucrats carrying out a policy (be it left or right wing) honestly with as little graft and theft and abuse as possible.
Ewok:
Trying to grasp your logic here on how I am paying for someone else's "tax break"...
Help me understand the logic - if I reduce the tax rates for the rich (which brings in more revenue from taxation - proved twice, once with a "D" president and once with a "R" president, but that is a different story...) and call this reduction of tax rates a "tax break" - how am I paying for it??
I could argue about the use fo the terms "tax break" to describe a reduction of tax rates but I will leave that point alone.
The onlyl way that I could be paying for the "tax breaks" for the rich is if the tax rates for the poor went up while the tax rates for the rich went down. And unless I am mistaken, that has not happened. Or did I miss that event?
Ethnically homogenous states (the Nordics, Japan, Germany) with cultural traditions of honesty and a strong worth ethic can prosper with higher levels of govt control, unionization, and the like.
Multi-ethnic states like America cannot function like that because our ethnic diversity fosters much higher levels of corruption.
In the Nordic countries anyone can decide to fake a back injury and go on the dole the rest of their life and milk the system. But the overwhelming majority don't do that because ... it's wrong. They would feel guilty stealing from their fellow Swede, or Finn, or Norwegian.
In a few short decades, non-hispanic whites will be down to about 50% of the US population. And for the past 50 years, blacks and hispanics have been daily taught that everything wrong with their lives is due to white racism.
If you are raised with that belief -- why not cheat the system? Why not fake the back injury? Why not file the bogus lawsuit? Why not try to cheat the (white) system when you've been marinated in the belief that the (white) system has systematically cheated your parents and grandparents.
Do the Greeks seem to feel any guilt about sticking it to the Germans? No. They feel the Germans still owe them for WW2. They don't feel bad about trying to stick Germany with the bill.
We can pass all the anti-corruption laws we want. But a society functions when people do the right thing even without some law telling them what to do. And it's that day-to-day honesty and fair-dealing which is under siege in America.
Juan,
I think your use of corruption as the evidence to assimulation not working is an interesting one, but I think failure to assimulate leads to even more serious consequences for a nation than corruption. A nation made up of balkanized, non assimulated citizens cannot defend itself and cannot find common cause with each other. This leads to competing factions for resources and entitlements often on the backs of the Majority that slides that majority into a minority by the law of physics.
Rome in the 5th Century was sacked by the vandals.. her armories were full of weapons yet none would defend her.. a result of non assimulation, and competing cultures.
We are failing to recognize that ethno-nationalism is real and we are the fools in this along with western europe.
I agree it's a problem. The question is what, if anything is to be done. I don't see the likelihood of the US actually breaking apart, if that's what you are implying. There's really only two (three counting Puerto Rico) scenarios that I see as plausible.
The first is from the La Raza/Aztlan crowd in the southwest. I'm not doubting we might see some terrorist splinter groups form in the coming decades, but I really don't see any strong public support for that. As Mexicans become the dominant ethnic group in California and the southwest I expect to see more corruption, but not a serious attempt to breakaway. But ethnic balkanization obviously provides the kindling and some charismatic Mex-American leader in 2030-40 could prey on that.
Another unlikely scneario is a breakway Hawaii. There are some separatist groups with (pretty minimal) support. What does have support is declaring Hawaiians an Indian tribe so they can siphon off more money from the rest of America. If i were China I'd be a big proponent of Hawaiian nationalism and self-determination.
There are some worrying data. But there are some positive data. Mexican immigration is slowing as the birth rate has dropped in Mexico. So the supply will dwindle in coming years. And assimilation does work on Mexicans, it just works slower. By the 3rd generation the vast majority of Mex-Americans are English-dominant -- speaking English at home, at work, among friends, etc.
And the culture of Mexico is not *that* different from the US. Compare that to the truly alien world view Muslim immigrants bring. The small # of Somalis we've allowed in have produced more terrorists than the tens of millions of Mexicans we've let in. Mexican TV is filled with - pro wrestling, celebrity chat shows, pro sports, trashy daytime TV, singing and dancing competition shows, and lots of Hollywood movies.
The melting pot is still working. But the size and scale of Mexican immigration in the past several decades has slowed it down. It'll take a while to work through the backlog.
That said, I think the likely future is the US will become more like Latin America. Poorer (relative to the world), greater inequality, more corruption, more violence. I think it will be hard for the US not to end up like Brazil.
To stop that I think we should install a high-skills approach to immigration, like most rich countries have. Especially since the US seems to have chosen to pursue a much larger welfare state.
You can have high immigration or a small welfare state, but not both.
Youre paying it t in decreased amount of money on defence, infrastructure, law enforcement - in reduced fleet, rusting bridges and less cops on the streets, and worse level of public schools. Oh you dont need bridges when you travel by jet/helicopter, and you dont need cops when you have private security, you dont need public schools when you can send your daughter to exclusive private school. Thats why rich evade taxes as much as they can. They dont understand that when the rusting state collapses, they will be the ones to blame. So their greed is really shortsighted. Let them eat cakes! - anyone?
The "rich" pay a proportionately much higher tax than the rest of us, And even if they didn't, all the infrastructure, law enforcement, and defense monies pale in comparison to entitlement spending. DoD is going to be about 18.5% of budget. And 3.4% of GDP. Entitlements are 68% and 15%, respectively.
It is a spending problem, not a revenue problem. Take every dime from every billionaire in the US, and you still would fall short of closing the 2011 budget deficit by almost half a trillion dollars.
In the last 30 years saw the bottom 20% of US society incomes rise up by 18%, the middle class by 40%, and the top 1% skyrocketed by 265%. Yes, they CAN pay MUCH more taxes. More than for direct effect, just to lead the way for those below who must bear the brunt of the cut spending. Also redirecting of funds needs to be done, from failed eco-energy to drilling oil and nuke power, from diversity industry to real science, from trying to build modern democracy in AFG to deterring China, from LCS... to pretty much anything that can float and fight.
Ewok,
You are surrounded by a socialist Europe so it may be difficult to grasp. Most Americans do NOT want to raise taxes on the "rich". First, it is a hard definition subject to political spin to determine what "Rich" is. Second, Instead of trying to tax someone for their good fortune, hard work and getting ahead, I think most Americans would applaud and admire the fact they got there!
To fall victim to the class warfare ideology is to really really drink the kool aid. The fact is the top 1% of wage earners pay 47% of the taxes. We do not have a revenue problem, we have a spending problem and massive transfer of wealth to undeserving parasitic class.
Turn off CNN...
WHY should they be required to PAY more?
I think it would be folly to assume we cannot collapse under our own weight.
- No manufacturing base
- Just in time supply/ logistics for fuel and food
- we are 9 meals away from anarchy is one common phrase
- a disjointed fractured society 47 percent dependent on the government in some form
- a govt that is 12.7 TRILLION in debt and getting in 250 BILLION a month deeper in debt, not accounting for deficit spending this is just DEBT alone
- a citizenry that continues to refuse to deny it's past and insist on "melting pot"
we are already balkanizing. look at the gated communties we live in. "White Flight" to the suburbs. Gerrymandering of congressional districts show it in stark detail.
Our nation already HAS changed.. we are like the Titanic. We already hit the ice berg... now we are simply arranging deck chairs.
I think we are seeing it play out now. We are going to have to make MASSIVE cuts in defense spending just to pay the interest on our debt. We pay that interest to China. China is building a first rate military on OUR Walmart dollars...
hell we cannot even build a SH-60F/H/R without parts from China and Turkey...
We can fix it but we dont have the stomache for it.
We could start by fixing our laws. Why some kids wearing American flag shirts on Cinco de Mayo in California should have to go to court to protect their rights to free speech is an abomination. Whose country is this? Until we answer that question correctly, nothing that follows from it will solve this problem.
Lots of oil in the ground, ditto natural gas. Lots of environmental regs and bureaucratic red tape keeping it there. Energy prices through the roof and spending gigabucks on imported oil when we should be developing energy resources in north america ASAP.
Tax law written to favor imports not protect industrial base. Huge balance of trade deficit.
Both, and the drug trade, mean huge amounts of dollars going overseas and not coming back. Industrial and energy jobs going, going.....
Taxes from those middle class jobs gone. Cost of supporting the unemployed gigantic, and value of the dollar in free fall.
Both parties culpable and clueless.
The rest is just commentary.
Hard times coming.
Ewok as others have said you generaly have your head screwed on straight but really from what i've seen european news is f**king slanted and terrible. I have laughed my A$$ off at the "is america going to have a rebelion again?!", "Is this the american autumn?" LOL.
Most people couldn't care less if the occupy douchebags got run out. The majority of them have shown their true colors.....games up.......can something be salvaged? Maybe...if they have the balls to admit it.
That "Huge" underclass......
The poorest are PAYED to breed. Add to that the ones coming in from south of the border of which a % are going to do the exact same thing-get payed to breed. And guess what?? Huge boost in the poor.
BTW the people who block drilling, nuclear energy and all the others youand we agree on? They are the same who provide the entitlments.
WE WANT those manufacturing jobs back. Hell and as mentioned one of the biggest detraments to getting those jobs is the Union GODS. Who make damn sure even if what your building is cheap you will pay the man who sweeps the floor $29.00hr.
The south in places where the above dont rule has bloosmed? Why? We follow the other path. My state is trying to figure out what to do with around 200,000,000 dollars it puts asside to build infestructure for instance and many others would be in fine shape without the squating giants that are our welfare controlled major cities.
Yes and no. Part of it is that in the vaste majority of societies there is no taboo with reguards to corruption and bribes.
Western values are Rare.
And not all blacks and hispanics buy into that BS. I once worked in a factory the hardest working guy on the line was a mexican who could barely speak english. GREAT GUY. So then we get these two A$$ hole brothers from the hood-except they are white not black.....super racist couldn't stand having to deal with a immigrant as their equal fucked with him till he just quite.
No one liked them they were loud, rude, thuged out bullies who were insanely lazy.
Its not race its a Culture that has been pumped from day one. And its rotten to the core.
I'd rather be stuck around a boat load of guys like the at mexican who couldn't speak english (but learned more everyday) than those 2 boys.
Its after they get hear that most immigrants fall off. Its the schools and the culture they flock to.
And who do you think is using these social entitlements? Illegal Frackin Aliens in Calif..
our government is complicent in allowing this. It is shameful..
Ding ding Ding... winner winner Chicken Dinner....
Damn. I was going for the steak, salad, bourbon over rocks... These austerity measures - tsk, tsk, tsk.
Ewok,
Good luck. In a few short years, I predict the US will pull out of Europe. The Current Economic crisis Greece, Italy and Spain and soon France and YES Germany, are likely to change the game. EU is certainly doomed in my opinion, and wont be long before Sovreign Debts are swamped and markers called in.. problem is, Europe's declining birthrate makes America look like a baby factory... What happens when a country is poor, cant repay her debts and is over run with Maximum Immigration? Let us know how that works out.. cause Europe is gonna go before we do, and probably sooner than can be expected... I predict some serious shift in policy, but will it be in time? Meanwhile we in the US have our own issues to deal with....
Booze = Currency in the new world order....
Hey Juan, the three countries you named, have the most strict immigration laws.. well okay Japan and the Nordics... they are maintaining racial ethno-nationalism... look how it works for them.
Ammo, too. Don't forget ammo. Until Hillary invites in the Pakistanis to confiscate our firearms. For our own good, of course.
Ammo I have covered, do my reloads.. now if I could learn how to make booze...
Regretably, I lost the recipe for mixing gunpowder and rum, and this and that, for a rum punch. Kind of 15th century, don't you know.
Vodka might make a fair molotov cocktail, or appalachin 'shine, but gasoline works better, I think.
Tennesee sippin whiskey, now that would be just wrong.
MTH,
Not always. I saw in Pensacola, Norfolk and even in Mount Vernon, WA; various groups of people scamming the system. A perfect example is when I was stationed in Pensacola and making my own meat and beer run in the middle of a footbal game on a Sunday. At the local Safeway I watched a young white woman trying to make a decision (with three crying kids in her cart) between getting enough formula for two of the kids to last a week or get a 48 pack of beer. Another example that I can think of is my sister interned at a dental office as an accountant/book keeper; noticed that for all sorts of people across all sorts of soci-economic backgrounds (a fancy way of saying up and down across colors and income scales) who were on either Medicare/Medicaid were either getting lesser procedures down but the office was charging for higher procedures or was actually doing the higher procedure but charging for additional work that would be considered "extra"; when she reported this to the state fraud it was bumped over to the G-men and find out this guy had been wanted not only in our home state of WA but also from Michigan and WI for all sorts of medical fraud committed the same way.
Your right though that our government is complicient in allowing some folks to abuse the systems out there supposedly created to help the less capable. The question though is whether or not some of these programs shouldn't be killed, because the large number of abuses has lead to the systems to be unsupportable.
SAP, golden wisdom re: defence industry mergers - one of reason WW2 era industry fared so well, was that there were lots of companies rivalling with different designs - P-38, P-39, P-40, P-47, P-51, F6F, F4U... and there were dozens of those that didnt make into full scale production. US is 2 mergers away from having one combat aircraft producer like France.
And expecting pension system designed in 1890s to work with 2010s demographics is another mega-failure. Plus the spiralling costs of medical care are simply function of more people getting older. Back in the days you rarely lived to get cancer, because usually pneumonia or tuberculosis got you first. All this is such a wonderful example of the law of unintended consequences...
SAP,
concur with the EBT scams but youre talking about legal citizens.. this is magnified times a 1000 when it is also illegals and their Lonestar or EBT cards...
<span>"<span>Plus the spiralling costs of medical care are simply function of more people getting older."</span>
Don't you believe it. The spiraling costs are due primarily to insurance costs due to massive and often frivolous malpractice suits that require millions in outlay from the hospitals even if they are successful in defending. Second on that list is treatment of illegal aliens and non-contributors who take from the system and have to be covered by the insurance and Medicare benefits of the contributors.
Yet, tort reform and immigration policies are absolutely verboten when discussing reducing health care costs. The aging of the population has almost nothing to do with the rise in cost.</span>
Thats why you get the VAT to tax the immigrants (and everyone else). The beauty of VAT is no matter your source of income, legal, shady, or totally illegal... you pay it with everyday shopping, and of course bigger items too.BTW, there is DEMAND side for the illegal immigrants, after all everyone who wants cheap worker hires them over unionised US labor.
Oh and the lawyers chasing ambulances? Guess what, those over-regulated socialist Europeans have none of that. Guess why Germany has cheaper medical care than US, as % of GDP.
So the answer to the exorbitant settlements, concomitant rise in health care costs, and the 12-14 million illegals that drag our system down is more tax for everyone?
E40K,
I fully understand that the US is 2 mergers or 1 economic downturn away from being a 1 stop shop for weapon systems from the WESAYSO corporation. That is something which is an absoulte shame and needs to be worked on by the business industry, but also within the hallways of the 5-sided wind tunnel. Think about the rising costs of some of our acquistion programs and then think of if instead of having one or two preferred buyers we instead had five or six? In the aviation industry, until the 777 and 787 took off for Boeing, they only thing really bringing in the money was thier SV and Defense houses. If you look at the ship side, we are almost already there for with 1 supplier. That being Northup/Grumman since they own about 90% of the civilian yards and the US DoD is tossing some work to BIW and EB (both of whom are owned by GenDynamics) just to keep those congressional critters happy. Look at the LCS program, we have the GenDynamics and Lockheed Martin (who is the owner of the yard that built LCS-1). I am sure that Byron can tell you that when he was a young pup working on the Trimarines to defend Athens, there were plenty of yards out there to work from all of which were independent or semi-independent. Now we have Three major contractors owning a large number of yards.
This needs to change because the government is screwing itself with this decline in manufacturing that can't also supply civilian markets as well as the overseas companies. There are some companies that are depending on government to keep them afloat with contracts (which is one of the things that killed Grumman Aero in the ealry 1980's) and in turn these companies are skimming contracts award them to keep the bottom line in the black.
Ewok,
I recommend you read Suicide of a Superpower by PJ Buchanan..
Well, now that I am living over in Europe now-the criticism seems to be somewhat overdone. The roads are decent-they have trains-and the getting back and forth is far better than it was in Shopping Mall. The Islamic thing is an issue-and there are far too many hijab wearing girls in the aisles of the REAL store. But not overwhelming as some would have you believe.
I think when you get down to it-its a question of what you value. Americans are more and more ceasing to value their own citizenry. They are doing it every bit as too much as those pesky Europeans who perhaps pay too much attention to the matters of the people. At least the French have it right in terms of the work vs vacation balance. America could stand to have more vacation-not less.
Plus-when one's source is the Wall Street Journal, a once great paper ruined by Murdoch, then you have to take it all with a huge grain of salt. The world is not ending over here yet.
Skippy,
It depends on what part of Europe you are living in. The years I spent in my bit were a lot better off than others within a day's driving - heck hours driving.
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