Refuse to Pay Government Debt Incurred for Unlawful and Oppressive Purposes ... It Is the Personal Debt of Those Who Ordered It to Be Incurred → Washingtons Blog
Refuse to Pay Government Debt Incurred for Unlawful and Oppressive Purposes ... It Is the Personal Debt of Those Who Ordered It to Be Incurred - Washingtons Blog

Friday, February 12, 2010

Refuse to Pay Government Debt Incurred for Unlawful and Oppressive Purposes ... It Is the Personal Debt of Those Who Ordered It to Be Incurred


There is an established legal principle that people should not have to repay their government's debt to the extent that it is incurred to launch aggressive wars or to oppress the people.

These "odious debts" are considered to be the personal debts of the tyrants who incurred them, rather than the country's debt.

Wikipedia gives a good overview of the principle:

In international law, odious debt is a legal theory which holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, such as wars of aggression, should not be enforceable. Such debts are thus considered by this doctrine to be personal debts of the regime that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion.

The doctrine was formalized in a 1927 treatise by Alexander Nahum Sack, a Russian émigré legal theorist, based upon 19th Century precedents including Mexico's repudiation of debts incurred by Emperor Maximilian's regime, and the denial by the United States of Cuban liability for debts incurred by the Spanish colonial regime. According to Sack:
When a despotic regime contracts a debt, not for the needs or in the interests of the state, but rather to strengthen itself, to suppress a popular insurrection, etc, this debt is odious for the people of the entire state. This debt does not bind the nation; it is a debt of the regime, a personal debt contracted by the ruler, and consequently it falls with the demise of the regime. The reason why these odious debts cannot attach to the territory of the state is that they do not fulfil one of the conditions determining the lawfulness of State debts, namely that State debts must be incurred, and the proceeds used, for the needs and in the interests of the State. Odious debts, contracted and utilised for purposes which, to the lenders' knowledge, are contrary to the needs and the interests of the nation, are not binding on the nation – when it succeeds in overthrowing the government that contracted them – unless the debt is within the limits of real advantages that these debts might have afforded. The lenders have committed a hostile act against the people, they cannot expect a nation which has freed itself of a despotic regime to assume these odious debts, which are the personal debts of the ruler.
Patricia Adams, executive director of Probe International (an environmental and public policy advocacy organisation in Canada), and author of Odious Debts: Loose Lending, Corruption, and the Third World's Environmental Legacy, has stated that:

by giving creditors an incentive to lend only for purposes that are transparent and of public benefit, future tyrants will lose their ability to finance their armies, and thus the war on terror and the cause of world peace will be better served.

A recent article by economists Seema Jayachandran and Michael Kremer has renewed interest in this topic. They propose that the idea can be used to create a new type of economic sanction to block further borrowing by dictators.
Jubilee USA notes that creditors may lose their rights to repayment of odious debts:

Odious debt is an established legal principle. Legally, debt is to be considered odious if the government used the money for personal purposes or to oppress the people. Moreover, in cases where borrowed money was used in ways contrary to the people’s interest, with the knowledge of the creditors, the creditors may be said to have committed a hostile act against the people. Creditors cannot legitimately expect repayment of such debts.

The United States set the first precedent of odious debt when it seized control of Cuba from Spain. Spain insisted that Cuba repay the loans made to them by Spain. The U.S. repudiated (refused to pay) that debt, arguing that the debt was imposed on Cuba by force of arms and served Spain’s interest rather than Cuba’s, and that the debt therefore ought not be repaid. This precedent was upheld by international law in Great Britain v. Costa Rica (1923) when money was put to use for illegitimate purposes with full knowledge of the lending institution; the resulting debt was annulled.

The launch of the Iraq war was an unlawful war of aggression. It was based on false premises (weapons of mass destruction and a connection between Iraq and 9/11; see this, this, this, this, this and this). Therefore, the trillions in debts incurred in fighting that war are odious debts which the people might lawfully refuse to pay for.

The Bush and Obama administrations have also oppressed the American people through spying on us - even before 9/11 (confirmed here and here) - harassment of innocent grandmothers and other patriotic Americans criticizing government action, and other assaults on liberty and the rule of law. See this. The monies borrowed to finance these oppressive activities are also odious debts.

The government has also given trillions in bailouts, loans, guarantees and other perks to the too big to fails. These funds have not helped the American people. For example, the giant banks are still not loaning. They have solely gone into speculative investments and to line the pockets of the muckety-mucks in the form of bonuses. PhD economist Dean Baker said that the true purpose of the bank rescues is "a massive redistribution of wealth to the bank shareholders and their top executives". Two leading IMF officials, the former Vice President of the Dallas Federal Reserve, and the the head of the Federal Reserve Bank of Kansas City have all said that the United States is controlled by an oligarchy. PhD economist Michael Hudson says that the financial “parasites” have killed the American economy, and they are "sucking as much money out" as they can before "jumping ship". These are odious debts.

Bush, Cheney, Paulson, Geithner, Summers and others who ordered that these debts be incurred must be held personally liable for them. We the American people are not responsible to creditors - such as China, Saudi Arabia - who have knowingly financed these illegal and oppressive activities which have not benefited the American people, but solely the handful of corrupt politicians who authorized them.

Note: Of course, many mom and pop American investors hold U.S. treasury bonds as well. The size of their haircuts on U.S. bonds might - under a strict reading of the principle of odious debt - depend on whether or not they knew of the unlawful and oppressive activities of the U.S. government. Arguably, small individual investors tend to be much less knowledgeable about such matters than other countries such as China or Saudi Arabia.

23 comments:

  1. GREAT article! HOW do we do this, though? If we don't pay our taxes, IRS confiscates our property and we get thrown in jail. Even if we site "odious debts" as our defense and even if we were successful in this, it would take years to get it all through the judicial system and we would be financially ruined in the meantime. Maybe you are rather suggesting that a group of individuals bring a case against "B, C, P, G, S, et al". You should run this idea by Glenn Greenwald (Salon) and see what he thinks. I, for one, would be willing to sign on as a supporter if there is really any hope of succeeding.

    ReplyDelete
  2. The fact that banks have failed miserably to finance loans - even loans that we already funded ourseleves, through TARP - has been part of our landscape for quite some time (at least it seems like a long time).

    But isn't this because of the WTO oppressive financial services "schedule" that Clinton secretly signed in 1999?

    If I read the WTO documents correctly, the financial services "schedules" posted on the WTO website actually stop the U.S. from regulating all types of "financial services" here in the U.S. due to the purported global "discriminatory" effects of such. As strange as it sounds, from a global perspective, the WTO apparently believes that regulation would, by default, prove favorable to the U.S.

    But, isn't that what we want? Or are the things WE want as citizens contrary to the wants & desires of the contolling "powers that be"?

    Or, in keeping with this post, have decisions already been made without our knowledge or participation and/or have harmful actions been taken about which we know nothing? If so, are we citizens similarly committed?

    Unless I'm missing something here, it certainly appears that the Obama/Bush/Clinton administrations have already secretly committed the United States to certain things to which we citizens did not agree. In reading the WTO service schedules (signed in 1999 by Clinton, but wholly facilitated later on by both Bush & Obama), it sounds like the United States is now only recognized in a global sense, and that actions taken by the United States can now only be understood in terms of their global effects.

    Just as we citizens have no responsibility for and therefore should refuse to pay "odious debts" taken on by others - we also are not liable for unknown & secretly signed agreements that prove harmful to us.

    Everything that was previously unexplainable fell into place as I read the wealth of information on the WTO website. Public Citizen also has significant information on the United States' apparent secret induction into the Global Hall of Fame. I am a voracious reader but would have known nothing about this issue had I not read about it first, here, on Washington's Blog.

    The audacity of this administration forging ahead with yet another doublespeak trick: calling for more loans & regulation while knowing it absolutely would & could not happen. Knowing this, then it must also be true that this administration forked over the TARP funds even as they knew that the banks would not be funding any loans.

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  3. The thing that most people don't realize is that gvoernment "debt" is different from household debt because the government is the currency issuer. while others are currency users. Currency users must pay their debts from income, hence are revenue-constrained. But this is not true of the government, which issues its own currency, hence is not financially constrained under a fiat system such as is in place now.

    Government debt is already paid for by the spending it offsets on the government's books. Government disbursement is through currency issuance that creates non-government net financial assets. It is this increase in NFA that is used in purchasing the debt, viewed on the macro level.

    The debt is just a switch from demand deposits increased by deficit spending, which do not bear interest, into Tsy bills and bonds that bear interest, like switching funds from a checking account to a CD. Operationally, this is just switching one asset form (demand) for another (time).

    The interest on government debt is also funded through currency issuance and increases NFA, like other disbursements.

    All the handwringing over the national debt is just much ado about nothing. It is based on gold-standard thinking that is now obsolete.

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  4. We need to start a disavow the debt movement

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  5. Yes dude- you may go to jail. Freedom isnt free and doesnt have a Hollywood ending. There is a cost, something we Americans usually outsource to others if we can.

    Live a swindled slave or risk being free. That is the choice 300 million of us must make, one by one, each alone, yet together a mighty, unstoppable force. (so far that choice has been for American Idle)

    As for me and my house? We will not serve the Synagogue of Lord Rothschild.

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  6. Look, Folks. Right now the government through Fannie Mae and Freddie Mac (and many other ways) have this deal set up where the banks have an opportunity, the equivalent for which, is like getting to go to Las Vegas and gamble with the government's money.

    If the banks lose? Not to worry for them, the government covers the losses. F&F buy all the drek.

    If they win? Hooray! The government calls that evidence of the ongoing economic recovery, and even rising real estate prices. Hah!

    This is what Ben Bernanke and Tim Geithner have devised to restore the rapacious credit economy.

    The only solution is to stop paying ALL debt back.

    All debt is odious in such a manipulated marketplace.

    The ever-increasingly convoluted rationale here is, if money is so laced with the sort of moral hazard at one level we know exists in these government bail out policies, then who is to tell me I should work to pay back what little money I have borrowed, and which I essentially had stolen from me through prices that are being manipulated?

    Government economic policy is clearly not meant for my benefit.

    The free market does not exist anymore, is all I can determine.

    Just send me MY $100 million bonus.

    Actually I'd settle for a few hundred grand right now! LOL!

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  7. This one's easy to knock down.

    So long as there are "elections" and so long as we go to them & vote, we've approved whatever the elected representatives decide to do. So long as that government exists, the debts it makes are the law of the land.

    The real story of Odious Debt would be the Soviet repudiation of Tsarist debt. The Soviets made a revolution & then reaped the consequences, good & bad. All we do is sit around, complain, look for excuses & cop outs.

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  8. As you surely know, the U.S. is currently a rogue state - as are Israel & Britain (it can be justifiably claimed that the true "Axis of Evil" runs through Washington, D.C. - London - Tel Aviv). This is one reason some Americans have joined the Tax Resistance Movement. We Americans need to stop paying our financial treasure into the black hole in D.C. A very strong case can be made that it is immoral, illegal and unnecessary to pay federal income taxes to 'Uncle Sam'. Therefore, I urge you to consider joining the movement. Below is a portion of an online post concerning this subject, if you're interested. I feel certain that our stopping the paying of federal income taxes will have a faster braking effect on the U.S. war machine than will any American election!

    --------

    We should all stop paying U.S. federal income taxes. Stop paying the people who are trying to bankrupt and exploit us!

    U.S. federal income taxes are unconstitutional (not ratified in accordance with the U.S. Constitution) - according to "The Law that Never Was: The Fraud of the 16th Amendment and Personal income Tax". Its author, Bill Benson, was apparently sent to prison (by a judge whose income depended on U.S. taxes continuing to be paid) for his writing/actions, but Mr. Benson seemingly remains steadfast in his confirmed beliefs). www.amazon.com/law-that-never-was-Amendment/dp/B0006ELT78/ref=sr_1_2?ie=UTF8&s=books&qid=1246119763&sr=1-2

    U.S. federal income taxes are also illegal, according to the well-supported idea that the U.S. government and military are terrorist organizations frequently violating international law. According to U.S. law, it is a crime to financially support terrorists - therefore, we may conclude that it is illegal (even according to U.S. law!) to support the immoral, arrogant, incompetent 'Uncle Sam'.

    Any American who pays such income tax, knowing that the U.S. federal government will spend over 1/2 of its discretionary budget on the bloodthirsty, socially-destructive killing machine AKA "The Pentagon", and also supports another rogue state AKA "Israel", thus becomes indirectly complicit in the crimes the US military/CIA/NSA/Israel military carry out.
    (An overall history of some of those U.S. crimes can be read in the non-fiction comic book, "Addicted to War", by Joel Andreas, and/or the book "Rogue State, 3rd Edition: A Guide to the World's Only Superpower", by William Blum
    (www.amazon.com/Rogue-State-3rd-Worlds-Superpower/dp/1567513743/ref=pd_sim_b_1).
    Also, a very detailed history is compiled in "Killing Hope: U.S. Military and C.I.A. Interventions Since World War II-Updated Through 2003" (www.amazon.com/Killing-Hope-C-I-Interventions-II-Updated/dp/1567512526/ref=sr_1_1?ie=UTF8&s=books&qid=1261985835&sr=1-1 ). )


    -----

    From http://newstandardnews.net/content/index.cfm/items/1675 :

    "...Anti-militarist tax resisters are fond of noting Principle IV of the Nuremberg Principles... "The fact that a person acted pursuant to order of his Government or of a superior," the Principle reads, "does not relieve him from responsibility under international law, provided a moral choice was in fact possible to him." The moral choice for
    Milner is clear: withhold taxes from the government, in spite of the unpredictable risks. ..."

    The consequences for war tax resistance are unpredictable, as are most direct actions for peace, so please think carefully about what you do, before acting. I for one know what I wanted to do, and am doing it.

    "... The majority of tax resisters redirect federal income tax money independently, choosing to donate to a wide variety of local, national and international peace and justice organizations in critical need of financial support. ..."

    ********************

    Thanks for all the good you do.

    Sam Bolivar
    StrivingForJustice @ yahoo.com

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  9. We all must make decisions based upon our circumstances and conscience. Then we are each individually responsible for our decisions. I have made mine, and feel good in my heart about it. I hope you have the courage to do what your conscience advises you to do... After all, which is more frightening - the thought of going to prison, or the thought of being partly responsible for the bullets & bombs killing Iraqi/Afghani/American/etc. children? (Oh, and one more thing about the CIA - several writers have stated that it appears the CIA is profiting from drug dealing via Afghanistan! Just another thing to think about...)

    ----

    Finances are the Achilles heel of 'Uncle Sam' - no money, no bloated politician salaries, no military-industrial complex! (^o^)

    "Let them march all they want, as long as they continue to pay their taxes."
    -Alexander Haig, U.S. Sec. of State, June 12, 1982

    "If a thousand men [and women] were not to pay their tax-bills this year, that would not be a violent and bloody measure, as it would to pay them, and enable the State to commit violence and shed innocent blood."
    -Henry David Thoreau

    "The sinews of war are infinite money."
    -Marcus Tullius Cicero, Roman statesman (BCE)

    -----

    Please consider joining the Tax Resistance Movement. Below are some links:

    www.warresisters.org/node/328
    History of War Tax Resistance

    http://newstandardnews.net/content/index.cfm/items/1675
    Anti-War Activists Promote 'Tax Resistance’as Direct Protest
    by Martha Baskin


    http://en.wikipedia.org/wiki/Tax_resister
    3.1 Redirection
    3.2 Refusing specific taxes
    3.3 Refusing to pay
    3.4 Paying under protest
    3.5 Tax avoidance
    3.6 Tax evasion
    3.7 Reducing expenditure and income


    ********************

    Thanks for all the good you do.

    Sam Bolivar
    StrivingForJustice @ yahoo.com

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  10. Not so fast, Dave of Maryland. I refer you to Lynsander Spooners' "The Constitution of No Authority", which makes an excellent case that a constitution signed by a handful of men 225 years ago does not bind us to the government existing today unless we, each of us, agree that it is binding on us (no more than if it was possible for my grandfather to bind me to a contract before I was born). And if you believe the constitution is binding on us, fine, then you should realize that the the debt incurred by this and prior administrations is unconsitiutitoinal, because it went to fund unconstitutional undertakings - i.e., the undeclared wars of aggression; the unconstitutional welfarism and social programs; etc. The elected reprentatives violated their oaths by casting votes for funding of unconsitutional undertakings. In fact, the whole central banking and fiat money system is unconstitutional, unless you can point out in the consitutition where it says the government is free to engage in a debt/interest relationship with private banks and amass a $100 trillion in debt, generated by one criminal legislative measure after another. The debt might be the law of your land (which is fine; you'd better get busy paying back all those trillions owed by your native Slaveland), but it sure as hell is not the law of my land

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  11. With regard to taxation: it is unconstitutional for the government to directly tax U.S. citizens. What this means is that the government cannot tax or directly benefit from our labor. The only taxes that are constitutional are those that are distributed and/or evenly apportioned amongst all the citizens, or taxes that we can opt out of or decline. For instance, we can choose to ride our bicycles instead of choosing to drive our cars, & purchase the gasoline for those cars along with paying the embedded fuel taxes.

    The IRS gets nervous when asked if direct taxation is legal. They will cite the sixteenth amendment as their taxing authority. But the sixteenth amendment discusses even apportionment, not direct taxation.

    Ever wondered about the numerous tax cheats that "just happen" to work in the Obama administration? How could this realistically happen unless all of these people knew something we don't know? Could it be that the government taxes only those they have predetermined as peons - but excuse from taxes the clued-in "favored" who somehow learned the truth?

    Meanwhile, we were "told" that tax-cheat Geithner - the "chief" pony that oversees the IRS and, as such, was barred from accepting the Treasury position - paid his huge tax bill but somehow was "excused" from paying the penalties.

    But the steep penalties account for the sharp increase in taxes owed. If this country was in such dire economic straits at the time, why would the government not want this source of income?

    More importantly, why did the IRS not prosecute Geithner for tax evasion earlier? Why did the IRS choose to ignore Geithner's quickly accruing tax bill?

    What a farce!! As if we wouldn't notice it! And, I'll just bet similar favorable treatment was afforded to all those tax cheats that work in the Obama administration.

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  12. All government debnt is odious debt, since the citizenry is not permitted to choose whether or in what amount the government contracts 'on their behalf' (according to the mythology of democracy).

    IF a debt is contracted but a third party is forced (with violence or the threat of violence) to make the repayments, then the debt is void: the fact that a government can send its armed thugs to extract value from its livestock, is neither here nor there... people who pay protection money to the mafia are not seen as willingly complicit, and nor should taxpayers be seen as willingly complicit in the state's rapine... they may pay simply out of fear o f reprisal.

    Cheerio


    GT

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  13. "Dave of Maryland said...

    This one's easy to knock down.

    So long as there are "elections" and so long as we go to them & vote, we've approved whatever the elected representatives decide to do. So long as that government exists, the debts it makes are the law of the land."


    What of people who refuse to participate in elections (i.e., those who realise that gang rape is not sanctified just because the gang is a majority of those who vote)?

    You realy should be bright enough to uinderstand that 'none of the above' is the ONLY valid moral decision... and as such those who choose NOT to vote are actually the only morally-defensible participants.

    What of situations in which the 'elected representative' engages in graft, or illegal actions (such as invading a sovereign nation under false pretences)?

    By your logic, the US had no right to attack Germany, since every action of the regime was legitimate under German law and the German government of the day was formed by a coalition after a democrtic election.

    Your position has absolutely no moral or theoretical justification, except that of the "majority rape is fine" logic of the prison yard. Its' reprehensible, and should be challeneged at every turn until people wake up.

    Cheerio


    GT


    PS Note to the webmaster: your OpenID validation mechanism doesn't work: this is the first site I have encountered that had trouble validating my OpenID credentials.

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  14. total avoidance of tax debt will not bring justice nor freedom as it is irresponsible. But were you, collectively, to decide another body to pay it to, say for instance your bankrupt states or local government bodies, to use and hold in trust until a better uncle sam government were established then you would be responsible and worthy of the liberty taken. Surely the stressed states and local governments would assist you in establishing such protocols even if it were merely set up as a credit towards future rates bills.
    great gratitude for your acuity, your courage and your good intentions. It is only through suffering and striving that you will be able to win through,
    yours
    in anticipation

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  15. The following website deals specifically with helping people who choose to stop paying their debts, it's quite helpful:

    http://www.freetoprosper.com

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  16. While the costs of these foreign wars is not a trivial thing, but so is the costs associated with Social Security, Medicare, and Medicaid. Similar to any American family, the federal government needs to get its house in order: cut all sorts of spending (social security, medicare, medicaid, charity donations [Haiti], cease and desist all proposals for stimulus packages for companies. If we do these painful cuts than perhaps we can see the day when bills that put forward into Congress maybe paid by cash.

    However the notion of odious debt cannot be claimed by Americans. We do not live in a dictatorship. So if we refuse the federal deficit, who would want to lend to us again. Especially the ones that have the most cash avaliable.

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  17. As far as I know, if you work for the Federal Govt., even part-time (say, as a disaster relief person), or if you work for an entity (say, the state of Texas, or any Texas county or municipal govt.) that gets Federal funds...this likely includes public schools as well...then under the Constitution you must pay taxes. the Cobnstitution set up two types of govt.: soveriegn states, and the District of Columbia. The 16th amendment was originally meant to only tax employees of DC. But because of various fed agencies "squattering" so to speak, turning the law on its head and making ALL OF US now UNITED STATES CITIZENS (notice the all caps, ever see your Social Security card?), that means we are all now no longer Sovereign Citizens, so technically now all of us must pay taxes.

    Since we know the 16th Amendment was never properly ratified, that would be the place to start. Now, if you don't want to pay taxes, then you have to live with the consequences. Consequences is something Americans don't do very well, so don't expect a huge amount of support for tax protesting (of course, so many folks are unemployed now that not paying taxes is a good option).

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  18. Who profits from the national debt? Who is the creditor? Who profits from America's military activities? Obviously not the American people they are financing throu debt and someone else is reaping the benefits.

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  19. nobodysaysBOO:
    JUST LIE LIE LIE like a bush bastard,NEVER pay only lie!!!
    This scum of a govnt deserves lies only,get creative and lie like bush everyone,NEVER tell these bastards the truth about ANYTHING!
    Tell them you are black when you are red,tell them you are female when you are NOT,just lie like the govnt for no reason except decption!!

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  20. "Refuse to pay" and "go to jail?" Better to get on an alternative currency before accepting the consequences of bankruptcy on the impossible debt. Don't pay and get out legally. Forget refusal until you have to.

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  21. Here's something you may find relevant. mises.org/daily/1423

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  22. Government disbursement is through currency issuance that creates non-government net financial assets.

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  23. Admiring the time and effort you put into your blog and detailed information you offer! I will post your blog and have my children check up here often. Thumbs up!


    package

    ReplyDelete

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