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Many traditionally looked to the government as if its job was to manage the economy. It wasn’t. The Constitution is clear on that. Not only does it state that money is to be coined, the Tenth Amendment specifically restricts our government from assuming any power or role not delegated to it by the constitution – that power being reserved to the states and the people. Aside from taking an unconstitutional role in the economy, we’ve continually seen a pattern where we give government a dollar, it provides $0.75 in goods and services, and we then expend another $0.50 of effort to reap the rewards.
According to the US Bureau of Economic Analysis, half of our economy is now state and local government. Government and the corporations that arise from the debt based money machine known as the Federal Reserve continually grow. Any job the government provides costs more than it would in the private sector, if only due to more administrative costs. Ergo, we pay for those expenses through taxes and inflation.
The Federal Reserve is the central bank of issue in the United States. It is a privately held corporation with the exclusive authority to print our currency. In order to pay for every expenditure of its government, it prints money. This includes everything from paying commercial farmers to destroy crops to paying for a department of education that makes education less effective. During the times we didn’t have a central bank of issue, our government functioned on excise taxes alone. This worked fine in terms of funding activities authorized by the Constitution. Now, the Federal Reserve prints money to pay the bills, at interest. In order to do this, the Federal Reserve secures a loan from foreigners in the form of treasury bills, like China, Japan, and the Saudis, and prints an IOU once that loan is secure, or a Federal Reserve Note. When you create more money, the money in circulation is worth less – and such as system is inherently deflationary, creating the worst of both worlds for the consumer.
In order to prevent hyperinflation, we created the IRS, which sends interest to the Federal Reserve – $404 billion in 2006 to be exact. It cost the American taxpayer an estimated $270 billion to administer this tax, aside from employers that kept records and worked on behalf of the IRS, for free. Economically, these costs are passed on to the worker in the form of reduced wages. In more cases, employers close their doors or take their business to other countries. In 2003, the IRS collected about $1.2 trillion in income taxes. It collected roughly another $700 billion in employment taxes that year. Every employer knows that workers are hit with a 15% tax on payday, and even though it’s said to be 7.5%, employers simply pay 7.5% less. Our GDP in 2006 was around $13 trillion.
What that GDP was actually worth is another story. The real question becomes how much harder you will have to struggle to stay ahead. The ability of you or your children to get ahead are now slim to none. There’s a reason for it. You can do something about it.
The fundamental reality of our currency virtually capsized every aspect of our economy during the Great Depression, which was caused by the Federal Reserve. Subsequent booms and busts have made our share of the economy smaller and smaller. This has consolidated all industrial sectors into the structures we know today. As with big pharma and the FDA, or commercial farming and the Department of Agriculture, and even big media and the FCC, we are told by the industries what regulations they will allow themselves to be subject to. What we do is no better than a Soviet Five Year Plan, especially when we grant retroactive patents on drugs that cost $0.11 to make and cost $272 to our poorest and uninsured. Our economy is now a hen house built by foxes, and prices are out of control.
Our “Free Trade” agreements protect all the rights of these cartels while our right to be equal trading partners and world consumers is negotiable. These cartels can benefit from going to China and enjoying a 2% tax rate when exporting the products of slave labor back to us. When we can’t export to China without being taxed at least 40% of what our exports are worth, we’re somehow the whiners. That’s somehow anti-American and isolationist according to the politicians in Washington.
Instead, we had the option of saying “no” to a central bank and an income tax we did not need. We still had the option of saying “no”, as Andrew Jackson did, routing it out as the “den of vipers” he’d so rightly described.
As Jefferson wrote of what the federal government does under the constitution –
"On every question of construction [of the Constitution] let us carry ourselves back to the time when the Constitution was adopted, recollect the spirit manifested in the debates, and instead of trying what meaning may be squeezed out of the text, or intended against it, conform to the probable one in which it was passed." -- Thomas Jefferson (1743-1826), letter to Judge William Johnson, (from Monticello, June 12, 1823)
Yet the interpretation of the Constitution is stretched for whatever rent seeking middlemen wish to visit upon us. We ran an embarrassing budget surplus before the Federal Reserve and IRS came into being. We built the Alexander Hamilton Customs House to collect the meager excise taxes our government needed, with its legendary artwork and 140 ton skylight. Now, we can’t even fix our roads and schools.
On top of this, our economy became based on a lie. In the name of saving the economy, Democrats and Republicans have used our money and credit, committed and spent, far more than enough to pay off every single loan in the United States, to bail out fraud. Aside from both parties’ complicity in “bailout” and “stimulus” piracy, only a small minority among the two party establishment has the stones to call for its massive rollback. That and aggressive pursuit of prosecution for securities, banking and other fraud, seems to be a tall order.
Now that we see what doesn’t work, and what would have worked, it’s time to stop it. It’s time for you to keep your money and your purchasing power. Over 100 years of economic management, boondoggles, tax increases and jobless recoveries failed to deliver real prosperity and wealth creation.
The “republican” and “democratic” parties are all about more theft, going along to get along. I am not. If this time isn’t the one to end it, then when? If not us, then who?
I am for fair and free markets. I am for taxes having the sole function of funding government. The Democrats and Republicans are not. 90+ years of experience says they’ll never be.
