THE LIBERTARIAN ENTERPRISE
Number 544, November 15, 2009
Life goes on.
Attribute to The Libertarian Enterprise
The United States was organized with a Federal structure. Under that structure the national government was supposed to have two overriding dicta: to safeguard the States from foreign invasion and domestic violence, and provide a Republican form of government to the States. (Article IV, Section 4 of the Constitution)
It should have been pretty easy to protect the States. A wide ocean on the east and west, and peaceable borders on the north and south do the government's job for them without spending a penny. So, they should have been focusing all their attention on providing the states with a Republican form of government. Instead, what we have now is a fascist police state.
I don't think that qualifies as a Republic.
A republic is a representative democracy, as opposed to a direct democracy. The key word is "representative." The states were supposed to be the pre-eminent players. In the beginning, the Senate chose who would be President of the USA, and the Senators were there in Washington to represent the interests of their states.
Over the past 200 years, Washington has turned the government we were promised into the government we were trying to prevent. Could any absolute monarchy or dictatorship be any worse than what we have now? King George didn't lay on a combined tax burden nearing 50% and trillions in debt.
The states of the Union have become little more than big counties, subservient geographic entities owned by Washington. For reasons too numerous to list here, the states allowed Washington to usurp nearly all of their power. The fecklessness of every state's political leaders mocks this nation's Federal system, and has destroyed the most important checks and balances against Federal tyranny.
Make no mistake. No one truly expects the Federal Government to check and balance itself...where would be its motivation to do that? No, the final arbiters were supposed to be the states.
The states had many arrows in their quivers to control the Federal Government. One of the most effective should have been nullification. Simply put, if Washington enacts laws that the states interpret as unlawful, the states could ignore the new laws like they never happened. Modern states are unwilling and afraid to use nullification against Washington.
Another strong arrow used to be withholding funds from Washington. But with the enactment of the income tax, that arrow was broken, and Washington takes the tax money directly from the people.
I say all of that about the states of the United States in general, but specifically as it relates to monetary policy in America. The US states have allowed...even empowered...Washington to destroy the monetary system of the USA through the Federal Reserve and fractional reserve banking.
The Federal Reserve, a consortium of PRIVATE banks, prints counterfeit currency for the Federal Government. Fractional reserve banking laws allow all the rest of the other banks to counterfeit by creating credit (money) out of thin air.
State political leaders are so clueless and visionless that they have laid down and allowed Washington to endanger the very economic security of each American state through the institutional counterfeiting of the Federal Reserve and all other American banks.
These are some of the reasons that I am not encouraged and excited to know that 39 states have passed some type of 10th Amendment resolution, thereby taking a position that they might just do something in the future, by God. The steely resolve is inspiring, isn't it?
But where is the state legislature and Governor that will notify Washington that there is a new "nullification sheriff" in town? When will some state begin nullifying the laws coming out of Washington, and refusing to allow them to be obeyed in that state? When will a state refuse to enforce Federal legislation? When will a state slap the cuffs on a Federal law enforcement officer who is trying to enforce Federal law in a state that has nullified Federal law?
Where is that state that will be true to its origins, and allow nothing but gold and silver coin (specie) as tender in payment of debts (Article I, Section 10)?
As a beginning step, how about if a state stops tax withholding and makes the payment of state income and property taxes mandatory in gold or silver coin or electronic gold? That would begin inculcating the citizens in a small way to once again consider gold and silver coin as money. I realize this idea doesn't work in Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming, since none of them have a state income tax. But it would work for their property taxes, and both will work everywhere else in America.
Any state could facilitate the exchange of Federal Reserve Notes for specie by making such transactions exempt from sales tax. The exchange of FRN currency for specie, which are both legal money, are in essence a "currency exchange," no difference substantively from changing dollars to Euros, Yen or Pesos.
One of the reasons that a gold/silver monetary standard would work so well for Texas is its petroleum exports. A New Texas with a gold standard would demand gold or silver specie as the only settlement of petro and natural gas transactions from any other country.
But you see, taking a position like that would directly challenge the power of Washington and the Federal Reserve. The paper money they issue says "this note is legal tender for all debts, public and private." If a state refused to accept Federal Reserve Notes for payment of state income or property taxes, they might have a fight on their hands.
A principled stand like this over money might also help repudiate the scurrilous IRS case of Robert Kahre in Nevada (Google "Robert Karhe" and get ready to be outraged). Mr. Kahre is now beginning a Federal prison term for paying his employees' wages by using legal tender gold coins. Kahre was acquitted on all 161 counts of tax law violations back in 2007. But the IRS tried him again (double jeopardy, anyone?) and a jury convicted him in 2009. Keep in mind that gold and silver coins are legal tender in the United States, just like Federal Reserve notes. But no one embarrasses the IRS, and Kahre's acquittal did just that. He has now paid the price. His life as a free man is over.
State political leaders have no stomach and no backbone for a fight with Washington. Those American citizens in favor of state secession might look to these issues as a barometer of how their state political leaders would react to a political or economic meltdown. If a state won't protect itself now, why should anyone believe that it will take principled stands later?
There is craven cowardice in the halls of state government in every state in the United States of America. Legislators and state executives go along to get along. Many look at state office as a springboard to Federal office. Few serve their constituents...most serve Washington, the Federal Reserve and banking interests.
"So that's how liberty dies...to thunderous applause."