Unbelievable changes have occurred
in the 20th Century. We went from the horse and buggy age to the space
age. Computer technology and the Internet have dramatically changed the
way we live. All kinds of information and opinions on any subject are now
available by clicking a few buttons. Technology offers an opportunity for
everyone who seeks the truth to find it, yet at the same time, it enhances
the ability of government to monitor our every physical, communicative,
and financial move. And let there be no doubt, for the true believers in
big government, they see this technology as a great advantage for their
cause.
We are currently witnessing an ongoing
effort by our government to develop a national ID card, a medical data
bank, a work data bank, "Know Your Customer" regulations on banking activities,
a National Security Agency all-pervasive telephone snooping system called
Echelon, and many other programs. There are good reasons to understand
the ramifications of the many technological advancements we have seen over
the century to make sure that the good technology is not used by the government
to do bad things.
The 20th Century has truly been a century
of unbelievable technological advancement. We should be cognizant of what
this technology has done to the size and nature of our own government.
It could easily be argued that, with greater technological advances, the
need for government ought to decline and private alternatives be enhanced.
But there's not much evidence for that argument. In 1902 the cost of government
activities at all levels came to 7.7% of the GDP; today it's more than
50%.
Government officials oversee everything
we do from regulating the amount of water in our commodes to placing airbags
in our cars, safety locks on our guns, and using our own land. Almost every
daily activity we engage in is monitored or regulated by some government
agency. If one attempts to just avoid government harassment, one finds
himself in deep trouble with the law.
Yes, we can be grateful that the technological
developments in the marketplace over the last 100 years have made our lives
more prosperous and enjoyable, but any observant person must be annoyed
by the ever-present "Big Brother" that watches and records our every move.
The idea that we're responsible for our own actions has been seriously
undermined. And it would be grossly misleading to argue that the huge growth
in the size of government has been helpful and necessary in raising the
standard of living of so many Americans. Since government cannot create
anything, it can only resort to using force to redistribute the goods that
energetic citizens produce. The old-fashioned term for this is "theft."
It's clear that our great prosperity has come in spite of the obstacles
that big government places in our way and not because of it. And besides,
our current prosperity may well not be as permanent as many believe.
Quite a few major changes in public
policy have occurred in this century. These changes in policy reflect our
current attitude toward the American Republic and the Constitution and
help us to understand what to expect in the future. Economic prosperity
seems to have prevailed, but the appropriate question asked by too few
Americans is, "Have our personal liberties been undermined?"
Taxes are certainly higher. A federal
income tax of 35 to 40% is something many middle-class Americans must pay,
while on average they work for the government for more than half the year.
In passing on our estates from one generation to the next, our "partner,"
the US government, decides on its share before the next generation can
take over. The estate tax certainly verifies the saying about the inevitability
of death and taxes. At the turn of the century we had neither, and in spite
of a continuous outcry against both, there's no sign that either will soon
be eliminated.
Accepting the principle behind both
the income and the estate tax concedes the statist notion that the government
owns the fruits of our labor, as well as our savings, and we are permitted
by the politicians' "generosity" to keep a certain percentage. Every tax-cut
proposal in Washington now is considered a "cost" to government, not the
return of something rightfully belonging to a productive citizen. This
principle is true whether it's a 1% or a 70% income tax. Concern for this
principle has been rarely expressed in a serious manner over the past 50
years. The withholding process has permitted many to believe that a tax
rebate at the end of the year comes as a gift from government. Because
of this, the real cost of government to the taxpayer is obscured. The income
tax has grown to such an extent and the government is so dependent on it
that any talk of eliminating the income tax is just that, talk.
A casual acceptance of the principle
behind high taxation, with an income tax and an inheritance tax, is incompatible
with a principled belief in a true Republic. It is impossible to maintain
a high tax system without the sacrifice of liberty and an undermining of
property ownership. If kept in place, such a system will undermine prosperity,
regardless of how well off we may presently be.
In truth, the amount of taxes we now
pay compared to 100 years ago is shocking. There is little philosophic
condemnation by the intellectual community, the political leaders, or the
media of this immoral system. This should be a warning sign to all of us
that, even in less prosperous times, we can expect high taxes and that
our productive economic system will come under attack. Not only have we
seen little resistance to the current high tax system, it has become an
acceptable notion that this system is moral and is a justified requirement
to finance the welfare/warfare state. Propaganda polls are continuously
cited claiming that the American people don't want tax reductions. High
taxes, except for only short periods of time, are incompatible with liberty
and prosperity.
We will, I'm sure, be given the opportunity
in the early part of this next century to make a choice between the two.
I am certain of my preference.
There was no welfare state in 1900.
In the year 2000 we have a huge welfare state, which continues to grow
each year. Not that special-interest legislation didn't exist in the 19th
Century, but for the most part, it was limited and directed toward moneyed
interests--the most egregious example being the railroads.
The modern-day welfare state has steadily
grown since the Great Depression of the 1930s. The federal government is
now involved in providing health care, houses, unemployment benefits, education,
food stamps to millions, plus all kinds of subsidies to every conceivable
special-interest group. Welfare is now part of our culture, costing hundreds
of billions of dollars every year. It is now thought to be a "right," something
one is "entitled" to. Calling it an "entitlement" makes it sound proper
and respectable and not based on theft. Anyone who has a need, desire,
or demand and can get the politicians' attention will get what he wants,
even though it may be at the expense of someone else. Today it is considered
morally right and politically correct to promote the welfare state. Any
suggestion otherwise is considered political suicide.
The acceptance of the welfare ethic
and rejection of the work ethic as the accepted process for improving one's
economic conditions are now ingrained in our political institutions. This
process was started in earnest in the 1930s, received a big boast in the
1960s, and has continued a steady growth, even through the 1990s, despite
some rhetoric in opposition. This public acceptance has occurred in spite
of the fact that there is no evidence that welfare is a true help in assisting
the needy. Its abject failure around the world where welfarism took the
next step into socialism has even a worse record.
The transition in the past hundred years
from essentially no welfare to an all-encompassing welfare state represents
a major change in attitude in the United States. Along with its acceptance,
the promoters have dramatically reinterpreted the Constitution from the
way it had been for our first 150 years. Where the general welfare clause
once had a clear general meaning (which was intended to prohibit special-interest
welfare, and was something they detested and revolted against under King
George), it is now used to justify any demand of any group, as long as
a majority in Congress votes for it.
But the history is clear and the words
in the Constitution are precise. Madison and Jefferson in explaining the
general welfare clause left no doubt as to its meaning.
Madison said: "With respect to the words
'general welfare,' I have always regarded them as qualified by the detail
of power connected with them. To take them in a literal and unlimited sense
would be a metamorphosis of the Constitution into a character which there
is a host of proofs not contemplated by its creators." Madison argued that
there would be no purpose whatsoever for the enumeration of the particular
powers if the general welfare clause was to be broadly interpreted. The
Constitution granted authority to the federal government to do only 20
things, each to be carried out for the benefit of the general welfare of
all the people. This understanding of the Constitution, as described by
the Father of the Constitution, has been lost in this century.
Jefferson was just as clear, writing
in 1798, when he said: "Congress has not unlimited powers to provide for
the general welfare but only those specifically enumerated."
With the modern-day interpretation of
the general welfare clause, the principle of individual liberty and the
doctrine of enumerated powers have been made meaningless. The goal of strictly
limiting the power of our national government as was intended by the Constitution
is impossible to achieve as long as it is acceptable for Congress to redistribute
wealth in an egalitarian welfare state. There's no way that personal liberty
will not suffer with every effort to expand or make the welfare state efficient.
And the sad part is that the sincere efforts to help people do better economically
through welfare programs always fail. Dependency replaces self-reliance
while the sense of self worth of the recipient suffers, making for an angry,
unhappy, and dissatisfied society. The cost in dollar terms is high, but
the cost in terms of liberty is even greater, but generally ignored, and
in the long run, there's nothing to show for this sacrifice.
Today, there's no serious effort to
challenge welfare as a way of life, and its uncontrolled growth in the
next economic downturn is to be expected. Too many citizens now believe
they are "entitled" to monetary assistance from the government anytime
they need it, and they expect it. Even in times of plenty, the direction
has been to continue expanding education, welfare, and retirement benefits.
No one asks where the government gets the money to finance the welfare
state. Is it morally right to do so? Is it authorized in the Constitution?
Does it help anyone in the long run? Who suffers from the policy? Until
these questions are seriously asked and correctly answered, we cannot expect
the march toward a pervasive welfare state to stop, and we can expect our
liberties to be continuously compromised.
The concept of the Doctrine of Enumerated
Powers was picked away at in the latter part of the 19th Century over strong
objection by many constitutionalists. But it was not until the drumbeat
of fear coming from the Roosevelt administration, during the Great Depression,
that the courts virtually rewrote the Constitution by a reinterpretation
of the general welfare clause. In 1936 the New Deal Supreme Court told
Congress and the American people that the Constitution is irrelevant when
it comes to limits being placed on congressional spending. In a ruling
justifying the Agricultural Adjustment Act, the Court pronounced: "The
power of Congress to authorize appropriations of public money for public
purposes is not limited by the grants of legislative power found in the
Constitution." With the stroke of a pen, the courts amended the Constitution
in such a sweeping manner that it literally legalized the entire welfare
state, which not surprisingly, has grown by leaps and bounds ever since.
Since this ruling, we have rarely heard the true explanation of the general
welfare clause as being a restriction of government power, not a grant
of unlimited power.
We cannot ignore corporate welfare,
which is part of the problem. Most people think the welfare state involves
only giving something to the unfortunate poor. This is generally true,
but once the principle is established that special benefits are legitimate
the moneyed interests see the advantages in influencing the legislative
process. Our system, which pays lip service to free enterprise and private-property
ownership, is drifting toward a form of fascism or corporatism, rather
than conventional socialism. And where the poor never seem to benefit under
welfare, corporations become richer.
But it should have been expected that
once the principle of favoritism was established, the contest would be
over who has the greatest clout in Washington. No wonder lobbyists are
willing to spend $125 million per month influencing Congress! It's a good
investment. No amount of campaign finance reform or regulation of lobbyists
can deal with this problem.
The problem lies in the now-accepted
role for our government. Government has too much control over people and
the market, making the temptation and incentive to influence government
irresistible and to a degree necessary. Curtailing how people spend their
own money or their right to petition their government will do nothing to
help this influence peddling. Treating the symptoms and not the disease
only further undermines the principles of freedom and property ownership.
Any serious reforms or effort to break
away from the welfare state must be directed as much at corporate welfare
as routine welfare. Since there's no serious effort to reject welfare on
principle, the real conflict over how to divide what government plunders
will continue. Once it's clear that the nation is not nearly as wealthy
as it appears, this will become a serious problem, and it will get the
attention it deserves.
Preserving liberty and restoring constitutional
precepts are impossible as long as the welfare mentality prevails, and
that will not likely change until we've run out of money. But it will become
clear, as we move into the next century, that perpetual wealth and the
so-called balanced budget, along with an expanding welfare state, cannot
continue indefinitely. Any effort to perpetuate it will only occur with
the further erosion of liberty.
The role of the US government in public
education has changed dramatically over the past 100 years. Most of the
major changes have occurred in the second half of this century. In the
19th century, the closest the federal government got to public education
was the Land Grant College program. In the last 40 years, the federal government
has essentially taken charge of the entire system. It is involved in education
at every level through loans, grants, court directives, regulations, and
curriculum manipulation. In 1900 it was of no concern to the federal government
how local schools were run at any level.
After hundreds of billions of dollars,
we have yet to see a shred of evidence that the drift toward central control
over education has helped. By all measurements, the quality of education
is down. There are more drugs and violence in the public schools than ever
before. Discipline is impossible out of fear of lawsuits or charges of
civil rights violations.
Controlled curricula have downplayed
the importance of our constitutional heritage while indoctrinating our
children, even in kindergarten, with environmental mythology, internationalism,
and sexual liberation. Neighborhood schools in the early part of the 20th
Century did not experience this kind of propaganda.
The one good result coming from our
failed educational system has been the limited but important revival of
the notion that parents are responsible for their children's education,
not the state. We have seen literally millions of children taken from the
public school system and taught at home or in private institutions in spite
of the additional expense. This has helped many students and has also served
to pressure the government schools into doing a better job. And the statistics
show that middle-income and low-income families are the most eager to seek
an alternative to the public school system.
There is no doubt that the way schools
are run, how the teachers teach, and how the bills are paid is dramatically
different from 100 years ago. And even though some that go through public
schools do exceptionally well, there is clear evidence that the average
high school graduate today is far less educated than his counterpart was
in the early part of this century.
Due to the poor preparation of our high
school graduates, colleges expect very little from their students, since
nearly everyone gets to go to college who wants to. Public school is compulsory
and college is available to almost everyone regardless of qualifications.
In 1914, English composition was required in 98% of our college; today
it's about one-third. Only 12% of today's colleges require mathematics
be taught, where in 1914, 82% did. No college now requires literature courses.
But, rest assured plenty of social-babble courses are required as we continue
to dumb down our nation.
Federal funding for education grows
every year, hitting $38 billion this year, $1 billion more than requested
by the administration and 7% over last year. Great congressional debates
occur over the size of a classroom, student and teacher testing, bilingual
education, teacher's salaries, school violence, and drug usage. And it's
politically incorrect to point out that all these problems are not present
in the private schools. Every year there is less effort at the federal
level to return education to the people, the parents, and the local school
officials. For 20 years at least, some of our presidential candidates advocated
abolishing the Department of Education and for the federal government to
get completely out of the public education business. This year we will
hear no more of that. The President got more money for education than he
asked for, and it's considered not only bad manners but also political
suicide to argue the case for stopping all federal government education
programs. Talk of returning some control of federal programs to the state
is not the same as keeping the federal government out of education as directed
by the Constitution.
Of the 20 congressionally authorized
functions granted by the Constitution, education is not one of them. That
should be enough of a reason not to be involved, but there's no evidence
of any benefit, and statistics show that great harm has resulted. It has
cost us hundreds of billions of dollars, yet we continue the inexorable
march toward total domination of our educational system by Washington bureaucrats
and politicians. It makes no sense!
It's argued that if the federal funding
for education did not continue education would suffer even more. Yet we
see poor and middle-class families educating their children at home or
at a private school at a fraction of the cost of a government school education,
with results fantastically better--and all done in the absence of violence
and drugs. A case can be made that there would be more money available
for education if we just left the money in the states to begin with and
never brought it to Washington for the bureaucrats and the politicians
to waste. But it looks like Congress will not soon learn this lesson, so
the process will continue and the results will get worse.
The best thing we could do now is pass
a bill to give parents a $3,000 tax credit for each child they educate.
This would encourage competition and allow a lot more choice for parents
struggling to help their children get a decent education.
The practice of medicine is now a government-managed
care system, and very few Americans are happy with it. Not only is there
little effort to extricate the federal government from the medical-care
business, but the process of expanding the government's role continues
unabated. At the turn of the 19th Century, it was not even considered a
possibility that medical care was the responsibility of the federal government.
Since Lyndon Johnson's Great Society programs of the 1960s, the role of
the federal government in delivering medical care has grown exponentially.
Today the federal government pays more than 60% of all the medical bills
and regulates all of it. The demands continue for more free care at the
same time complaints about the shortcomings of managed care multiply. Yet
it's natural to assume that government planning and financing will sacrifice
quality care. It is now accepted that people who need care are entitled
to it as a right. This is a serious error in judgment.
There's no indication that the trend
toward government medicine will be reversed. Our problems are related to
the direct takeover of medical care in programs like Medicare and Medicaid.
But it's also been the interference in the free market through ERISA mandates
related to HMOs and other managed-care organizations, as well as our tax
code, that have undermined the private insurance aspect of paying for medical
care. True medical insurance is not available. The government dictates
all the terms.
In the early stages patients, doctors,
and hospitals welcomed these programs. Generous care was available with
more than adequate reimbursement. It led to what one would expect: abuse,
overcharges, and overuse. When costs rose, it was necessary through government
rulemaking and bureaucratic management to cut reimbursement and limit the
procedures available and personal choice of physicians. We don't have socialized
medicine, but we do have bureaucratic medicine, mismanaged by the government
and select corporations who usurped the decision-making power from the
physician. The way medical care is delivered today in the United States
is a perfect example of the evils of corporatism, an artificial system
that only politicians responding to the special interests could create.
There's no reason to believe the market
cannot deliver medical care in as efficient a manner as it does computers,
automobiles, and televisions. But the confidence is gone and everyone assumes,
just as it is in education, that only a federal bureaucracy is capable
of solving the problems of maximizing the number of people, including the
poor, who receive the best medical care available. In an effort to help
the poor, the quality of care has gone down for everyone else and the costs
have skyrocketed.
Making generous medical savings accounts
available is about the only program talked about today that offers an alternative
to government mismanaged care. If something of this sort is not soon implemented,
we can expect more pervasive government involvement in the practice of
medicine. With a continual deterioration of its quality, the private practice
of medicine will soon be gone.
Government housing programs are no more
successful than the federal government's medical and education programs.
In the early part of this century, government housing was virtually unheard
of. Now the HUD budget commands over $30 billion each year and increases
every year. Finances of mortgages through the Federal Home Loan Bank, the
largest federal government borrower, is the key financial institution pumping
in hundreds of billions of dollars of credit into the housing market, making
things worse. The Federal Reserve has now started to use home mortgage
securities for monetizing debt.
Public housing has a reputation for
being a refuge for drugs, crimes, and filth, with projects being torn down
as routinely as they are built. There's every indication that this entitlement
will continue to expand in size, regardless of its failures. Token local
control over these expenditures will do nothing to solve the problem. Recently
the Secretary of HUD, using public funds to sue gun manufacturers, claimed
this is necessary to solve the problem of crime which government housing
perpetuates. If a government agency, which was never meant to exist in
the first place under the Constitution, can expand their role into legislative
and legal matters without the consent of Congress, we indeed have a serious
problem on our hands. The programs are bad enough in themselves, but the
abuse of the rule of law and ignoring the separation of powers makes these
expanding programs that much more dangerous to our entire political system
and is a direct attack on personal liberty.
If one cares about providing the maximum
and best housing for the maximum number of people, one must consider a
free-market approach in association with a sound non-depreciating currency.
We have been operating a public housing program directly opposite to this,
and along with steady inflation and government promotion of housing since
the 1960s, the housing market has been grossly distorted. We can soon expect
a major downward correction in the housing industry, prompted by rising
interest rates.
Our attitudes toward foreign policy
have dramatically changed since the beginning of the century. From George
Washington through Grover Cleveland, the accepted policy was to avoid entangling
alliances. Although we spread our wings westward and southward as part
of our manifest destiny, in the 19th Century we accepted the Monroe Doctrine
notion that Europeans and Asians should stay out of our affairs in this
hemisphere and we theirs. McKinley, Teddy Roosevelt, and the Spanish American
War changed all of that. Our intellectual and political leaders at the
turn of the last century brought into vogue the interventionist doctrine
setting the stage for the past 100 years of global military activism.
From a country that once minded its
own business, we now find ourselves with military personnel in more than
130 different countries, protecting our modern-day American empire. Not
only do we have troops spread to the four corners of the earth, we find
Coast Guard Cutters in the Mediterranean and around the world, our FBI
in any country we choose, and the CIA in places the Congress doesn't even
know about.
It is a truism that the state grows
and freedom is diminished in times of war. Almost perpetual war in the
20th Century has significantly contributed to steadily undermining our
liberties while glorifying the state. In addition to the military wars,
liberty has also suffered from the domestic "wars" on poverty, literacy,
drugs, homelessness, privacy, and many others.
We have, in the last 100 years, gone
from the accepted and cherished notion of a sovereign nation to one of
a globalist, New World Order. As we once had three separate branches of
our government, the United Nations proudly uses its three branches, the
World Bank, the IMF, and the World Trade Organization to work their will
in this new era of globalism. Because the US is by far the strongest military
industrial power, it can dictate the terms of these international institutions,
protecting what we see as our various interests such as oil, along with
satisfying our military industrial complex. Our commercial interests and
foreign policy are no longer separate. This allows for subsidized profits,
while the taxpayers are forced to protect huge corporations against any
losses from overseas investments. The argument that we go about the world
out of humanitarian concerns for those suffering-which was the excuse for
bombing Serbia-is a farce.
As bad as it is that average Americans
are forced to subsidize such a system, we additionally are placed in greater
danger because of our arrogant policy of bombing nations that do not submit
to our wishes. This generates the hatred directed toward America, even
if at times it seems suppressed, and exposes us to a greater threat of
terrorism, since this is the only vehicle our victims can use to retaliate
against a powerful military state.
But even with the apparent success of
our foreign policy and the military might we still have, the actual truth
is that we have spread ourselves too thinly and may well have difficulty
defending ourselves if we are ever threatened by any significant force
around the world. At the close of this century, we find our military preparedness
and morale at an all-time low. It will become more obvious as we move into
the 21st Century that the cost of maintaining this worldwide presence is
too high and cutbacks will be necessary. The cost in terms of liberties
lost and the unnecessary exposure to terrorism are difficult to determine,
but in time it will become apparent to all of us that foreign interventionism
is of no benefit to American citizens, but instead is a threat to our liberties.
Throughout our early history and up
to World War I, our wars were fought with volunteers. There was no military
draft except for a failed attempt by Lincoln in the Civil War, which ended
with justified riots and rebellion against it. The attitudes toward the
draft definitely changed over the past century. Draftees were said to be
necessary to fight in World War I, World War II, Korea, and Vietnam. This
change in attitude has definitely satisfied those who believe that we have
an obligation to police the world. The idiocy of Vietnam served as a catalyst
for an anti-draft attitude, which is still alive today. Fortunately, we
have not had a draft for over 25 years, but Congress refuses to address
this matter in a principled fashion by abolishing, once and for all, the
useless Selective Service System. Too many authoritarians in Congress still
believe that in times of need an army of teenage draftees will be needed
to defend our commercial interests throughout the world..
A return to the spirit of the Republic
would mean that a draft would never be used and all able-bodied persons
would be willing to volunteer in defense of their liberty. Without the
willingness to do so, liberty cannot be saved. A conscripted army can never
substitute for the willingness of freedom-loving Americans to defend their
country out of their love for liberty.
The US monetary system during the 20th
Century has dramatically changed from the one authorized by the Constitution.
Only silver and gold were to be used in payment of debt and no paper money
was to be issued. In one of the few restrictions on the states, the Constitution
prohibited them from issuing their own money and they were to use only
gold and silver in payment of debt. No central bank was authorized. The
authors of the Constitution were well aware of the dangers of inflation,
having seen the great harm associated with the destruction of the Continental
currency. They never wanted to see another system that ended with the slogan
"It's not worth a Continental." They much preferred "sound as a dollar"
or "as good as gold" as a description of our currency. Unfortunately their
concerns, as they were reflected in the Constitution, have been ignored
and, as this century closes, we do not have a sound dollar "as good as
gold." The changes to our monetary system are by far the most significant
economic events of the 20th Century.
The gold dollar of 1900 is now nothing
more than a Federal Reserve note with a promise by untrustworthy politicians
and the central bankers to pay nothing for it. No longer is there silver
or gold available to protect the value of a steadily depreciating currency.
This is a fraud of the worst kind and the type of crime that would put
a private citizen behind bars.
But there have been too many special
interests benefiting by our fiat currency, too much ignorance and too much
apathy regarding the nature of money. We will surely pay the price for
this negligence. The relative soundness of our currency that we enjoy as
we move into the 21st Century will not persist. The instability in world
currency markets, because of the dollars' acceptance for so many years
as a reserve currency, will cause devastating adjustments that Congress
will eventually be forced to deal with.
The transition from sound money to paper
money did not occur instantaneously. It occurred over a 58-year period
between 1913 and 1971 and the mischief continues today. Our central bank,
the Federal Reserve System (established in 1913 after two failed efforts
in the 19th Century) has been the driving force behind the development
of our current fiat system. Since the turn of the century, we have seen
our dollar lose 95% of its purchasing power, and it continues to depreciate.
This is nothing less than theft, and those responsible should be held accountable.
The record of the Federal Reserve is abysmal. Yet at the close of the 20th
Century, its chairman is held in extremely high esteem, with almost zero
calls for study of the monetary system with intent to once again have the
dollar linked to gold.
Ironically, the government and politicians
are held in very low esteem, yet the significant trust in them to maintain
the value of the currency is not questioned. But it should be.
The reasons for rejecting gold and promoting
paper are not mysterious, since quite a few special interests benefit.
Deficit financing is much more difficult when there's no central bank available
to monetize government debt. This gives license to politicians to spend
lavishly on the projects that are most likely to get them reelected. War
is more difficult to pursue if government has to borrow or tax the people
for its financing. The Federal Reserve's ability to create credit out of
thin air to pay the bills run up by Congress, establishes a symbiosis that
is easy for the politicians to love. It's also advantageous for the politicians
to ignore the negative effects from such a monetary arrangement, since
they tend to be hidden and disseminated.
A paper-money system attracts support
from various economic groups. Bankers benefit from the "float" they get
with a fractional reserve banking system that accompanies a fiat monetary
system. Giant corporations, who get to borrow large funds at below-market
interest rates, enjoy the system and consistently call for more inflation
and artificially low interest rates. Even the general public seems to benefit
from the artificial booms brought about by credit creation, with lower
interest rates allowing major purchases like homes and cars.
The naïve and uninformed fully
endorse the current system, because the benefits are readily apparent while
the disadvantages are hidden, delayed, or not understood. The politicians,
central bankers, commercial banks, big-business borrowers all believe their
needs justify such a system. But the costs are many and the dangers are
real. Because of easy credit throughout this century, we have found that
financing war was easier than if taxes had to be raised. The many wars
we have fought and the continuous military confrontations in smaller wars
since Vietnam have made the 20th Century a bloody century. It is most likely
that we would have pursued a less militaristic foreign policy if financing
it had been more difficult. Likewise, financing the welfare state would
have progressed much slower if our deficits could not have been financed
by an accommodative central bank willing to inflate the money supply at
will.
There are other real costs as well,
that few are willing to believe are a direct consequence of Federal Reserve
Board policy. Rampant inflation after World War I, as well as the 1921
Depression, were a consequence of monetary policy during and following
the war. The stock market speculation of the 1920s, the stock market collapse
of 1929, and the Depression of the 1930s (causing millions to be unemployed)
all resulted from Federal Reserve Board monetary mischief.
Price inflation of the early 1950s was
a consequence of monetary inflation required to fight the Korean War. Wage
and price controls used then totally failed, yet the same canard was used
during the Vietnam War in the early 1970s to again impose wage and price
controls with even worse results. All the price inflation, all the distortions,
all the recessions and unemployment should be laid at the doorstep of the
Federal Reserve. The Fed is an accomplice in promoting all unnecessary
war as well as the useless and harmful welfare programs with its willingness
to cover Congress' profligate spending habits.
Even though the Fed did great harm before
1971, after the total elimination of the gold dollar linkage, the problems
of deficit spending, welfare expansion, and military industrial complex
influence have gotten much worse.
Although many claim the 1990s have been
great economic years, Federal Reserve board action of the past decade has
caused problems yet to manifest themselves. The inevitable correction will
come as the new century begins and is likely to be quite serious.
The stage has been set. Rampant monetary
growth has led to historic high asset inflation, massive speculation, over-capacity,
malinvestment, excessive debt, negative savings rate, and a current account
deficit of huge proportions. These conditions dictate a painful adjustment,
something that would have never occurred under a gold standard. The special
benefits of foreigners taking our inflated dollars for low-priced goods
and then loaning them back to us will eventually end. The dollar must fall,
interest rates must rise, price inflation will accelerate, the financial
asset bubble will burst, and a dangerous downturn in the economy will follow.
There are many reasons to believe the economic slowdown will be worldwide
since the dollar is the reserve currency of the world. An illusion about
our dollar's value has allowed us to prop up Europe and Japan in this past
decade during a period of weak growth for them, but when reality sets in,
economic conditions will deteriorate. Greater computer speed, which has
helped to stimulate the boom of the 1990s, will work in the opposite direction
as all the speculative positions unwind, and that includes the tens of
trillion of dollars in derivatives. There was a good reason the Federal
Reserve rushed in to rescue Long-Term Capital Management with a multi-billion
dollar bailout. It was unadulterated fear that the big correction was about
to begin. Up until now, feeding the credit bubble with even more credit
has worked and is the only tool they have to fight the business cycle,
but eventually control will be lost.
A paper money system is dangerous economically
and not constitutionally authorized. It's also immoral for government to
"counterfeit" money, which dilutes the value of the currency and steals
value from those who hold the currency and those who did not necessarily
benefit from its early circulation. Not everyone benefits from the largesse
of government spending programs or a systematic debasement of the currency.
The middle class, those not on welfare and not in the military industrial
complex, suffer the most from rising prices and job losses in the correction
phase of the business cycle. Congress must someday restore sound money
to America. It's mandated in the Constitution; it's economically sound
to do so; and it's morally right to guarantee a standard of value for the
money. Our oath of office obligates all Members of Congress to pay attention
to this and participate in this needed reform.
A police state is incompatible with
liberty. A hundred years ago the federal government was responsible for
enforcing very few laws. This has dramatically changed. There are now over
3,000 federal laws and 10,000 regulations employing hundreds of thousands
of bureaucrats diligently enforcing them, with over 80,000 of them carrying
guns. We now have an armed national police state, just as Jefferson complained
of King George in the Declaration of Independence: "He has sent hither
swarms of officers to harass our people and eat out their substance." A
lot of political and police power has shifted from the state and local
communities to the federal government over the past hundred years. If a
constitutional republic is desired and individual liberty is cherished,
this concentration of power cannot be tolerated.
Congress has been derelict in creating
the agencies in the first place and ceding to the executive the power to
write regulations and even tax without congressional approval. These agencies
enforce their own laws and supervise their own administrative court system
where citizens are considered guilty until proven innocent. The Constitution
has been thrown out the window for all practical purposes, and although
more Americans everyday complain loudly, Congress does nothing to stop
it.
The promoters of bureaucratic legislation
claim to have good intentions but they fail to acknowledge the costs, the
inefficiency or the undermining of individual rights. Worker safety, environmental
concerns, drug usage, gun control, welfarism, banking regulations, government
insurance, health programs, insurance against economic and natural disasters,
and regulation of fish and wildlife are just a few of the issues that prompt
the unlimited use of federal regulatory and legislative power to deal with
perceived problems. But inevitably, for every attempt to solve one problem,
government creates two new ones. National politicians aren't likely to
volunteer a market or local-government solution to a problem, or they will
find out how unnecessary they really are.
Congress' careless attitude about the
federal bureaucracy and its penchant for incessant legislation have prompted
serious abuse of every American citizen. Last year alone there were more
than 42,000 civil forfeitures of property occurring without due process
of law or a conviction of a crime, and oftentimes the owners weren't even
charged with a crime. Return of illegally seized property is difficult,
and the owner is forced to prove his innocence in order to retrieve it.
Even though many innocent Americans have suffered, these laws have done
nothing to stop drug usage or change people's attitudes toward the IRS.
Seizures and forfeitures only make the problems they are trying to solve
that much worse. The idea that a police department, under federal law,
can seize property and receive direct benefit from it is an outrage. The
proceeds can be distributed to the various police agencies without going
through the budgetary process. This dangerous incentive must end.
The national police state mentality
has essentially taken over crime investigation throughout the country.
Our local sheriffs are intimidated and frequently overruled by the national
police. Anything worse than writing traffic tickets prompts swarms of federal
agents to the scene. We frequently see the FBI, DEA, CIA, BATF, Fish and
Wildlife, IRS, federal marshals, and even the Army involved in local law
enforcement. They don't come to assist, but to take over. The two most
notorious examples of federal abuse of police powers were seen at Ruby
Ridge and Waco, where non-aggressive citizens were needlessly provoked
and killed by federal agents. At Waco even army tanks were used to deal
with a situation the local sheriff could have easily handled. These two
incidents are well known, but thousands of other similar abuses routinely
occur with little publicity. The federal police-state, seen in action at
Ruby Ridge and Waco, hopefully is not a sign of things to come; but it
could be if we're not careful.
If the steady growth of the federal
police power continues, the American Republic cannot survive. The Congresses
of the 20th Century have steadily undermined the principle that the government
closest to home must deal with law and order and not the federal government.
The federal courts also have significantly contributed to this trend. Hopefully,
in the new century, our support for a national police state will be diminished.
We have, in this past century, not only
seen the undermining of the federalism that the Constitution desperately
tried to preserve, but the principle of separations of power among the
three branches of government has been severely compromised as well.
The Supreme Court no longer just rules
on constitutionality but frequently rewrites the law with attempts at comprehensive
social engineering. The most blatant example was the Roe vs. Wade ruling.
The federal courts should be hearing a lot fewer cases, deferring as often
as possible to the state courts. Throughout the 20th Century with Congress'
obsession for writing laws for everything, the federal courts were quite
willing to support the idea of a huge interventionist federal government.
The fact that the police officers in the Rodney King case were tried twice
for the same crime, ignoring the constitutional prohibition against double
jeopardy, was astoundingly condoned by the courts rather than condemned.
It is not an encouraging sign that the concept of equal protection under
the law will prevail.
When it comes to Executive Orders, it's
gotten completely out of hand. Executive Orders may legitimately be used
by a president to carry out his constitutionally authorized duties but
that would require far fewer orders than modern-day presidents have issued.
As the 20th Century comes to a close, we find the executive branch willfully
and arrogantly using the Executive Order to deliberately circumvent the
legislative body and bragging about it.
Although nearly 100,000 American battle
deaths have occurred since World War II, and both big and small wars have
been fought almost continuously, there has not been a congressional declaration
of war since 1941. Our presidents now fight wars, not only without explicit
congressional approval, but also in the name of the United Nations with
our troops now serving under foreign commanders. Our presidents have assured
us that UN authorization is all that's needed to send our troops into battle.
The 1973 War Powers Resolution, meant to restrict presidential war powers,
has either been ignored by our presidents or used to justify war for up
to 90 days. The Congress and the people, too often, have chosen to ignore
this problem saying little about the recent bombing in Serbia. The continual
bombing of Iraq, which has now been going on for over 9 years, is virtually
ignored. If a president can decide on the issue of war, without a vote
of the Congress, a representative republic does not exist. Our presidents
should not have the authority to declare national emergencies, and they
certainly should not have authority to declare marshal law, a power the
Congress has already granted for any future emergency. Economic and political
crises can develop quickly, and overly aggressive presidents are only too
willing to enhance their own power in dealing with them.
Congress, sadly, throughout this century
has been only too willing to grant authority to our presidents at the sacrifice
of its own. The idea of separate but equal branches of government has been
forgotten and the Congress bears much of the responsibility for this trend.
Executive Powers in the past hundred
years, have grown steadily with the creation of agencies that write and
enforce their own regulations and with Congress allowing the President
to use Executive Orders without restraint. But in addition, there have
been various other special vehicles that our presidents use without congressional
oversight. For example the Exchange Stabilization Fund, set up during the
Depression, has over $34 billion available to be used at the President's
discretion without congressional approval. This slush fund grows each year
as it is paid interest on the securities it holds. It was instrumental
in the $50 billion Mexican bailout in 1995.
The CIA is so secretive that even those
Congressmen privy to its operation have little knowledge of what this secret
government actually does around the world. We know, of course, it has been
involved in the past 50 years in assassinations and government overthrows
on frequent occasions.
The Federal Reserve operation, which
works hand-in-hand with the administration, is not subject to congressional
oversight. The Fed manipulates currency exchange rates, controls short-term
interest rates, and fixes the gold price; all behind closed doors. Bailing
out foreign governments, financial corporations, and huge banks can all
be achieved without congressional approval. A hundred years ago when we
had a gold standard, credit could not be created out of thin air, and because
a much more limited government philosophy prevailed, this could not have
been possible. Today it's hard to even document what goes on, let alone
expect Congress to control it.
The people should be able to closely
monitor the government, but as our government grows in size and scope,
it seeks to monitor our every move. Attacks on our privacy are incessant
and are always justified by citing so-called legitimate needs of the state,
efficiency, and law enforcement. Plans are laid for numerous data banks
to record everyone's activities. A national ID card using our social security
number is the goal of many, and even though we achieved a significant victory
in delaying its final approval last year, the promoters will surely persist
in their efforts. Plans are made for a medical data bank to be kept and
used against our wishes. Job banks and details of all our lending activities
continue to be of interest to all national policing agencies to make sure
they know exactly where the drug dealers, illegal aliens, and tax dodgers
are and what they're doing, it is argued. For national security purposes,
the Echelon system of monitoring all overseas phone calls has been introduced,
yet the details of this program are not available to any inquiring Member
of Congress.
The government knew very little about
each individual American citizen in 1900, but starting with World War I,
there has been a systematic growth of government surveillance of everyone's
activities, with multiple records being kept. Today, true privacy is essentially
a thing of the past. The FBI and the IRS have been used by various administrations
to snoop and harass political opponents and there has been little effort
by Congress to end this abuse. A free society, that is a constitutional
republic, cannot be maintained if privacy is not highly cherished and protected
by the government, rather than abused by it.
And we can expect it to get worse. Secretary
of Defense Bill Cohen was recently quoted as saying: "Terrorism is escalating
to the point that US citizens may soon have to choose between civil liberties
and more intrusive forms of protection;" all in the name of taking care
of us! As far as I am concerned, we could all do with a lot less government
protection and security. The offer of government benevolence is the worst
reason to sacrifice liberty, but we have seen a lot of that during the
20th Century.
Probably the most significant change
in attitude that occurred in the 20th Century was that with respect to
life itself. Although abortion has been performed for hundreds if not thousands
of years, it was rarely considered an acceptable and routine medical procedure
without moral consequence. Since 1973 abortion in America has become routine
and justified by a contorted understanding of the right to privacy. The
difference between American's rejection of abortions at the beginning of
the century, compared to today's casual acceptance, is like night and day.
Although a vocal number of Americans express their disgust with abortion
on demand, our legislative bodies and the courts claim that the procedure
is a constitutionally protected right, disregarding all scientific evidence
and legal precedents that recognize the unborn as a legal living entity
deserving protection of the law. Ironically the greatest proponents of
abortion are the same ones who advocate imprisonment for anyone who disturbs
the natural habitat of a toad.
This loss of respect for human life
in the latter half of the 20th Century has yet to have its full impact
on our society. Without a deep concern for life, and with the casual disposing
of living human fetuses, respect for liberty is greatly diminished. This
has allowed a subtle but real justification for those who commit violent
acts against fellow human beings.
It should surprise no one that a teenager
delivering a term newborn is capable of throwing the child away in a garbage
dumpster. The new mother in this circumstance is acting consistently knowing
that if an abortion is done just before a delivery it's legally justified
and the abortionist is paid to kill the child. Sale of fetal parts to tax-supported
institutions is now an accepted practice. This moral dilemma that our society
has encountered over the past 40 years, if not resolved in favor of life,
will make it impossible for a system of laws to protect the life and liberty
of any citizen. We can expect senseless violence to continue as a sense
of self-worth is undermined.
Children know that mothers and sisters
when distraught have abortions to solve the problem of an unwanted pregnancy.
Distraught teenagers in copying this behavior are now more prone to use
violence against others or themselves when provoked or confused. This tendency
is made worse because they see, in this age of abortion, their own lives
as having less value, thus destroying their self-esteem.
The prime reason government is organized
in a free society is to protect life-not to protect those who take life.
Today, not only do we protect the abortionist, we take taxpayers funds
to pay for abortions domestically as well as overseas. This egregious policy
will continue to plague us well into the 21st Century.
A free society designed to protect life
and liberty is incompatible with government sanctioning and financing abortion
on demand. It should not be a surprise to anyone that as abortion became
more acceptable, our society became more violent and less free. The irony
is that Roe vs. Wade justified abortion using a privacy argument, conveniently
forgetting that not protecting the innocent unborn is the most serious
violation of privacy possible. If the location of the fetus is the justification
for legalized killing, the privacy of our homes would permit the killing
of the newborn, the deformed, and the elderly-a direction in which we find
ourselves going. As government-financed medical care increases, we will
hear more economic arguments for euthanasia-that's "mercy" killing for
the benefit of the budget planners. Already we hear these economic arguments
for killing the elderly and terminally ill.
Last year the House made a serious error
by trying to federalize the crime of killing a fetus occurring in an act
of violence. The stated goal was to emphasize that the fetus deserved legal
protection under the law. And indeed it should and does-at the state level.
Federalizing any act of violence is unconstitutional; essentially all violent
acts should be dealt with by the states. And because we have allowed the
courts and Congress to federalize such laws, we find more good state laws
are overridden than good federal laws written. Roe vs. Wade federalized
state abortion laws and ushered in the age of abortion. The Unborn Victims
of Violence Act, if passed into law, will do great harm by explicitly excluding
abortionists, thus codifying for the first time the Roe vs. Wade concept
and giving even greater legal protection to the abortionist.
The responsibility of the Congress is
twofold. First, we should never fund abortions. Nothing could be more heinous
than forcing those with strong right-to-life beliefs to pay for abortions.
Second, Roe vs. Wade must be replaced by limiting jurisdiction, which can
be done through legislation-a constitutional option. If we as a nation
do not once again show respect and protect the life of the unborn, we can
expect the factions that have emerged on each side of this issue to become
more vocal and violent. A nation that can casually toss away its smallest
and most vulnerable members and call it a "right" cannot continue to protect
the lives or rights of its other citizens.
Much has changed over the past hundred
years. Where technology has improved our living standards, we find that
our government has significantly changed from one of limited scope to that
of pervasive intervention.
A hundred years ago, it was generally
conceded that one extremely important government function was to enforce
contracts made voluntarily in the marketplace. Today government notoriously
interferes with almost every voluntary economic transaction. Consumerism,
labor-law, wage standards, hiring and firing regulations, political correctness,
affirmative action, the Americans with Disabilities Act, the tax code,
and others all place a burden on the two parties struggling to transact
business. The EPA, OSHA, and government-generated litigation also interfere
with voluntary contracts. At times it seems a miracle that our society
adapts and continues to perform reasonably well in spite of the many bureaucratic
dictates.
As the 20th Century comes to a close,
we see a dramatic change from a government that once served an important
function by emphasizing the value of voluntary contracts to one that excessively
interferes with them.
Although the interference is greater
in economic associations than in social, the principle is the same. Already
we see the political correctness movement interfering with social and religious
associations. Data banks are set up to keep records on everyone, especially
groups with strong religious views and anybody who would be so bold as
to call himself a "patriot". The notion that there is a difference between
murder and murder driven by hate has established the principle of thought
crime, a dangerous trend indeed.
When the business cycle turns down,
all the regulations and laws that interfere with economic and personal
transactions will not be as well tolerated, and then the true cost will
become apparent. It is under the conditions of a weak economy that such
government interference generates a reaction to the anger over the rules
that has been suppressed.
To the statist, the idea that average
people can and should take care of themselves by making their own decisions,
and that they don't need Big Brother to protect them in everything they
do, is anathema to the way they think. The bureaucratic mindset is convinced
that without the politicians' efforts, no one would be protected from anything,
rejecting the idea of a free-market economy out of ignorance or arrogance.
This change in the 20th Century has
significantly contributed to the dependency of our poor on government handouts,
the recipients being convinced they are entitled to help and that they
are incapable of taking care of themselves. A serious loss of self-esteem
and unhappiness result, even if the system on the short run seems to help
them get by.
There were no federal laws at the end
of the 19th Century dealing with drugs or guns. Gun violence was rare,
and abuse of addictive substances was only a minor problem. Now after a
hundred years of progressive government intervention in dealing with guns
and drugs, with thousands of laws and regulations, we have more gun violence
and a huge drug problem. Before the social authoritarians decided to reform
the gun and drug culture, they amended the Constitution enacting alcohol
prohibition. Prohibition failed to reduce alcohol usage, and a crime wave
resulted. After 14 years, the American people demanded repeal of this social
engineering amendment and got it. Prohibition prompted the production of
poor-quality alcohol with serious health consequences, while respect for
the law was lost as it was fragrantly violated. At least at that time the
American people believed the Constitution had to be amended to prohibit
the use of alcohol, something that is ignored today in the federal government's
effort to stop drug usage.In spite of the obvious failure of alcohol prohibition,
the federal government after its repeal, turned its sights on gun ownership
and drug usage.
The many federal anti-gun laws written
since 1934, along with the constant threat of outright registration and
confiscation, have put the FBI and the BATF at odds with millions of law-abiding
citizens who believe the Constitution is explicit in granting the right
of gun ownership to all non-violent Americans. Our government pursued alcohol
prohibition in the 1920s and confiscation of gold in the 1930s, so it's
logical to conclude that our government is quite capable of confiscating
all privately owned firearms. That has not yet occurred, but as we move
into the next century, many in Washington advocate just that and would
do it if they didn't think the American people would revolt, just as they
did against alcohol prohibition.
Throughout this century, there has been
a move toward drug prohibition starting with the Harrison Act in 1912.
The first federal marijuana law was pushed through by FDR in 1938, but
the real war on drugs has been fought with intensity for the past 30 years.
Hundreds of billions of dollars have
been spent, and not only is there no evidence of reduced drug usage, we
have instead seen a tremendous increase. Many deaths have occurred from
overdoses of street drugs, since there is no quality control or labeling.
Crime, as a consequence of drug prohibition, has skyrocketed, and our prisons
are overflowing. Many prisoners are non-violent and should be treated as
patients with addictions, not as criminals. Irrational mandatory minimal
sentences have caused a great deal of harm. We have non-violent drug offenders
doing life sentences, and there is no room to incarcerate the rapists and
murderers.
With drugs and needles illegal, the
unintended consequence of the spread of AIDs and hepatitis through dirty
needles has put a greater burden on the taxpayers who are forced to care
for the victims. This ridiculous system that offers a jail cell for a sick
addict rather than treatment has pushed many a young girl into prostitution
to pay for drugs priced hundreds of times higher than they are worth. But
the drug dealers love the system and dread a new approach. When we finally
decide that drug prohibition has been no more successful than alcohol prohibition,
the drug dealers will disappear.
But the monster drug problem we have
created is compounded by moves to tax citizens so government can hand out
free needles to drug addicts who are breaking the law, in hopes there will
be less spread of hepatitis and AIDs in order to reduce government health-care
costs. This proposal shows how bankrupt we are at coming to grips with
this problem.
And it seems we will never learn. Tobacco
is about to be categorized as a drug and a prohibition of sorts imposed.
This will make the drug war seem small if we continue to expand the tobacco
war. Talk about insane government policies of the 20th Century, tobacco
policy wins the prize. First we subsidize tobacco in response to demands
by the special interests, knowing full well even from the beginning that
tobacco had many negative health consequences. Then we spend taxpayers'
money, warning the people of its dangers without stopping the subsidies.
Government then pays for the care of those who choose to smoke despite
the known dangers and warnings. But it did not stop there. The trial lawyers'
lobby saw to it that local government entities could sue tobacco companies
for reimbursements of the excess costs they were bearing in taking care
of smoking-related illnesses. And the only way this could be paid for was
to place a tax on those people who smoke.
How could such silliness go on for so
long? For one reason. We as a nation have forgotten a basic precept of
a free society-that all citizens must be responsible for their own acts.
If one smokes and gets sick, that's the problem of the one making the decision
to smoke, or take any other risks for that matter, not the innocent taxpayers
who have already been forced to pay for the tobacco subsidies and government
health warning ads. Beneficiaries of this monstrous policy have been: tobacco
farmers, tobacco manufacturers, politicians, bureaucrats, smokers, health
organizations and physicians, and especially the trial lawyers. Who suffers?
The innocent taxpayers that have no voice in the matter and who acted responsibly
and chose not to smoke. Think of what it would mean if we followed this
same logic and implemented a federal social program, similar to the current
war on smoking, designed to reduce the spread of AIDS within the gay community.
Astoundingly, we have done the opposite by making AIDS a politically correct
disease. There was certainly a different attitude a hundred years ago regarding
those with sexually transmitted diseases like syphilis, compared to the
special status given AIDS victims today.
And it is said an interventionist economy
is needed to make society fair to everyone! We need no more government
"fairness" campaigns. Egalitarianism never works and inevitably penalizes
the innocent. Government in a free society is supposed to protect the innocent,
encourage self-reliance, and impose equal justice while allowing everyone
to benefit from their own effort and suffer the consequence of their acts.
A free and independent people need no
authoritarian central government dictating eating, drinking, gambling,
sexual or smoking habits. When rules are required, they should come from
the government closest to home, as it once did prior to America's ill-fated
20th Century experiment with alcohol prohibition. Let's hope we show more
common sense in the 21st Century in these matters than we did in the 20th.
A compulsive attitude by politicians
to regulate non-violent behavior may be well intentioned but leads to many
unintended consequences. Legislation passed in the second half of the 20th
Century dealing with drugs and personal habits has been the driving force
behind the unconstitutional seizure and forfeiture laws and the loss of
financial privacy. The war on drugs is the most important driving force
behind the national police state. The excuse given for calling in the Army
helicopters and tanks at the Waco disaster was that the authorities had
evidence of an amphetamine lab on the Davidian's property. This was never
proven, but nevertheless it gave the legal cover-but not the proper constitutional
authority-for escalating the attack on the Davidians, which led to the
senseless killing of so many innocent people. The attitude surrounding
this entire issue needs to change. We should never turn over the job of
dealing with bad habits to our federal government. That is a recipe for
disaster. |