L. Neil Smith's
Number 190, September 16, 2002


Review: CRASHMAKER: A Federal Affaire
by James J Odle

Special to TLE

[Part II of III]

Beyond Checkbook Economics

"The gold standard's the formula for honesty in our government, too; for prosperity in our government, too, and for peace among men of goodwill throughout the world...We often forget, that, however that democracy is a fragile species that can survive only by curbing its appetite...Society cannibalizes itself at the polls and in the legislature. And, inevitably, an unresolvable crisis in governmental finance occurs - whereupon, democracy collapses into dictatorship.

"The role of inflation in this process is clear...Inflation promotes public greed, perverts political morality, and subverts all social order...Lenin...once declared that the surest way to destroy capitalism was to debauch the currency. History confirms Lenin's insight. History also confirms that only the gold standard can curb inflation. From which it follows the no democracy can remain stable for long without the gold standard." [Page 167]

For all our commercial success, we Americans are remarkably financially ignorant. Ask the average American to define the word 'dollar'(1) and he will promptly pull from his billfold a green rectangular object that has the words 'Federal Reserve Note' boldly printed thereon. Other than discussing how and in what he invests, interest rates, what he earns, spends and owes the average American can't muster an intelligent discussion about money. Asked about the money multiplier effect or fractional reserve banking and he will respond with "Huh? What are you talking about?"

The US Constitution recognizes four tools, which were to enable the American people to control the power and authority of government. It recognizes the ballot box, the jury box, the cartridge box and the gold standard. Of the four, it is the last the concerns us here.

From my study of monetary matters I have concluded that every government that has ever been on the gold standard has resented it's constraints. Think about it for a minute. The gold standard, if properly followed, would force politicians to make tough decisions and to behave in something resembling a wise, frugal and moral manner. Something they are loath to do, as it would remove the fun of being in government. They would have to come to us and say something like:

"OK. Folks. Here's the deal. You can have either Program 'A' or Program 'B.' But you cannot have both 'A' and 'B' unless you want to give us some more of your hard earned wealth."

Whereupon we would all get our backs up.

Moving to the 'fiat money standard' loosens those Constitutional shackles. Now the game playing can begin. Now politicians can employ "swarms of officers to harass our people and eat out our substance."(2) They can station troops in more than 100 nations around the world where they don't belong. They can redistribute other people's wealth thus enabling them to buy votes with other people's money. They can promise the citizenry the sun, the moon, the earth and the stars all without regard to the citizenry's ability to pay as they consider America to be a bottomless pool of wealth from which they can draw.

They can also use inflation to monetize part of the debt.

Unconstitutional federal programs such as Social Security, Medicaid/Medicare, education and other outrages would be financially impossible under strict application of the gold standard. All these evils are made possible by 'fiat money' and are partially funded by....

The Abominable Sixteenth Amendment

"Even if the Sixteenth Amendment was validly ratified in 1913, it provided no basis for a tax on labor. In Pollock v. Farmer's Loan & Trust, the Supreme Court ruled that a tax on incomes derived from real and personal property was a "direct" tax, which {to be Constitutional} had to be apportioned among the States. The Sixteenth Amendment was designed to circumvent Pollock, by allowing Congress "to lay and Collect taxes on incomes, from whatever source derived, without apportionment" - provided that those taxes were Constitutional in all other respects. This allowance, however, had nothing to do with a tax on individuals' incomes from professions, trades, employment, and labor. For, even before Pollock, the Supreme Court had held in Springer v. United States that such a tax was an "indirect" tax - an excise or duty - to which the rule of apportionment would never apply...The Sixteenth Amendment has always been irrelevant to taxes on incomes derived from labor. Indeed, in the Stanton, Eisner and Brushaber cases, the Supreme Court held that the Sixteenth Amendment conferred no new powers of taxation, did not extend the power of taxation to new subjects, and granted no power to levy income taxes in a generic sense." [Pages 1208-9]

This is not the time and place to demolish the individual income tax laws. Irwin Schiff in The Great Income Tax Hoax and in other books has already done that job. From him and other sources, I have concluded that there is only one reason why we are filing income tax returns today. I can sum up that reason in one word. Corruption. Corruption in government. Corruption in the legal profession. Corruption in accounting and financial services. It's either that, or its abject stupidity. Actually, it's both.

Here's one simple example that clearly demonstrates their corruption. Go and read the Fourth, Fifth and Thirteen Amendments to the Constitution and then ask yourself why you are filing an income tax return. The Fourth and Fifth Amendments state that we are to be safe and secure in our homes, persons, papers and effects and also that we cannot be compelled to be witnesses against ourselves. The Thirteenth outlaws slavery. All these Amendments are ignored by taxation on our labor as well as the legal requirements that we file income tax returns.

Now, before we all cease filing our IRS 1040 confessions, there are a few harsh facts of life to consider. In my 45 years of life I have learned a few basic principles of government: 1) The operating principle of the Supreme court is that they are free to interpret the Constitution anyway they please regardless of what it actually says. 2.) The operating principle of the Congress is that they are free to pass any legislation the Supreme Court, the Executive Branch, and public opinion will allow regardless of the what the Constitution actually says. 3.) The operating principle of the Executive Branch is that they are free to enforce any law or write any Executive Orders {that have the force and effect of law} the Supreme Court, Congress, and public opinion will allow regardless of what the Constitution actually says.

I'll put it another way. As I heard columnist Joe Sobran say, "The Constitution is no serious threat to our form of government. It just has nothing to do with it anymore!" In short, the constraints that were intended by the Bill of Rights and the Constitution upon the lawful activities of government officials {and thus, upon their power}, have come unbound. Leviathan has slipped its leash.

For that, we can thank the Supreme Court. Quoting from CRASHMAKER:

In 1936, even while it recognized that "[t]he power to confer or withhold unlimited benefits is the power to coerce or destroy", the Supreme Court in United States vs. Butler held that Congress might tax and spend for whatever politicians deemed to be "the general Welfare of the United States" - thereby effectively creating a Constitutionally unrestrainable power to redistribute wealth from taxpayers to special-interest groups. Of course, this cornucopia came with thick strings attached. For, in 1942, the Court in Wickard vs. Filburn ruled that "[i]t is hardly lack of due process for the government to regulate that which it subsidizes" - once again validating Laocoon's warning to the Trojans, "quidquid id est, timeo Danaos et dona ferentis."

Thus within a scant three decades, the American political class's strategy of "Greeks bearing gifts" became...crystal clear. Commandeer the country's own resources in order to wage a political war against We the People - confiscating American's wealth openly through taxes or surreptitiously through monetization of public debt, bribing voters with unlimited benefits for their supposed welfare, strictly controlling what the government subsidizes, and through it all inveigling more and more of society into a state of subservience to and dependency on Washington and its satrapies in the States. [page ii]

The discerning reader might ask, "If you believe that your facts and arguments concerning the Sixteenth Amendment are correct, why not petition the courts for redress of grievances? Bring them up at trial? We still have trail by jury, don't we?"

No we don't.

Today we live in a country where our 'law' makers believe that they have the right to predetermine which facts and legal arguments a defendant may offer at trial. For example, California has predetermined that "medical necessity" is "not a defense" to the charge of marijuana possession. At the trials of both the Branch Davidians and the Arizona Viper Militia, the defendants were told in each case that the Second Amendment was 'unavailable' to them. [Tell me people, when should a defendant be able to count on the most solemn governmental respect for his rights? Could it be, let me think now...when he is on trial?!!] This is a blatant invasion of the province of the jury. With this ability, our 'law' makers have effectively stripped us of one of our most important protections and Constitutional rights and the average American doesn't even know it. Then the legal profession has the nerve to call what happens in these kangaroo courts 'trial by jury.'

(1) 'Dollar' is a unit of measurement, like 'inch,' 'quart,' 'ounce,' 'mile,' or 'pound.' At the time of the passage of the Constitution, it was the equivalent to the Spanish milled dollar. Under the Coinage Act of 1792 it measured 24.75 grains of pure gold or alternatively 371.25 grains of pure silver. See The Case for Gold: A Minority Report of U.S. Gold Commission.

(2) From the Declaration of Independence, in case you didn't know.

James J. Odle holds a BS degree in Management from Arizona State University. This doesn't necessarily qualify him to commit about economic matters even though one of his courses was 'Money, Banking and the Economy.' Further, unlike the vast majority of so-called 'public servants' he has a real job in the private sector performing real work, which a real employer voluntarily pays him to perform.

He is also a Life Member of Gun Owners of America.


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