The Early Years
The Founders believed that the primary role of government
was to protect the inalienable rights of its citizens, enshrined in the
Constitution. That, having been secured for the time being, gave way to voters
and politicians thinking up things government could do for them.
In the beginning, government did a good job protecting
citizens’ property and expanding the country West to the Mississippi
River. We of course, did this at the
expense of the Indians. The Louisiana
Purchase was a really good deal. In
1803, Thomas Jefferson purchased the French held land West of the Mississippi
from Napoleon for $15 million. That got
us to edge our way down through the Spanish-held Southwest to Mexico with some
help from Texas. Of course, we did this
at the expanse of the Spanish and Mexicans, many of whom were pushed south, but
have since re-invaded.
The government did give land titles to citizens to settle
the West and the functions of government began to “civilize” the West. States formed, taxes were paid, roads were
built and after the development of the piston driven steam engine, even the
Federal government contributed to the cross-continental railroad, built by
Chinese and other immigrants. Property could be bought and sold, towns
established schools and town Sheriffs kept the peace. Citizens were free to
pursue their own paths, within their own means.
We were as close to a meritocracy as anyone had ever been.
There had always been problems. For a free people, might meant right. Those ranchers who employed small armies of
ranch-hands surely bullied smaller ranchers to sell their land. As laws attempting to protect smaller ranchers
were passed, the bullies adopted more sophisticated methods. Today, armies of
lawyers perform this service.
Great fortunes were made by 19th century
entrepreneurs like Carnegie, Rockefeller and others, based on great inventions
by Edison, Tesla and others.
By 1900, it was clear to the bankers that a means to
print money would be helpful to them and their largest customers. So in 1913,
the bankers concocted the Federal Reserve System and Congress passed it into
law. That was a game changer. The Federal Reserve was given the power to
coin money and create a “managed” economy. Up to that point, embarking on large
projects required large private investments.
These loans were expensive and carried the risk of having your lender
take over your business. When the
Federal Reserve is the lender, politics drives decisions rather than sound
financial analysis. The government bribed citizens by “insuring” bank deposits
under FDIC. The distraction worked.
Many battles were fought in Congress during the 19th
century over the limits imposed by the wording in the Constitution and the 10th
Amendment, but in the end, politics trumped accurate interpretation and
enforcement.
Fast Forward
Now we have a bankrupt government with a National Debt of
$17 trillion and rising, a GDP of $16 trillion and falling, unfunded
liabilities of over $200 trillion and the spending hasn’t been brought under
control. All of this as a result of the
Federal government overstepping its charter and ignoring the 10th
Amendment.
This has happened to many governments in the past and has
always resulted in some form of economic collapse. Over-printing money has always ended in
inflation or hyper-inflation. The only
folks who think we can get out of this mess unscathed are in a coma. No country
has ever escaped the punishment program for overspending. Rome fell after they ran out of money, so did
Germany in 1928 with hyper-inflation. In
the U.S. in the 1960s and 1970s, inflation was dribbled out at 4% per year, but
our debt and liabilities were relatively small.
This bout of inflation resulted in a 5-fold drop in the value of the
dollar after overspending and printing $billions. Now we have a real problem; we have overspent
$trillions. With the recent 400%
increase in the money supply, we can pay for that with 10% inflation over 40
years or 40% inflation over 10 years. In
either case, our standard of living will take a 10-fold drop. If the poor think they’re poor now, they
ain’t seen nothin’ yet.
In the 1960s, a family income of $10,000 was
sufficient. Now in 2014, it takes a
family income of $100,000 to maintain the same standard of living. After our $trillion dollar adventure, it will
take $1 million a year of household income to maintain that same standard of
living.
Norb Leahy, Dunwoody GA Tea Party Leader
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