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When President Obama announced a new $50 billion stimulus plan Labor Day weekend, conservatives scoffed — and rightfully so.

Who does this guy think he’s fooling? After the $700 billion TARP bailout, the auto manufacturer bailout, and an $800 billion stimulus, does this president actually think a measly $50 billion is going to successfully turn around an economy where greater sums have failed? But the president and his party have a ready reply for such naysayers: “Imagine if we did nothing?” This open-ended question will undoubtedly continue to provide cover for stimulus-loving liberals, no matter how often conservatives insist that their government intervention simply doesn’t work.

When my commentary on the ninth anniversary of 9/11 was broadcast on WTMA, a number of callers were angry I suggested that our policy of foreign intervention does not work. No matter how much I explained how our incompetent government does more damage than good abroad, my critics sounded pretty much like Obama: “But Jack, imagine if we did nothing?”

So yes, let’s imagine these scenarios. What if the Federal Reserve had never artificially lowered interest rates and created a housing bubble? What if the Fed had not printed literally countless dollars out of thin air, further weakening our currency? What if we never had borrowed money from China to pay for bailouts and stimulus? Would we be worse off financially than if the government had never done any of these things? Any conservative worth his salt recognizes the absurdity of these arguments and also recognizes that such fear-mongering is typically used as an excuse for more statism.

But such fear-mongering is also used by those on the Right to support our equally statist foreign policy, particularly when they portray radical Islam as somehow a threat on par with the Soviet Union or talk radio’s favorite comparison, the Nazis. Although I agreed with some callers that there probably is a uniquely medieval aspect to Islam not present or as prominent in other major religions, I asked, “Why did Americans not have to worry about Islamic terrorism in the 1940s, ’50s, and ’60s? What has changed? Islam? Or our foreign policy?” The question answers itself in the sense that we don’t have to “imagine” what might happen if we “did nothing” in the Middle East today, precisely because when we did little to nothing decades ago, there was no terrorist threat to the United States.

A few of my critics immediately and predictably called me an “isolationist” in much the same way Obama now chides conservative Republicans as belonging to the “Party of No” for opposing every new government intervention the Democrats come up with. Government must do something, you see, and no doubt Obama would readily paint anti-stimulus Republicans as some sort of domestic, economic “isolationists” if such jargon came into fashion. Luckily for conservative hawks, such jargon is well-established but is no less absurd. Compared to how engaged we are today in the Middle East, did the U.S. have an “isolationist” policy toward that region in the first half of the 20th century? Is Switzerland asking for trouble due to their long history of neutrality or isolationism? Are 99 percent of nations “isolationist” for not mimicking the foreign policy of the U.S., arguably the most ambitious imperial power in world history?

When conservatives suggest that we should apply free market solutions to financial crises, liberals dismiss those who make such proposals as libertarian wackos who don’t realize that it was the lack of government regulation that led to such problems in the first place. This is similar to the claim many conservatives make concerning foreign policy: that if the U.S. does not drop bombs on certain Third World countries indefinitely, station troops in some Mideast sand pit for decades on end, and regulate the world stage, our refusal to do all this will somehow put Americans at risk.

It’s time for both sides to start imagining what they fear most: What if we did nothing? What if our federal government didn’t spend or borrow beyond its means or constantly meddle domestically? What if our federal government did not constantly intervene overseas, spending and borrowing well beyond its means to do so?

We used to have a Constitution which restricted our federal government from doing such damage, and if we could only return to that charter, this entire column would be a moot point. Yet the prevailing belief that government must always do something both domestically and abroad will not be discarded by the Left or Right anytime soon. Both sides have an enduring attachment to statism, born not only of their particular ideologies but political identities, and they will continue to create new problems using government intervention in the name of solving old ones, blind to the fact that the larger mess is almost entirely of their own making.

The “Southern Avenger” Jack Hunter is a conservative commentator (WTMA 1250 AM talk radio) and columnist (Charleston City Paper) living in Charleston, South Carolina. See his blog.

Copyright 2010, Charleston City Paper

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Senator Brogdon is a featured speaker at Nullify Now! in Fort Worth – on September 4th
click here to get your tickets today! (or call 888-71-TICKETS)

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The only solution to our nation’s economic woes is freedom’s expansion. Washington politicians, whom many have spent the majority of their career working for the government, have become self-appointed experts on the economy. Their ideas and policies have bolstered increased debt and financial devastation for millions of Americans.

President Obama’s budget teeters upon sophomoric folly. His $4 trillion dollar budget has set a course of financial ruin for many families. Free market principles are being replaced with socialism and government control of business. Capitalism, which made America great and the envy of the world, is now at risk.

I dare say most junior high school students understand a simple principle; “borrowed” money cannot be used to pay off a debt. Borrowing money to pay off a debt only creates double indebtedness. It is a mystery how politicians cannot understand a simple principled fact of Economics 101.

As Washington insiders, bureaucrats, and politicians continue to “pickpocket” the taxpayers, it’s more than our money that is lost; our freedom is in jeopardy. Every legislative policy that transfers wealth from the people to the politicians will be listed on the negative side of the balance sheet of liberty. It is impossible to multiply wealth by dividing, and giving to others.

Washington politicians continue to trick people by lulling them into a false sense of security. They have created an atmosphere of entitlements by promising “a chicken in every pot” without regard for the future. Most politicians’ vision of the future is determined by reading yesterday’s headlines. It is easier for them to be a Monday morning quarterback than an inspirational leader and visionary.

President Obama presented the “club” in Washington a budget that will raise taxes, slow the economy, and devastate the family budget for future generations to come. Priorities have been shunned; pork barrel spending and earmarks have set a new disgraceful high and the politicians are stumbling over themselves in an effort to “bring home the bacon”.

Elected officials, who neither respect the Constitution nor understand its basic tenets, should be expelled from Washington and sent home to live under the conditions and mandates they have created. Sound judgment and wisdom should be the minimum benchmark for public servants; rather than, the perpetual aggrandizing and pontificating of one’s attributes and authority. Washington politicians rarely have all the answers, but today, they are the source of most of our problems.

I have a much different vision. I believe that freedom is the welcome mat at the door of America. When individuals exercise their freedom, atrophy is negated and our nation becomes stronger. A policy that empowers the people and binds the politician is favored. Ideas that support private sector profits are superior to government bailouts. Individual liberty and personal responsibility must always take presidents over government intrusion.

Given the choice of bailouts or freedom, I choose freedom.

Senator Randy Brogdon was elected to his first term in the Oklahoma Senate in 2002. Randy Brogdon is also the author of SJR 10, otherwise known as the 10th Amendment Resolution. This resolution is designed to protect states rights and prevent the federal government from overexerting its legislative power. His efforts on the 10th Amendment Initiative have brought him national attention from several media outlets across the country. In March of 2009, Senator Brogdon was invited to speak to members of the Pennsylvania State Legislature about his work on the 10th Amendment Initiative.

The financial system our federal government created in 1913 and thereafter maintained has created nothing but iron chains around the hands, feet and necks of the states of America. Unfortunately, most Americans do not understand the unconstitutionality and dangers of this system (mostly because of a lot of brainwashing over the years). When politics begin to affect the wallet, however, many Americans all of a sudden become politically active and “righteously” indignant. This sadly reveals that principles of truth are not priority. But if a person even cares about America’s history, principles of freedom as accepted by our forefathers or the natural and revealed laws of God, he has to admit that one of the most fundamental elements of freedom is financial freedom. These fundamentals confirm the right of individuals to work in exchange for other items contracted for by the engaged parties, to reap all the benefits and rewards of his labor, skill and intellect without the unjust or unauthorized interference of anyone else, including government. Our Declaration of Independence categorizes this natural right as the “pursuit of happiness,” meaning property, which money certainly is.

Despite financial freedom being considered a natural right, our federal government has ignored this right and principle of freedom; and today, it controls virtually every aspect of money, starting with money’s very creation (i.e. printing) through the inaptly-named, Federal Reserve System (created in 1913 by Congress). But the idea of this system did not come from our forefathers. In fact, based upon the principles of individual freedom, self-government and limited government, our founders rejected the federal government’s power to print money by giving only this power to Congress in Article 1, Section 8: “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.” Moreover, States agreed (by ratification of the U.S. Constitution) that they would only be limited as follows relevant to money and currency: “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts.” Since 1913, the federal government has been perpetually acting unconstitutionally; and today, States are forced to violate the U.S. Constitution and accept fiat money as tender in payments of debts.

Even a shallow scan of America’s history reveals that our founders and ratifiers considered the constitution to be worth nothing more than fire starter if Congress had the power to print money and create a fiat monetary system. Consider of a few of our founders’ position on the money system we have had since 1913 (citing from, George Bancroft, History of the United States of America: From the Discovery of the Continent [to 1789], Volume 6, [New York: D. Appleton and Company, 1890], 301–303) (Emphasis added):

“[George] Mason of Virginia had a MORTAL HATRED TO PAPER MONEY.”

“[The ratification of the U.S. Constitution] is a favorable moment to shut and bar the door against paper money, which can in no case be necessary. THE POWER MAY DO HARM, NEVER GOOD. Give the government credit, and other resources will offer. “(Oliver Ellsworth)

“PAPER MONEY CAN NEVER SUCCEED WHILE ITS MISCHIEFS ARE REMEMBERED; and, as long as it can be resorted to, it will be a bar to other resources.” (James Wilson).

“Rather than give the power [to congress to emit bills] I WOULD REJECT THE WHOLE PLAN [of the Constitution].” (John Langdon)

“[Under the ratified version of the U.S. Constitution], THE PRETEXT FOR A PAPER CURRENCY, and particularly for making the bills a tender, either for public or private debts, WAS CUT OFF.” (James Madison)

“[Nathanial] Gorham favored STRIKING THE WORDS [in the Constitution, allowing Congress to “EMIT BILLS”] without a prohibition inserted in the document, feeling that if the words were to stand, this could lead to the issuance of paper money.”

“Pierce Butler remarked that paper money was a legal tender in no other country in Europe, and he wanted to DISARM THE GOVERNMENT OF SUCH POWER.”

“George Read stated that if the words [and emit bills] were not struck, IT WOULD BE AS ALARMING AS THE MARK OF THE BEAST IN REVELATION.”

“This is the interpretation of the [Article 1, Section 8] clause…History cannot name a man who has gained enduring honor by causing the issue of paper money.” Ibid., 303. Contradicting these sound lessons and mandates of human history, the U.S. Constitution and natural law (meaning, the value of commercial exchange should have actual value, not pretend value), the federal government has for nearly 100 years operated under a fiat financial system, printing money out of thin air, being backed by nothing of substance, increasing the federal debt, causing inflation, decreasing the value of our contracted-for work, diminishing our future investments, and jeopardizing the lives of millions (just to name a few). Do you think that a country is living in freedom when this takes place?!

The very implementation and structure of the Federal Reserve System is corrupt, considering the most basic principles of a free society, as it puts the power of the fiat money market into the control of a few unelected and uncontrolled people. The danger of this system was recognized immediately by financial experts after its implementation. Consider what Professor John Holdsworth observes in 1914: “It is obvious that a board clothed with such powers can exercise an enormous influence either for good or ill upon the new system. Success or failure…will depend largely upon their ability, wisdom, and tact.” John Thom Holdsworth, Money and Banking, 6th Edition, (New York: Appleton, 1914), 353. Is the definition of “oligarchy” coming to mind?

The creation of our Constitutional Republic was to place the power of securing individual natural rights under the constraints of a fixed constitution into the hands of many who would be affected by its abuse: that is, the people and their agents! The federal system was entirely a check and balance upon all powers in the federal government: checks by the people directly, checks by the other branches of federal government, checks by time itself and checks by the state governments. Yet, the Federal Reserve System literally removes one of the most fundamental natural rights (property) from the control, oversight and power of the people and of their closest representatives (Congress and the State governments). America’s monetary system is without a doubt despicable, unnatural, fraudulent and dangerous.

So, what is our federal government going to do about it? What have they done since 1913? Nothing! I believe we can say with certainty they will continue their legacy. Sure, we know Congressman Ron Paul (and maybe a few others) has attempted to make a difference in this area (See, H.R. 4683, The Free Competition in Currency Act of 2007). God bless him for his lone-wolf efforts. However, even with a Republican-controlled federal government from 2000 to 2008, nothing has been done to bring the Federal Reserve into accountability and responsibility, much less to termination–all this after nearly 100 years of this corrupt system being woven into the fabric of our states and even the entire world. We can say with assurance that putting our hope in the federal government to control the monster it has created is misplaced. It is disgusting how the federal government usurps the delegations and trusts of its power, violates the principles and limitations of the constitution, does nothing to reverse the usurpations and expressly revert these powers back to the states and the people. Still, every year, they expect that we vote for them and look to Washington D.C. for the answers to our problems. What a racket of tyranny! Yet, most take the bait. I would not trust them with taking caring for my dog.

There is, however, an alternative solution–one that our founders expected in cases of federal usurpations: the STATES. What has to be concluded here is that since the federal government does not possess the power to create this fiat system, it of course has acted unconstitutionally since 1913, depriving individuals, the people and the states of the powers they retained under the ninth and tenth amendments of the U.S. Constitution. Being sovereign, the states have the power to do what their constitutions give them power to do in this regard. As a result, the States must take courage to use of their inherent sovereignty: they must be energized by the force of truth, the fire of freedom and the passion of the people. The state governments must recognize this: we, who demand justice, demand that our states retake powers that rightly belong to us, terminate powers that have wrongly been usurped by tyrants, and create within our borders a free and independent system of finance and commerce.

The States must recognize and proclaim once again that,

“Paper money has no hold, and from its very nature can acquire no hold, on the conscience or affections of the people. It impairs all certainty of possession, and taxes none so heavily as the class who earn their scant possession by daily labor. It injures the husbandman by a twofold diminution of the exchangeable value of his harvest. It is the favorite of those who seek gain without willingness to toil; it is the deadly foe of industry. No powerful political party ever permanently rested for support on the theory that it is wise and right. No statesman has been thought well of by his kind in a succeeding generation for having been its promoter.” Bancroft, History of the United States of America, 304.

Freedom for a Change

Tim Baldwin is an attorney who received his Juris Doctor degree from Cumberland School of Law at Samford University in Birmingham, Alabama. He is a former felony prosecutor for the Florida State Attorney’s Office and now owns his own private law practice. He is author of a soon-to-be-published new book, entitled FREEDOM FOR A CHANGE. Tim is also one of America’s foremost defenders of State sovereignty. See his website.

Copyright (c) 2010 Timothy Baldwin

Last week politicians in Washington made a few things clear about how they really feel about the state of the union. First, they are beginning to hear the growing discontent with the size and scope of government and the broken promises that keep piling up. Certain events in Massachusetts recently made that statement loud, clear and unavoidable.

In the face of those events, the powers that be made the determination that some populist rhetoric was in order, and the idea of a spending freeze in Washington was proposed, albeit with several caveats. These caveats to the proposed spending freeze ensure that we are not at any real risk of actually doing anything about spending.

First of all is timing. It wouldn’t go into effect until 2011, which allows plenty of time to increase spending levels quite a bit before they are frozen.

If the administration really understood and cared about our spending problems they would not freeze spending a year from now, but cut spending immediately and significantly. But, spending cuts almost never happen in Washington, and they are not likely now or a year from now – if the politicians have anything to say about it.

The second caveat is the huge areas of the budget that are shielded from this freeze. The entire State Department budget is exempt, as are all entitlements, all military industrial spending and almost all foreign aid.

Fully 7/8 of federal spending is excluded from this freeze, and some areas to be frozen were actually set to decrease, which means a freeze actually guarantees a higher level of spending.

Especially insulting is the idea that in spite of our own fiscal problems at home, taxpayer dollars will continue to be sent overseas in the form of foreign aid where it often does more harm than good. When need is demonstrated to Americans and they can afford it, they can be counted on for a tremendous outpouring of private, voluntary charity to worthy aid organizations, as we recently saw in Haiti.

By contrast, government-to-government aid is taken from the poor by force and too often enriches the corrupt. It is counterproductive and wasteful. But the idea of eliminating, freezing, or reducing foreign aid is not up for serious debate any time soon.

The third caveat is what is included in the freeze that would make it politically impossible to pass Congress, for example air traffic controllers salaries, education, farm subsidies and national parks.

I do not necessarily want a cut in spending in this country – I just want to change who does the spending. The spending should be done by the people who earn the money, if they choose, and on what they choose, without any government interference. That is what makes the economy work.

Politicians should stick to the very limited roles given them by the constitution instead of allocating such a sizeable portion of our capital and intervening through regulations and tax policy. But because politicians have disregarded the constitution, and the people have no idea what rule they will break next, there is already a very real spending freeze underway in this economy, by the people.

If government would stick only to what it was authorized to do, and leave the rest to the people, most of these problems would resolve themselves.

Ron Paul is a Republican member of Congress from Texas

Much has been made recently about the supposed economic recovery. A few blips in a few statistics and many believe our troubles are all over. Of course, they have to redefine recovery as “jobless” to account for the lack of improvement on Main Street. But the banks have money, Wall Street is chugging along, and the administration would like to get on with other agendae.

They have even set up a commission to investigate the crisis as if it were all in the past.

The truth is that Americans are still losing jobs, the Fed is still inflating, and more regulations are in the works that will prevent jobs and productivity from coming back. We are on this trajectory for the long haul. The claim has been made many times that this administration has only had a year to clean up the mess of the last administration. I wish they would at least get started!

Instead of reversing course, they are maintaining Bush’s policies full speed ahead. They are even keeping the Bush-appointee in charge of the Federal Reserve! They are not even making token efforts at change in economic policy. And for all the talk of transparency, we hear that some powerful senators will do all they can to block a simple audit of the powerful and secretive Federal Reserve.

We have been on a disastrous course for a long time. The money supply has doubled in the last year, our debt is unsustainable, the value of the dollar is going to continue its drop, and those Americans who understand where we are headed feel helpless and held hostage by foolish policy makers in Washington.

When the bills finally come due and the dollar stops working we are in for some real social, economic and political chaos. That is, unless we take some major steps now to allow for a peaceful transition in the future. These steps are laid out in my legislation to legalize competing currencies.

First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes.

Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money.

The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power.

Ron Paul is a Republican member of Congress from Texas.

Editor’s Note: CLICK HERE to view the Tenth Amendment Center’s Constitutional Tender Legislation Tracking Page

Last week it was revealed that when Treasury Secretary Tim Geithner was Chairman of the New York Federal Reserve, he urged AIG officials not to disclose to the Securities Exchange Commission relevant details of agreements with banks to bail out Goldman Sachs.

Apparently he felt at the time that regulators and the public would be angry that taxpayer money was used to fully compensate bankers who made some horrifically bad investment decisions. These banks should have suffered the consequences of the huge risks they were taking. After all, they kept plenty of rewards when times were good. Instead, the Fed found a way to socialize these major losses so these banks could survive and continue making more bad decisions, at the expense of the American people and the value of the dollar.

Geithner claims that they had to take politically unpopular actions to save the economy from collapse. Half of that is right – it was politically unpopular, but it is extremely premature at best, to claim the economy has been saved.

It was just reported that the economy shed 85,000 more jobs in December. Unemployment stands at 10 percent officially, and 22 percent according to more traditional calculations. It is hard to argue that this sort of government waste has done anything but harm to our economy.

Raiding Main Street to bail out Wall Street is a foolish idea. Main Street productivity and the strength of the dollar is the bedrock of the economy. You cannot gut this foundation without eventually toppling everything else.

This is what too many policy makers either don’t understand or refuse to face. Or even worse, perhaps they do understand, but don’t care!

In any case, this revelation makes precisely my point about the need for Fed transparency. This claim that the Fed should have “independence” is a canard. They very much enjoy their comfortable pattern of bailing out friends and devaluing the currency with no oversight and no accountability.

Geithner specifically asked officials at AIG not to disclose to the SEC or to the public particulars about this special deal for his friends. We only know these details now because AIG was eventually forthcoming when Congress demanded some answers.

We should be getting this information, and information on all such dealings, straight from the Fed. The Fed should be accountable to Congress because it is a creature of Congress.

The Constitution gives Congress the authority to oversee the integrity of the monetary unit. We have unwisely and unconstitutionally delegated this authority to the Federal Reserve, which has in turn devalued our dollar by 95 percent and counting.

When the Federal Reserve engages in harmful policies, Congress is still ultimately responsible. If the Fed is not made accountable through a GAO audit at least, it will continue to be accountable to no one, and that is unacceptable.

Geithner expects to be praised and thanked for his actions instead of rebuked and fired. He expects to be given more power to engage in “experimental” monetary policy in the future. But he has just given us a very good idea of what the Fed and Treasury would do with more power, what they consider good monetary policy, and why they like their so-called independence.

Ron Paul is a republican member of Congress from Texas.

Why do we have a Constitution? How and why did it come into existence? Just what, exactly, prompted the calling of the Constitutional Convention, which gave birth to it? Most Americans believe, logically enough, that with the passing of the British from the scene it was simply time to create a new government to take the place of the old. That notion, however, ignores the facts that Americans already had a functioning government at the time of the Convention and that that government had been in effect for six years following the final British defeat at Yorktown.

No, the overthrow of the old government and the establishment of the new were prompted by an internal tumult, by domestic corruption, oppression, and chaos, all but forgotten today, that had nothing to do with the departure of the British. That crisis revolved around the printing of paper money by some of the newly freed states. As the Federal Farmer, one of the Anti-Federalists, stated in opposition to the Constitution,

Our governments have been new and unsettled; and several legislatures, by making tender, suspension, and paper money laws, have given just cause of uneasiness to creditors. By these and other causes, several orders of men in the community have been prepared, by degrees, for a change of government; and this very abuse of power in the legislatures, which, in some cases, has been charged upon the democratic part of the community, has furnished aristocratical men with those very weapons, and those very means, with which, in great measure, they are rapidly effecting their favourite object…. The conduct of several legislatures, touching paper money, and tender laws, has prepared many honest men for changes in government, which otherwise they would not have thought of…. [Emphasis added.]

It is vital, first, to see the printing of paper money for what it was — a welfare scheme and an erosion of property rights enacted by impoverished majorities with the sole intent of taking money (property) from the creditor class. It is no exaggeration, no stretch of the imagination, no revisionist or wild-eyed conspiracy theory to state that the Constitution of the United States of America came into being, more than any other reason, to crush a welfare program, to stop the poor from ganging up on the rich and, endowed with the power of democracy, stealing their money.

In their book Decision in Philadelphia: The Constitutional Convention of 1787, Christopher Collier and James Lincoln Collier state,

What concerned Madison most in “Vices” was not only that the states were flouting national regulations, but that they were treating unjustly certain minorities within their own borders…. Madison was especially troubled by the stay laws and tender laws and the paper money that so many of the plain people of the country were clamoring for. These laws, Madison believed, were “oppressing” the creditor minority. [Emphasis added.]

Edward J. Larson and Michael P. Winship stated in The Constitutional Convention,

In several state legislatures, a new breed of politicians, often from lower social backgrounds, was passing debt-relief measures, most notoriously by issuing inflationary paper money. Such legislative action, Madison believed, was an attack on the rights of creditors and amounted to the few being plundered by the many.

The story of paper money is a simple one of greed and corruption fueled by the power of unchecked democracy degenerating into oppression and turmoil. For the Framers, the paper-money crisis was the manifestation of all their fears of mob rule followed by chaos, and it was paper money, far more than anything else, that prompted them to convene the assembly that gave birth to the Constitution. Yes, there were other issues and concerns, chiefly the tendency of the states to strangle interstate trade, and the fear that 13 separate states would constantly war with each other, much like the European powers, or be weak in the face of foreign attack; but, other than the trade issue, those things were merely theoretical in nature, while paper money was all too real.

As you read of paper money, you might wonder just exactly what all the fuss was about. After all, in 21st-century America, when debt-relief measures to the detriment of creditors are this very hour in front of Congress; when battling over which legislator gets the biggest share of your paycheck for distribution to his constituents is all government seems to do; and when there’s a welfare program for virtually every ill that can be imagined by even the most creative among us, — I recently read of the California legislator who has secured funds to pay for tattoo removal because tattoos might hurt a job applicant’s chance of getting hired — just exactly what physical form state-issued money takes might not seem to be the kind of thing over which to change governments. But if the paper-money shenanigans outlined below seem rather tame to the modern American reader, that just goes to show how very far we’ve fallen from the days when the Framers had “an almost religious respect” for property rights.

Paper money and the Articles of Confederation

Paper-money schemes could not stand on their own and necessarily spawned a whole series of additional laws, each one more odious than its predecessor, to prop up the whole corrupt edifice. Property rights aside, the Framers believed that the baneful effects of all the legislative chaos, the internal turmoil, and the international ridicule and disrepute generated threatened the very existence of the nation.

So frightening was the specter of paper money that one Convention delegate said that granting the federal government the power to issue it “would be as alarming as the mark of the Beast in Revelation.” Another delegate said he would “rather reject the whole” Constitution than see the federal government granted that power.

The paper-money crisis began when debtors, usually farmers struggling to make loan payments, would turn to their state legislatures and push for the creation of paper money. That was welfare pure and simple, as the paper money had nowhere near the worth of the gold, silver, or other medium of payment specified in original loan documents, and that, of course, was exactly the idea behind the legislation. Debtors also forced the creation of such extraordinary measures as “stay laws,” which postponed or even canceled debt collection. Then there were the awful “tender laws,” and “ex post facto laws,” which actually compelled unwilling creditors to accept the newly printed paper money regardless of what the preexisting contract specified. Printing paper money was one thing, but to actually nullify preexisting contracts and force creditors to accept it in payment was simply more than the Framers could tolerate.

But it was the example of Rhode Island that most horrified the Framers. The legislature, dominated by indebted farmers, circulated paper money that creditors naturally refused to accept. The legislature then made acceptance mandatory. Many creditors at this point actually fled the state to avoid the dreaded paper. The government’s answer was simply to pass more corrupt legislation, this time allowing debtors to legally discharge the debt by depositing money with courts and posting an advertisement attesting to such in newspapers. Things got nastier still. When Rhode Island’s supreme court declared the paper-money law unconstitutional, the legislature threw the court out of office and replaced the justices.

Paper money and the Constitution

Study of Madison’s Notes of Debates in the Federal Convention of 1787 reveals a fascinating obsession on the part of the Framers with paper money. Amazingly, proposed legislative schemes, philosophies of representation, and existing political arrangements were all judged good or bad almost solely on whether they were likely to lead to or had already led to the creation of paper money. On page after page of the Notes we find that paper money is the overriding, all-important litmus test for analyzing the compositions and powers of state legislatures, the courts, and internal police; determining the rules of a quorum; and debating the proposed federal veto on state law.

Virtually every time the Framers sought to find an example of something “wicked” to be avoided, something they wished the Constitution to repress, some terrible failing of the state government or the Articles of Confederation, they turned to paper money. Mention of the rights with which we are today so obsessed, and those most commonly associated with the Framers, are conspicuous only in their absence.

1. Why is a large republic, spread over a great area, encompassing a multitude of various political interests a good thing? Because, as Madison notes in Federalist No. 10, “[A] rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union, than a particular member of it….”

2. Who should select U.S. senators and congressmen, the people or their state legislatures? Charles Pinkney, South Carolina delegate to the Convention, favored the legislatures because “the people in South Carolina were notoriously for paper money” while the legislature had rejected the idea.

3. Elbridge Gerry, Massachusetts delegate to the Convention, likewise favored the legislatures, because “the people are for paper money when the Legislatures are against it.”

4. Should the federal government have the power to veto state laws that offend the Constitution? Here again, paper money is the litmus test. Elbridge Gerry was generally against it, but, “He had no objection to authorize a negative to paper money and similar measures.” Madison also was for the veto power, pointing to the fate of the Rhode Island judges who had refused to uphold the constitutionality of paper money laws and noting that the newly selected judges would be “willing instruments of the wicked and arbitrary plans of their masters.”

5. Every American knows of the need for “checks and balances,” though few could name paper money as one of the evils to be checked. According to Alexander Hamilton, a lack of such checks in the state governments had led to “our paper money, installment laws, et cetera.”

6. Should the federal government have the power to “interfere” with the state governments in matters of “internal police”? According to Gouverneur Morris, Pennsylvania delegate to the Convention, the internal police “ought to be infringed in many cases, as in the case of paper money and other tricks by which Citizens of other states may be affected.”

7. Setting a quorum in the House and Senate at less than a majority of members might be a good thing. George Mason, after all, “had known a paper emission prevented by that cause in Virginia.”

8. “Proper elections” were better left to the people, if divided into large districts, than by state legislatures, thought George Mason. After all, “Paper money had been issued by the latter when the former were against it.”

Restricting the states

So what did the Framers do to rectify this situation? Where is the constitutional salvation from the evil of paper money? Relief lies in Article I, Section X. It is in Section X that we find the relatively few things that state governments may not do. Many Americans do not realize that at the time the Bill of Rights was ratified, it applied only to the federal government. In other words, until after the Constitution was amended following the Civil War, the states had absolute power to engage in censorship, regulate the press, suppress free speech, or even establish a state-supported church, which, in fact, many of the states actually did. At the time of the Revolution, for example, most of the colonies had tax-supported churches; all except Rhode Island imposed legal restrictions on various sects and “penalties for dissenters, apostates, blasphemers and idolators were numerous and severe.” (Novus Ordo Seclorum, The Intellectual Origins of the Constitution, by Forrest McDonald.)

In short, for the states, the entirety of the Bill of Rights was a nonentity. While the Framers certainly could have attempted to impose bill-of-rights-type restrictions on the states, they did not. It is instructive, then, to see just what state restrictions the Framers actually did write into the Constitution.

The Constitution expressly prohibited the states from such things as continuing to act as separate nations with treaty-making powers, engaging in war, floating a navy, and establishing tariffs. But the most significant checks on state authority, and the only checks that involved the rights and liberties of citizens, were those that would no longer allow the states to “emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts….” In other words, no more paper money and no more voiding of contracts with stay laws or tender laws.

The prohibition of ex post facto laws was instituted for the same reason, for, as previously noted, most of the legislation passed to support paper money was made to retroactively affect existing contracts, a perfect example of an ex post facto law. Bills of attainder were legislative findings of guilt (no judge, jury, or trial) for various crimes, which usually resulted in forfeiture of landed estates. These bills had been unjustly employed to seize Tory properties during the Revolution; but with infringements of property rights becoming more and more common with every passing day, the Framers feared that they could be used against the creditor class at any time.

It is very likely impossible to understand the Constitution without first understanding the importance of Article I, Section X: of all the dozens upon dozens of rights that the Framers could have attempted to prohibit states from infringing, the property rights of the minority were the only ones to make the list. Remember, the federal government could not prohibit free speech, establish or handicap a religion, or regulate the press. The states, however, (again, because the Bill of Rights did not apply to them) could do all of those things. Property rights, then, were the only rights to be protected from both federal and state action.

For those who read of the Framers and their obsession with property rights and paper money and who are tempted to look with scorn on those men for having such a monomaniacal focus on something not so high, not so enlightened or elevated, a harder look at history, a more down-to-earth approach might be necessary.

The Framers saw the entire history of government for what it was: one long, sad saga in which those in power — be they the king, aristocrat, or oligarch, the many, the few, or the one — trampled the rights of those without power. Human beings being what we are, the oppression would take a multitude of forms, but the oppression of property is almost always the first and favorite of oppressions. Anti-majoritarian measures aside, the common man, the people, the majority wielded the power under the new Constitution. History, political theory, and the contemporaneous paper-money crisis all demonstrated that a government of the people would be no different from governments throughout history. It would live down to expectations, and those in power, the numerous poor, would oppress the property rights of others. The Framers wrote the Constitution, then, to safeguard against the chief defect of democratic representative government — the oppression of the wealthy minority by the poor majority.

Rick Lynch is an author living in Virginia. He is finishing a book on constitutional issues entitled They Are Vicious. Send him email.

This article originally appeared in the January 2009 edition of Freedom Daily. Subscribe to the print or email version of Freedom Daily.

Copyright 2009 Future of Freedom Foundation

We’ve come a long way baby, in 233 years!  The elite are still controlling our money, the corrupt, in and out of government, are still making billion (or is it trillion) dollar deals with the devil and the Congress and the President are trying to strip us of our freedom and sell America’s sovereignty to the third world, along with giving away our national wealth and resources.  Other than that, not much has changed.  In fact, we continue to repeat the same mistakes, over and over and over again, to the detriment of all Americans and to the destruction of our freedom and sovereignty.

President Andrew Jackson (1829 to 1837) knew what the central banks were doing and he closed them, paid off the national debt and returned the monetary system to gold and silver coins.  He said about the central banks:

“The paper-money system and its natural associations—monopoly and exclusive privileges—have already struck their roots too deep in the soil, and it will require all your efforts to check its further growth and to eradicate the evil.”

Jackson also said, while throwing the bankers out of the oval office:

“… You are a den of vipers and thieves.  I intend to rout you out, and by the grace of the Eternal God, I will rout you out,” and he did.

Jackson called paper money “rag money”.  He was right then and he is still right now.

Thomas Jefferson said to John Taylor in 1816 that: “I sincerely believe that banking establishments are more dangerous than standing armies…”.

President James Madison (1809 to 1817) said: “History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.”

These men knew what they were talking about.

In the end, it only took the money changers and the power brokers 81 years to undue the actions of Andrew Jackson and get their way again, by convincing the U. S. Congress and President Wilson that we needed another central bank, euphemistically called the Federal Reserve, which isn’t federal and it doesn’t have any reserves.

Congressman Louis T. McFadden (Rep. PA – June 1932) said of the Federal Reserve:  “The Federal Reserve banks are one of the most corrupt institutions the world has ever seen.There is not a man within the sound of my voice who does not know that this nation is run by the International Bankers.” McFadden also blamed the Great Depression on the Federal Reserve.  McFadden was right then and he is still right today.

The Federal Reserve, with the help of many socialist presidents and Congresses since 1913, have turned a once prosperous and wealthy nation, into a debtor nation by corrupting the phrase in the pre-amble of the U. S. constitution where it states: ”….. and promote the general welfare“.  As a result, every dollar we spend now represents debt and does not equal a fair measure of goods and services, as it should.  You would need $21.60 in 2007 to equal what a dollar was worth in 1913, prior to the establishment of the Federal Reserve.  Since 2000, the value of the dollar, thus each American’s buying power, has eroded by over 20%.

Socialist politicians in our government, for almost 100 years, for the purposes of remaining in power by exploiting the weakness in individuals who were looking for a free handout, worked in conjunction with the Federal Reserve to expand the money supply (debt) to pay for the handouts.  Not only was the public treasury pillaged for purely political reasons (that should be treason), but the American taxpayer also picked up the tab for the interest paid to the Federal Reserve and other countries for the loans and the hidden cost of inflation because of diluting the number of dollars in circulation.  This evil is still going on today, but the numbers are escalating exponentially.

The estimated liability for actual government debt and unfunded entitlement programs (Medicare, Medicaid and Social Security) for every man, woman and child in America, is estimated to be almost $350,000.  The Social Security unfunded liability is just shy of $14 Trillion.  Medicare’s unfunded liability is over $73 Trillion.  Both numbers are rising rapidly.

In light of the nation’s current financial black hole, which we are being dragged into by the sheer gravity of it, along with the failure of most government social programs, for the government to even be contemplating, much less debating the implementation of nationalized health care and cap and trade legislation, is not only fool hardy and grossly negligent, it is outright treason.

But as long as there are corrupt politicians who will exploit the weakness in humans for their votes and conspire with special interest groups, giant, international corporations and the Federal Reserve to create money out of thin air to pay for unconstitutional welfare and environmental protection programs, America’s airplane is on fire and is in a crash dive to the deadly sea of national bankruptcy, while Americans are headed for perpetual indentured servitude.

No!  Americans are already indentured (slaves) to America’s rising debt and the relief can only come from patriotic Americans who will bring this madness to an abrupt halt, first peacefully and if that doesn’t work, by any other means.

We claimed freedom from tyranny once before and if necessary, we can and will do it again.  We cannot let the bastards win, or the Revolution from which America was born and all the lives that were sacrificed since then to maintain our freedom, will have been for naught.

It is high time that free Americans everywhere, repeat the words of President Andrew Jackson, to the politicians of Washington DC and to those politicians elsewhere in state and local governments, “… You are a den of vipers and thieves.  We intend to rout you out, and by the grace of the Eternal God, we will rout you out,” and then do it.

President Jackson also said,  “it will require all your efforts to check its further growth and to eradicate the evil”, and indeed it WILL take the efforts of millions of Americans to “eradicate this evil.”

Ron Ewart [send him email] is President of the NATIONAL ASSOCIATION OF RURAL LANDOWNERS, an organization dedicated to re-establish, preserve, protect and defend property rights.

Statement at Hearing of the House Financial Services Committee, February 15, 2007

Transparency in monetary policy is a goal we should all support. I’ve often wondered why Congress so willingly has given up its prerogative over monetary policy. Astonishingly, Congress in essence has ceded total control over the value of our money to a secretive central bank.

Congress created the Federal Reserve, yet it had no constitutional authority to do so. We forget that those powers not explicitly granted to Congress by the Constitution are inherently denied to Congress – and thus the authority to establish a central bank never was given.

Of course Jefferson and Hamilton had that debate early on, a debate seemingly settled in 1913.

But transparency and oversight are something else, and they’re worth considering. Congress, although not by law, essentially has given up all its oversight responsibility over the Federal Reserve.

There are no true audits, and Congress knows nothing of the conversations, plans, and actions taken in concert with other central banks. We get less and less information regarding the money supply each year, especially now that M3 is no longer reported.

The role the Fed plays in the President’s secretive Working Group on Financial Markets goes unnoticed by members of Congress. The Federal Reserve shows no willingness to inform Congress voluntarily about how often the Working Group meets, what actions it takes that affect the financial markets, or why it takes those actions.

But these actions, directed by the Federal Reserve, alter the purchasing power of our money. And that purchasing power is always reduced. The dollar today is worth only four cents compared to the dollar in 1913, when the Federal Reserve started. This has profound consequences for our economy and our political stability. All paper currencies are vulnerable to collapse, and history is replete with examples of great suffering caused by such collapses, especially to a nation’s poor and middle class. This leads to political turmoil.

Even before a currency collapse occurs, the damage done by a fiat system is significant. Our monetary system insidiously transfers wealth from the poor and middle class to the privileged rich. Wages never keep up with the profits of Wall Street and the banks, thus sowing the seeds of class discontent. When economic trouble hits, free markets and free trade often are blamed, while the harmful effects of a fiat monetary system are ignored. We deceive ourselves that all is well with the economy, and ignore the fundamental flaws that are a source of growing discontent among those who have not shared in the abundance of recent years.

Few understand that our consumption and apparent wealth is dependent on a current account deficit of $800 billion per year. This deficit shows that much of our prosperity is based on borrowing rather than a true increase in production. Statistics show year after year that our productive manufacturing jobs continue to go overseas. This phenomenon is not seen as a consequence of the international fiat monetary system, where the United States government benefits as the issuer of the world’s reserve currency.

Government officials consistently claim that inflation is in check at barely 2%, but middle class Americans know that their purchasing power – especially when it comes to housing, energy, medical care, and school tuition – is shrinking much faster than 2% each year.

Even if prices were held in check, in spite of our monetary inflation, concentrating on CPI distracts from the real issue. We must address the important consequences of Fed manipulation of interest rates. When interest rates are artificially low, below market rates, insidious mal-investment and excessive indebtedness inevitably bring about the economic downturn that everyone dreads.

We look at GDP numbers to reassure ourselves that all is well, yet a growing number of Americans still do not enjoy the higher standard of living that monetary inflation brings to the privileged few. Those few have access to the newly created money first, before its value is diluted.

For example: Before the breakdown of the Bretton Woods system, CEO income was about 30 times the average worker’s pay. Today, it’s closer to 500 times. It’s hard to explain this simply by market forces and increases in productivity. One Wall Street firm last year gave out bonuses totaling $16.5 billion. There’s little evidence that this represents free market capitalism.

In 2006 dollars, the minimum wage was $9.50 before the 1971 breakdown of Bretton Woods. Today that dollar is worth $5.15. Congress congratulates itself for raising the minimum wage by mandate, but in reality it has lowered the minimum wage by allowing the Fed to devalue the dollar. We must consider how the growing inequalities created by our monetary system will lead to social discord.

GDP purportedly is now growing at 3.5%, and everyone seems pleased. What we fail to understand is how much government entitlement spending contributes to the increase in the GDP. Rebuilding infrastructure destroyed by hurricanes, which simply gets us back to even, is considered part of GDP growth. Wall Street profits and salaries, pumped up by the Fed’s increase in money, also contribute to GDP statistical growth. Just buying military weapons that contribute nothing to the well being of our citizens, sending money down a rat hole, contributes to GDP growth! Simple price increases caused by Fed monetary inflation contribute to nominal GDP growth. None of these factors represent any kind of real increases in economic output. So we should not carelessly cite misleading GDP figures which don’t truly reflect what is happening in the economy. Bogus GDP figures explain in part why so many people are feeling squeezed despite our supposedly booming economy.

But since our fiat dollar system is not going away anytime soon, it would benefit Congress and the American people to bring more transparency to how and why Fed monetary policy functions.

For starters, the Federal Reserve should:

• Begin publishing the M3 statistics again. Let us see the numbers that most accurately reveal how much new money the Fed is pumping into the world economy.
• Tell us exactly what the President’s Working Group on Financial Markets does and why.
• Explain how interest rates are set. Conservatives profess to support free markets, without wage and price controls. Yet the most important price of all, the price of money as determined by interest rates, is set arbitrarily in secret by the Fed rather than by markets! Why is this policy written in stone? Why is there no congressional input at least?
• Change legal tender laws to allow constitutional legal tender (commodity money) to compete domestically with the dollar.

How can a policy of steadily debasing our currency be defended morally, knowing what harm it causes to those who still believe in saving money and assuming responsibility for themselves in their retirement years? Is it any wonder we are a nation of debtors rather than savers?

We need more transparency in how the Federal Reserve carries out monetary policy, and we need it soon.

Ron Paul is a Republican member of Congress from Texas. His “Audit the Fed” bill, HR1207, currently has over 290 co-sponsors in the House of Representatives.  He is the author of seven books, including “The Revolution: A Manifesto,” and his latest, “End the Fed.”

Tem·po·rar·y – an adjective meaning lasting, used, serving, or enjoyed for a limited time. Derived from the Latin tempora rius, from tempus, tempor-, time.  Synonyms include temporary, acting, ad interim, interim, provisional. Antonym is permanent.

Governor Rendell continues to press for a temporary, 16 percent increase in the Personal Income Tax (PIT), which he argues is the state’s “best option” to balance the state budget.

He says a PIT increase wouldn’t be as bad since roughly half of Pennsylvania households would not pay it. For the half that would end up footing the tax bill, the Governor says the increase would be “less than $5 per week.”

Milton Friedman said:  “Congress can raise taxes because it can persuade a sizable fraction of the populace that somebody else will pay.”

Although $5 may not seem a lot to the Governor, this “temporary tax” adds up to $20 a month, or $240 a year – money I am sure individuals would rather spend elsewhere.

From a look at the definition, “permanent” is an antonym of “temporary;” that is exactly what has become of other “temporary” tax increases throughout Pennsylvania history.

The most famous (or infamous) temporary tax is the 1936 Johnstown Flood Tax.  Enacted as a 10 percent tax on liquor, the toll was set to expire May 31, 1937.  Over the years, the sunset date was extended numerous times until the tax was made permanent in 1951.  The current rate is 18 percent.

A year prior to the Johnstown Flood Tax, the Cigarette Tax was enacted as another emergency tax of 0.1 cent per cigarette. It became permanent in 1951, and the current rate is 6.75 cents per cigarette.

Other “temporary” taxes include the Realty Transfer Tax – enacted in 1951 as a 1 percent temporary tax. The tax was made permanent in 1961 and the rate remains at 1 percent.

The Corporate Net Income Tax (CNI) was first imposed in 1935 at a rate of 6 percent.  The rate “temporarily” was raised in 1977 to 10.5 percent, which was made permanent in 1982.  In 1991, the rate reached a high of 12.25 percent, and in 1995, lowered to its current rate of 9.9 percent.

The Sales and Use Tax was enacted in 1953, and eventually evolved into support for public education.  The tax started at 1 percent and currently is at 6 percent. The initial 6 percent imposition was also to be temporary until 1969, however, later that year the 6 percent was made permanent. Philadelphia and Allegheny County impose another 1 percent on purchases in their jurisdictions.

The Personal Income Tax (PIT) was imposed in 1971 at 2.3 percent.  Throughout the years, the rate has varied and some increases automatically sunsetted.  The PIT reached its current high in 2003 when Governor Rendell raised the rate to its current 3.07 percent.

As you can see, temporary taxes are rarely temporary and higher taxes are simply no good for Pennsylvania’s future or economic recovery. We must get government spending under control and have additional choices other than raising taxes – even if only “temporary.”

Mike Folmer [send him email] of Lebanon, Pennsylvania is a Pennsylvania State Senator who represents the 48th Senate district, which includes all of Lebanon County and portions of Berks, Chester, Dauphin and Lancaster Counties.