Thursday, September 29, 2011

Rolling Back the Terrible Year in American History


I consider 1913 to be the "terrible year" for the American Republic.   That year saw the introduction of the income tax in a form that would stick.  It was also the year we got the Federal Reserve System that has siphoned off 96% of the value of the dollar since 1913.  That siphoned-off value went to the government as a hidden tax and into the pockets of the big banks which comprise the fed.

Consider that only four pennies in 1913 could purchase what requires a dollar to buy today.     Indeed, a silver dime from 1963 is worth almost three dollars today.  That's just how fast our currency has been drained of value.  That value went somewhere.   That somewhere was the government, which grew in size and scope even as the currency it issued contracted in worth.  Also benefiting were the large banks which control the issue of currency.   Over the last one hundred years, those are the parties that gained big from the dollar's fall.

1913 also brought us the 17th amendment, which states that United States Senators are to be chosen by direct election of the people.  Prior to that time, they had been selected by the largest house of the legislatures of the states.  In Arkansas, that would mean that the 100 state representatives would choose our U.S. Senators should the 17th amendment be repealed.

Critics of the amendment prophetically warned that it would tip the balance of power between the state governments and the federal government far more toward the federal government.  All three measures re-enforced federal power.   The federal government has grown so explosively since 1913 that the system of governance the Founders originally established is scarcely recognizable.  It could not have done so without the income tax, the federal reserve, and the 17th amendment.

All three measures discussed here set the stage for this explosive growth.   The federal income tax made it the federal government's business as to how much money every citizen made.   It gave them the power to use the tax code to redistribute wealth and grant special favors to the well-connected.    The Federal Reserve System, once the dollar was finally severed from the gold standard, gave them the power to enact a hidden tax called inflation.   It also allowed governments to borrow like mad at the expense of savers while concealing (for a time) the true cost.   It allowed well-connected financial interests to manipulate booms and busts in the economy and, for the select few who knew which was coming ahead of time, profit both ways.

Of course, the 17th amendment did have the effect that it's critics predicted.   The states dwindled in influence and the federal government gathered more and more power to itself.   Without the Senators being beholden to the state legislatures, there was no one to watch out for the interests of the states in the federal power structure.     While the federal government has sometimes used this new power over the states for good, in the long run centralized power is never good for the cause of liberty.   Washington now increasingly forces "one size fits all" solutions on areas of life that were once left up to each state individually.   If some state discovered a better way, others could copy it.   If some citizens did not like the way a state did something, they could easily move to one which did things more to their liking.   But where do you go when all the decisions are made in one city?

I favor the repeal of the federal individual income tax, and the disbanding of the Federal Reserve System.  Returning those two policies to the original American condition will help reign in Washington in more ways than I can describe here.   Yet I can't support repealing the 17th amendment at this time.

Let me explain the apparent inconsistency.   State legislatures can no longer be counted on to defend the rights of the states (and therefore the people in those states) against unjust federal power.   Both major political parties are now thoroughly creatures of the D.C. beltway.   If ambitious young state representatives want to move up in our current system they almost have to please the party hierarchy.   That hierarchy runs straight back to D.C.   The power of political parties has been centralized in D.C. just like government power has been.   The federal government now has lots of high paying easy-money jobs to offer through party patronage to state legislators who sell out and vote against the interests of the states and for the interests of the federal government.   At this point, the people themselves are more to be trusted than the legislature.

Consider our own state representatives.   Most of the Democrats are so sold out that I don't even feel the need to document it.  But even the Republicans feel establishment pressure.  For example, many of the state's GOP representatives did not try to pick a senator, but they did try to pick the GOP Presidential nominee.   Sadly, they tried to pawn Texas Governor Rick Perry on unsuspecting Republican voters in the state.   Oh, some of them may have been fooled themselves, but you just don't do something like that unless you know enough to avoid being made a fool of.   Why did they do it?  It surely was not a constituent service.   The people of this state were not begging them to pick a Presidential candidate for them.  I suspect they were asked to by someone in the GOP hierarchy.

End the fed.   End the individual income tax.  But don't repeal the 17th until, somehow, some way, political power in the form of the two party system is transformed into something more grass-roots and decentralized.





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