Jan 14, 2013 | Constitution, Economy, Take Action, Taxes
By Dr. Harold Pease
There are few parts of the Constitution more clear than, “All bills for raising revenue shall originate in the House of Representatives but the Senate may propose or concur with amendments as on other bills” (Article I, Section 7, Clause 1). In a vote taken well after midnight (the supposed deadline) December 31, the SENATE passed a bill raising taxes on those with incomes above $400,000 a year, a tax increase on this group from 35% of their annual income to 39.6%, and the removal of tax exemptions for those making $250,000 or more a year. The capitol gains tax on everyone was raised from 15% to 20% and there were many other adjustments on the tax code as well. This bill definitely did not originate in the House of Representatives as required by the Constitution. So, does anyone care?
The Senate then forwarded their “revenue raising” bill to the House the day after the deadline presenting them with a single choice, be blamed for taking the country over the so-called fiscal cliff or not. It was blackmail! With no way to modify any of its provisions and the bell having already rung ending the tournament, they agreed. It is true that the House had not presented to the Senate any revenue raising solution as it opposed such, largely because President Barack Obama had made it clear that he would not sign any law that did not raise revenue on the rich. Still, the House is the only body that had authority to do so and their intention not to support a tax increase, by not originating one, should have stood regardless of what the Senate and President thought or wanted. Allowing these other bodies to do so for them has weakened this part of the Constitution and House authority. Henceforth, past practice wrongly will be used to legitimize future revenue raising by the Senate and this part of the Constitution, in effect, will be obliterated.
So why should you care? For thousands of years, until the Constitution, governments taxed their citizens whenever and whatever they wished. The people had no say. If the pharaoh in Egypt wanted bricks without straw from the Israelites, for instance, so be it. In our republic we have two legislative bodies, the House to represent the people, and the Senate to represent the individual states. Prior to 1913 the State Legislators elected the Senate so that it could protect the interests of the states from the federal government’s natural inclination to grow, absorbing state functions. This is called federalism—shared government. The House was to protect the interests of the people as its first and major concern.
The power of the purse (both taxing and spending) is one of the most important powers of the Constitution. The Founders resolved that it should be left with the representatives of the people; “all bills for raising revenue shall originate in the House of Representatives (Article I, Section 7).” This made it impossible for the people to be over-taxed for more than two years as all members of this body come up for reelection on the same date—every two years.
Addressing this subject James Madison, the father of the Constitution, observed, “This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.” The U.S. Constitution mandates that “the House of Representatives cannot only refuse, but they alone can propose the supplies requisite for the support of government.” This power alone he added, “can overcome all the overgrown prerogatives of the other branches of the government. They, in a word, hold the purse… (The Federalist 58).”
Taxes, the historic grievances of the masses of all ages, were left to this body alone to originate or initiate. The significance of this placement cannot be over-stated. In the Constitution only the masses could originate taxes as all revenue for the government came from the backs of the people. In the United States it is impossible to be over-taxed if we are following the Constitution. No other nation in all history, as far as we know, had this protection from their government. Once processed through the House, the Senate could modify as on other bills, but it must first come from the House. This cannot happen without permission from the people’s representatives.
This may seem like a small thing given all the hype on the Fiscal Cliff but the people really do not want to surrender their freedom from excessive taxation, which, prior to this document was virtually unheard of in the history of the world. Losing this is far more serious than what pundits said would be the worst-case scenario of the cliff because, once gone, it is unlikely to be retrieved. Members of congress are doing so incrementally by not insisting that the government stay within its bounds and honor the document that they individually have sworn to uphold. No one will destroy the Constitution all at one time but by their ignorance, or worshipful loyalty to party, are doing so one piece at a time. If your representatives voted for this please send him a copy of this article so that he/she will be more sensitive to this issue in the future.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Dec 17, 2012 | Constitution, Economy, Healthcare, Take Action, Taxes, Tea Party
By Dr. Harold Pease
What most do not realize is that December 31 is but the first fiscal cliff—the little one. Given the inability of both parties to deal with this little one, although they have known about it for almost two years, how can we have any faith in their ability to prevent the ultimate collapse of the economy if immediate and drastic changes are not made soon? Why not solve both now before options are more drastic later?
Neither party really represents limited constitutional government and both are addicted to debt. It is like an addict prescribing his own detox program. Consequently Freedom Works, a Tea Party affiliate, selected 12 of their own members and through the Internet invited 150,000 members to make suggestions on what should be done. The Tea Party Debt Commission was formed to provide the federal government a solution. Its final report summarized the problem, “Our government is doing too many things it can’t do well, or shouldn’t do at all, with money it doesn’t have. We are borrowing 43 cents of every dollar we spend….”
The Tea Party Plan cuts, caps, and balances federal spending. The budget is balanced in four years, without tax hikes, and remains balanced. Federal spending is reduced by $9.7 trillion over the next ten years. The plan shrinks the federal government from 24 % of GDP to about 16 %. Finally it stops the growth of the debt and begins paying it down. Within a generation there would be no national debt. Bold indeed!
How do they do this? First, stop duplication of services. They note that the “Government Accountability Office counted no fewer than 47 job training programs, 56 financial literacy programs, 80 economic development programs, 18 food assistance programs, 20 programs for the homeless, 82 teacher-quality programs spread across 10 agencies, and more than 2,100 data centers. All told, we have nearly 2,200 federal programs.” Government is bloated, inefficient, and wasteful.
Second, repeal services that we can no longer afford and/or that are not authorized within the Constitution. These goals include repealing ObamaCare, eliminating four unconstitutional, costly, inefficient Cabinet agencies—Energy, Education, Commerce, and HUD—and reducing or privatizing many others, including EPA, TSA, Fannie Mae, and Freddie Mac. Their report calls for ending farm subsidies, government student loans, and foreign aid to countries that don’t support us—luxuries we can no longer afford.
Third entitlement programs must be incentivized to give donors more for their money. Boldly they opened the unfunded liabilities door—the door neither party dares to open as potentially it could destroy career politicians and political parties. They concluded that they could make Social Security “sustainable and actually improve benefits by harnessing the power of compound interest.” They noted, “Three decades ago, Chile embarked on a bold transformation of its retirement security system. Today, that system [SMART Accounts] is the envy of the world, giving seniors far better benefits than the old, government-run system ever did.”
Shortly thereafter three counties in Texas adopted the SMART Accounts program in favor of personal accounts and thus those retiring today do so “with much more money and have significantly more generous death and disability supplemental benefits than do Social Security participants.” Moreover, they “face no long term unfunded pension liabilities.” The Commission recommends that, “all state and local governments should have the option of opting into the ‘Galveston model.’ ”
The Tea Party Debt Commission saw the Medicare program as outdated, inefficient, and corrupt and recommended six major changes that if followed would save, they predicted, $676,000,000 the first year and $2,030,843,000,000 in 10 years. These changes are first “let individuals opt out of Medicare under Senator Jim DeMint’s ‘Retirement Freedom Act.”’ Second, let all new Medicare beneficiaries enroll in the Federal Employees’ Health Benefit Program (FEHBP) introduced by Senator Rand Paul as the “Congressional Health Care for Seniors Act.” Third, reduce Medicare subsidies to actual cost of hospitals’ graduate medical education. Fourth, maintain Medicare’s physician payment rates at the 2011 level. Fifth, convert the open-ended Medicaid program into a capped block grant to the states. And six call on all states to reform their medical malpractice and product liability systems—tort reform.
Opting into the same Medicare program the members of Congress use, the second Tea Party change recommended, is much better for participants because it “relies on competing private insurers to provide benefits, and as a result has very little of the fraud and waste problems that plague today’s outdated and poorly designed Medicare system.” One wonders why Congress can make for themselves such a good system and leave us one with “between 10 and 20 percent of Medicare’s $450 billion annual budget being attributable to waste, fraud, and abuse….” Moreover, it suspends pension contributions and COLAs for Members of Congress, whenever the budget is in deficit.
The new plan offers a rational transition to ownership of our own retirement and more control and choice over our health care. Why did the government fail to accomplish the same thing—even behind closed doors? Their first concern is to protect their jobs and party. Outsiders, without a personal stake in the outcome, can see much more and do much more without the inevitable political wrangling. Learn more and review the details of the Tea Party Debt Commission’s recommendations by visiting FreedomWorks.org/the-tea-party-budget. Will Congress explore these changes with intent to make them? Not unless you demand that they do so.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Dec 10, 2012 | Constitution, Economy, Healthcare, Take Action
By Dr. Harold Pease
Presently 17 states have chosen not to setup insurance exchanges with respect to the Patient Protection and Affordable Care Law, commonly cited as Obamacare, primarily because they fear that doing so would bankrupt their state and they remain convinced that it is a serious intrusion on their constitutional jurisdiction—even freedom. Some were among the 26 states that suede the Federal Government for exceeding its constitutional authority. They may not know that they have one constitutional check left to exercise if they but have the will.
Those who spend any time with the Constitution know that the federal government is limited to a list of specific areas wherein Congress can legislate (Art. I, Sec. 8) and if a desired power is not on that list, or not added thereto by way of an amendment to the Constitution, they are prohibited from legislating therein. All other powers not provided in that document are left to the states and to the people as per Amendment 10 of the Bill of Rights. Checks and balances were created in an effort to keep the federal government from creating its own authority and taking over everything. The Founding Fathers saw going off the list and thus doing something not authorized as tyranny.
Senators were especially charged to protect state sovereignty, the list, and the 10th Amendment, but Progressives in the early 20th Century weakened that protection by ratifying the 17th Amendment, which favored a popular vote for this office rather than, as it was before, having Senators selected by state legislatures who were purposely far more state sovereignty centered. State power was thereafter left unprotected and measures clearly of state jurisdiction and unlisted, such as health care, got through the badly damaged shield and became law.
The Supreme Court was also one of those checks and balances, but it too has become damaged when previous small perversions of the Constitution become leverage for yet other larger perversions, and original intent the intended interpretation, was replaced by past practice, a philosophy also accentuated by the Progressives Movement. What do we do when the Court too is compromised as in Obamacare?
The Supreme Court also has one other problem. Think of our government, as the founders did in the Constitution, as two parts, with power divided between two government teams—the federal and the state. The Supreme Court can never be the final arbitrator between these two teams as it is a valued player on the federal team, and thus not neutral. It will always tend to favor the federal team. What can the states do to stop federal intrusion into their arena even when such intrusion is blatantly clear to anyone reading the Constitution? Nullification.
The Founders left us with one final check on tyranny, but it is not well known and is little used. If the 26 suing states, or even the 17 who have rejected creating the insurance exchanges, instead just said “No! “The law is clearly unconstitutional and will not be implemented, in part or whole, in this state without a constitutional amendment so authorizing. If this law, which virtually destroys the 10th Amendment to the Constitution, is allowed to stand the states have no protected jurisdictions from the federal government and are merely appendages to it.” If enough understood that this law is the death of the philosophy of shared power, or federalism, they would oppose it. If even a minority of states stood together on this point it would stop this federal takeover of one-seventh of the economy in its tracks. State legislators, you are the last constitutional check. Are you listening?
Nullification has two historical precedents. Thomas Jefferson (principle author of the Declaration of Independence) and James Madison (referred to as the father of the Constitution) attempted to nullify The Alien and Sedition Acts in 1798 created by their Federalist Party predecessors. These authors penned the Virginia and Kentucky Resolves objecting on the basis of the unreasonable empowerment of the president and the attack on the First Amendment, particularly freedoms of speech and press. The Supreme Court never took the case, largely because the bill was design to last only until 1801, (Federalists did not want it used against them should they lose the next election) thus the issue died naturally undoubtedly assisted by resistance of these states.
Next to use the Nullification Doctrine was South Carolina with respect to the 1828 “Tariff of Abominations,” believed by them and neighboring states to be unconstitutional. Opponents to it declared it to be “null and void” within their border and threatened to take South Carolina out of the Union if Washington attempted to collect custom duties by force. Andrew Jackson prepared to invade the state. A compromise Tariff of 1833 gradually lowered the tariff to acceptable levels and the issue faded away. States standing firm brought compromise.
Unfortunately for power-hungry federal politicians, the word health is not in Section 8, nor has it been added to the Constitution by way of amendment through Article V, which is the process for “change that you can believe in,” and thus our Founders would have considered it devoid of constitutional authority. If we are to follow the Constitution as intended, and not make a mockery of it, health related concerns are state functions at best and cannot be moved to a federal jurisdiction without a 3/4th affirmative vote of the states as per Article V of the U.S. Constitution. The last acceptable constitutional check to federal tyranny is the state legislatures. Will states stand with the Constitution and its authors or be bullied into submission?
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Nov 19, 2012 | Economy
By Dr. Harold Pease
This Thanksgiving Day we think of the Pilgrims, abundant foods, and giving thanks. Few remember the starving times when the first year after landing about half died, largely of famine. Harvests were not bountiful in 1620, 1621 and 1622. Plymouth was beset by laziness and thievery. William Bradford, the governor of the colony, in his History of Plymouth Plantation reported that “much was stolen both by night and day” to alleviate the prevailing condition of hunger. The mythical “feast” of the first Thanksgiving did fill their bellies briefly, he reported, and they were grateful, but abundance was anything but common. Why did this happen? Because they had fallen victim to the socialistic philosophy of “share the wealth.” This dis-incentivizes the productive element of society.
Then suddenly, as though night changed to day, the crop of 1623 was bounteous, and those thereafter as well, and it had nothing to do with the weather. Bradford wrote, “Instead of famine now God gave them plenty and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God.” He concluded later, “any general want or famine hath not been amongst them since to this day.”
One variable alone made the difference and ended the three-year famine. They abandoned the notion of government (or corporation) owning the means of production and distribution in favor of the individual having property and being responsible to take care of himself. Before no one benefited by working because he received the same compensation as those who did not. After the change everyone kept the benefits of his labor. Those who chose not to work basically chose also to be poor and the government (corporation) no longer confiscated from those who produced to give to those who did not. No government food stamps here.
Ironically all this could have been avoided had Plymouth consulted history and communicated with their neighboring colony, some distance south of them, who had previously been down the same trail. Jamestown too was first a socialist society where each produced according to his ability and received according to his need which, of course, was affected by the supply. One cannot divide what does not exist. Our textbooks tell us that only one of twelve survived the first two years for precisely the same reason, again, largely because of their starving time. The problem, as noted by Tom Bethel in his work The Noblest Triumph: Property and Prosperity through the Ages, was identified by an unnamed participant as “want of providence, industrie and government, and not the barenness and defect of the Countrie.”
Captain John Smith is credited with having saved the floundering colony by his “no workie, no eatie” government program (once again the Virginia Company was the government) and was hated for it. Addicted to the promise of getting something for nothing, even if it is always less than promised, the receiving part of the population will always oppose their not getting their “fair share.” Sound familiar? Captain Smith was eventually carted off to England in chains as fast as the parasitic population could do so. Once again, why? Philip A. Bruce in his Economic History of Virginia in the Seventeenth Century, p. 121 called it agricultural socialism. “The settlers did not have even a modified interest in the soil…. Everything produced by them went into the store, in which they had no proprietorship.” When settlers finally were allowed to own their own property, and keep what they produced, things changed over night.
Colony Secretary Ralph Hamor wrote of incoming prosperity, beginning in 1614, after ownership of land was allowed. “When our people were fed out of the common store, and labored jointly together, glad was he [who] could slip from his labor, or slumber over his tasks he cared not how, nay, the most honest among them would hardly take so much true pains in a week, as now for themselves they will do in a day, neither cared they for the increase, presuming that however the harvest prospered, the general store must maintain them, so that we reaped not so much corn from the labors of thirty as now three or four do provide for themselves.”
This Thanksgiving let us be grateful for the prosperity that we have even in hard times such as today. Jamestown and Plymouth set us upon a course that recognized that prosperity requires incentive to flourish and that the profit motive stimulates industry. We are so grateful that having recognized the poison of “the share the wealth” philosophy, they purged it from their midst and proceeded to make America the most prosperous country on earth. Others, through the ages, maintained that understanding. Will we be so smart? Let us share this message at the table as we feast upon turkey and pumpkin pie this Thanksgiving Day so that our children will know how prosperity is produced.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Oct 30, 2012 | Constitution, Economy, Taxes
By Dr. Harold Pease
Viewing past presidential elections, and the one we are now in, it becomes very obvious to me that the winner will be the one who gathers the most special interest groups by promising them favors in return for their vote, often from the public treasury. Today there are between 9 and 15 thousand lobbyists working on Capitol Hill seeking ever-larger portions of the tax pie for their faction. Purchased politicians can’t say no. When they can’t actually meet all the promises they have made, they simply raise the debt ceiling which signals the Federal Reserve to print more paper money, a process sometimes called quantitative easing. Hence we have passed to our children a debt in excess of 16 trillion dollars.
The Founding Fathers were quite familiar with the need to control special interest groups, then referred to as factions, as absolutely critical to liberty. Democratic governments in both Athens and Rome had bred and fed factions thus, “bread and circuses” was the cry of their factions before their loss of liberty.
James Madison, Father of the U.S. Constitution and the Bill of Rights, defined a faction, in The Federalist Papers No. 51, as “a number of citizens, whether amounting to a majority or minority of the whole, who are united and activated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community.” He saw the source of factions as being “the various and unequal distribution of property. Those who hold, and those who are without property, have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination.”
Tension over income distribution will always exist because we do not share the same talents or work ethic. The problem with democracy, he continued, is that “there is nothing to check the inducements to sacrifice the weaker party, or the obnoxious individual. Hence, it is, that such democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security, or the rights of property; and have in general been as short in their lives, as they have been violent in their deaths.” Free men are not equal and equal men are not free.
George Washington warned that factions “put in the place of the delegated will of the nation the will of party, often a small but artful and enterprising minority of the community” (Congressional Record, Feb. 19, 1973, S2653). He admitted that they “may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men, will be enabled to subvert the power of the people, and to usurp for themselves the reins of government; destroying afterwards the very engines which have lifted them to unjust dominion.” Unions come to mind. Factions are focused only upon themselves and demand an ever larger share of the public pie until there is no pie. Look at Greece.
Madison knew that factions could not exist in non-free states, they could simply be outlawed, but in free states only a republic could control them. The Constitution was specifically designed to do just that by offering them no incentive to assemble on the federal level. Congress was given but four powers: to tax, to pay the debts, and to provide for the general welfare and common defense. Clauses 2-9 of Section 8, Article 1 defined what general welfare is and 10-17 what common defense is. No money was set aside for, or provided to, any special interest. The power distributed benefited all equally and at the same time. The federal role was as referee only. Our Constitution does not redistribute wealth; it leaves the individual to do that by his work ethic. It remains the fairest way. The Founders, who were all veterans, even resisted the temptation to carve out special privileges for themselves. With no money to divide, the vultures had no reason to assemble.
Unfortunately, the resistance to use the public treasury to further special interests did not last. A transcontinental railroad was desirable in the late 1860’s and the country was willing to look the other way, ignoring the Constitution, when two railroads, the Union and the Central Pacific, were given the privileged contracts. The completed track laid in 1869 wet the lips of other railroad building companies who thought that they should get monies from the public treasury as well. The government, invaded by “me too” applicants financed three additional transcontinental railroads by the early 1890’s.
Benjamin Harrison decided to promise veterans monies from the treasury in his election against Grover Cleveland, who honorably refused to do so. Harrison’s win opened Pandora’s box. Now that some were getting access to the treasury, other groups and causes felt that they should as well. Franklin D. Roosevelt and Lyndon B. Johnson opened it even wider allowing anyone with a cause to get taxpayer monies. Armies of special interest groups now assemble on the Capital to feed off the public trough. Damaged is the view that the federal government can only do and finance the listed items in Article I.
Factions will inevitably destroy our republic unless we return to the list. It will not be easy. We are addicted to debt, having everything right now, and passing it along to our children. Still, the foundation is there. Every remodel is first ugly and dirty before it shines, but getting back to where government cannot show favoritism to any group, interest, or faction is critical or this patient is terminal. The Founders had to start from the beginning to control factions. We already have machinery in place to do so but lack statesmen who will use it. It is time to find those statesmen.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
Oct 9, 2012 | Constitution, Economy
By Dr. Harold Pease
On August 31, between the two national party conventions, our national debt exceeded $16 trillion dollars; four of which is from eight years of George W. Bush and six, and counting, from less than four years of Barack Obama—the two biggest spending presidents in U.S. history. So what is a trillion dollars? Let me try to give some perspective. To begin with a trillion is the number 1 followed by twelve zeros. A trillion dollars is a thousand billion and a billion is a thousand million. This still means very little to my students who count their money in fives, tens and twenties.
One mathematician gave us a more practical way to evaluate our outstanding debt. One trillion one-dollar bills stacked atop each other (not end to end but flat) would reach nearly 68,000 miles into space—a third of the way to the moon (See CNN News Cast, Feb. 4, 2009). If so, the debt incurred under President Obama alone, $6 trillion, would take us to the moon and back. Moreover, if you like traveling atop this stack of ones, our total $16 trillion in debt would take you to and from the moon twice and to the moon a third time and you would still get a third of the way back to earth as well.
Senator Mitch McConnell gave another illustration just as awe striking. He calculated that if we spent a million dollars every day since Jesus was born we still would not have spent a trillion dollars—only three-fourths of a trillion dollars (ibid.).
Someone else equated our national debt to seconds and concluded that a million seconds is about 11½ days and a billion seconds is about 32 years. A trillion seconds is about 32,000 years thus 16 trillion seconds is 512,000 years (See CNN News Cast, Feb. 4, 2009). This only make my head spin. My Ph. D is not in math.
I ask my students, “Who gets to go without so that this debt can be paid?” Go without?” That is a concept foreign to this generation!! They do not know, and neither do their parents and grandparents who laid it on their backs. When they are told that their immediate share of the debt is $51,265 (see USDebtClock.org), due immediately, they are angry.
The 13th amendment ending slavery has been rescinded. They are America’s new slaves. Bondage was given them before their birth, or while they were in the womb, or before they were old enough to know what it meant to be sold into slavery. The past generation wanted nice costly programs for free and were willing to sell their children in order to have them. Well Communist China owns an eighth of us and the bills are due. What is worse the older generation is still anxious to incur even more debt on our defenseless children and grandchildren. Are we not the most debt addicted, insensitive generation in all human history?
The latest new theory to avoid fiscal responsibility and continue unlimited spending used by both Bush in late 2009 and Obama in 2010 is referred to as Quantitative Easing. Crudely it means printing more money out of thin air to cover our debt, but it is far more sophisticated than that. For Bush the money supply was greatly expanded by having the Federal Reserve purchase $600 billion in Mortgage-backed securities (Harding, Robin. 3 November 2010, Quantitative Easing Explained. Financial Times). Obama purchased $600 billion of Treasury securities over a six month period of time beginning in November 2010 in what has been called Quantitative Easing or QE2 to distinguish it from QE1, the Bush expansion of the money supply (Cesky, Annalyn,3 Nov.2010, “QE2: Fed Pulls the Trigger” CNNmoney.com. Retrieved 10 Aug. 2011). Neither has stimulated the economy or created jobs, but for a few months, like a drug high, things seem to feel better.
The biggest problem with expanding the money supply is that it reduces the value of the money that you have in your pocket. Prices go up. Those on fixed incomes are robbed as surely as had a thief lifted their wallet or purse. They cannot return to their employer for a raise to compensate for the loss caused by their own government.
Last month the Federal Reserve announced a third round of Quantitative Easing, QE3. Fed Chair Ben Bernanke will be expanding the money supply, this time by purchasing $40 billion worth of mortgage-backed securities per month indefinitely. By doing so now we will experience a similar feel good euphoria, with respect to the economy, through the presidential election. Bernanke fears more fiscal restraint from a President Mitt Romney than from President Barack Obama, it is alleged (Skousen, Mark, Oct. 2012, “Forecasts and Strategies,” p. 1).
Still, with all the sophisticated “doublespeak” it means that we will print whatever money we need to purchase whatever we wish. Neither party is serious about stopping the debt and removing the bondage that we are imposing upon our children and grandchildren. Moreover, who cares if our debt of dollar bills stacked upon one another can go to the moon four times and back to earth three so long as the government fills our stomachs and buys our cell phones.
Dr. Harold Pease is an expert on the United States Constitution. He has dedicated his career to studying the writings of the Founding Fathers and applying that knowledge to current events. He has taught history and political science from this perspective for over 25 years at Taft College. To read more of his weekly articles, please visit www.LibertyUnderFire.org.
