Getting America Back to Work

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 government takes more than it provides.

According to the US Bureau of Economic Analysis, approximately 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. 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, we’re printing money to pay the bills.

When you create more money, the money in circulation is worth less. This reduces purchasing power. Unfortunately, there is a deflationary element that comes into play when banks make too many unsecured or irresponsible loans. This causes investors to take money elsewhere, and it eventually forces banks (except for the privileged “too-big-to-fails) out of the equation while forcing a massive liquidation to raise capital. When the economy is allegedly booming, Main Street loses purchasing power and must work harder to have less. When the economy is contracting, Main Street simply doesn’t have enough work to catch up from the alleged economic growth.

Republicans and Democrats haven’t figured out that it’s not a recovery if its jobless. They also haven’t figured out that our banking system, the Federal Reserve System itself, plays favorites. Wall Street and government rarely suffer, and they gain at the direct expense of our purchasing power. Both major parties are lobbying structures that place favored institutions closest to newly issued money and credit first.

This arrangement has only destroyed purchasing power and created systemic risk. The first part of the solution is to return the power to create money where it belongs – Congress. The second part of the solution is to prosecute looting, fantasy accounting and fraud. 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 accurately described. We need Jackson’s option back on the table.

What that GDP was actually worth is another story. Both major parties willfully include government in that figure, borrow and tax to expand government, then argue it to be economic growth. 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. We have to reject creative data models for political convenience.

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. We have to repeal NAFTA, CAFTA, GATT and anything like it. Our policy should be equal trade with all.

Healthcare costs are killing economic growth as well. We can address those in detail, something Democrats and Republicans never have and never will do.

We have to repeal the income tax. That doesn’t mean instituting a sales tax, a value added tax or this “fair” tax Republicans are starting to talk about. The only way to keep spending under control and leaving the most money we can in your pocket is to apportion taxes. This approach worked, it forced Congress to come up with realistic budgets, and it prevented Congress from treating Americans as a personal slush fund.

Apportionment is simple. Congress comes up with a number of what things will cost for the next two years, then it sends a bill to each state capital proportionate to its population. The states raise the money, they send it to Washington, and it’s done. There are no more earmarks, special interests playing with the tax code, forms, middlemen, or federal tax barriers to hard work and innovation. I propose to do away with these. This change alone will save $300 billion in compliance costs.

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.