 
Liberty Lost:

America's History of Slippery Slopes

American Resurrection:

Book 1

by

Gary W Brown

FairTaxWarrior

www.FairTaxWarrior.com

Liberty Lost:

America's History of Slippery Slopes

Second Edition, Dec 2011

Copyright 2011 Gary W Brown

All rights reserved under International Copyright Conventions.

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This book also available in print at <https://www.createspace.com/3668203>

***~~~***

### Excerpts . . . . .

The history of this nation—from its first administration—has been one of Liberty being lost bit by bit. The ideals that personified this nation were steadily tarnished and abandoned over the following two centuries. Distinct points in time will be discussed when original founding ideals were attacked and were, if not outright done away with, at least transformed into a mockery of their original meaning.

Individual rights implicitly possessed by right of existence morphed into individual privileges granted, and seemingly changed at will, by government decree.

A central Federal Government—limited both by a Constitution and by constrained financial resources—morphed into a near-limitless power which seemed to scoff at constraints, financial or otherwise.

The free market of capitalism, in which entrepreneurs flourished and free men peaceably traded, morphed into a system of government-enforced monopolies in which political deal-making con-men flourished and once-independent men were guided towards the 'common good'.

A foreign policy which focused on leaving other nations free to determine their own destinies mutated into a foreign policy focused on imposing the 'American view' of what the destinies of other nations should be.

Finally, a nation of equal states voluntarily forming a Republic was transformed into a nation of a central government that tolerates the illusion of geographic entities called states.

. . . . .

How would we destroy the _idea_ of the United States of America? It is through this question that we will examine the history of the United States and more importantly the profound changes that have taken place since her founding.

In grateful memory of those who came—and left—before me.

My parents:

Benjamin Gerald (Jerry) and Anita Louise Brown

My parents-in-law:

John Lester (Jack) and Rose Marie Vankat

To my darling wife, Monica,

for putting up with this book project

along with all the other nonsense I put you through.

And to my wonderful children

—Andy, Carrie and Tim—

in whom I am most pleased.

Maybe this book might actually explain

some of my peculiarities.

Table of Contents

Author's Notes: Foreword

Preface

Philosophical Musings

\--Pilgrims & Capitalism

\--The Enlightenment

\----John Locke

\----David Hume

\----Adam Smith

\--Extrapolation: Individual Rights & Government

\----The Nature of Man

\----Rights, society and Government

\--Quotes

Prologue – 1754 to 1789

\--Birth of a Nation

\----War of Independence

\----Articles of Confederation

\----United States Constitution

\----The Ratification Fight

\----Bill of Rights

\----Federalist Papers

\--Quotes

The Plan: Blueprint of Destruction

\--Hearts and Minds

\--The Ideals

\--The Goals

\--Plan of Attack

\--The Tools

\----Constitutional Ambiguities

\----Democratic Government

\----National Treasury

\----People – Religion

\----People – Class Struggle/Envy

\----People – Altuism

\--Strategy

\--Quotes

Implied Powers – 1791 to 1836

\--The Plan: Goal

\--Course of Events

\----General Welfare Clause

\----Necessary and Proper Clause

\----Commerce Clause

\----Early Conflicts

\----Later Conflicts/Problems

\--The Plan: Result

\--Quotes

The End of Federalism: Physical Enforcement – 1828 to 1877

\--The Plan: Goal

\--Course of Events

\----Cultural Divide: North vs South

\----Population Divide: North vs South

\----Taxation Divide: North vs South

\----Early Conflicts

\------Abraham Lincoln and The Republicans

\----Birth of a Nation: The Confederate States of America

\----The War Between the States

\----The Assassination of President Lincoln

\----Reconstruction

\----Later Conflicts/Problems

\--The Plan: Result

\--Quotes

Direct Taxation Tyranny – 1861 to 1913

\--The Plan: Goal

\--Course of Events

\----Constitutional Federal Taxation

\----Early Conflicts

\----Sixteenth Amendment

\----Later Conflict/Problems

\--The Plan: Result

\--Quotes

The End of Federalism: Constitutional Enforcement – 1913

\--The Plan: Goal

\--Course of Events

\----Steady Erosion

\----Election of Senators

\--The Plan: Result

\--Quotes

The Plan: Mission Accomplished?

\--Philosophical Musings

\----The Warriors

\------Ludwig von Mises

\------Friedrich Hayek

\------Isabel Paterson

\------Rose Wilder Lane

\------Ayn Rand

\----Liberty and Capitalism: Inseparable Virtues

\--The Plan: Adaptation

Antitrust Madness – 1890 to 1920

\--The Plan: Goal

\--Course of Events

\----Early Conflicts

\----Sherman Antitrust

\----Later Conflicts/Problems

\------The Clayton Act

\--The Plan: Result

American Progressivism – 1901 to 1941

\--The Plan: Goal

\--Course of Events

\----The Last of the non-Progressive Presidents?

\----Progressive Theory

\----Political Beginnings

\------Theodore Roosevelt

\------William Howard Taft

\------Woodrow Wilson

\------Harding-Coolidge-Hoover

\------Franklin D Roosevelt

\----Later Conflicts/Problems

\--The Plan: Result

\--Constitution for the New Deal – Satire

Federal Inflation Machine – 1910 to 1978

\--The Plan: Goal

\--Course of Events

\----Federal Reserve Bank

\------History

\------Inflation as Policy

\----Later Conflicts/Problems

\--The Plan: Result

\--Quotes

Socialism and Security – 1935 to 1979

\--The Plan: Goal

\--Course of Events

\----Social Security

\----Medicare

\----Later Conflicts/Problems

\--The Plan: Result

\--Quotes

American Conservatism – 1950 to 1988

\--The Plan: Goal

\--Course of Events

\----American Conservatism vs Classical Liberalism

\----Transitions

\----Later Conflicts/Problems

\--The Plan: Result

\--Quotes

The Plan – Secret Revealed

\--Moral Relativism

\--Moral Hazard

Total Meltdown – 1960 to Present

\--Ideals and Morals revisited

\--Moral Relativism Examples

\----Hate Crimes

\----Americans with Disabilities Act

\----Public Education

\----Public Transportation

\----Federal Housing

\----Growth of Government Unions

\----Personal Responsibility

\----Economy

\------Budget ... We Don't Need No Stinking Budget

\--Moral Hazard Examples

\----Welfare (Individual)

\----Welfare (Corporate)

\--Quotes

Foreign Entanglements – 1940 to Present

\--Entangling

\----Pre-Cold War

\----Cold War: Pre-Vietnam

\----Vietnam

\----Cold War: Post-Vietnam

\----Interests vs Friends; Pragmatism vs Emotions

\--American Empire

\----Worldwide Presence

\----Worldwide Protector

\----Empire-Like Costs (and Deceptions)

\--The Plan: Result

The Plan in Perspective

Author's Notes: Conclusion

Acknowledgements and References

# Author's Notes: Foreword

I harbor several wishes in regards to this manuscript.

First, I wish to present my case that many of the perceived problems in our nation are simply symptoms of larger systemic issues that have developed over the course of decades and sometimes centuries. Two reasons this is so critically important are:

* Expending energy and political capital on symptoms tends to use up finite resources that might better be expended battling the root problems.

* Securing victories over symptoms can satiate the desire to confront the root problems.

Second, I wish to present my case that solving our national ills requires widespread societal changes and not just simplistic victories at the ballot box. It makes no difference whether Republicans or Democrats control the Federal Government, for they both equally oversaw the creation of our problems. To believe otherwise is to ignore historical truths. In fact, a good case can be made that the best situation would be if both parties were rejected

I further intend to help Americans to understand the history of their nation's faults as well as its virtues. Obviously we've made plenty of mistakes, but unless we understand those mistakes it is meaningless to say we can fix them.

Finally, I wish to explore the concept behind the United States of America. It is not enough to say that this nation is special—one needs to have a concept of what special qualities it was meant to represent. And if those qualities are not understood ... then how would one ever know if we have wandered from them or if we are rediscovering them.

My goals are:

* To present my interpretation of the concepts behind the United States of America.

* To identify what I see are systemic, root problems in the American system. Their origins will be examined both in relation to history, when they first manifested themselves, and philosophically, what it is about the concepts that are being eroded.

* To put forth ways to address those root problems in a manner that is consistent with the concepts I will be presenting.

Along the way I can assure you of several things.

* I will alienate many who choose to believe the myths about the perfection of the Founding documents and the sainthood of the Founders themselves.

* I will not stick with established history-book platitudes about great American Presidents.

* I will surely draw criticism from Democrats and Republicans due to the equal disdain shown for both major political parties.

* I will most likely draw criticism from Conservatives and Liberals due to the equal disdain shown for both these ideologies, at least the 'modern' versions of them.

* I promise to be honest in my criticisms and always try to get my facts straight. I am not claiming to be a scholarly historian or a constitutional lawyer, and there certainly may arise legitimate questions about dates I refer to or some judicial interpretation. I can assure you I have tried to be accurate with such details.

As with most books of this genre, events are chosen to bolster the opinions I am trying to get across. Do I dwell on the multitude of choices which have made America the envy of the world? Not really. My goal is to identify and explain the causes of our national ills. There is an expectation, certainly by me, that America is supposed to be great and her people are supposed to act morally. It is the other times, the times we as a nation have really messed up, that need to be understood. Those events need to be understood before we can learn from them and hopefully try to correct them. All the good things; we should be expecting those as a matter of course. Whether—in hopes of reversing our national ills—it is of more benefit to dwell on the good or the bad is a question I'll leave for others.

Gary W Brown

March 2011

P.S. The saying may be trite, but I think it is worth remembering: If you don't stand for something you'll tend to fall for anything.

If you waste your time a-talkin' to the people who don't listen,  
To the things that you are sayin', who do you think's gonna hear.  
And if you should die explainin' how the things that they complain about,  
Are things they could be changin', who do you think's gonna care?

There were other lonely singers in a world turned deaf and blind,  
Who were crucified for what they tried to show.  
And their voices have been scattered by the swirling winds of time.  
'Cos the truth remains that no-one wants to know.

To Beat the Devil

Kris Kristofferson, 1970

# Preface

This book is the first in a series presenting ideas aimed at what will hopefully inspire an American Resurrection. Such a Resurrection will have to involve sweeping political, societal, military and economic changes to the United States.

Any discussion of a Resurrection obviously implies a downfall. Thus, this initial book will examine the first 220 years of The United States with particular emphasis on those periods in history which most affected that downfall.

The first portion of the book will go over the philosophical concepts that had the most influence on what would become the United States of America. What did it mean to be an American? Too many of our citizens have, for too long, professed a vague notion that problems exist but yet few can articulate the actual ideals this nation was founded upon. Trying to 'fix' the problems in such an environment is akin to trying to give someone driving directions when you have no clue where they are coming from nor where they are going.

The concepts that formed our nation were real—and revolutionary. In the final century or so leading up to the American Revolution great thinkers posed many ideas that stood the established order on its head. Freedom of the individual was introduced not just as a far-flung fantasy goal but as the basis for societies to succeed beyond anything mankind had yet experienced.

But interesting ideas would remain just that until something new could come along to nurse them from theory to practice. These ideas are collectively referred to as Liberty, and at the end of the 18th century Liberty found form in this upstart country called the United States of America. However, the ideals which guided the founders of this new country—this new experiment—were not new to them at all. We will explore the philosophical theories and writings that molded those ideals, with the goal of defining what really constituted the American experiment.

The bulk of this book will examine historical events pertaining to these ideals. Therefore, this first portion will lead up to the formation of the United States and the embodiment of these ideas.

A concept will then be introduced which is meant to change the way we look at American history. Having identified the ideals that culminated in this new nation, we will then look at how those ideals could best be undermined given the societal and political structure that was evolving in the United States. Our national history can be examined as a series of steps that strengthened those ideals of Liberty or as a series of slides down a slippery slope whereby the ideal of Liberty was continually weakened.

Conventional wisdom seems to be that our history is one of strengthening the founding ideals—with the occasional setback that must be overcome. This certainly seems the opinion taught in American schools.

However, that is definitely not the way this book portrays American history. The history of this nation—from its first administration—has been one of Liberty being lost bit by bit. The ideals that personified this nation were steadily tarnished and abandoned over the following two centuries. Distinct points in time will be discussed when original founding ideals were attacked and were, if not outright done away with, at least transformed into a mockery of their original meaning.

Individual rights implicitly possessed by right of existence morphed into individual privileges granted, and seemingly changed at will, by government decree.

A central Federal Government—limited both by a Constitution and by constrained financial resources—morphed into a near-limitless power which seemed to scoff at constraints, financial or otherwise.

The free market of capitalism, in which entrepreneurs flourished and free men peaceably traded, morphed into a system of government enforced monopolies in which political deal-making con-men flourished and once-independent men were guided towards the 'common good'.

A foreign policy which focused on leaving other nations free to determine their own destinies mutated into a foreign policy focused on imposing the 'American view' of what the destinies of other nations should be.

Finally, a nation of equal states voluntarily forming a Republic was transformed into a nation of a central government that tolerates the illusion of geographic entities called states.

There were individuals attempting to fight this downfall. At the nation's founding these individual represented Liberty. During the course of the downfall the definition of the term Libertarian (i.e. one who advocates maximizing individual rights and minimizing the role of the state) somehow got twisted into the Orwellian definition of 'one who opposes government protections'. During that same period the definition of the term Conservative (i.e. one disposed to preserving existing conditions) morphed from meaning a supporter of the British monarchy (1776) to a supporter of traditional U.S. founding principles (1940) to any opponent of the Democratic Party (2000). Along the way the definition of the term Liberal morphed from classical liberalism (i.e. a supporter of free markets and maximized individual liberties) to Progressivism (1900) and Statism (1940) to any opponent of the Republican Party (2000).

Later entries in this series will introduce ways to return to our founding principles. There will certainly be disagreements on the methods, but far less so if those principles are understood in the first place. There are infinite paths leading to some amorphous goal that can be defined by anyone in their own way. However, if we define the goal as that set forth in the Constitution of the United States, there are a lot less paths leading to it. By not bothering to properly understand our founding philosophies—or worse yet bastardizing those philosophies to fit our own personal beliefs and desires—we eliminate any chance of being taken seriously if we profess to 'return' to something we don't even understand.

**********

# Philosophical Musings

We have all heard, I hope, the saying that 'Those who do not remember the past are bound to repeat it'. That sage wisdom is usually ascribed to the American philosopher George Santyana but the sentiment has been often expressed both before and since.

I personally find the saying 'The best way to eat an elephant is one bite at a time' equally relevant.

It can be debated whether the United States of America represented, at its founding, the most revolutionary societal experiment in human history. Certainly it was one of the top such social experiments.

What should not be debatable is the following: historical evidence shows that nations and empires, certainly _important_ nations and empires, were always shaped and controlled by powerful and influential individuals, families or ruling groups. Important nations became so because of the vision and aspirations of their rulers who used the resources, mostly people, of their nations to achieve the power they sought.

That is a lesson of human history. It in no way or form dissolved because of a social experiment in the libertarian principles of limited government based on laws; of the people, for the people and by the people.

If, then, powerful entities wished to use the various resources of the new United States of America to foster their own aspirations of power they would in effect be faced with the dilemma of how best to subjugate the new nation.

A large nation.

And like an elephant, the best way would be one bite at a time.

Before specifically examining the American experience, it may prove constructive to review some of the philosophical ideas which heavily influenced what was to become the United States of America. We will do so by looking at some scenarios and individuals historically preceding the formation of The United States as an entity. Then, from those examples, as well as later philosophical theories, we will explore the concepts and ideals that appear to have had profound influences on that formation.

## Pilgrims & Capitalism

It might seem strange to throw in a brief history of The Pilgrims as some sort of philosophical idea, but the circumstances of that event did exemplify a lot of what was to become the new American experience.

When the Mayflower reached the shores of what is now Massachusetts late in the year 1620 what followed was a very tumultuous, and deadly, winter. These colonists, many of which were the religious refugees from England we refer to as Pilgrims, had spent several months at sea sailing about in Europe and then crossing the Atlantic to the New World. They spent their first winter in that New World living ship-board while trying to piece together a foothold onshore.

Half of the approximately 130 colonists and crew died that first winter.

As with the few other English colonies in what would become America, the Pilgrims were organized in a communal society where essentially everyone contributed to the welfare of the entire group.

The survivors thrived, comparatively, in the spring and summer of 1621 and that Fall celebrated in a traditional European harvest festival with local Indians. We now celebrate this event as the first Thanksgiving.

The winters of 1621 and 1622, as before, proved brutal and deadly. It was becoming obvious that the small community could not long endure these feast-famine cycles.

William Bradford, at that time the Governor of the colony, decided that the existing contract regarding colony structure (called The Mayflower Compact) was not working and he instead modified it to do away with the communal economic nature of the colony and institute private property rights and a market-oriented labor system.

Each colonist was allotted his own plot of land and was allowed to keep for themselves whatever was produced from that land.

What followed over the next several years literally saved the colony.

Entire families, not always just the men, worked their land and performed other productive tasks. Families who did not grow enough food were able to trade other skills they might have, woodworking, sewing, etc, for food. Men could sell their excess labor to others in exchange for more goods or food than they might produce on their own lands. Specialization of labor and exchange of goods maximized the productivity of everyone.

Most of the colonists prospered, and did so without resorting to violence against their neighbors—a practice which has so often plagued mankind.

In short, they discovered the true meaning of Capitalism.

Now this coincided roughly with Protestant reformers such as John Calvin preaching that work, and the success it wrought, could well be considered a sign that one was a member of the 'elect' which were, according to Calvinism, the pre-determined favorites of God.

For most of early Christian history, work was regarded as something one had to do not only to subsist but also to 'pay-off' the landed aristocracy—to whom one owed physical security—and the Church—to whom one owed spiritual security. The favorites of God were usually considered those individuals who had risen above the work-to-subsist stations of life.

There were few examples from man's past of hard work and self-reliance being enough to bring about true success. A person's class was the main determinate in such matters. While obviously survival was the main measure of success, the other primary recipients of the fruits of diligence and hard work tended towards the kingdom and the church who demanded one's allegiance. The range of benefits any individual could bring to himself or his family was usually fairly limited.

By the time of John Calvin, greater measurements of success were beginning to be realized by individuals as the result of their own efforts. However, the ruling aristocracies could not allow the lower classes to let this idea of success get too out of hand and they still severely limited prospects for class movement. Since part of that ruling aristocracy was the Church, Calvin's teachings that success equated with divine favor complicated the imposition of those limits.

In an isolated continent, removed from central governmental authority, this small group of individuals we call Pilgrims had unwittingly stumbled upon an oft-suppressed innate characteristic of all humans. This fact has always been true but because it contradicted with existing power structures had always—to some extent or another—been squashed. This characteristic could best be summed up as _self interest_ ; that the strongest incentive to work is to benefit yourself—not your neighbor or ruler or church.

Thus the opening of the New World, combined with Calvinism-related ideas, proved an opportunistic turn of events. This realization that work, success and religious favor could now be seen as inter-related was profound.

The original document that these early colonists had agreed to abide by, the Mayflower Contract, was essentially a declaration that all of them would work for the _common good_ and that their primary allegiances were to the Sovereign (King James) of Great Britain as well as the God of Great Britain.

The changes Governor Bradford instituted in 1623 effectively unleashed that tremendous power of self-interest. The small colony survived because of the recognition that the best _common good_ comes from all members pursuing their own _self interests_.

For the waves of colonists who followed the Pilgrims to the Americas, this linkage of 1) work with success, 2) success with Godliness and 3) not having to be beholden to a central authority did a lot to mold later generations.

## The Enlightenment

The period of time corresponding to the development and maturation of the early American experience has become known philosophically as the Enlightenment. Though the experiences in America were shaped by, and helped shape, this period in mankind's history, the Enlightenment was certainly far more widespread than just this piece of North America.

This was a time, and it's not so clear-cut as to what range of years we refer to here, when reason was advanced as being the source and legitimacy of authority.

For the bulk of human societies throughout history, social authority was primarily based on power and heredity. In the mid-to-late 17th century this began increasingly to change, as scientific and political discourse began to move out of the realm of the ruling elites and more to the 'common man'.

The terms 'common man' and 'freedom of thought/expression' certainly seem very constrained when compared with the modern concepts of those terms. However, the rifts developing in those philosophical areas between the 17th and 19th centuries were monumental.

Central to this period was the rise of what became known as the 'public sphere'. The public sphere can be thought of as separate from the state but where the legitimacy and ideals of the state were openly discussed and debated by citizens. Individuals and groups would discuss, in a more or less free fashion, the makeup and actions of the state. Examples of these idea exchanges were coffee shops, salons, town squares, newspapers, publishing houses, debating societies, parliaments, free markets and academic institutions.

Many of these concepts had vague beginnings in the ancient Greek and Roman worlds. Most of that was lost, or at least retarded, dramatically during the roughly 1200 years we refer to as the Middle Ages.

The concept of a public sphere is often affiliated with the term bourgeois, simplistically meaning middle class. There developed during this period distinct societal stratifications between a ruling elite class concerned primarily with obtaining and wielding power, a bourgeois class concerned primarily with bettering their station via the leveraging of private property rights and a working class who Karl Marx would later refer to as the proletariat.

The pecking order, if you will, went something like this.

The ruling elite controlled the apparatus which governed the state (e.g. the military, the legislative process, the state treasury, the police, the courts, etc). The more numerous bourgeois controlled the means of wealth-production (e.g. the land, the shops, the merchants, the mines, etc). The still more numerous working classes controlled usually not much more than their labor, which was primarily rented out to the bourgeois for productive purposes.

Throughout human history, the power attainment of the ruling elite increasingly shifted away from conquer-and-acquire to dependence on wealth-production by the bourgeois middle-class. Likewise, the welfare and living standards of the working classes increasingly shifted from substance-farming to employment by that same bourgeois middle-class.

It is small doubt, then, that the bourgeois would demand more say in influencing, or at least openly discussing, the makeup and actions of the ruling elites. The old elite's grip on literally everything loosened; the public sphere widened to accommodate questioning not only by the middle classes but also by the working classes.

Thus we have this expanding public sphere with its focus on trying to apply the concepts of reason—absolutely necessary to bourgeois productivity—to understand the proper purpose and scope of governments as well as attempt to guide governments to those legitimate roles.

The Enlightenment certainly did not have just a narrow focus on the nature of Government. Profound questions were asked relating to scientific inquiry, religion's relationship to man, the economic relationship among men and many more areas we could broadly refer to as philosophical.

Historical figures such as Thomas Hobbes, Algernon Sidney and John Locke questioned the origin, purpose and structure of governments and began asking the questions of whether societies of men even needed governments.

Relatively new (or at least more bold versions of) concepts were introduced such as capitalism, free markets, the scientific method, religious freedom, societal contracts and the nature of learning itself.

The transition, however, did not occur without conflict. Many of the questioners ended up persecuted and even killed for daring to question the authority and legitimacy of both governments and the Church. Revolutions and civil wars were fought throughout Europe as competing groups faced such arguments. In fact, the madness known as The French Revolution is often considered the endpoint of this period.

In many ways, the sons and daughters of these 'Enlightenment pioneers' found an accommodating home in the Americas, specifically England's American colonies.

The early American colonists were tied to Europe in general and England in particular so much that life was not totally cutoff from the civilization they were accustomed to. But the geographic and cultural differences were great enough that they were not bound by as stringent a conduct of rules with which they philosophically 'had issues'.

Let us examine in more detail some of the giants of The Enlightenment and the ideas they are known for, especially those who seemingly had some of the greatest influence on the thinking of those men who would later craft the Constitution of The United States.

### John Locke

One of the most influential of The Enlightenment thinkers was the English philosopher and physician John Locke (1632 – 1704). He was sometimes called the Father of Liberalism; referring to his (at the time) unconventional beliefs in the importance of individual liberty.

The concept of individual liberty was radical in Locke's time, as individuals were mainly seen as objects, possessions and tools of 'the Crown' and/or the 'the Church'. Individuals were autonomous insomuch as they had to care for themselves and their families, but usually that autonomy was completely subservient to the wishes of the ruling entities.

John Locke was a great pioneer in the branch of philosophy called epistemology, or the Theory of Knowledge. Essentially, epistemology is concerned with questions such as 'What is knowledge?', 'How do we gain knowledge?' and 'How do we really know what we know?'. Locke was especially interested in how the human mind gathered knowledge through perception and the various senses.

He was educated as a physician, but in his 40s began work on a manuscript later to be called the 'Two Treatises of Government'. In it he argues against governments as a monarchy and for legitimizing governments based on individual consent and liberties.

In _Two Treatises_ as well as other writings he strongly espoused the theories of individual liberty and social contracts.

Social contracts are the means by which, though mostly theory in Locke's time, individuals organize into states and agree to trade certain of their sovereign liberties away to form governments in an attempt to gain or maintain social order. The understanding of this voluntary trade—liberties for order—needed to be codified into a binding contract. The implementation of this social contract was what would be viewed as the concept called 'Rule of Law'.

The idea that a government would be formed by the governed and that any beneficial relationship was to be reciprocal and defined by a set of agreed-upon rules (i.e. laws) was certainly not well-received by the ruling elites of England at the time. Partly due to such 'disagreements' Locke fled to the Netherlands in 1683 and resided there till 1688, returning to an England that by then was a bit more tolerant of his political views.

After returning to England he promptly published his ' _Two Treatises of Government_ '. Also published, supposedly unknown to him, were his works ' _A Letter Concerning Toleration_ ' and his ' _Essay Concerning Human Understanding_ '.

In ' _Two Treatises of Government_ ', as previously noted, Locke lays out the rationale for governments being based on individual liberty.

' _A Letter Concerning Toleration_ ' attempted to explain how religious tolerance resulted in a more civil society than government attempts to enforce religious uniformity. The chief conclusion seems to be that the government should not involve itself in the care of souls. This conclusion would be viewed as an early call for separation of church and state. It should be noted, however, that while the logic in this work lays out well why forcing one to conform to a specific religion is not an effective societal exercise Locke himself seems to consider as unacceptable atheists and non-Christian 'believers'. Even among Christians he was strongly biased against Roman Catholics, whom he thought no state other than Rome could really ever trust because of the Roman Papal ties.

In the ' _Essay Concerning Human Understanding_ ', Locke laid out in two books his theories on self-realization and knowledge. In book one he spends time debunking the idea of innate ideas, or knowledge one is born with. Instead, he was of the mind that the human mind starts out blank and everything it is to become is the result of what we perceive through our senses. Just as there are no innate ideas, he reasoned, there can be no innate principles but only those formed through our environment. In book two he expanded on all human knowledge as originating from our senses OR from our reflections and refinement of those ideas. Essentially, the accumulation of knowledge allows us to extrapolate new or modified knowledge. Locke presents arguments for the existence of an intelligent being, though he never really insisted it need be the Judeo-Christian concept of God. It is worth noting that the American Founding Fathers, most of whom were well aware of Locke's views, often referred to God or Providence but seldom if ever alluded to any tradition Christian theology.

John Lock would come to be viewed as one of the greatest Enlightenment thinkers in general and a huge influence on the coming United States of America.

### David Hume

David Hume (1711 – 1776) was a Scottish philosopher, economist and historian.

Most famous in his lifetime as an English historian, his ' _Treatise of Human Nature_ ' is what mainly marked him as a philosophical prodigy. Published when he was only 26, ' _Treatise of Human Nature_ ' was a massive three book collection of essays on acquiring and understanding knowledge, the understanding of emotions and free will followed up by an examination of morals, virtue, vice, benevolence and justice.

As with John Locke, it is thought that David Hume believed in an intelligent creator. Unlike Locke, he was largely considered an atheist because of his refusal to embrace traditional Christian theologies. This was important because being considered an atheist in 18th century Europe was detrimental to one's chances of being taken seriously, especially in matters of human nature. In fact, being considered an atheist at that time and place often ostracized you from society completely.

Of importance to us in our upcoming analysis of the American experience are Hume's theories about ethics, free will, determinism and political theory.

Hume believed all actions, or more precisely the motivations behind those actions, were the result of morals and ethics as opposed to reason. Reasoning alone dealt with facts and was useful not as a motivating force but in shaping how we feel about ourselves and our relationships to our environment. This 'shaping' is itself influenced by experiences, culture, desire for acceptance, etc. The actual motivating forces are the morals and ethics we form through experiences and cultural influences. Then, when confronted by the need to act, we make decisions based primarily on those morals and ethics as opposed to pure reasoning. This can be seen as a facet of self-realization. It also can be extended to mean that morals and ethics are more subjective than mere reasoning, since they are results of various experiences and cultural mores.

Hume believed that events were deterministic: that they are determined by an unbroken chain of prior causes (e.g. A caused B caused C caused D caused ...). However, he also espoused free will as being compatible with determinism.

There were then, as there are now, two philosophical camps in this regard. Some believed that all events are deterministic and free will is impossible; what we refer to as an individual's 'will' is actually pre-determined. Others, and Hume would probably fall into this camp, believed that while events are deterministic individuals exercise free will. One way he presented this idea was in distinguishing between 'necessity' and 'liberty'. The actions of systems, or men, that require no conscious decision-making are necessitated, or determined, by other related events. The decisions of a man, the power to act or not to act upon an event, is determined freely if that decision is not itself forced upon him. The decision taken is influenced by both fore-knowledge of likely deterministic results as well as individual choice.

In short, according to Hume 'free will' and 'determinism' are compatible with 'free will' representing individual influence over the course of 'deterministic' events.

In matters of political theory, several of Hume's beliefs are relevant in this discussion. These have mostly been gleaned from his several political essays, most notably the 1754 ' _Idea of a Perfect Commonwealth_ '.

In those essays he counseled against changing governmental structures unless current structures proved overly tyrannical. He apparently felt this way because he had little faith that any type of government would approach perfection. He was, being a renowned historian, aware and wary of religious and civil discourse in society and urged moderation in whatever form of government was adapted. He felt that a government that abided by rules, a contract between government and the governed, was more important than the actual form of government.

He indicated in ' _Idea of a Perfect Commonwealth_ ' several aspects he would ascribe to his idea of a perfect government, though he was explicit that the same form of government was not necessarily applicable to all societies.

A republic was preferred, with representatives being chosen only by citizens with a sufficient level of property or wealth to be considered societal stakeholders. Governmental functions should be as decentralized as feasible, powers should be strictly separated and higher officeholders should be elected by and from the ranks of the elected representatives themselves. The Swiss militia model was the preferred state defense force, primarily meaning all able-bodied men would be rotated into and out of paid militia service such that all contribute to the security of the nation.

Of the early American founders, it is believed that the only one to have known David Hume was Benjamin Franklin. However, Hume's influence is evident in many writings having to do with formation of the United States.

### Adam Smith

Adam Smith (1723 – 1790) was a Scottish philosopher and economist most known for his published works ' _The Theory of Moral Sentiments_ ' and ' _An Inquiry into the Nature and Causes of the Wealth of Nations_ '.

Smith entered the University of Glasgow at the young age of 14, with his primary studies being moral philosophy. This field of philosophy was focused on the moral concepts of good and evil, right and wrong, justice and virtue. From all accounts he seemed especially enamored with the related concepts of liberty, reason and free speech.

At age 17 he was awarded a prestigious scholarship to Oxford University, though by most accounts he quickly regretted that honor. He did not like Oxford near as much as the University of Glasgow, though he apparently expanded his academic sphere of studies while there. He left Oxford in 1746 but returned to Glasgow in 1751 to teach logic and moral philosophy. He remained in that position for the next 13 years.

Smith's views closely coincided with those of the slightly older David Hume, whom he met in 1750 and with whom he remained friends until Hume's death in 1776.

He published ' _The Theory of Moral Sentiments_ ' in 1759. In it he attempts to explain moral consciousness as a reaction to social interaction. People prefer to feel liked, appreciated and to feel that they are helping others; this is not only to help others per-se but because it makes one look good to society to be viewed as compassionate and moral.

According to Smith humans have a natural tendency to care about the well-being of others for no other reason than the pleasure one gets from seeing others happy. He calls this sympathy. He also felt that most people feel pleasure from being around others with the same emotions and displeasure in the presence of those with contrary emotions. Thus, people are more likely to assist others if they all share a similar emotional state.

Smith observed that people tend to respond more from being around people with shared sympathy for negative emotions than for positive emotions. When we are sad or displeased about something we expect others to respond likewise, which reinforces our interpretation of the event that made us feel that way. If others do not respond similarly, then we assume this means there is something somehow wrong with their moral reasoning. If others do not express joy at events that make us joyful, then we might wonder how they cannot be as happy as we are but seldom do we ascribe poor morals to them because of the situation.

The sympathy we feel for others is itself an expression of our feelings regarding the justness of their morals. If we feel them to be morally just then we tend to be more sympathetic to them in appropriate situations. If instead we judge them to be morally unjust then we tend to withhold our sympathies.

It is these types of observations that this moral philosophy treatise, largely a collection of Smith's prior essays and teachings, involves itself.

But the major work history attributes to Adam Smith, and certainly the one most applicable to formative thoughts regarding the United States, was ' _The Wealth of Nations_ '. Published in 1776 the full title was ' _An Inquiry into the Nature and Causes of the Wealth of Nations_ '. For brevity, and to follow common convention, we shall refer to this piece of literature as ' _The Wealth of Nations_ '.

A major theme was that of the 'invisible hand', an intangible entity that guides economies in the most efficient use of resources. This can be loosely described as an early reference to what would become known as laissez-fare economics.

Smith felt that the interplay of wages, prices and return on capital investments would result in the best allocation of resources in any marketplace. He believed that productivity could be maximized by the efficient specialization, and division of, labor. Furthermore, he felt that the influence of factions, or special interests, were harmful in that their interactions usually resulted in higher prices due to unnatural wage inflation and/or government manipulation of markets.

He laid out formal definitions of accumulated wealth as being used for either immediate consumption or for revenue-generating capital.

He examined the evolution of nations from agrarian to that of commerce-driven economies between cities, towns and among nations themselves. Smith concluded that commerce among nations was the real route to prosperity and wealth, not wars and conquest.

While importation of goods (i.e. inter-nation commerce) is not to be discouraged true national wealth comes about by domestic production. Treaties allowing favored import privileges to selected nations often leads to market conditions less favorable than if all nations were allowed equal access to domestic markets.

In the final chapter of ' _Wealth of Nations_ '— 'OF THE REVENUE OF THE SOVEREIGN OR COMMONWEALTH'—Adam Smith's views regarding government taxation are stated. He felt that the rich should pay proportionately more of their wealth than the poor and also warned that all citizens needed to pay some taxes to the state so that the burden would be shared and equally felt by all.

He also pointed out that unchecked government borrowing would tend to lead to an increase in wars, since nations that were forced to tax its citizens more heavily in wartime would be less likely to engage in such activity than those who could borrow funds to pay for war expenses.

As with David Hume, we do know that Benjamin Franklin had interactions with Adam Smith during his European trips prior to the American War of Independence. Whether the American colonies were a major target of ' _Wealth of Nations_ ' is not clear, but several of those later to be referred to as 'American Founders' were early readers of this important work.

## Extrapolation: Individual Rights & Government

Let us now engage in a bit of extrapolation.

Though it has been attempted many times to divine from history the intent of those men we have come to know as The Founders, I propose we do so again but from the viewpoint of the three philosophical giants we just briefly examined.

We'll add to the resulting conjectures the wording and tone of The Constitution, which we have yet to explore directly, and some additional insights derived from a 20th-century philosophy called Objectivism.

The intent here will be to try and explain why The Founders believed as they did regarding Liberty and Individual Rights. We will then, hopefully, gain a better understanding into why they architected The Constitution in such a way as they did.

### The Nature of Man

A good place to start would be analyzing the nature of Man.

Man differs from other animals primarily by his self-realization and his ability to reason. He knows that, unlike other animals, he cannot just react to situations at hand and expect to live very long. Compared to other mammals he is not overly strong or fast. He has no claws, fur, superior senses or superior agility.

He is dependent for his very existence on one primary feature; his mind.

Man acquires knowledge not only through his meager senses, but also by expanding upon and indeed generating new knowledge by the reasoning power of his mind.

Man, it can rightly be said, is able to exist because of the rational use of his mind. He not so much reacts to his environment as reasons how to adapt to his environment or modify his environment to better meet his needs.

It follows that since reason is the primary sustaining force of man's existence, individual rights necessarily mean the right to exercise that reason. Specifically, it means the right to freely and effectively exercise that reason. To exercise reason means the ability to take independent action on that reasoning.

### Rights, Society and Government

The word 'rights' only makes sense in the context of a social grouping or community. If a man were alone there would never be a question of his being able to do whatever he was able. Thus, we can define 'rights' as moral concepts that define how one interacts with others in a society given that each individual, in order to survive, must be able to independently take action on their own reasoning.

Viewing rights as independent actions implies that such actions can be undertaken, or not, at the whim of the individual. One can either act as a right or by permission. If one has the right to do something they have no need to seek permission before acting. If, however, permission must be sought before action is taken then the action taken is not a right but rather a privilege that has been granted. Of course, if one is forced to take an action then the action would be considered neither a right nor a privilege.

Thus a right is a prerogative that cannot, by definition, be granted by another. Rights are the natural conditions for man's survival.

There is one fundamental right for any rational being; that being the right to life. As we have seen, a man lives through his reasoning facilities and the freedom to exercise actions dictated by that reasoning. All other rights flow from this fundamental right. Some examples are liberty (i.e. the freedom to act), property (i.e. the freedom to possess things that you value) and the pursuit of happiness (i.e. the freedom to succeed— _or fail_ —attempting to achieve whatever you wish).

If one does not have liberty he does not have the means of acting upon that reason which is the chief faculty of his continued existence. Liberty cannot be quantified or enumerated; it exists or it does not exist. If an individual needs to ask if a desired action is permitted then he is not at liberty to act in that manner but rather he is being allowed a privilege.

It thus follows that governments cannot grant liberties; governments restrict liberties. And the best government is the kind which least restricts liberties.

If one does not have the right of property he does not possess the means of translating his rights into tangible reality. No amount of effort will amount to anything if the result can't be said to 'belong' to you. Why would one expend any amount of effort in such a case? If we accept that the rational use of man's mind allows him to mold his environment to serve his needs then it must be reasonable that he also has the right to use, dispose of or keep the things of that environment that he has produced. That is, he owns what he produces. He has the right to that property and to do with it as he pleases.

It thus follows that governments can either protect an individual's right to property (i.e. wealth) or govern over a nation of slaves.

If one does not have the right to pursue happiness then he does not have the right to live for his own sake. What else besides happiness would one pursue? Each individual may measure happiness in differing ways but it is that pursuit which is the reason we desire to exist at all. Though the pursuit is for happiness it is imperative to note that the term 'pursuit' implies the risk of failure. This, then, raises several contemplative questions. If there were not that risk, or we knew we would be sheltered from that risk, then what would be the point in pursuit? Can reward exist without failure? If no matter what the decision or effort one was guaranteed to succeed then would success have any meaning? The answers should point to the fact that for 'pursuit of happiness' to have any meaning 'risk of failure' must exist.

It thus follows that governments should never restrict liberties to the point that the _pursuit_ of happiness is unduly hindered. But at the same time they should not pursue some impossible goal of eliminating risks associated with bad individual decisions.

Individual 'morals' are the standards or ethics that the individual's reasoning tells him is consistent with the manner in which he, for whatever reason, wishes to live his life. Societal 'morals' can be seen as the ethical context that guides societies to agree on which independent actions to allow without an individual being seen as encroaching on the independent actions of his neighbors.

Seen in another way, when individuals form organized societies they must agree on a set of guiding principles. These principles let individuals know which independent actions, or rights, they will be expected to refrain from in exchange for the privileges of living in that society. These form the morals of the society. Societal morals, then, can be thought of as a list of 'thou shall not' items. To act in ways that are against the morals of the society is in effect to break the contract you agreed upon in order to be part of the society.

It stands to reason that the most ideal society for any rational individual is thus the one whose societal morals most closely match his individual morals. When we say something is morally correct we are saying that it is consistent with the moral environment we find ourselves in, which can understandably be confusing when there is a disconnect between societal and individual morals.

A society will usually enforce its moral code by enacting laws. If one acts in ways that have been deemed immoral by his society then that society should not be considered to be acting immorally by forcing the individual to desist in those activities.

In cases where there are clear differences between individual morals and societal morals an individual must choose to either a) work within the societal rules to influence a change in the societal morals or b) withdraw from that society.

Infringement of individual rights comes about via the initiation of force. Rights cannot be violated except by physical force. That physical force may take the form of overt violence, threat of violence or fraud.

So force can thus be good or evil, moral or immoral. Its immoral purpose is obviously in infringing on another individual's rights. In such a case force is initiated against another. The moral purpose of force is to stop someone from infringing on another individual's rights. In such a case force is being used as last resort against the initiator.

When men choose to live together as a society one of the implicit agreements is usually that the society will become the final arbitrator of when to use force. The society in effect has a monopoly on the legal use of force; either in initiating/administering such force or excusing selected use of force, usually self-defense.

If society did not see to its duty to apply force when rights were threatened, rights would only exist for individuals capable of defending themselves against any hoodlum who wanted to deprive them of those rights. If society did not exercise a monopoly over the moral use of such force, every individual member would need to be constantly wary of violence erupting from disagreements over disputed rights. Each individual being unique, and primarily looking out for himself or his own family, conflicts will arise with others who are also unique and looking out for themselves and their families.

Obviously a moral society is one that limits its use of force to moral purposes; such as preventing the initiation of force by any member of the society to deprive another member of his rights.

Given a society supportive of the prime ability to reason and to act upon that reason, what might next be necessary for the most efficient interplay among members of that society?

A government that codifies moral and ethical societal rules as a series of laws!

The primary focus of such laws must be to protect an individual's rights from anyone who seeks to deny them by physical force.

All such laws must also be objective in nature and applied equally to every citizen.

Arguably the most insidious indirect evil that a government can inflict upon society is to take the view that it is _granting_ freedoms to its citizens. A government's role is to define what freedoms are being _withheld_ from its citizens. And a moral government limits the freedoms withheld to those necessary to maintain a moral society.

There is little chance that those sentiments were debated verbatim by our Founders, but there is much in the way of superficial evidence that their views on rights and liberties and the form of government necessary to secure those rights and liberties were much as described above.

They did speak often of Natural Law, which was generally accepted to mean core liberties that men by their very nature must possess in order to live just and peaceful lives. The basis of such liberties is the very nature of man and is not dependent on any government.

It was the arrogance of European monarchs, who thought they could bestow individual liberties on their subjects, which the early Americans were rebelling against. Better, they thought, that men enjoying their innate Natural Law rights should bestow powers to any government they might choose to form.

The reasons for trying to put into words these basic concepts of individualism and freedom will prove necessary to the manner in which we will examine the American experience in later chapters.

## Quotes

William Bradford

"The settlers now began to consider corn more precious than silver; and those that had some to spare began to trade with the others for small things, by the quart, pottle, and peck, etc.; for they had no money, and if they had, corn was preferred to it. In order that they might raise their crops to better advantage, they made suit to the governor to have some land apportioned for permanent holdings, and noy by yearly lot, whereby the plots which the more industrious had brought under good culture one year, would change hands next, and others would reap the advantage; with the result that the manuring and culture of the land were neglected. It was well considered, and the request was granted."

John Locke

"Revolt is the right of the people"

"Being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions."

David Hume

"Be a philosopher; but, amidst all your philosophy, be still a man."

"Liberty of any kind is never lost all at once."

Adam Smith

"Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all."

"The first thing you have to know is yourself. A man who knows himself can step outside himself and watch his own reactions like an observer."

**********

# Prologue – 1754 to 1789

"What do we mean by the American Revolution? Do we mean the American war? The Revolution was effected before the war commenced. The Revolution was in the minds and hearts of the people; a change in their religious sentiments, of their duties and obligations...This radical change in the principles, opinions, sentiments, and affections of the people was the real American Revolution."

\------ Excerpt from a letter from John Adams to H. Niles (February 13, 1818)

The American Revolution was far more than a war of independence, as John Adams articulated late in his illustrious life. Its purpose was not so much separating from British tyranny but rather creating a new societal framework.

For some 150 years before hostilities broke out between England and her American colonies refugees, entrepreneurs, adventurers and wanderers risked severe hardships to cross the Atlantic Ocean and make a new life in the New World. Most considered themselves loyal subjects of the British Empire but for some reason or another felt constrained and shackled by the conventional life in Europe in general and England in particular.

Considering the philosophical and societal changes taking place throughout Europe in the 17th and 18th centuries, which made 'the conventional' not quite so well defined, many people decided to take their chances where they reportedly had more authority in the direction of their own lives.

Freedom had much more of a meaning in the American colonies. There were less rules and regulations, less aristocrats and class system, more upward mobility and opportunity.

It can be argued that the tensions that were building up to Lexington and Concord were not so much overt tyranny on England's part but more her trying to impose British societal constraints and standards on people who had become increasing less like normal British subjects.

## Birth of a Nation

Between 1754 and 1763 Britain and her North American colonies were engaged in war with the French and their American Indian allies. This conflict, which became part of a European conflict known as the Seven Years War, was actually a smaller version of later World Wars in that it spread to all the major world powers of the time and resulted in widespread destruction.

While the colonists were surely brought closer to the British because of their allegiance during that war, external hostilities eventually ended and internal frictions quickly arose. This was essentially because Britain wanted to financially recoup some of her expenses for defending her far-off colonies. The colonists, however, felt they had suffered enough and didn't feel they owed the Mother-country for the help she had provided. It is certainly true that some of the colonists felt very indebted to English protection and aid, but enough of them objected to 'repaying' Britain for what they considered her responsibilities that things started getting tense throughout much of the colonies.

Most of the hostilities in North America, often termed the French and Indian War, ended late in 1760. Most of the territory known as New France, a huge swath of land stretching from what is now central Canada down to modern Louisiana, was surrendered to British and Colonial forces. The more expansive Seven Years War ended in early 1763 with the Treaty of Paris.

Britain did indeed expend a lot of resources in bolstering and maintaining its forces in a land war nearly 3,000 miles to her west, which consequentially decreased available resources for the European conflict on her east. But such are the costs for maintaining foreign empires.

Over the next several years Britain imposed several taxation acts on the colonists intended to recoup at least some of her expenses from the French and Indian War. The taxes were also intended to help allay some of the ongoing expenses of maintaining its American colonies. Among these were the Sugar Act, Currency Act and Stamp Act.

As mentioned, many of the colonists found this unfair and became openly defiant. Groups such as the Sons of Liberty leveraged this defiance and engaged in aggressive acts such as tar-and-feathering customs officials as well as burning British ships.

Tensions continued to rise and in 1770 the so-called Boston Massacre took place. A mob of colonists formed and British troops ended up firing on them, killing five. By most accounts the incident, which was certainly not in any sense of the word a massacre, was chiefly caused by a false accusation from a colonist. A relatively minor retaliation by a British guard led to a British contingent being surrounded by an angry mob of colonists. In the confusion someone fired a weapon and five colonists were killed.

Regardless of the confused accounts, it was seized upon as a 'massacre' and became a rallying cry for further resentment and violence.

Groups had been forming informally, especially around the Boston area, since the mid-1760s to facilitate communication between the colonies and to coordinate collective actions against British policies. These were generally referred to as Committees of Correspondence. In late 1772, Boston officially established a Committee in the face of increasing tensions and similar groups rapidly spread throughout Massachusetts. By the summer of 1774 every American colony had at least one Committee of Correspondence in operation.

These Committees proved to be the main groups behind the growing insurrection, coordinating activities and even directing espionage actions to usurp British authority. Most of the major American leaders during the Revolution served on the various Committee of Correspondence groups.

### War of Independence

In 1774 the so-called Intolerable Acts (e.g. Boston Port Act, Quartering Act II, Administration of Justice Act, etc) prompted the First Continental Congress to gather in Philadelphia. Every colony except Georgia was represented, with a total of some 50-odd representatives. Most representatives were members of a Committee of Correspondence from their respective colonies.

This Congress organized a colonial boycott of British products, published a list of grievances for delivery to King George III and laid preliminary groundwork for a Second Continental Congress to meet if the planned boycott did not avert open warfare.

A group of delegates proposed a Plan of Union which sought reconciliation with Britain. They proposed a colonial Parliament be formed whose consent would be required for any British imperial measures. In effect the two Parliaments, British and American, would have to agree or compromise on any legislation having to do with the American Colonies.

This plan, called the Galloway Plan of Union after its author, was narrowly defeated by the more rebellious delegates.

Though the boycott that began January 1, 1775 appeared remarkably successful, events in April rendered it mute.

On April 19, 1775 several companies of British troops attempted to seize colonial military supplies thought to be cached in Concord, Massachusetts. In reality the colonial militias had known the British were planning such a raid and had removed the Concord supplies but planned to engage the British troops if and when the raid was launched.

Small numbers of colonial militia in and around the town of Lexington engaged the British troops at dawn of the 19th, falling back before the British as they advanced. By most accounts no one really anticipated hostilities at Lexington and to this day it is unknown who fired the first shot.

At the outskirts of Concord the Americans concentrated their forces and forced the British to withdraw. The outnumbered British were attacked several times during their retreat, finally receiving reinforcements in the vicinity of Lexington. A series of running battles raged as the British continued their retreat to Boston.

The battles of Lexington and Concord were the opening salvos of the American Revolutionary War.

American forces besieged the British-occupied city of Boston for the next year, eventually resulting in British withdrawal from the city in March of 1776. During this siege British forces suffered possibly their greatest single-day loss of life of the entire war at the Battle of Bunker Hill in June of 1775. Bunker Hill was technically a British victory but tactical mistakes by both sides resulted in American withdrawal from defensive positions that they occupied on Bunker and Breeds hills. In the process they inflicted over 1,000 British casualties.

In May of 1775 the Second Continental Congress met in Philadelphia. This time there were representatives from all thirteen colonies, roughly 50 in number at most times. The Congress's main task, of course, was to coordinate actions regarding the ongoing war against Britain.

In June they created the Continental Army and put as its commander a member of the Virginia delegation, George Washington. In July they sent a final appeal, the Olive Branch Petition, to England asking for a secession of further hostilities and a settlement of tax and trade disputes. The Olive Branch Petition, however, was never really considered by the British Parliament, in part because of a letter intercepted around the same time from Congressman John Adams. In it, Adams informed friends of his that war was inevitable and that the colonists should be doing more to prepare for a prolonged conflict. Combined with the remarks by Adams, the Olive Branch Petition was seen as proof of how divided the colonists were to the prospect of a prolonged war.

The Congress assumed functions of a national government, such as raising armies, appointing generals, appointing ambassadors, signing treaties, obtaining loans from Europe, issuing paper money, and disbursing funds. The Congress had no authority to levy taxes, and was required to request money, supplies, and troops from the states to support the war effort. In the years that followed, many states often ignored or refused those requests.

In January of 1776 Thomas Paine, a newly-arrived Englishman who had been in Philadelphia barely one year, published a widely popular pamphlet called 'Common Sense' in which he presented reasons why the American colonies should declare independence from Great Britain. 'Common sense' was indicative of the revolutionary fervor widespread at the time.

In May of 1776 the local colonial conventions in Virginia declared the Commonwealth of Virginia to be independent from Britain. Virginia, preferring not to be seen by Britain as one of the few colonies to declare independence, sent word to its delegates in Philadelphia to press for a colony-wide declaration of independence. Virginia Congressman Richard Henry Lee proposed such a declaration to the Second Continental Congress on June 7, 1776.

On July 2, 1776 the Congress approved the resolutions for independence and Virginian Thomas Jefferson put the finishing touches on the document. Approved on July 4, 1776 it became known as The Declaration of Independence.

The thirteen states, the term colony no longer applied, developed differing constitutions to govern themselves. Generally, these were organized along the lines of the English parliamentary system the colonists were most familiar with. The Continental Congress set about after the Declaration of Independence to form some framework for a central government that would bind these states together in defined way.

The Congress was having poor results in getting the states to devote resources to the war. Essentially all they could do was request aid and beg for help while the Continental Army tried to hold itself together. In fact, by far the Congress's greatest strength in those early years was the perseverance of General George Washington and his ability to hold his ragged troops together given the poor support they were receiving.

Following the British withdrawal from Boston in early 1776, they regrouped in Nova Scotia and attacked the Continental Army around the New York area that summer. In September of 1776, after a series of American defeats, British forces under General Howe forced Washington and his army to withdraw.

Defeat after defeat in rapid order seemed to befall Washington's forces. Morale was somewhat raised by a daring raid across the Delaware River on Christmas night of 1776. During the raid a force of British mercenary troops (i.e. Hessians) was caught unaware near Trenton, New Jersey and most of them were captured. Then, several days later Washington's forces successfully repulsed a British attack near Trenton followed in quick succession by a victory at Princeton.

In June 1777 the British General Burgoyne was given the task of attacking south out of Quebec to draw away American forces so that the main British forces under General Howe could better defeat Washington and bring the war to an end. General Howe's forces did succeed in capturing Philadelphia in September of that year but did not adequately support Burgoyne who ended up surrendering his entire army at the Battle of Saratoga in up-state New York in October.

While Saratoga was a crippling blow to the British, there was still little doubt that they could prevail militarily against the undisciplined and poorly-equipped Continental Army. General Washington chose the area around Valley Forge, Pennsylvania for his winter encampments and spent the winter of 1777-78 trying to hold his beleaguered forces together while attempting to determine the best strategy for continuing the war. It was here that he came up with the strategy that ultimately prevailed.

The key to victory, Washington determined, was to prevent the Continental Army from being destroyed. Time was on his side, since the expense of maintaining an army in far-off America had to be taxing on England. The most important focus, then, needed to be keeping his army intact and ensuring that any battles were ones of his choosing and ones where he was assured clear ability to withdraw his forces safely if things went bad.

Meanwhile, the Continental Congress in November of 1777 sent to the states for ratification the Articles of Confederation. They had spent over a year after issuing the Declaration of Independence debating the form that an alliance between the states should take. Since the British had taken Philadelphia in September the Articles were finalized in Congress's temporary home of York, Pennsylvania. The Articles were not ratified by the requisite number of states till early 1781 but effectively served as the de facto form of government for the new nation till that time.

Let us put aside discussions about the Articles of Confederation until later. At this point it will be sufficient to point out that a main purpose of the Articles was to show to the world in general and England in particular that all of the thirteen states were committed to standing together.

In February of 1778 England's chief European rival, France, formerly entered the war on the American side, though that meant mainly economic and political support until years later.

In June of 1778 the British abandoned Philadelphia to better consolidate once again around their main base of operations in New York. Combining that with General Washington's new harassing strategy and the northern theater of war essentially became a stalemate with little significant action. The southern theater (Virginia, the Carolinas and Georgia) saw the bulk of action from 1778 to 1781.

The populations of the southern states were generally considered to have more allegiance to Britain. The idea was that higher percentages of Loyalists, people loyal to the British Crown, and slaves should allow the British forces greater freedom of operations.

The years of 1779 and 1780 saw the British capture of Savannah, Georgia and Charleston, South Carolina as well as the establishment of smaller forts along the coast. They hoped to attract Loyalists to their forces or maybe even entice southern states to abandon ideas of independence. That strategy died when on October 7, 1780 an American militia force inflicted a devastating defeat to Loyalist forces near King's Mountain, North Carolina.

In March of 1781 the last state ratified the Articles of Confederation. The war was now officially between Great Britain and the United States of America. Also, several months earlier, French troops had been landed on American soil to augment the naval forces it had been deploying to aid the new nation.

The British forces under General Cornwallis congregated at Yorktown, Virginia in the summer of 1781 with the intent of re-supply and eventual naval evacuation back to join British forces in New York. In August of 1781 General Washington was persuaded by the French General Rochambeau to divert American and French forces from around New York and undertake a forced march south to join an ongoing siege of Cornwallis at Yorktown. Any hope of English naval aid was dashed by a French naval force in the Battle of the Chesapeake on September 5, effectively trapping Cornwallis' forces at Yorktown to face a vastly superior American/French force.

General Cornwallis surrendered his forces on October 17, 1781 during the Battle of Yorktown. The English were not prepared to start all over again from their base in New York, this time against America and France. For all intents and purposes the hostilities in America ended with Yorktown.

The Treaty of Paris officially ended the American War for Independence on September 3, 1783.

### Articles of Confederation

As mentioned, work on the Articles of Confederation coincided with issuance of the Declaration of Independence. There was no way that thirteen colonies, or states by this time, were going to defeat the British Empire unless they did so united.

Each state had by this time adopted a constitution of its own and no one was under the illusion that any of those states would be willing to abandon its new sovereignty to a new empire just because it was based in Philadelphia rather than London.

Let's look at some of the differing forms of state government before examining the document that was to describe a confederation of them.

As mentioned earlier, these where former British colonies so they naturally gravitated to the form of government they were familiar with; the British parliamentary system. The overwhelming majority also believed strongly in social contracts, where a written constitution would spell out the roles and responsibilities of the government and the governed. They felt that without such a contract the arguments against the abridgement of rights they felt Britain had been guilty of would be meaningless.

It is not too far of a stretch to imagine that some of these new Americans felt a twinge of guilt because, since there was no single British compact, there had really been no definitive way to say that the British Parliament had violated anything specific.

There was unanimous agreement that the state governments would be composed of representatives elected by citizens. The individual states, however, differed in their determination of how those representatives were elected.

All of the states restricted the right to vote to males who could meet certain criteria. One of the most wide-spread restrictions was that the voter must be white, although free blacks could vote in several states if they met the other voting requirements. Most states required a certain level of accumulated wealth to vote. Wealth was viewed as an indication of an increased level of involvement and stewardship toward the community as well as having more of a stake in the management of that community. While age was a restriction in some states, the requirements on wealth or land holdings usually precluded young voters.

Different religious affiliations were sometimes used to restrict suffrage. Some Constitutions mandated that only Protestants could vote or hold office. In some states Jews and Catholics were barred from voting or holding office.

It was not uncommon for less than half of the free male population in some states to actually qualify to vote.

The structure of the state governments varied widely. In some states the voters would elect an Executive branch, whether a Governor or an Executive Committee, and an assembly of legislators. In other states the voters could elect just a legislative assembly who would then appoint a Governor. In some judges were elected directly while in others the legislative assembly appointed judges.

In some states the legislative assembly consisted of two houses, in some one. Some would allow an individual to hold multiple offices while others limited an individual officeholder to a single office.

Generally there was a belief that the majority of power should reside with the legislative branch of government, as it was felt that this body would more closely represent the will of individuals due to its greater number of members. Still, explicit separation of powers between executive, legislative and judicial branches was high on the citizenry's priority list after having witnessed real or imagined bickering between government officials over who was supposed to do what.

Once war became a certainty the prime concern was in ensuring that all of the states cooperated against England. If one or more states decided to make a separate act of reconciliation the British would surely have seized upon that opportunity to drive a wedge between the states.

As expressed by Benjamin Franklin prior to signing the Declaration of Independence, " _We must, indeed, all hang together, or most assuredly we shall all hang separately._ "

Thus, the Articles of Confederation were seen as a necessity to bind the states not just as thirteen independent and sovereign entities fighting against British rule but also as a coalition of thirteen sovereign entities committed to that united goal.

These Articles by 1777 had largely taken on the form formally ratified in 1781. They are summarized as follows.

**Article 1** _. That the name of the confederacy established shall be The United States of America._

**Article 2** _. Each state retains its sovereignty, freedom, and independence. That every power, jurisdiction, and right not expressly stated in this document as being reserved to the United States shall remain with the states._

**Article 3** _. The states will enter into a firm league of friendship with each other for purposes of common defense, the security of their liberties, and their mutual and general welfare. Any attack made on, or force offered to, any State will be as an attack on all states. Such attack may be on account of religion, sovereignty, trade, or any other pretense whatever._

**Article 4** _. Freedom of movement will be allowed between states, excluding criminals. All people are entitled to the rights established by the state into which he travels. If a crime is committed in one state and the perpetrator flees to another state, he will be returned to and tried in the state in which the crime was committed._

**Article 5** _. Each state shall have one vote in Congress, but can have a delegation of between two and seven persons. Delegates are appointed by their respective State legislatures and may not represent the state any more than three years out of any six year period. No state delegate may hold any United States office or be receiving any monetary compensation from the United States. There shall be no legal action brought about because of any speech or debate made within the Congress._

**Article 6** _. Only the central government is allowed to declare war and conduct foreign policy. No states may have navies or standing armies, or engage in war, without permission of Congress. Exceptions are allowed for defensive matters. State militias, and the material to support them, are encouraged to be maintained._

**Article 7** _. If an army is raised for the United States common defense, each state shall be responsible for raising its own contribution and shall appoint all officers, colonels and below, for those forces._

**Article 8** _. Any expenditures of the United States shall be made from a common treasury whose funds are collected from the states according to the real property values of each._

**Article 9** _. Enumerates the powers of the central government, among these being: to declare war, to establish weights and measures, to coin money, and for Congress to serve as a final court for disputes between states._

**Article 10** _. Defines a Committee of the States which can function as a national government when Congress is not in session._

**Article 11** _. Allows for the admission of Canada to the United States if it agrees to these Articles but allows for admission of other states only if at least nine of the current member-states agree._

**Article 12** _. States that all war debt incurred by Congress to be the responsibility of the United States._

**Article 13** _. States that the Union shall be perpetual and that Articles of this Confederation shall be inviolably observed by every state. Any alteration to the Articles must be agreed to in a Congress of the United States, and be afterwards confirmed by the legislatures of every state._

The Articles of Confederation had several problems. Those problems would become clear over the intervening decade but the important point was the formation of a United States of America in which to engage in the war against England.

The first four Articles are just and necessary. They establish the name of the Confederation and state that it exists not to take over sovereignty from the states but to be a vehicle for the states to cooperate in common defense. Individuals within the states are freely allowed to move from state to state as long as they are not doing so as fugitives from any state law.

As discussed earlier, the laws and societal structure within each state varied greatly and it seemed reasonable that individuals should be allowed freedom to move to any state in which they felt most comfortable in and could better prosper.

It is worth noting that Article 4 is the only place in the Articles of Confederation in which the relationship between individuals within the new United States is mentioned. All others refer to the relationship among the states. This is in complete concert with the idea of a decentralized and limited government, as well as the words of the Declaration of Independence.

The Declaration declared that all men are created equal with certain unalienable rights, chiefly Life, Liberty and the pursuit of Happiness. To protect those rights they institute Governments that derived their powers from the consent of the governed.

Historically nations were considered sovereign with the people being subject to the laws it proclaims. The Declaration in effect declared the people as sovereign and governments are instituted by those people not to tell the people what they can do but to protect the rights of the people.

What does it mean for an individual to be sovereign? It means that unless one infringes on the sovereignty of another (i.e. threatens or inflicts coercive force) then one is free to do as they please.

Sovereign individuals agree to give up some of their sovereignty to a state for common protection, primarily against infringement by others. If it is deemed that a state has failed to serve the purposes that an individual thought it would, then that individual can realign himself with another state that seems more to his liking.

The concept of decentralized and local government is that the closer to the individual the government is the more responsive that government will be to the needs of the individual. This, of course, depends on the concept of individuals as sovereign entities and that the governments are truly formed by those individuals for the purpose of protecting that sovereignty.

Article 4 is thus crucial in that it explicitly forbids a state from refusing free individuals the freedom to leave if they find the state objectionable. Obviously there were disagreements, and would be more disagreements, over the qualifier of 'free' individuals.

Articles 5 and 8 would prove very detrimental to the new Union.

On one hand there were thirteen states of varying population, geographic size and wealth. Funds to a United States treasury could only be collected, albeit voluntarily, from individual states and the amounts to be collected would be apportioned based on estimated valuations of the land and buildings existing within each state. On the other hand, each state had a single vote in the Congress over actions that would commit the United States to incurring debt.

So each state had 1/13th of a say in deciding Congressional actions. But each state would be responsible for more or less than 1/13th of the taxes that were supposed to be contributed to the United States common treasury. Most of the states had restrictions on who could vote in that state primarily to ensure that the people who pay the taxes have more of a say over what the state does with those tax monies. And yet the United States treasury was set up so that approval to commit its money could be equally voted upon by states that did not equally share in the taxes it contributed.

The main reason for this common treasury to exist was to pay war debt and any new military expenses. However, the temptation was still there to make decisions to pay one's debts with other people's money.

While on the subject of taxes and war debt we should temporarily skip to a discussion of Article 12. This stated that war debt incurred by the Continental Congress, before ratification of the Articles, was to be absorbed by the central treasury. This was to assure holders of such debt that the new nation was not just going to forget about the massive financial obligations incurred during its creation. Though the bulk of war debt had been incurred by individual state governments, and was thus their responsibility, the Continental Congress had also incurred a large amount of debt. The chief foreign entity to whom this debt was owed was France. The majority of this national debt, however, was owed to individual Americans.

Under the Articles of Confederation there was no central authority forcing states to comply with requests for taxes from the Congress. This presented a huge problem. Some states paid toward that debt by contributing taxes asked for by Congress—others did not.

Remember that the war in large part had been fought in response to unfair taxation under British rule. It might well have been this fact that led to the insufficient taxation powers of the Articles.

During the war the Continental Congress, lacking a taxing authority, had issued printed notes called Continentals to pay for needed war costs. These notes were backed by no tangible assets but the states were asked to pay real money, usually called specie, in redemption of these notes. It was initially considered unpatriotic not to accept Continentals as payment but after roughly 1777 most states felt compelled to pass laws saying these debt notes had to be accepted for payment. Legal or not, neither the states nor anyone else wanted to be stuck with this paper that wasn't backed by anything tangible.

Sadly, many Americans were effectively robbed to pay for the war of their own country. It has been estimated that at the outbreak of war in 1775 this fiat money (currency that has value solely due to government decree ) was generally only worth 90% of corresponding hard currency (e.g. gold) , by 1777 only 35% and by 1780 only 1%; thus the saying 'Worthless as a Continental'. To add to the rapid devaluation of these notes, the British effectively conducted a counterfeiting campaign as well.

The Articles transferred the outstanding _national_ debt from the war to the central treasury of the United States. Without a way to force collection of taxes from the states, however, there still was not enough real money to buy back the Continentals. One has to assume that ordinary Americans who had been forced to accept this worthless paper for payment of goods and services were already pretty much ruined, and most of the Continentals were repurchased over the years at hugely-discounted prices, often for only pennies on the dollar.

If somehow the government could ever be in a position to redeem the Continentals, especially at face value, most of the debt holders stood to make massive profits. These American debt holders certainly had a vested interest in seeing a more powerful national government come into being.

This war debt problem would linger throughout the 1780s.

Articles 6 and 7 provide for a common defense, though as mentioned that was hard to do with no consistent source of revenue.

Articles 9 and 10 spell out the limited powers of Congress and the central government. Article 11 is strange because it mentions admitting new states to the Confederation but only if at least nine existing states vote to allow entry. Nine states represented about a 2/3 majority in 1781, the year of final ratification, but obviously any addition of new states would dilute that percentage.

Article 13 allows for altering, or amending, the Articles only with the agreement of all the states. This would make changes very hard to accomplish. More interestingly, it also specifically states ' _the Articles of this Confederation shall be inviolably observed by every state_ ' and ' _the Union shall be perpetual_ '. This makes sense if we once again remember the main reason why these Articles were needed. The states needed to face England as a united entity. It was far from certain when the Articles of Confederation were drafted whether the Revolution would succeed, and it was imperative that all the states stuck together in the face of their enemy.

Referring back to our earlier discussions regarding sovereignty, individuals knowingly surrendered some of their sovereignty when they formed governments because if they did not then that government would not have the means of protecting them. If there weren't other individuals or other nations which would seek to do away with the rights of the people then governments would not be necessary. This is an example of a necessary evil; surrendering some rights to secure security for all rights.

It seems that expediency overshadowed this reasoning with regards to the Articles of Confederation. With the exception of Article 4, freedom of individual movement, the entire document lays out the relationship between sovereign states. As with an individual, the only reason a state would join a grouping of other states would be for protection and mutual benefit. And as with an individual, the only way to have such a grouping be able to protect its members would be to enter into an exchange whereby some sovereignty is surrendered to the group in exchange for security.

The Articles of Confederation did not ask much from the states. They had to refrain from maintaining an army or navy, it was true, but it is doubtful any of them could have afforded to do so anyway. They had to refrain from entering into foreign treaties. They couldn't declare war on anybody. It is doubtful those stipulations bothered most of them.

The United States of America, apart from its member states, was basically impotent however. Its main 'prerogatives' seemed to be to coordinate military forces, when needed, and pay off Revolutionary War debt. For those it depended entirely on requests to the states; with little in the way of recourse if they refused.

This, however, remained the relationship that defined The United States of America for its first 6 years of existence.

### United States Constitution

Under the Articles of Confederation the United States struggled from 1781 to 1789. The primary reason for this was that the Confederation Congress, representing the only legitimate branch of Government, was far too weak to be very effective.

It lacked the power to collect tax revenues using any means other than requesting funds from the states. It is estimated that during the 1780s far fewer than 50% of the taxes levied by states on their own citizens were actually paid. It is also estimated that over this period the states paid less than 50% of the taxes requested of them by the U.S. Government.

It lacked any governmental branch besides the legislative power granted to Congress. There was no provision for a national court system, which meant that individual states had no set venue for arbitrating interstate disputes. And there were quite a few disputes since the national Congress had no authority to regulate interstate trade.

It lacked a strong Executive. There were ten U.S. Presidents during the nearly eight years the Articles of Confederation were in effect. However, their only role was to preside over the Confederation Congress. They had little in the way of power in and of themselves.

It lacked demographic balance. The single vote per state gave the smaller states more influence relative to the larger ones. The larger states, who contributed more taxes, certainly should have had more say in how those taxes were to be used.

A series of events finally persuaded both the Congress and other prominent Americans that the Articles needed amendment:

In 1783 there was a near mutiny by the Continental Army. They had been promised wages that were not being paid and at one point they threatened to hold Congress hostage in Philadelphia. The Confederation Congress relocated to several different cities before finally appropriating enough funds to satiate the troops.

Many state legislatures were imposing punitive tariffs on trade with neighboring states, making worse an already horrendous economy. Some states were charging higher tariffs against other states in the Union than they were against foreign governments, including England.

Britain refused to leave a few outposts it still held in the Northwest, primarily because local governments refused to return the confiscated lands of Loyalists (i.e. colonists who had maintained allegiance to England). There were incursions and unauthorized agreements with the Spanish being made along the western borders. There was no money to adequately address any of these security issues.

In some states extremely harsh taxation policies were enacted to pay their state-obligated war debt. The most extreme case was in Massachusetts, where in 1786 and 1787 an uprising of mainly poor farmers—called Shays' Rebellion—shut down many of the state courts that were enforcing property confiscation for non-payment of taxes. A mercenary army disbanded the rebels in March of 1787 but not before the federal military arsenal at Springfield, MA was temporarily seized.

In the fall of 1786 delegates from five states assembled in Annapolis, Maryland at the urgings of the Virginia Legislature to investigate ways to amend the Articles of Confederation. In early 1787, at the urging of attendees of that Annapolis Conference, the Confederation Congress finally called for a new Constitutional Convention to be held in Philadelphia that May.

On May 25, 1787 there were enough delegates present to begin the Convention. It had been delayed for more than a week because not everyone could get there in time—travel was not always easy in colonial America. Over the next several days 55 delegates assembled, representing twelve of the thirteen states. Rhode Island chose not to send any delegates because it was not especially supportive of the need to change the status quo.

The bulk of the delegates in attendance were plainly biased towards a stronger national government, far more so than any random sampling of Americans in general. This seemed especially true of the three men who clearly had the greatest impact on the Convention; James Madison, Alexander Hamilton and George Washington.

Not in attendance were the most outspoken opponents of a strong national government; Thomas Paine, Patrick Henry, Sam Adams and Richard Henry Lee. Thomas Jefferson, who held many of the same concerns but would not officially side with either camp, was U.S. Minister to France and was out of the country. If these men had attended events would very likely have turned out much different than they did. This is mainly because they would have vigorously opposed the Convention proceedings being held in secret, as ended up being the case.

George Washington was unanimously elected to act as chairman of the Convention, as he was without a doubt the most respected and admired man in the United States. Initially declining a position on the Virginia delegation, a vigorous campaign by fellow Virginian James Madison had convinced him of the importance his support would lend the nationalist cause.

It was decided that in order to promote 'free and open debate' the Convention proceedings should remain secret. While the Convention's purpose was to come up with ways to amend, or fix, the Articles of Confederation many of the delegates from the outset appeared determined to come up with a new system to replace the Articles. The argument about 'free and open debate' may have been just that, but it could just as easily be explained as a means of plotting with co-conspirators without having to deal with a hostile citizenry and press.

It many respects the Convention represented a coup d'état, albeit a peaceful one, rather than the planning of a set of amendments to the current government.

The three main models put forth to base changes on were as follows.

A Large-State Plan was proposed by members of the Virginia delegation, primarily Edmund Randolph and James Madison. In it the national legislature would be composed of two chambers. The lower chamber would be elected by the free people of the states and would thus be proportionate to population. A state's upper chamber representatives would be nominated by state legislatures and then voted on by state delegates of the lower chamber. The national legislature would elect a president (i.e. executive), whose main function would be to carry out the will of the legislature. The national legislature would be able to veto state legislatures in cases where the state was violating national laws. A national judiciary would be appointed by the legislature with a form of Supreme Court as the court of last resolve. Finally, the Supreme Court and the president would form a Council of Revision that could veto either state or national legislatures if their actions were determined to violate the national constitution. All elective offices were to be of fixed durations and limited terms.

A Small-State Plan was proposed by members of the New Jersey delegation, primarily William Paterson. It could be best described as amending the Articles of Confederation, which was really what the Convention was called for. In it the national legislature would still be allowed one vote per state. The Congress would still require nine votes to pass legislation related to finances or foreign relations but a simple majority for other legislation. The Congress would elect a president who could legislate when Congress was not in session, though he could not do so for those cases that required nine votes. Congress would have the power to levy taxes and appoint members to a national judiciary. A national treasury would be established with states being required to fund with taxes paid proportionate to property held. A national military would also be established with states being required to contribute manpower in proportion to their white male populations. All elective offices were to be of fixed durations and limited terms.

A British Plan was proposed by Alexander Hamilton, who was a proponent of a strong central government along the lines of what they had in Britain. In it the states would basically give up their sovereignty to a national government who would then appoint governors for each of those regions. Congress was to be composed of a lower chamber elected to three-year terms by the people and an upper chamber elected by state electors for life. A president would also be elected by state electors for life. Congress would have an absolute veto over state legislation and the president would have an absolute veto over Congress. There were provisions for a national judiciary and a national military.

The Convention delegates never really considered Hamilton's plan as feasible, even though many were well disposed to the man himself, who served with distinction in the Revolution as the main aide to General Washington. There was no way they were going to support a plan of action that was in effect no different than the British government they had fought to escape from. Hamilton, on the other hand, was very cognizant of the dangers posed by a government being overly influenced by mob mentality.

Clear national sovereignty over individual states was a top priority for many of the delegates, especially James Madison and Alexander Hamilton. This was understandably a tough sell, since opposition to British sovereignty over those same states was what the Revolution had been about.

In an attempt to resolve the clear contentions between large and small states Roger Sherman of Connecticut crafted the Connecticut Compromise. In it he composed Congress of one chamber to be represented proportionately to the populations of free inhabitants in each state as well as another to be represented with one vote per state. Though initially rejected by vote of the delegates this compromise was essentially what went into the final Constitution.

It is of note that Roger Sherman has the notable distinction of being the only person to have signed all four of the most important documents of our Founding. These are:

* The Continental Association in 1774, coordinating a colony-wide boycott of British goods.

* The Declaration of Independence in 1776, declaring all the colonies independent of Britain.

* The Articles of Confederation in 1777 which established the first government of the United States of America.

* The United States Constitution in 1787 which established the second government of the United States of America.

After a month or so of debate as to the overall governmental model and individual details, the Convention formed a Committee of Detail in late June to begin drafting an eventual document they could agree on. John Rutledge of South Carolina was the chairman.

The Convention continued its work. By late July they felt the Committee of Detail had taken in enough information that a final compromise could begin to take shape. The Convention adjourned for several weeks and in early August began deliberations on the first draft of the Constitution that had been produced by the Committee of Detail.

Edmund Randolph, a very influential member of the Detail Committee, included in the preamble of their report:

"In the draught of a fundamental constitution, two things deserve attention:

1. To insert essential principles only; lest the operations of government should be clogged by rendering those provisions permanent and unalterable, which ought to be accommodated to times and events: and

2. To use simple and precise language, and general propositions, according to the example of the constitutions of the several states."

It was felt that this first draft adhered so well to Randolph's goals that it remained largely unchanged in the final Constitution.

On September 8th a Committee of Style was appointed to make presentable the latest draft of the Constitution. Four days later they presented their final draft to the Convention. Gouverneur Morris of Pennsylvania is credited with being the chief architect of this final copy, especially its Preamble.

On September 17, 1787 the final copy of the United States Constitution was approved and signed by 39 of the delegates. The signatories represented approximately 2/3 of the delegates at the Convention, some having left early when it became obvious that the resulting document was something they could not support. Several delegates present that day just refused to sign it, most notably Elbridge Gerry (later to become the fifth Vice President), George Mason and Edmund Randolph (of Virginia Plan fame and later to become second Secretary of State).

When announced to the public on September 19 there at first arose a great outcry because it had been understood that the Convention was just supposed to have been amending the Articles of Confederation—not designing a new government.

### Preamble

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

### Article I – House of Representatives

*** Section 1 ***

All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.

*** Section 2 ***

The House of Representatives shall be composed of Members chosen every second Year by the People of the several States, and the Electors in each State shall have the Qualifications requisite for Electors of the most numerous Branch of the State Legislature.

No Person shall be a Representative who shall not have attained to the Age of twenty five Years, and been seven Years a Citizen of the United States, and who shall not, when elected, be an Inhabitant of that State in which he shall be chosen.

Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons. The actual Enumeration shall be made within three Years after the first Meeting of the Congress of the United States, and within every subsequent Term of ten Years, in such Manner as they shall by Law direct. The Number of Representatives shall not exceed one for every thirty Thousand, but each State shall have at Least one Representative; and until such enumeration shall be made, the State of New Hampshire shall be entitled to chuse three, Massachusetts eight, Rhode-Island and Providence Plantations one, Connecticut five, New-York six, New Jersey four, Pennsylvania eight, Delaware one, Maryland six, Virginia ten, North Carolina five, South Carolina five, and Georgia three.

When vacancies happen in the Representation from any State, the Executive Authority thereof shall issue Writs of Election to fill such Vacancies.

The House of Representatives shall chuse their Speaker and other Officers; and shall have the sole Power of Impeachment.

### Article I – Senate

*** Section 3 ***

The Senate of the United States shall be composed of two Senators from each State, chosen by the Legislature thereof for six Years; and each Senator shall have one Vote.

Immediately after they shall be assembled in Consequence of the first Election, they shall be divided as equally as may be into three Classes. The Seats of the Senators of the first Class shall be vacated at the Expiration of the second Year, of the second Class at the Expiration of the fourth Year, and of the third Class at the Expiration of the sixth Year, so that one third may be chosen every second Year; and if Vacancies happen by Resignation, or otherwise, during the Recess of the Legislature of any State, the Executive thereof may make temporary Appointments until the next Meeting of the Legislature, which shall then fill such Vacancies.

No Person shall be a Senator who shall not have attained to the Age of thirty Years, and been nine Years a Citizen of the United States, and who shall not, when elected, be an Inhabitant of that State for which he shall be chosen.

The Vice President of the United States shall be President of the Senate, but shall have no Vote, unless they be equally divided.

The Senate shall chuse their other Officers, and also a President pro tempore, in the Absence of the Vice President, or when he shall exercise the Office of President of the United States.

The Senate shall have the sole Power to try all Impeachments. When sitting for that Purpose, they shall be on Oath or Affirmation. When the President of the United States is tried, the Chief Justice shall preside: And no Person shall be convicted without the Concurrence of two thirds of the Members present.

Judgment in Cases of Impeachment shall not extend further than to removal from Office, and disqualification to hold and enjoy any Office of honor, Trust or Profit under the United States: but the Party convicted shall nevertheless be liable and subject to Indictment, Trial, Judgment and Punishment, according to Law.

### Article I – Congressional Elections and Rules

*** Section 4 ***

The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the Places of choosing Senators.

The Congress shall assemble at least once in every Year, and such Meeting shall  be on the first Monday in December, unless they shall by Law appoint a different Day.

*** Section 5 ***

Each House shall be the Judge of the Elections, Returns and Qualifications of its own Members, and a Majority of each shall constitute a Quorum to do Business; but a smaller Number may adjourn from day to day, and may be authorized to compel the Attendance of absent Members, in such Manner, and under such Penalties as each House may provide.

Each House may determine the Rules of its Proceedings, punish its Members for disorderly Behaviour, and, with the Concurrence of two thirds, expel a Member.

Each House shall keep a Journal of its Proceedings, and from time to time publish the same, excepting such Parts as may in their Judgment require Secrecy; and the Yeas and Nays of the Members of either House on any question shall, at the Desire of one fifth of those Present, be entered on the Journal.

Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days, nor to any other Place than that in which the two Houses shall be sitting.

*** Section 6 ***

The Senators and Representatives shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States. They shall in all Cases, except Treason, Felony and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses, and in going to and returning from the same; and for any Speech or Debate in either House, they shall not be questioned in any other Place.

No Senator or Representative shall, during the Time for which he was elected, be appointed to any civil Office under the Authority of the United States, which shall have been created, or the Emoluments whereof shall have been encreased during such time; and no Person holding any Office under the United States, shall be a Member of either House during his Continuance in Office.

### Article I – Congressional Law-Making

*** Section 7 ***

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.

Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States: If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a Law. But in all such Cases the Votes of both Houses shall be determined by yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House respectively. If any Bill shall not be returned by the President within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like Manner as if he had signed it, unless the Congress by their Adjournment prevent its Return, in which Case it shall not be a Law.

Every Order, Resolution, or Vote to which the Concurrence of the Senate and House of Representatives may be necessary (except on a question of Adjournment) shall be presented to the President of the United States; and before the Same shall take Effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the Rules and Limitations prescribed in the Case of a Bill.

### Article I – Enumerated Congressional Powers

*** Section 8 ***

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

To establish Post Offices and post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

### Article I – What Congress Cannot Do

*** Section 9 ***

The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a Tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person.

The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it.

No Bill of Attainder or ex post facto Law shall be passed.

No Capitation, or other direct, Tax shall be laid,  unless in Proportion to the Census or enumeration herein before directed to be taken.

No Tax or Duty shall be laid on Articles exported from any State.

No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.

No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.

No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.

### Article I – What States Can't Do

*** Section 10 ***

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; 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, or grant any Title of Nobility.

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress.

No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

### Article II – Presidency

*** Section 1 ***

The executive Power shall be vested in a President of the United States of America. He shall hold his Office during the Term of four Years, and, together with the Vice President, chosen for the same Term, be elected, as follows:

Each State shall appoint, in such Manner as the Legislature thereof may direct, a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress: but no Senator or Representative, or Person holding an Office of Trust or Profit under the United States, shall be appointed an Elector.

The Electors shall meet in their respective States, and vote by Ballot for two Persons, of whom one at least shall not be an Inhabitant of the same State with themselves. And they shall make a List of all the Persons voted for, and of the Number of Votes for each; which List they shall sign and certify, and transmit sealed to the Seat of the Government of the United States, directed to the President of the Senate. The President of the Senate shall, in the Presence of the Senate and House of Representatives, open all the Certificates, and the Votes shall then be counted. The Person having the greatest Number of Votes shall be the President, if such Number be a Majority of the whole Number of Electors appointed; and if there be more than one who have such Majority, and have an equal Number of Votes, then the House of Representatives shall immediately chuse by Ballot one of them for President; and if no Person have a Majority, then from the five highest on the List the said House shall in like Manner chuse the President. But in chusing the President, the Votes shall be taken by States, the Representation from each State having one Vote; A quorum for this purpose shall consist of a Member or Members from two thirds of the States, and a Majority of all the States shall be necessary to a Choice. In every Case, after the Choice of the President, the Person having the greatest Number of Votes of the Electors shall be the Vice President. But if there should remain two or more who have equal Votes, the Senate shall chuse from them by Ballot the Vice President.

The Congress may determine the Time of chusing the Electors, and the Day on which they shall give their Votes; which Day shall be the same throughout the United States.

No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty five Years, and been fourteen Years a Resident within the United States.

In Case of the Removal of the President from Office, or of his Death, Resignation, or Inability to discharge the Powers and Duties of the said Office, the Same shall devolve on the Vice President, and the Congress may by Law provide for the Case of Removal, Death, Resignation or Inability, both of the President and Vice President, declaring what Officer shall then act as President, and such Officer shall act accordingly, until the Disability be removed, or a President shall be elected.

The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.

Before he enter on the Execution of his Office, he shall take the following Oath or Affirmation:--"I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States."

### Article II – Presidential Powers

*** Section 2 ***

The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States; he may require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any Subject relating to the Duties of their respective Offices, and he shall have Power to grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment.

He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.

### Article II – Presidential Responsibilities

*** Section 3 ***

He shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient; he may, on extraordinary Occasions, convene both Houses, or either of them, and in Case of Disagreement between them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper; he shall receive Ambassadors and other public Ministers; he shall take Care that the Laws be faithfully executed, and shall Commission all the Officers of the United States.

*** Section 4 ***

The President, Vice President and all civil Officers of the United States, shall be removed from Office on Impeachment for, and Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.

### Article III – Judiciary

*** Section 1 ***

The judicial Power of the United States shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services a Compensation, which shall not be diminished during their Continuance in Office.

*** Section 2 ***

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;--to all Cases affecting Ambassadors, other public Ministers and Consuls;--to all Cases of admiralty and maritime Jurisdiction;--to Controversies to which the United States shall be a Party;--to Controversies between two or more States;-- between a State and Citizens of another State,--between Citizens of different States,--between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction. In all the other Cases before mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make.

The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such Place or Places as the Congress may by Law have directed.

*** Section 3 ***

Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No Person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court.

The Congress shall have Power to declare the Punishment of Treason, but no Attainder of Treason shall work Corruption of Blood, or Forfeiture except during the Life of the Person attainted.

### Article IV – State and Federal Relationships

*** Section 1 ***

Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.

*** Section 2 ***

The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.

A Person charged in any State with Treason, Felony, or other Crime, who shall flee from Justice, and be found in another State, shall on Demand of the executive Authority of the State from which he fled, be delivered up, to be removed to the State having Jurisdiction of the Crime.

No Person held to Service or Labour in one State, under the Laws thereof, escaping into another, shall, in Consequence of any Law or Regulation therein, be discharged from such Service or Labour, but shall be delivered up on Claim of the Party to whom such Service or Labour may be due.

*** Section 3 ***

New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.

The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.

*** Section 4 ***

The United States shall guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened), against domestic Violence.

### Article V – Amendment Methods

*** Section. 1 ***

The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.

### Article VI – Federal Obligations

*** Section. 1 ***

All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States.

### Article VII – Ratification of the Constitution

*** Section. 1 ***

The Ratification of the Conventions of nine States, shall be sufficient for the Establishment of this Constitution between the States so ratifying the Same.

### The Ratification Fight

The debates that raged in the states over whether to ratify the new constitution generally revolved around two camps; Federalists and Anti-Federalists.

The Anti-Federalists argued against ratification. In general they did not trust a powerful central government. They felt that the states were giving up too many sovereign rights to the national government for what they expected to receive in return. Some did not like the fact that the national government was allowed to maintain a standing army and navy while the states were not. Also, the idea of a powerful president seemed too much like a king to a lot of them.

Boiled down to a unitary concern, it would be fear of despotism.

The most persuasive of the Anti-Federalist arguments against ratification seems to be the lack of specific rights being listed. However, the lack of such a list was often pointed out primarily as an argument behind which the masses could rally. It is doubtful that any finite list could have made Anti-Federalists comfortable with the fear that rather than a republic of free states what was planned—in a secret, clandestine fashion—was a supremely powerful central government to which all member states would surrender a lot of their sovereignty.

Anti-Federalists tended to be populists and believers in individualism. Their leaders were men such as Thomas Jefferson, Patrick Henry, Thomas Paine, Samuel Adams, Richard Henry Lee, George Mason and George Clinton.

The Federalists argued for ratification. In general they pointed out that the separation of powers into three branches, with each branch having some control over the other, adequately protected against abuses of power.

They argued against the wisdom of specifically listing individual rights since that would imply a finite number. As there would be no way to list every right all rights should be assumed to reside with the individual and/or the states and only specific rights be surrendered to the national government. If there were to be an attempt to list all rights, they argued, then wouldn't the national government be able to more legitimately violate rights not listed?

Federalists tended to believe in stronger central governments and their leaders were men such as Alexander Hamilton, John Jay, John Adams and James Madison.

The Federalists were more successful at persuading the populace, especially when founding giants such as George Washington and Benjamin Franklin tended to side with them. Their most persuasive writings, 85 of them, have been referred to as the Federalist Papers.

The Federalist Papers were put forth as answers to the Anti-Federalist Papers that were written by the opponents to the proposed constitution. The common theme in the Anti-Federalist Papers was that the Articles of Confederation were not in dire need of immediate revision, much less total overhaul, and that there was no reason to rush into an entirely new form of government without careful deliberation _by the entire nation_. The proposed constitution had many questions and concerns that should be thoughtfully debated rather than just blindly accepted.

To say the Federalist Papers persuaded a majority of Americans is probably not accurate. They persuaded a majority of state delegates, whom were the only ones who counted for ratification anyway. The bulk of Americans, especially those outside the several large cities, paid scant attention to the proceedings and were largely wary of a strong central government.

Several states ratified the constitution within months with seemingly no reservations. Massachusetts was the first state where in a showdown it appeared ratification would be defeated. Then during that debate John Adams and John Hancock convinced, by a narrow margin, the state to ratify the constitution but include a list of rights they would like to see included as a Bill of Rights if the constitution went into effect. This Massachusetts Compromise of February 1788 became the blueprint for the other states to ratify the Constitution over the next several years. Eventually, states would submit—along with their ratifications—dozens of rights they would like to see included in a Bill of Rights which they fervently called on the new government to include in the new Constitution.

But ratification was not a sure-thing by any means. Yes, the first five states to ratify—Delaware, Pennsylvania, New Jersey, Georgia and Connecticut—did so quite handily. But then apparently people started thinking more about the Anti-Federalist arguments. Massachusetts barely ratified, even after their Compromise, by 53% to 47%. The next three states—Maryland, South Carolina and New Hampshire—ratified the Constitution by an average vote of 69% to 31%.

The new Constitution required only nine of the thirteen states for ratification. It is of interest that the Articles of Confederation specified that every state must agree to any alteration of the Articles. Thus, this new Constitution of The United States truly represented the blueprint for forming a new Union and in no way was it just an amending of the old Union that existed under the Articles of Confederation.

By July 2, 1788 nine states had ratified the United States Constitution and within days a committee was put in place by the outgoing Confederation Congress to provide for an orderly transfer of power. Actually ten states had ratified by that time but it is likely that slow communications prevented news of the Virginia ratification from being very widely known.

The last four states to ratify the Constitution did so by an average vote of 57% to 43%. Virginia, as mentioned, did so in late June of 1788 followed roughly a month later by New York. North Carolina finally ratified the new Constitution, which by this time meant joining the Union, late in 1789. Rhode Island, who had never even sent delegates to the Constitutional Convention, didn't join until the summer of 1790.

On March 4, 1789 the first Congress elected under the new Constitution convened in New York City. It was early April before enough members actually reached New York, however, to conduct any business. There the President pro-tempore of the Senate was John Langdon and Speaker of the House was Frederick Muhlenberg. Presidential ballots had been cast that February in the eleven states that had at that time constituted the United States.

When counted in April George Washington won 100% of the votes and John Adams was second with 34%. Note that the first form of Electoral College (1789 – 1804) required every elector to cast votes for two candidates, with the leading candidate winning Presidency and runner-up winning Vice-Presidency.

Thus George Washington became the first President of the United States and John Adams became the first Vice-President as well as President of the Senate.

### Bill of Rights

On September 25, 1789 Congress submitted 12 amendments to the Constitution. Each was voted on by the individual state legislatures, with approval by ¾ of the states needed to approve any amendment. With 13 states that meant approval by 9.75 of them (rounded up to 10).

James Madison, an ardent Federalist who had argued against a Bill of Rights, became the primary author. After the Massachusetts Compromise and the bitter ratification fight he came to realize that providing a Bill of Rights was far less fearful than the idea of a second Constitutional Convention that may well undo the fragile compromise that the new Constitution represented.

Madison almost did not even get seated to the 1st Congress because of his Federalist views. Patrick Henry, an ardent Anti-Federalist, persuaded the Virginia legislature not to appoint Madison to the Senate. But Madison mounted a quick campaign and was elected as a U.S. Representative instead.

He filtered over 200 ideas for amendments down to the 12 submitted to the states in 1789. His chief model, however, was the 1776 Virginia Declaration of Rights by George Mason. It was the absence of a similar declaration of rights that led George Mason to refuse to sign the new U.S. Constitution. Thus, a major irony of this first amendment process is that Madison, who initially opposed a Bill of Rights, aided George Mason in writing a similar 1776 Virginia document and then ended up being the main author of the U.S. Bill of Rights.

In early 1790, after seeing the submitted Bill of Rights, Vermont ratified the U.S. Constitution and became the 14th state. Thus each amendment at that time would require the approval of 10.5 (rounded up to 11) states before being considered ratified. The original 1st amendment, having to do with number of representatives, was only approved by 10 states. The original 2nd amendment, concerning Congressional pay, was only approved by 6 states. All the others were approved by 11 states, Virginia being the last to do so on December 15, 1791.

Which brings to light another irony of this first amendment process; Virginia, home to both George Mason and James Madison, ended up being the last state to ratify the U.S. Bill of Rights. And maybe just as strange is the fact that the last three states to ratify the Bill of Rights—Massachusetts, Georgia and Connecticut—did not do so until 1939.

Before listing the 10 amendments that were ratified to become the U.S. Bill of Rights we will list the 2 that failed ratification.

The first was probably just too wordy and detailed, which was strange because Madison supposedly went to great lengths to filter out too much detail in other amendments.

"After the enumeration required by the first article of the Constitution, there shall be one representative for every thirty thousand, until the number shall amount to one hundred, after which the proportion shall be so regulated by Congress, that there shall be not less than one hundred representatives, nor less than one representative for every forty thousand persons, until the number of representatives shall amount to two hundred; after which the proportion shall be so regulated by Congress, that there shall be not less than two hundred representatives, nor more than one representative for every fifty thousand persons."

The second was eventually re-submitted and ratified in virtually the same wording in 1992.

"No law varying the compensation for the services of the Senators and Representatives shall take effect, until an election of Representatives shall have intervened."

The Bill of Rights that was finally ratified by the requisite number of states is as follows.

Amendment 1

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

Amendment 2

"A well regulated Militia, being necessary to the security of a free State, the right of the People to keep and bear Arms, shall not be infringed."

Amendment 3

"No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law."

Amendment 4

"The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."

Amendment 5

" _No_ _person_ _shall be held to answer for any capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."_

Amendment 6

" _In all_ _criminal_ _prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district where in the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defense."_

Amendment 7

"In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any court of the United States, than according to the rules of the common law."

Amendment 8

"Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."

Amendment 9

" _The_ _enumeration_ _in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people."_

Amendment 10

" _The_ _powers_ _not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."_

### Federalist Papers

We looked briefly at the Federalist and Anti-Federalist groups earlier. Because we will later refer to this philosophical battle over Constitutional ratification some discussion over the arguments needs explaining.

In 1787 thru 1789 there were many articles published in various newspapers raising concerns about the new Constitution. These articles are loosely referred to as Anti-Federalist Papers. Most were written under pseudonyms such as Cato, Brutus, Centinel and the Federal Farmer.

In 1788 The Federalist was published as a collection of essays by Alexander Hamilton, James Madison and John Jay in which they attempted to address the concerns of Anti-Federalist forces.

The Federalist later became known as the Federalist Papers and is generally considered one of the finest sources of insight into the philosophy and motivation of The U.S. Founders.

There are 85 essays that make up the Federalist Papers, too many to present individually. One can get a fairly good idea of the general content by the title, however, so those will be listed. In other sections of this book we will make references to specifics of these essays as they relate to the topic being discussed.

1. Introduction

2-5. Concerning Dangers from Foreign Force and Influence.

6-7. Concerning Dangers from Dissensions Between the States.

8. Consequences of Hostilities Between the States.

9-10. The Utility of the Union as a Safeguard Against Domestic Faction and Insurrection.

11. The Utility of the Union in Respect to Commercial Relations and a Navy.

12. The Utility of the Union In Respect to Revenue.

13. Advantage of the Union in Respect to Economy in Government.

14. Objections to the Proposed Constitution From Extent of Territory Answered.

15-20. Insufficiency of the Present Confederation to Preserve the Union.

21-22. Other Defects of the Present Confederation.

23. Necessity of a Government as Energetic as the One Proposed to the Preservation of the Union.

24-25. Powers Necessary to the Common Defense Further Considered.

26-28. Idea of Restraining the Legislative Authority in Regard to the Common Defense Considered.

29. Concerning the Militia.

30-36. Concerning the General Power of Taxation.

37. Concerning the Difficulties of the Convention in Devising a Proper Form of Government.

38. The Same Subject Continued, and the Incoherence of the Objections to the New Plan Exposed.

39. Conformity of the Plan to Republican Principles.

40. On the Powers of the Convention to Form a Mixed Government Examined and Sustained.

41-43. The Powers Conferred by the Constitution.

44. Restrictions on the Authority of the Several States.

45. Alleged Danger From the Powers of the Union to the State Governments.

46. The Influence of the State and Federal Governments.

47. The Particular Structure of the New Government and the Distribution of Power Among Its Different Parts.

48. These Departments Should Not Be So Far Separated as to Have No Constitutional Control Over Each Other.

49. Method of Guarding Against the Encroachments of Any One Department of Government by Appealing to the People Through a Convention.

50. Periodical Appeals to the People.

51. The Structure of the Government Must Furnish the Proper Checks and Balances Between the Different Departments.

52-53. The House of Representatives.

54. Apportionment of Members of the House of Representatives Among the States.

55-56. The Total Number of the House of Representatives.

57. The Alleged Tendency of the New Plan to Elevate the Few at the Expense of the Many Considered in Connection with Representation.

58. Objection That The Number of Members Will Not Be Augmented as the Progress of Population Demands.

59-61. Concerning the Power of Congress to Regulate the Election of Members.

62-63. The Senate.

64-65. The Powers of the Senate.

66. Objections to the Power of the Senate To Set as a Court for Impeachments Further.

67. The Executive Department.

68. The Mode of Electing the President.

69. The Real Character of the Executive.

70. The Executive Department Further Considered.

71-72. The Duration in Office and Re-Eligibility of the Executive.

73. The Provision For The Support of the Executive, and the Veto Power.

74. The Command of the Military and Naval Forces, and the Pardoning Power of the Executive.

75. The Treaty-Making Power of the Executive.

76.-77. The Appointing Power and Other Powers of the Executive.

78.-83. The Judiciary Considered.

84. Certain General and Miscellaneous Objections to the Constitution Considered and Answered.

85. Concluding Remarks.

## Quotes

Marcus Tullius Cicero

"Out of all the material of the philosophers' discussions, surely there comes nothing more valuable than the full realization that we are born for Justice, and that right is based, not upon men's opinions, but upon Nature . . ."

David Hume.

"Every wise, just, and mild government, by rendering the condition of its subjects easy and secure, will always abound most in people, as well as in commodities and riches."

"It is seldom that liberty of any kind is lost all at once."

"A wise man proportions his belief to the evidence."

John Locke.

"All men are liable to error; and most men are, in many points, by passion or interest, under temptation to it."

"All wealth is the product of labor."

"Government has no other end, but the preservation of property."

"The state of nature has a law of nature to govern it, which obliges every one: and reason, which is that law, teaches all mankind, who will but consult it, that being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions:"

Adam Smith.

"Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer."

"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things."

"Man is an animal that makes bargains: no other animal does this—no dog exchanges bones with another."

Benjamin Franklin.

"A great empire, like a great cake, is most easily diminished at the edges."

"If you would not be forgotten as soon as you are dead, either write something worth reading or do things worth writing."

"There are several parts of this Constitution which I do not at present approve, but I am not sure I shall never approve them. ... I doubt too whether any other Convention we can obtain, may be able to make a better Constitution. ... It therefore astonishes me, Sir, to find this system approaching so near to perfection as it does; and I think it will astonish our enemies..."

"Those who give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety."

George Washington.

"Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master."

"The constitution vests the power of declaring war in Congress; therefore no offensive expedition of importance can be undertaken until after they shall have deliberated upon the subject and authorized such a measure."

"The time is near at hand which must determine whether Americans are to be free men or slaves."

James Madison.

"All men having power ought to be distrusted to a certain degree."

"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."

"A popular government without popular information or the means of acquiring it, is but a prologue to a farce, or a tragedy, or perhaps both."

John Adams.

"Each individual of the society has a right to be protected by it in the enjoyment of his life, liberty, and property, according to standing laws. He is obliged, consequently, to contribute his share to the expense of this protection; and to give his personal service, or an equivalent, when necessary. But no part of the property of any individual can, with justice, be taken from him, or applied to public uses, without his own consent, or that of the representative body of the people. In fine, the people of this commonwealth are not controllable by any other laws than those to which their constitutional representative body have given their consent."

"A government of laws, and not of men."

"All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation."

"Democracy... while it lasts is more bloody than either aristocracy or monarchy. Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There is never a democracy that did not commit suicide."

Thomas Paine.

"An army of principles can penetrate where an army of soldiers cannot."

"If we do not hang together, we shall surely hang separately."

"If there must be trouble, let it be in my day, that my child may have peace."

"Society in every state is a blessing, but government, even in its best stage, is but a necessary evil; in its worst state an intolerable one."

"When we are planning for posterity, we ought to remember that virtue is not hereditary."

George Mason

"In all our associations; in all our agreements let us never lose sight of this fundamental maxim—that all power was originally lodged in, and consequently is derived from, the people."

"We came equals into this world, and equals shall we go out of it."

"A few years' experience will convince us that those things which at the time they happened we regarded as our greatest misfortunes have proved our greatest blessings."

Thomas Jefferson.

"A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine."

"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned—this is the sum of good government."

"History, in general, only informs us of what bad government is."

"But with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years."

**********

# The Plan: Blueprint of Destruction

How would we destroy the United States of America? It is through this question that we will examine the history of the United States and more importantly the profound changes that have taken place since her founding.

One can study history as an unbiased observer who simply notes what happens and how later events may or may not have been influenced by what transpires.

We will instead become a more active observer.

Staring from the beginning, or at least a beginning, prior to our nation's creation we will collect data and analyze what were the reasons for that creation. The goal will be not so much what was created, in this case a revolutionary form of government, but why they created it.

What were the arguments for and against the United States of America created in 1789? How valid were those arguments?

We started this analysis last chapter.

Rather than looking at the broad spectrum of what has been described as the American Experience, we will hypothesize what would have been needed to destroy the new nation. Not how to bring about military defeat or topple the government, but destroy the very spirit that guided its citizens to form the country itself. Not a temporary setback to be overcome, no matter the hardships, but the actual destruction of the will to even try anymore.

The level of destruction is important. Ideally we are looking for a way to destroy the essence of the nation's founding ideals. While physical destruction would be acceptable it would be far more preferable to transform the United States, while leaving it physically standing, into something philosophically different than what it envisioned itself as back at the beginning.

Remember that we are formulating this plan from the standpoint of someone viewing the United States of America at its birth in 1789. We will assume no time limit; utter destruction in 1800, 1910 or 2015 makes no difference to us. We will assume no ideological bent—mission accomplishment will be our ideology. We will assume no moral limits—if half the American population dies to achieve our goal then they just die.

With such a blueprint in mind, we will then examine certain aspects of that American Experience through the prism of that destructive lens.

Why we would want to destroy the United States is irrelevant. Of course it's nothing anyone reading this book would have wanted to do back then. But who best to defeat an enemy than someone who totally understands that enemy? So how better to understand the United States of America, and the mortal wounds it has suffered, than to put yourself in the shoes of its perfect antagonist?

There is a risk of being labeled a conspiracy book; this has been considered but discounted. The vast majority of, if not all, conspiracies fail quickly because of the simple reason that human beings always act for some reason. The greater the conspiracy the greater is the temptation to brag about it or find a way to profit from it.

Of course, a successful conspiracy would be one that accomplishes its goal and yet no one other than the conspirators knew about it. But then history would never know it was a conspiracy that led to the supposed conspiratorial results.

Does a conspiracy exist if no one ever knows about it?

I don't know. But it seems much more likely that several trees could fall and cause a chain of events that impact a whole forest, even if no one was around to hear them, than for a group of humans to plan something monumental and then succeed at it but yet keep their actions secret.

But the fact that a conspiracy is highly unlikely does not mean that it is not instructive to think about what you would have done if you were one of the conspirators. If, and how, you need to imagine such manipulations will be left to you the reader.

At least according to television, detectives try to reconstruct the motives and acts behind a crime in order to make sense out of evidence and to determine where to look for further clues.

I contend that we should understand the moral 'crimes' against our nation if we wish to understand it's past and try to preserve, or resurrect, its future.

## Hearts and Minds

In 1965 U.S. President Lyndon Johnson would say of the Vietnam War that " _the ultimate victory will depend on the hearts and minds of the people who actually live out there_ ". That's an apt enough description of our thought experiment.

Our objective will be not just to destroy the U.S. Government but to destroy the U.S. society. To do this will require changing the hearts and minds of the American people so that they themselves destroy the idea that is the United States. An outside enemy is too easy to be rallied against, so the road to success will be to transform Americans themselves into the agents of their own destruction.

To do this, we need to understand fully what this idea called the United States is. Then formulate methods to destroy that idea.

## The Ideals

So it is said that if you know your enemies and know yourself, you can win a hundred battles without a single loss.

If you only know yourself, but not your opponent, you may win or may lose.

If you know neither yourself nor your enemy, you will always endanger yourself.

The Art of War

Sun Tzu

We have already examined the concepts of rights and liberties as derived from several great philosophers who came before—and influenced—The Founders. We will make the assumption in this book that many of those concepts molded the ideals held by our Founding Fathers. Such ideals have manifested themselves through actions, speeches and writings and can be inferred mainly from the type of government those men labored to give us.

It is these ideals that must be understood. For the surest, maybe the only, way to crush this new nation will be to crush those ideals from the soul of its citizens.

Ideal 1

The individual is the most important entity and his rights are paramount. A moral individual is one who chooses to exercise his rights without initiating physical force to deprive any other individual of his rights.

A right is nothing more than the ability to freely take independent action as a human being.

The primary right for all individuals is to live; the right to life. This concept can only be challenged by those who feel that the individual exists not for himself but to serve at the whim of a master.

All other so-called individual rights are in some manner derived from this primary right. Since they are derived they are somewhat relative and all individuals will never agree on the definition, or derivation, of those rights as they pertain to themselves. This is why we must be careful when speaking of individual rights.

Since all individual rights, other than the primary right to exist, are to some extent subjective this poses a problem. This problem is mitigated by banding together in societies as we will discuss next.

All of the philosophical minds who most influenced the Founders, as well as the words and writing of the Founders themselves, point to this view of the individual. Even for those Founders who were Christians and professed a belief in Jesus of Nazareth as a deity there seems to be the belief in the concept of individual free will and thus they were seemingly able to reconcile the paramount nature of individual rights in at least our Earthly plane of existence.

Acting on reason is, as we have previously discussed, man's primary means to exist. If we accept that an individual's primary right is to exist then it stands to reason that his rights to exercise the primary means of that existence are indeed paramount.

That reasoning can lead him to either produce, in some manner, the means of his existence or to use physical force to take the means of his survival from other men. Those two generalities are the only means of a man's existence.

The initiation of physical force to violate the rights of any other man is always immoral, and there is no way to initiate physical force against another without violating that person's rights. Likewise, a moral individual never initiates force against another man.

Note that the key word in that determination of moral actions is initiate. Physical force is, unfortunately, necessary among men for self-defense against those who choose to initiate it.

Because individual rights are more relative than absolute, the moral individual would tend to not project his vision of rights on others but rather be consistent in his respect of all rights. He would strive to never deprive others of their rights just as he would not want to be deprived of his.

Ideal 2

Moral societies are formed to allow the most effective and efficient environment for moral individuals to thrive.

Men form societies with other men in order to maximize their opportunities to thrive.

Since an individual's right to life is his paramount right then if being a member of a society were perceived to be detrimental to that right it would make the most sense to withdraw from that society. If a society, through force, prevents any member who chooses to from withdrawing then that society is acting immorally.

Just as there are different types of individuals, different types of societies exist to best accommodate those individuals. If an individual finds one society not of his liking then he may try to peacefully influence changes in that society or withdraw and possibly find another society more to his liking.

At the time of our country's founding there were in all of the states societal rules, laws and customs certainly not to the liking of all individuals. There were official state religions in many. Slavery existed in some. There were numerous limitations in most on who could vote. Yet the individuals comprising those state societies had made the decision that such rules, laws and customs were what provided them what they perceived as the most effective and efficient environment to thrive.

What may be a moral society for some may not be considered so by others. In this sense morality can be seen as relative. As with individuals, however, the mark of absolute immorality would be for one society to initiate physical force against another.

In the context of the United States, the various societies are the various states. The role of the United States in relation to the states was seen as chiefly a society of those states. Unless explicitly specified otherwise, any rights referred to in the Constitution referred to the rights of those individual states.

It was understood as a right that individuals may move between their respective states or indeed withdraw from all the states in total if the individual citizen so desires. Such free movement, at least between states, was codified in the Articles of Confederation but understood as an implicit right under the Constitution of the United States.

Ideal 3

All governments exist to facilitate functioning societies. Moral governments exist to facilitate moral societies and to minimize the violation of individual rights within those societies. Moral laws are ones which deter men from infringing on individual rights of other men.

Societies form governments in order to simply exist in any functional form. While men form societies to enhance their ability to thrive this certainly does not mean all members of that society are moral, or indeed that they perceive morality the same. Some individuals could certainly justify, to themselves at least, initiating physical force against a neighbor because of a perceived 'right' to property that the neighbor owns.

A government is formed to protect the individual rights of its members. To facilitate such protection members of the society voluntarily agree to give up some of their rights to that government in exchange for stability, consistency and safety.

In effect they are paying for the services of the government as an arbitrator of last resort, and if necessary the enforcer of last resort.

A moral government is one that understands it exists because of such surrendered rights and always works to minimize the number of rights that must be surrendered while protecting the rights of its citizens.

A moral law's focus should be on protecting individual rights. It is not government's job to decide, via laws, which activities are good and which are bad.

A moral society also recognizes that morality among societies tends to be relative and resists temptations to gain advantage of neighboring societies via the initiation of physical force.

Ideal 4

Any government holds society's monopoly on the legal initiation of physical force.

The chief power granted by a society's members to their government is the monopolistic right to initiate physical force.

The only manner of stopping force is through the application of force. One can try to dissuade the use of force, but once used it can only be stopped via force. Government is society's agent to wield that force, both for purposes of dissuading the initiation of force as well as answering it.

Individuals within society agree to give up their use of physical force, other than in emergencies where they feel they have no choice, to their government. This ideally guarantees the fair, equal, effective and efficient application of such force for purposes of overall societal protection and stability.

A moral government will not initiate physical force against moral citizens, i.e. anyone not guilty of violating the rights of another individual. Such a government will attempt to use its power to protect its citizens from those who initiate force against them or to retaliate against citizens, or other governments, who violate the rights of its citizens.

The alternative to granting such a monopoly to government would be for every citizen to forgo productive use of their time to constant guarding of oneself from predators. Society would break down and individual wealth would only be as good as the individual's ability to defend it.

Ideal 5

Any government action is ultimately backed by physical force.

Any government exists only to facilitate the effective functioning of society. It is not an individual but rather an abstract entity formed by individuals to facilitate their peaceful and productive coexistence.

Governments cannot produce anything themselves. They exist only as a vehicle for society members to define and enforce the rules and regulations required to hold the societal contract together.

Governments toward this end are granted a monopoly on the legal initiation of force. They are a society's enforcer of last resort.

It thus is an undeniable fact that any action undertaken by a government is backed by the legal, societal-approved threat of physical violence.

Ideal 6

Governments are themselves simultaneously the greatest protector and the greatest danger to individual rights.

They are the greatest protector in their role as a barrier against 'the mob'. History shows without a doubt that when in a group some individuals will tend to convince themselves that it is somehow their 'right' to violate the legitimate rights of other individuals or groups. Since such groups erroneously hold that such immoral activity is itself a legitimate 'right' they must be dissuaded from their delusions by force.

Direct democracy is nothing more than mob rule. Any majority can, and unfortunately will, grant itself the 'right' to take whatever it wants from the minority. This will continue until the society breaks down. Such a government is certainly not moral and will always destroy itself within a short time; usually though civil war or because the majority runs out of 'stuff' to take from a minority.

A moral society depends on its government to exert the force given it to hold the line against, and punish, such mob activity. However, having been granted a legal monopoly on force leads governments to usually collapse societies in one of two manners.

If the government is tyrannical it suppresses all individual rights and over time society falls apart. As we have earlier pointed out individuals cannot thrive, nor long exist, as slaves without rights. A society cannot thrive if its individual members cannot do so, and such a society soon collapses.

If the government has democratic tendencies, in that it is selected by input from the people it is to govern, then it will tend toward forming and leading mobs itself. By allowing satiation of a large mob's desire to violate the rights of individuals 'not of the mob', the government increases its power because obviously all or most of those mob members will give them their support. Society collapses for the same reason as the tyranny mentioned before. To the victim there is little difference between violence visited by a tyrannical government or a tyrannical government-supported mob.

Ideal 7

Government force is necessary for society to remain functional but should always be cautiously feared and vigorously limited.

Among men, any individual that initiates physical force against another individual is acting immorally. This applies to individual men or individual societies of men.

We have seen that to prevent this is a major reason men form societies.

That governments are necessary for societies to survive has hopefully been explained adequately. The alternative is a mob; an anarchy. The specialization of labor necessary for any but bare subsistence living would be impossible within such an alternative.

That government must be granted a monopoly on force in order to be effective has also hopefully been explained to satisfaction. This monopoly, however, can easily lead to the downfall of the very society the government was formed to support.

Governments are thus, and ever will be, an example of a necessary evil.

As an evil they must be feared for if they get out of control the possibilities are far worse than any individuals could generally even contemplate.

To help ensure they don't get out of control they must be kept as limited as possible.

## The Goals

Our ultimate goal we know; to destroy the very idea of the United States of America. We have identified several of the basic ideals that went into the societal contract known as that Constitution.

To undermine the concept which took form as the United States we will examine those founding ideals and look for chinks that could be exploited. They don't need to be logical chinks or even real chinks. A hallmark of this new nation is that it professes to be formed and operated by 'the people'. If we accept that this experiment in governing will actually be adhered to then all that is necessary is to convince 'the people' that these ideals are not benefiting them.

If we look at these ideals as the pillars upon which this concept, this experiment, is built then our goal becomes clearer. With enough time and enough small nudges, American society itself can be persuaded to weaken those pillars.

A good starting point will be to examine the Anti-Federalist Papers. The men who wrote these envisioned a lot of the destruction we will seek.

Remember that it is our goal to destroy the United States of America. Whether this means that the nation is to be put in total ruin or to be replaced, through violence or transformation, into a new nation matters not.

##  Plan of Attack

Therefore one hundred victories in one hundred battles is not the most skillful. Seizing the enemy without fighting is the most skillful.

The Art of War

Sun Tzu

We need to begin by identifying the tools with which we have to work with.

In most campaigns the main tool is force of arms. Obviously, if the premiere military power of the era, England, could not halt this new nation from forming then such force seems a waste of time. And as per the parameters of our little experiment, time is something that is our ally instead of an imposed deadline.

No, to look for the tools we will need we should examine the ideals that are meant to hold up this nation; this new United States Constitution itself as well as the culture and psychology of these people who presume that they can rule themselves.

The selection and usage of these chosen tools will need to remain flexible and strategic in nature. With no time constraints to force our hand the best plan of attack will probably be to concentrate on actions which can be carried out in ways which allow the populace to feel as if they are actually helping the nation.

By taking small bites out of this elephant, as it were, we can hopefully have it crippled before it realizes it's being devoured.

##  The Tools

### Constitutional Ambiguities

On reading the Constitution of the United States, several sections stand out as being strangely worded. Whether that is because of the different style of writing in the late 18th century or simply because the authors failed to realize the possible ambiguities is not clear.

The reason this is significant is that the United States was begun with the concept that its government would be bound strongly to this set of written laws. It was supposed to be as if a covenant were being constructed to bind the relationship between the government and the governed.

This leaves room for mischief if the covenant cannot be interpreted clearly.

A few examples follow.

Starting out in the preamble, there is this clause stating that one of the reasons to establish the Constitution was to promote the general Welfare. Was 'general welfare' a phrase with a specific meaning in 1787 or is it a catch-all phrase that could mean all sorts of things? The same phrase is repeated later on as something that Congress is supposed to do. What exactly is it they are being tasked to 'do'?

Congress is also given the power to 'regulate commerce among the several states'. Not very clear what that means or what kind of regulation is meant.

There is ambiguous wording in several places where the Constitution speaks of 'the people' even though common consensus seemed to be that this was a compact between the states. Which was it? Or was it both ... which doesn't always make contextual sense.

During the intense ratification debates such ambiguities were debated but the voices who did the most questioning, the Anti-Federalists, were voted down with a promise that a Bill of Rights would clarify everything.

Well, those first ten amendments weren't worded the clearest either. Chief among the discrepancies there was the tenth amendment which apparently tried to tie up all the loose ends by stating that 'The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.' But it was precisely 'the powers granted to the United States' that was ambiguous in many cases. So an amendment stating that powers NOT granted to the United States is to remain with the states or people means little if the scope of those _granted powers_ are not really understood in the first place.

For our purposes, the ambiguities are a recipe for creating chaos.

### Democratic Government

No matter what the flavor, direct or representative, a democracy is a mob. A major question in 1787, maybe THE main question, was whether the United States would be able to have the strict discipline needed to halt that mob from destroying its own society.

This may well prove the greatest tool in our arsenal for dissecting the new Republic.

Since the major focus of most individuals is themselves there is often a very relative view of individual rights. Rather than the freedom to act on one's reason without infringing on the individual rights of others there is always the temptation to view individual rights as the freedom to succeed in one's desires even when such success does infringe on the individual rights of others. The first describes a moral society while the second describes a very contentious society.

A society of individuals all running around thinking their rights are the only ones that count would surely end in anarchism in short order, but what can even be worse in the Democracy paradigm is when several such individuals start to agree enough to form their own mob that claims collective mob rights at the expense of individuals outside their group. Such situations occur often. At its admittedly polarized extreme, 51% of the entire society could group as such a mob and proclaim their right to victimize the other 49%.

But isn't a Republic, as opposed to a direct democracy, supposed to prevent stuff like this?

Well, yes and no.

The idea of a representative democracy (i.e. a Republic) was to create layers of, hopefully, rationality between the government and the governed. Add to that rules put in place to lessen the direct democracy irrationality and a Republic is to many the ideal form of government.

But that makes a functionally sound Republic dependent on three factors. It's sort of a triad with each leg dependent on the others to distribute the burden.

Factor one is the citizens themselves. If each citizen of the nation could always be counted on to act in a moral manner then the only reason behind a Republic, as opposed to a direct democracy, would be the logistical impracticality of having every citizen make a reasoned decision about every national issue.

The definition of a 'moral manner' would be for each individual to have the right to act on their reasoning without ever initiating physical force against any other citizen. As discussed previously, since most individual rights are derived rather than absolute there is room for relativism in such 'moral' behavior but the purpose of society is for the most part to define acceptable parameters for such relativism.

There has never been such a society of purely 'moral' individual humans nor is there likely to ever be. The reasons can be legitimate, such as valid disagreements over how a right is defined or illegitimate, such as simply choosing to violate the understood rights of others.

Factor two is the representative process itself. When those representatives are elected directly by a subset of the nation's citizens then ideally they would be expected to reflect the average 'moral vision' of that subset, as differing viewpoints of morality and individual rights are averaged together by such a representative process. It is certainly hoped that the chosen representatives would be able to devote more time to study the issues and physically participate in the governing process than would be the case for the entire subset of citizens. So if those representatives are chosen not directly but rather by other representatives that have themselves been chosen by the citizens, then we have even more separation between citizen and government—but hopefully an even more specialized, sophisticated and deliberative representative.

The United States chose to have both sorts of representation in their legislative branch (i.e. Congress). Each member of the House of Representatives would directly represent a subset of citizens while each member of the Senate would represent their individual state, by virtue of being appointed by elected representatives of that state. The Senate members serve terms three times longer than House members because theoretically the Senate would be less susceptible to the more volatile whims and fancies of the mob than the House.

Factor three would be the rules of the nation government; what citizens are guaranteed in the way of government operations in exchange for the individual rights they have voluntarily agreed to surrender in the name of stability and security. This was supposed to be the reason behind the United States Constitution. It was not meant to be a list of what the citizens could do but rather what the national government was allowed, and sometimes required, to do.

It should be obvious that each of these three depends upon, and effects, the other. It should also be obvious the manner in which Democracy itself can be used as a tool against the United States.

If the people's beliefs and values can be changed enough their representatives must eventually reflect those changes. It matters not if those changes are logical or illogical, right or wrong, moral or immoral. Those are mostly subjective calls. If the changes reflect genuine reasoning or result from mass hysteria makes no difference. Rules may have previously been in place to prohibit the changes desired, but if enough of the citizenry wants the changes then their elected representatives will have to change the rules.

If the representatives of the citizens decide to stray from the wishes of their constituents, then they will not be re-elected unless their constituents act irrationally. In such a case we must ask whether the problem is the representative or the citizens. If a representative acts immorally (e.g. supporting the violation of legitimate individual rights) but is supported by his constituents, then the representative is doing a good job of representing an immoral citizenry. Good representation thus depends on good citizenry. It would be hard to explain the case of a bad representative of moral citizens if it turned out that the representative served more than one term.

Any rules in place to limit or control government actions are only as effective as the desire of the people to ensure such rules are enforced. Certain representatives may flaunt the rules, but if they are re-elected by their constituents then the message is clear; at least that subset of the citizenry desires them to flaunt the rules—or at least certain rules.

It all comes down, in any form of democracy, to the people of the nation. It may be useful if things turn sour to blame the government representatives or even the rules of 'the game', but in reality the responsibility lies with the citizens.

And as we shall see, it is the people themselves who are the most vulnerable piece of the puzzle.

### National Treasury

An empire or nation wishing to have vast influence must have a relatively vast treasury.

Democracies, as we have seen, are subverted from within when citizens decide in mob fashion that rather than advancing their lives through their own efforts and investment they can influence their government to advance their lives using national effort and the national treasury.

Of course, if all citizens contributed equal amounts of effort and treasure and all citizens benefited equally in the goal then the only benefit to having government do anything would be when the task in question could only be accomplished collectively. National defense is the clearest example of this.

The greatest pressure to expend national funds is from citizens who perceive that:

1. the national treasury is filled with relatively more of other people's money than their own and

2. the expenditures will provide relatively more of a benefit to themselves than to others.

For the Founders of the United States the intention was to remove any temptation of misuse of the national treasury. Referring to our earlier three legs of a sound republic, those men did not want to rely on a moral citizenry either directly or indirectly via their representatives.

The rules codified by their Constitution explicitly limited growth of a national treasury in any manner that would be unduly lopsided in term of proportionality. As long as such proportionate taxation was in place there would likely never be a very large national treasury simply because any increase would equally tax every citizen.

The key to our leveraging of money towards the goal of national destruction must be to somehow enable a non-proportional growth of the United States treasury. This will in all likelihood lead to divisions in the national character as those citizens contributing proportionately less will demand more 'social advancement' that is paid for out of that treasury. After all, they will rightly calculate that the benefits to be gained will exceed the costs they will be paying. Such citizenry, probably in mob fashion, will leverage the democratic aspects of the U.S. governmental system to obtain a greater national treasure to pay for ever greater 'good deals'. Such a growing national treasure, of course, will need to be obtained via a non-proportional taxation system.

Our goal would be an ever-increasing tax-and-spend cycle that the citizenry of the United States would themselves demand. Their representatives would, rather than winning re-election for moral behavior, instead be rewarded for abetting in this 'rob Peter to pay Paul' immorality.

In terms of our experiment to find ways to destroy the moral fabric of the United States, this would work fantastic. However, such a tool would have to be shelved until and if the Constitution of the United States could somehow be amended.

The men who compiled that document left few ambiguities about their explicit prohibition regarding any such non-proportionate taxation.

We'll just have to bide our time for any possible opening to money-whip this new nation.

### People - Religion

The Enlightenment period which spawned much of the philosophical underpinnings of the United States was fertile ground for the ascendancy of a religious movement known as Deism. Deists believed in a Creator, or God, that would be understood using Reason. To them, the existence of God could be shown through Reason and observations of the natural world rather than via miracles or mystic revelations.

The fundamental problem with such a philosophy in the Western world was that it implicitly, and sometimes explicitly, rejected the premises of the major Western religion; Christianity. Such premises include Jesus Christ being the human manifestation of God, The Bible being the literal word of God, 'accepting' Jesus as being the only path to heaven, even the concept of heaven and hell itself. Toss in the various Christian denominations (Catholic, Lutheran, Episcopalian, Presbyterian, Quaker, Baptist, etc) and we have a lot of resistance to Deism.

We know that the vast majority of the Constitutional Founders were Christian, as were most of people they were representing. Several of the more prominent Founders were clearly philosophically aligned with Deism, even if some of those remained officially affiliated with their own traditional Christian denominations.

As was the case in most communities in America and Europe, affiliation with a specific denomination of a specific organized religion was to a large extent a matter of tradition or peer acceptance. To be seen as a 'disbeliever' was usually to subject oneself to scorn and ridicule.

There is plenty of anecdotal evidence that Benjamin Franklin, Thomas Jefferson, James Madison, John Adams and George Washington were philosophically closer to Deism that any established Christian denomination of the time. All of those men repeatedly stressed reason and observation as means of understanding the world, as did all of the Enlightenment philosophers, and in their writings showed no inclination towards just accepting that world through mysticism or miraculous revelations.

In neither the Articles of Confederation, the Declaration of Independence nor the United States Constitution is there mention of, or even hint of, any Christian religious affiliation at all. There are multiple mentions of God, the Great Governor of the World, a Creator, Nature's God, Supreme Judge and Divine Providence. Certainly they all refer to the unknown force men refer to as God, but there was absolutely no mention of Jesus, Moses or The Bible.

Fervent Christians believe that mentions of God are completely synonymous with Jesus and the Bible, but all the major monotheistic religions (i.e. Christianity, Judaism and Islam) believe in an entity referred to as God. A main difference between the God of those religions and the God of Deism is that Deists do not claim to 'understand' God via divine revelations accepted through what the major religions refer to as faith.

Faith, in this religious context, refers to confidence or trust in the achievement and supremacy of God's will without any requirement of logical proof or physical evidence. To Christians, without a doubt the main religion having to do with America, this faith is extended to the belief that a holy figure of all three of the main religions (namely Jesus Christ) was/is God incarnate and that The Bible is a set of writings directly attributed to God.

An aspect of faith, since it does not rely on proof, is that you either have it or you don't. Humans seldom get convinced by any sort of argument or proof that they should have faith in a certain religion. The reasons are almost always cultural, traditional or personal conviction. It could be said that the exception is Deism, since it relies only on reason and observation, but someone with true faith in a non-Deist religion would seldom be persuaded to abandon that faith.

An observation at this point will illustrate the folly of trying to combine religion and reason, which is in large part what the American experience would try to accomplish over the next several centuries. The American Revolution was lent an immense moral support both at home and abroad by a pamphlet published in early 1776 by an English-born immigrant by the name of Thomas Paine. This booklet was entitled ' _Common Sense'_ , and laid out in a reasoned approach why the colonists were justified in breaking away from Great Britain. This same author, in 1794, published a book called ' _The Age of Reason'_. In it he laid out reasons why he himself believed fervently in an entity-force referred to as God. But because he held that conviction through reason alone, assigning no credence at all in ancient stories of mystic revelations, he became the target of near-universal condemnation by every Christian denomination in America and Europe. In particular, he was hated for daring to explain why he personally could not accept the validity of stories in the Bible. He was subsequently imprisoned for a time in France and forsaken by most of his powerful American friends, many of whom felt the same but socially could not be seen to agree. Paine died in New York City on June 8, 1809. No Christian church would allow his remains to be buried in one of their churches, and so this Revolution-era hero was buried on his own farm with only six persons bothering to show up.

So how do we use religion as a tool in our little crusade? We will of course focus on Christianity as it is the major religion in the United States.

Faithful followers of all Christian denominations tend to accept as the teachings of God whatever interpretations their particular church chooses to accept from The Bible. This can be a diverse set of interpretations as there are four main Gospels of The Bible which describe the life and events surrounding Jesus Christ as well as several dozen other books describing the early Christian Church. Most of the books, at least certainly the Gospels, were physically written at widely differing times by different author using different styles. There are even quite a few discrepancies between the four different stories regarding the life of Jesus.

Thus all sub-groups within Christianity are convinced that they know 'The Truth' and any other interpretations are obviously not 'The Truth'. They can refer to no proof of their 'Truth' except their Faith which by definition itself requires no proof or evidence other than maybe The Bible.

This 'Truth' dispute is magnified infinitely when we look at the teaching of actual different religions, especially the monotheistic ones all believing in an entity referred to as God.

Most people who believe in God, whatever they imagine God to be, are unlikely to put many things at a higher priority than 'his Truth'. However, they get their interpretation of that Truth from human leaders of their respective religions or denomination. Thus, such leaders wield immense power to persuade masses of people and influence virtually any event involving mankind.

Because of this power, the major religions have historically been used by empires and nations as instruments of immense power. If the ruler of an empire controls, or strongly influences, the accepted leaders of a particular religion then thousands (sometimes millions) of faithful followers can be convinced to do the empire's bidding because they believe it is 'God's Will' to do so. To those true believers who are absolutely convinced they know 'The Truth' through their faith then it would be unthinkable not to follow that truth, even if the path being followed involved massive death and destruction. This is especially true if any such death and destruction is aimed at heathens who reject 'The Truth'.

Thus, we must recognize religion as one of the most potentially powerful tools that exist for molding public opinion and physical manpower.

But powerful tools can be dangerous.

We also need to recognize religion as a powerful tool to potentially fight against our cause of destroying the United States. As we shall see, however, there are general aspects of such faith-based religions that should tend to make them more malleable tools for our cause than against it.

### People \- Class Struggle/Envy

In any society there will be disparities between individuals in terms of physical and mental attributes, reasoning abilities, educational levels, apparent happiness, personalities, achieved wealth, etc.

Individuals are unique and different.

Is this difficult to understand in some way?

A moral individual is one who acts upon his reasoning without infringing on the legitimate individual rights of others. Just as no two individuals are the same, which should be considered a good thing, the reasoning of no two individuals will be the same. Thus the actions they take on such reasoning, and the outcomes resulting from those actions, will obviously be different. Moral men have a right to act upon their reasoning, and in turn not to expect some kind of guarantee that the outcomes of such actions will always be the same.

In societies where individuals are not allowed individual rights but rather agree, or are forced, to live according to the whims of a ruling caste then various rigid class strata are the norm. Members of the different classes, I am sure, envy the upper classes but just accept that as among the societal norms.

In societies, at least hypothetically, as envisioned by the founders of the United States individuals have the freedom of action to move between social classes based on their successes and failures. For the society to be moral it supports the free expression of individual rights with a minimum of restrictions; such expressions must succeed or fail on their own merits.

But many individuals in such a society do not like to contemplate the possibility that their actions, or their reasoning, may not be optimal. They rationalize that the outcome of their actions, at least measured in terms of wealth, is only lower than another individual's because obviously that other individual cheated or acted immorally in some way.

The disparities in wealth are then seen not as a logical conclusion to the disparities between individuals but rather as conditions to be envied and vilified. It is 'not fair'!

This phenomenon is real and is usually known as class struggle, class envy or class warfare. Such class envy matters little in societies which hold little stock in democratic participation in the ruling process. But in democratic societies, especially ones where every citizen has an equal say in the makeup of government, class envy is very relevant.

When citizens, for whatever reason, convince themselves that other citizens with a higher level of wealth somehow do not 'deserve' those things conflict can easily result. If the wealth was acquired through immoral means (i.e. from violations of the individual rights of others) then there is a legitimate reason for concern. If, as is more often the case, the wealth was acquired through moral means (i.e. legitimate reasoned actions) then the only immorality present is the sin of one coveting what isn't his.

Unfortunately, such illogical envy seems to be human nature. And, as such, it is a vice easily manipulated to turn segments of society against one another.

In Democratic societies, governments can be subverted and nations turned to civil conflict because of these envious have-versus-have-not struggles. It is ironic, in a way, that the societies that allow the most freedom to affect the class you are in are the ones that seem to suffer the most from the disparities between such classes.

Many major religions taut the virtues of 'the poor' which tends to carry implicit warnings about upper classes somehow being less virtuous. As seen from our discussions on faith, religion has enormous influence with the 'benefit' that little about it needs to be logically proven or naturally observed.

Religion, then, can contribute mightily to the whole class struggle equation. And that influence tends to exacerbate the struggles because of its tendency to provide a perceived moral crutch to those who view themselves as socially downtrodden and oppressed.

All these human struggle and envies can be exploited by those, who like us, are examining ways to bring down the type of society the American Founders had envisioned.

### People - Altruism

An attribute, whether innate or evolved, that man possesses is that of compassion. He will tend to give aid to other men who he perceives as needing help. Not all the time, surely, but when he can and if the person needing help exhibits qualities that for whatever reason are valued by the giver.

This attribute is of great benefit in societal and familial bonding, to be sure, and is overall a beneficial and admirable virtue.

We often give the label of altruism to such actions.

However, this attribute has been twisted over the centuries by many religious or 'morally-enlightened' philosophers such that it is often held as immoral for an individual to pursue his own self-interests to the exclusion of helping others. This is even when pursuit of such self-interests in no way harms other men or interferes in their freedom to act as they wish. In this light we are told that to NOT be altruistic is to be labeled selfish or immoral.

This is indeed a seeming insurmountable discrepancy between the views of what it means to be moral.

The United States Founders viewed a moral individual as one who freely exercises his individual rights without infringing on other men exercising theirs. Many of those Founders probably performed altruistic acts. But it was in their self-interest to do so, of that you can be sure.

Desiring to feel good about yourself is in your self-interest. The opposite would make no sense; that feeling bad about yourself would somehow be in your self-interest.

If you help someone out of your own free choice then obviously you are doing it because you want to. Whether the reason you choose to do so is to feel good about yourself or to be able to proclaim how generous you are is not relevant to the fact that you are providing the help. It can be argued whether the 'proclamation of generosity' reason is somehow 'fake compassion' but to the person being helped the reason does not matter.

When you are spending time, treasure and/or effort you either are doing so in voluntary exchange or through forced servitude (i.e. slavery). No one would knowingly attempt to equate altruism with slavery and clearly slavery is not involved where we are voluntarily aiding a person in need. The voluntary exchange is our time/treasure/effort for whatever good feelings or character-advertisement reason we were looking for.

Such voluntary exchange is called compassion, and through it both parties gain. An act of compassion is therefore a win-win situation, but only if it is engaged in voluntarily.

In the 'Moral Duty' philosophy, however, we are told that we must sacrifice our own self-interest for someone else for no other reason than that they 'need' help. It is somehow immoral if we make our aid dependent on getting something in return. The impetus for helping cannot be because we want to for internal reasons but because we are obligated to care for the welfare of others.

Logic says that to sacrifice one's own self-interest for someone else NOT because we want to but ONLY because that someone has a whip or a gun is generally considered theft or slavery. It is safe to say that theft and slavery are acts of immorality.

'Moral Duty' adherents say that to sacrifice one's own self-interest for someone else NOT because we want to but ONLY because that someone 'needs' our help is considered a moral duty.

As referred to earlier, that is a pretty insurmountable discrepancy.

Most, if not all, adherents of this 'Moral Duty' philosophy came to it by way of religion. As noted earlier, religion and faith are hugely powerful influences on individuals. Every major religion proclaims this 'moral duty' in one form or another, and faith cannot usually be countered by logic, so no matter the logical absurdity of this thinking it has and will persist.

To most religions, however, the concept of morality is meaningless outside the context of God. The problem with this is that most of them define God exclusively in terms of their particular religion (i.e. their vision of 'The Truth') so it is hard for them to see anyone outside their religion as being moral.

This logical contradiction regarding the most basic fabric of human society—the definition of individual morality—lends itself as an obvious tool to be used in our examination of ways to destroy the American ideal.

If situations develop over time whereby a national treasury can be grown and wielded as a weapon by 'the people' then this convoluted, but popular, concept of altruism might be the reason to get 'the people' to proclaim the moral high-ground while committing logical theft and slavery.

That would be a powerful agent of national transformation towards the oblivion we are looking for.

##  Strategy

The strategy against most empires in the past has been to use various tactics towards the purpose of weakening the central government and thus making defeat of the nation as a whole more attainable.

In the case of the United States of America our strategy should instead be to use various tactics to strengthen the central government and in the process transform that nation into something that no longer represents its beginnings.

The strategy against most empires in the past has been aimed at conquest, the acquisition of territory or treasure, national expansion, or other of the myriad of reasons societies of humans battle other societies of humans.

The strategy in our case is not aimed at ending the existence of anything so tangible, or indeed so secular. If the early structure and relationship between the citizens and government of the United States can be said to implement an idea then it can likewise be said that our strategy is aimed at bringing about the disillusionment of that idea.

What tactics are utilized, and in what situations, will require a degree of finesse. Manipulation of events, primarily public perceptions, will need to be accomplished in a sequence such as that the groundwork for ruin is put in place with little or no concern for consequences. The battlefield, thus prepared, can then be precisely controlled by a few well-designed enabling events. The tools for accomplishing these tactical, and ultimately strategic, victories have been selected from pre-existing human weaknesses. It should even be possible to bring about defeat while appealing to the so-called 'better side' of human nature; compassion, love, altruism, fair-play, charity and happiness among others.

In many ways a successful campaign would be not just the dismantling of this upstart nation but also to have the future generations of its forbearers realize that they have destroyed their legacy. The citizens of a beaten nation can always look back and know that they tried their best to thwart disaster, but to have such citizens look back and know that they willingly chose to destroy themselves is a real feat that would be long remembered.

## Quotes

Sun Tzu

"Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent's fate."

"He who knows when he can fight and when he cannot, will be victorious."

"Opportunities multiply as they are seized."

Alexander the Great

"I am not afraid of an army of lions led by a sheep; I am afraid of an army of sheep led by a lion."

Buddha

"All things appear and disappear because of the concurrence of causes and conditions. Nothing ever exists entirely alone; everything is in relation to everything else."

Napoleon Bonaparte

"Among those who dislike oppression are many who like to oppress."

Charles-Louis De Secondat

"The deterioration of every government begins with the decay of the principles on which it was founded."

Marcus Tullius Cicero

"The enemy is within the gates; it is with our own luxury, our own folly, our own criminality that we have to contend."

"A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murderer is less to fear. The traitor is the plague."

"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance."

**********

# Implied Powers – 1791 to 1836

##  The Plan: Goal

Key to our planning must be centralization of power, but we would need to be able to expand such central power beyond the very limited scope envisioned by the men who crafted the Constitution.

There are several reasons for this.

Moral governments are formed by the voluntary surrendering of individual rights to that government for the perceived benefits of order and security. The U.S. Constitution was the contract that spelled out that surrender of rights from individual states, and individual citizens, to the new Federal Government. Surely part of our goal would be to transform that relationship from a moral to an immoral foundation. Just as surely, having the Federal Government step outside the bounds of that contract and appropriate individual rights that were never agreed to be surrendered would undermine that whole concept of a moral government.

A centrally governed society is more vulnerable to the type of attacks we will need to mount. A society with more dispersed power, such as a Republic, would prove a much tougher target. The first requires concentration of transformative pressures on one entity—the Federal Government—while the second requires such pressures be successfully applied against multiple state governments.

Greater centralized power, when corrupted, has a multiplier effect. With more centralized federal power comes greater dependence by the states and individual citizens. Power usually seeks more power, and thus if the Federal Government's influence increases over that of the states the imbalance will tend to take on a momentum of its own. Thus, concentration on corrupting federal control will almost certainly have a huge and compounding effect on corruption of the states.

Thus, anything that could allow the Federal Government to gain powers not granted to it in the Constitution would be an invaluable aid towards our goals.

The contentious ratification arguments of 1787 and 1788 document the fears of the Anti-Federalists in this regard. Of interest to us is Anti-Federalist 32, written by Cato (most probably the pseudonym for Robert Yates of New York).

Anti-Federalist 32 questions whether the proposed Legislature will really have any limits on federal taxation and power given Constitutional wording to 'provide for the common defense, and general welfare of the United States'. Because of this wording, he argues that:

'If then the objects of this power cannot be comprehended, how is it possible to understand the extent of that power which can pass all laws which shall be necessary and proper for carrying it into execution. It is truly incomprehensible. A case cannot be conceived of, which is not included in this power.'

It would have been impossible to enumerate, as the Anti-Federalists seem to have wanted, a list of individual rights that the Federal Government was prohibited from violating. The seemingly reasonable view of the Federalists was that as long as federal powers are strictly enumerated all other rights could assume to remain with the states or the individual.

But it is really difficult to strictly enumerate any list of human actions, especially if that list is supposed to be around for any length of time. If the authors of that list put in some rather flowery, but vague, wording then it becomes extremely difficult to limit the list given determined future arguments to expand it.

As we have seen, Article 1 Sections 8 and 9 of the U.S. Constitution attempt to enumerate a list of actions Congress can and cannot take. But those sections do tend to be rather vague and certainly can't be said to be a strict enumeration.

And the Constitutional amendment passed as an answer to concerns such as those expressed in Anti-Federalist 32, The Tenth Amendment, states:

'The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.'

How was it ever believed that this amendment meant anything? Were the concerns of the Anti-Federalists not taken seriously? Nothing in the Tenth Amendment better defines what powers are delegated to the United States, which is THE problem in the first place. Rather, it simply states that IF we consider these powers to be defined adequately THEN all other powers are reserved for the states and the People.

At the very least the word 'explicitly', as in 'powers explicitly granted', should have been present.

According to 'The Plan' the actual actions to be delegated, and the Constitution's wording, allows vast expansion no matter what The Founders' actual wishes were. Our first goal will be to set the precedent that federal powers can be expanded upon beyond the mere wording of The U.S. Constitution.

##  Course of Events

### General Welfare Clause

Article 1 Section 8 begins:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

So the U.S. Congress is constitutionally allowed the power to collect revenue needed to provide for something called general welfare.

The clauses that follow in Article 1 Section 8 enumerate some services that the United States government is mandated to provide. But this beginning clause leaves it ambiguous as to whether the enumerations that follow represent the definition of 'common Defense and general Welfare' or are just some examples of that phrase.

James Madison, the chief author of the U.S. Constitution, expressed in Federalist #41 that he meant the phrase 'common Defence and general Welfare' to be a general synonym for the enumerated list given.

"For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars."

The Madisonian interpretation, then, would limit Congressional power to spend and/or enact laws only pursuant to the enumerated powers listed in Article 1 Section 8.

Alexander Hamilton, the chief proponent of a strong Federal Government, seems to have thought that the phrase was more of a general escape clause whereby the Federal Government could assume powers necessary for pretty much anything it considered 'general Welfare'. There is reason to believe that he may have tried to introduce language at the Constitutional Convention to broaden the Constitution's general welfare wording but in this he failed. That there does not appear to be any such claim in the Federalist Papers, of which Hamilton and Madison were the chief authors, is understandable since both men were trying to convince the public that just those type of Anti-Federalist concerns were invalid.

The Hamiltonian interpretation, then, is that the phrase constitutes an independent grant of power to the Congress in terms of what it can spend on and pass laws in pursuit of. Essentially anything Congress deems as for the 'general welfare' would be legitimately within its power.

In fact Hamilton, who seldom agreed with Madison even though the two of them were primarily responsible for ratification of the U.S. Constitution, would later quote Madison's own words in Federalist #44 to help justify his broader interpretation of 'general welfare'.

"No axiom is more clearly established in law or in reason than wherever the end is required, the means are authorized; wherever a general power to do a thing is given, every particular power for doing it is included."

Does the saying "the ends justify the means" come to mind? It is a certainty that James Madison wished he'd never uttered such sentiment.

Later, Supreme Court Justice Joseph Story would in essence split the difference between the Madisonian and Hamiltonian interpretations. In his influential 1833 work ' _Commentaries on the Constitution of the United States'_ , Justice Story expressed the interpretation that Congress does not necessarily have the authority to enact laws pursuant to 'general welfare' but does have the authority to spend federal revenues to further 'general welfare'.

Few contentious Legislative actions would result from the seemingly large gap this general welfare clause presented to Legislative Branch powers until the 1930s. The reason for this is mainly because it made little sense to enact laws or spend federal resources on anything other than bare necessities as long as explicit limits existed on federal taxation methods.

As we'll see later, by the 1930s such limits had themselves been removed.

### Necessary and Proper Clause

Article 1 Section 8 ends:

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

As with the General Welfare clause, this clause caused much consternation among Anti-Federalists. They saw the very real probability that future governments would use this wording as an excuse to grab excessive and undefined powers as suited their own interpretations of 'necessary and proper'.

In Federalist #44, James Madison argued that this clause was essential for the new constitution.

"Few parts of the Constitution have been assailed with more intemperance than this; yet on a fair investigation of it, no part can appear more completely invulnerable. Without the SUBSTANCE of this power, the whole Constitution would be a dead letter."

He argued that if, as the Articles of Confederation had done, this new Constitution prohibited from Congress the exercise of any power not EXPRESSLY delegated then the nation's new government would find itself as impotent as its old government.

At the Virginia Ratifying Convention Patrick Henry, representing the Anti-Federalist position, argued vehemently that such wording would lead to limitless federal power that would inevitably menace civil liberties.

It is difficult to differentiate between the rationale of government expansion attributed to 'necessary and proper' or 'general welfare'. It is hard to distinguish among the arguments, both Federalist and Anti-Federalist, for and against this seemingly generic wording.

It is also difficult to grasp how prescient the Anti-Federalists were in all this.

### Commerce Clause

Article 1 Section 8 has as one of its enumerated powers:

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

The chief reason for this clause seems to be a desire that the new government not be helpless to the individual state commerce regulations that plagued the nation under the Articles of Confederation. Under that scenario it was not uncommon for interstate commerce to be severely hampered as particular states tried to manipulate regulations that locally aided their economies to the detriment of their neighbors.

Commerce (i.e. trade) between individuals was recognized to be a huge component of economic success. Without a central referee to ensure that the individual states did not engage in local trade wars it would be difficult to foster such success.

This Commerce Clause was meant as a Congressional power to limit the ability of individual states from damaging Republic-wide free trade in pursuit of their own interests.

Even the Anti-Federalists did not seem to question this much, as the interstate commerce concerns regarding the Articles of Confederation were obvious.

But, as it turned out, these innocent-looking sixteen words would prove maybe the most damaging of the Constitutional implied power 'enablers'.

The problem was never really commerce itself, or state laws that affected such commerce. Everyone pretty much understood the rules there. Movement of goods between entities residing in different states need to remain as consistently unhampered as possible.

But when the meaning of commerce is expanded in such a manner that any potentially indirect component is considered .... the sky's the limit on what can be regulated.

###  Early Conflicts

The Federalist Party, primarily identified with Alexander Hamilton, George Washington and John Adams were the first organized proponents of what would become known as 'implied powers' within the government of the new nation. That this party was in existence from roughly 1790 to 1816, as well as the fact that the first two U.S. Presidents were members, played a huge role in preparing the young nation for the future 'power creep' to come.

The term 'implied powers' was the catchall phrase used to describe the rationalization given for expansion of Federal power; primarily the General Welfare Clause, the Necessary and Proper Clause and the Commerce Clause.

This specter of implied powers was one of the main concerns expressed by the Anti-Federalist factions that opposed ratification. The Federalist faction (of Federalist Papers fame) believed that the U.S. Constitution defined the best limited republican form of government and ultimately won ratification for that document.

It is ironic that the first several governments formed under that Constitution were headed by a Federalist Party that sought to expand governmental powers in ways that had just been warned about by the Anti-Federalist factions. Alexander Hamilton, as first U.S. Treasury Secretary, was the chief proponent of such expansions while the primary opponents of such expansions were James Madison and Thomas Jefferson.

A few examples will illustrate such implied powers.

Hamilton early on convinced Congress and President Washington to assume the outstanding war debt of the states. The result was that the Federal Government ended up penalizing—relatively—the states that had been diligent in repaying their debt while rewarding those who had failed to meet their obligations. The benefit to Congress was that by controlling all that debt they increased their power over the states and did so with money they raised from the states via taxes anyway. By accumulating public (i.e. federal) debt the holders of that debt would also become dependent on the Federal Government for payments. This hotly contested argument was finally decided when Hamilton promised Virginia, main opponent of the debt assumption, to support permanent establishment of the national capital in present-day Washington, D.C.

Hamilton then convinced Congress to allow chartering, and financing, a privately-owned Bank of the United States. In so doing he began the argument that would be used often in implied powers debates; that as long as the end goal was not unconstitutional the means to achieve that goal should not be considered unconstitutional. The stated goals were to honor previously-issued United States debt (Article 6 Section 1), to establish financial order and stability and to establish credit for the Republic. The means of doing this, chartering a national bank, was never granted to Congress in the Constitution. After a close Congressional passage, Hamilton convinced President Washington to sign the bill over the objections of both his Secretary of State (Thomas Jefferson) and his Attorney General (Edmund Randolph).

James Madison, primary author of both the Constitution and the Federalist Papers, apparently did not appreciate this irony of the new Federalist policies and in 1792 joined with Thomas Jefferson and other Anti-Federalists to form the Democratic-Republican Party.

It is James Madison who maybe represented the greatest puzzle of the early republic. A staunch proponent of national sovereignty over the states, he was one of the most instrumental men in guiding development of the U.S. Constitution. Certainly he contributed more than anyone in the ratification debates, being chief author of the Federalist Papers. However, by President Washington's second term Madison had become a clear opponent of both Alexander Hamilton and the president himself. The chief reason seems to be this entire matter of implied powers; that maybe he realized that he had been on the wrong side of the debate all along.

In any case, the election of 1796 saw Madison and Jefferson running a vicious campaign against Vice-President John Adams. Jefferson lost that election and thus, as was the rule then, became Vice-President under President John Adams.

In 1798, to squash opposition to their policies, the ruling Federalists passed legislation called The Alien and Sedition Acts. Essentially, the Sedition Act made punishable by federal law _the printing, publishing or uttering of false, scandalous and malicious writings against any branch of the United States government._

Of course, it was that very government that decided what actions were false, scandalous and malicious! More specifically, it was up to the heads of the various federal branches. Thus, President Adams or members of his Federalist Congress could define anything their political opponents did in this way. The chief opponent of the Acts, of course, was Vice President Jefferson.

Some 25 persons, including the grandson of Benjamin Franklin, were actually prosecuted for speaking out against this travesty.

These Acts completely backfired against the Federalists and was a major reason for the sweeping rejection of that Party in the elections of 1800. Thomas Jefferson won, and became the third president of the United States.

It was this transfer of power, from a Federalist administration to a Democratic-Republican one, in 1800 which provided the first real test of the peaceful transfer of power within the United States government.

And the peaceful transfer of power had been by no means a sure thing.

President Jefferson let the Alien and Sedition Acts expire in 1801 and as one of his first actions pardoned all citizens who had been convicted of such 'crimes'.

By the way, President Jefferson was not immune to the temptation of using dubious constitutional powers when he felt they were needed himself. Though a long-time proponent of United States friendship with France, Jefferson became convinced after the rise of Napoleon that any French presence on the American continent should be kept to an absolute minimum. Even though he felt it almost un-constitutional to do so, he took full advantage of an opportunity in 1803 to solidify what would become the single greatest guarantee of U.S. dominance over the North American continent. In that year the United States doubled its size in a $15 million land deal with France that became known as the Louisiana Purchase.

An aside about early American political parties is in order.

This 1788 to 1824 period, known as the First Party System, saw the Democratic-Republicans for the most part dominating the Federalists. The Second Party System, lasting from 1828 to 1854, saw the Democratic-Republicans split into Andrew Jackson's rural and populist Democratic Party going against the modernization and economic-protectionism of Henry Clay's Whig Party. For the rest of the 19th century—and then some—the War Between the States and the new Republican Party would dominate U.S. politics.

After the War of 1812, a Second United States Bank was formed to help get the Nation's financial affairs back in order. The First United States Bank's charter had expired in 1811, with Congress being just as split over re-chartering as it had been over the initial charter. In 1818, Maryland passed a law requiring out-of-state banks (of which the local branch of the Second United States Bank was the only one) to pay it a state tax. The purpose of the law was clearly to protect Maryland banks from competition.

James McCulloch, head of that bank branch, refused to pay the tax. Maryland courts in turn ruled the Second United States Bank to be unconstitutional, as "the Constitution is silent on the subject of banks". McCulloch appealed to the United States Supreme Court.

_McCulloch vs Maryland_ was presided over by Supreme Court Chief Justice John Marshall. Daniel Webster represented the Bank. In 1819 the Court ruled in favor of McCulloch—and by extension the United States. The majority opinion, presented by Chief Justice Marshall, stated that the Taxing and Spending power given Congress was a legitimate Constitutional power and thus the means to that end (in this case the Second United States Bank) was also a legitimate implied power.

He also pointed out that the Necessary and Proper clause was listed in the enumerated _powers_ of Congress and not the enumerated _limits_ on Congress. The clause, then, " _purport[s] to enlarge, not to diminish the powers vested in the government. It purports to be an additional power, not a restriction on those already granted_ ". Thus, not every Congressional action or law need to be ruled necessary and proper as long as it was enacted pursuant to a valid enumerated Congressional power.

The Maryland bank tax was thus ruled invalid.

Justice Marshall himself had previously made statements about the need for a limited Federal Government. However, in _McCulloch vs Maryland_ he stated " _Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional_."

Chief Justice Marshall, like James Madison, seems to have been in conflict over whether the letter and spirit of the Constitution was indeed that of limited government. Pointing out that " _the power to tax involves the power to destroy_ ", Marshall apparently decided that if Maryland could tax a legitimate federal entity then that could lead to any state being able to contravene the Supremacy Clause (article 6 section 1 clause 2) of the Constitution.

In 1824, the Supreme Court cited the Commerce Clause in the case of _Gibbons vs Ogden_.

The state of New York had for decades granted exclusive rights to individual companies to operate passenger steamships in and around the waterways of New York. The rights were granted to one company at a time, in sort of a state-sponsored monopoly. In the early 1820s that monopolistic arrangement was chiefly held by Aaron Ogden. Thomas Gibbons, another steamship operator, received permission from the United States government to transport passengers between New Jersey and New York. Aaron Ogden, who interestingly had been Governor of New Jersey in 1813, petitioned the state of New York to uphold his exclusive agreement with the state and halt the operations of Gibbons. The state of New York upheld their arrangement with Ogden and ordered Gibbons to cease operations into New York.

Gibbons appealed the case and in 1824 it reached the United States Supreme Court.

Chief Justice John Marshall stated, for the majority, that commerce meant more than the physical transport of goods for trade purposes and rather should be interpreted in a much broader sense. In this case, the navigation rights of waterways between states could fall within that broader definition, and since Congress was granted powers to regulate interstate commerce the previous arrangement by the state of New York was found unconstitutional.

In effect, the Court's decision was that the Commerce Clause meant much more than seeing that _intrastate_ regulations did not affect _interstate_ movement of goods for trade. It could be extended to apply to any action, regardless of nature or location, which could be shown to potentially affect, in some manner, interstate commerce.

In 1829 the Supreme Court once again expanded upon the meaning of the Commerce Clause.

The state of Delaware had given a private company permission to construct a dam over a navigable creek called Black Bird Creek. A ship owned by a man named Wilson damaged the dam as he attempted to navigate the creek. The state of Delaware insisted Wilson pay damages but Wilson brought suit arguing that the Commerce Clause of the United States should not have allowed Delaware to commission the dam in the first place as it clearly was a hindrance to commercial traffic

This time Chief Justice Marshall, speaking for the majority again, sided with the state. However, even though the Court felt that in this instance Delaware had not run afoul of the Commerce Clause, he made clear the Court's position that a state could violate the Commerce Clause even in cases where Congress had not explicitly passed any laws regulating commerce in that specific area. This was a _dormant_ power of the Commerce Clause that applied even if Congress had not yet taken any action.

In effect, the Court's comments and not its decision were important here. The Commerce Clause, which in _Ogden_ was declared to be extensible to undefined and indirect activities _that might_ _possibly_ affect interstate commerce could now be applied retroactively. Congress could cite something to be in violation of the Commerce Clause even if Congress itself had never passed any regulations defining how that Clause affected interstate commerce in a specific instance.

###  Later Conflicts/Problems

Actions taken by early 20th century Progressives would substantially remove federal taxation limits and open the floodgates for these implied powers to be exploited.

In 1933 Congress enacted the Agricultural Adjustment Act. Its stated purpose was to manipulate agricultural prices to reduce the disparity between those prices and the prices of other commodities. Prices would be regulated by the imposition of federal manufacturing taxes that would fund the paying of farmers not to grow specified crops or raise specified livestock.

It should be clear that this move was not so much a tax levied by Congress in support of one of its Constitutionally-enumerated powers as it was a wealth-transfer subsidy from non-farmers to farmers. The tax was adjusted for no other reason than to 'cover' the gap between actual agriculture market prices and what Congress felt such prices 'should' be. For instance, if a higher price for wheat was desired the tax monies would be used to pay some farmers not to grow wheat; thus reducing the supply and raising market prices.

In the 1936 Supreme Court case United States v Butler the taxes were declared unconstitutional. However, the Court decision indicated that Congress does indeed have the power to expend monies for the purpose of what it considers general welfare. Rather, the chief reason for the unconstitutional decision was that in this case the Court felt that the act invaded rights reserved to the states (e.g. regulating agricultural production).

Over the next three years, though, Congress passed a series of laws that gave the Secretary of Agriculture authority to reduce acreage and production as needed for any basic agricultural commodity through agreements, rentals and benefit payments. The reasoning was that the 'general welfare' of the nation depended on maintaining a base level of crop prices and that leaving such supports to the states would cause non-uniform turmoil.

Those new laws were later upheld by the Supreme Court mainly because of the decision rendered in Butler regarding the new implied Congressional power regarding general welfare.

Over the next half century or more Congress decided that lots of actions—and lots of taxes—were necessary for the general welfare; an interstate highway system, subsidized housing, subsidized health care, establishing minimum wages, creating and expanding national parks, anti-pollution laws, funding/mandating education programs, etc.

Over that same period similar reasoning was applied to actions considered necessary and proper; national speed limits, restrictions on private land use, anti-discrimination laws, limits on toilet bowl sizes, light bulb restrictions, etc.

Up until the mid-1930s Congress generally utilized Commerce Clause powers as a limit on the actions of individual states. True, _Gibbons_ established the precedence of a broad interpretation of commerce, but Justice Marshall made it clear that there were things too far attenuated from interstate commerce to be held as 'affecting' it. Generally, only direct or indirect activities affecting the transport of goods were considered relevant.

In 1895 the Court even ruled, in _United States vs E.C. Knight_ , that the newly-passed Sherman Anti-Trust Act could not be used to prevent mergers between companies to prevent a monopoly in manufacturing—in that case sugar refining. The reasoning was that the Commerce Clause's stated purpose of interstate commerce could not be extended to intrastate manufacturing.

However, in 1937 they ruled, in _NLRB vs Jones & Laughlin Steel_, that the Commerce Clause did allow the United States Congress to regulate manufacturing or any other activity if such activity _is deemed to have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions_.

The National Labor Relations Board (NLRB) was a New Deal program instituted to allow the Federal Government to intervene between business and labor. It was instituted during the midst of the Great Depression. Jones & Laughlin Steel was charged with interfering with union labor organization and even firing several workers. The NLRB said Jones had to reinstate ten of those workers and cooperate with the union. Jones challenged Congress's right to establish the Board and the case was accepted by the Supreme Court.

The Court upheld the NLRB's authority to regulate Jones and any other company in disputes with labor.

The Court's ruling seemed to declare, at least for the steel industry, that the right to organize a labor union was _essential or appropriate to protect that commerce from burdens and obstructions_. Rather than the cost of labor being just another component of production, apparently the _right_ to higher wages was somehow deemed to be essential to commerce. This could, one would suppose, be the case if commerce were interpreted so broadly that lower wages for anyone was seen as a detriment to overall consumer financial activity.

In 1942 a farmer was fined for growing wheat solely for the purpose of feeding his own chickens. The Secretary of Agriculture had decreed strict limits on wheat production in order to artificially prop up wheat prices. In _Wickard v. Filburn_ the Supreme Court stated that although Mr. Filburn's wheat was not sold on any market its mere existence meant that he wouldn't have to pay the propped-up 'market' price of wheat and thus would damage wheat farmers who were now not going to be able to **potentially** sell him their wheat for chicken feed.

The Court thus gained precedence to regulate activities related to Commerce in whatever way and no matter how trivial if they determined that such activities _in the aggregate_ **may possibly** impede Commerce.

Over the next few years the concept of implied powers quickly resulted in ways for Congress to become involved in numerous areas of American society. Congress took upon itself the role of regulator of the broad aspect of Commerce and when they felt the need most any activity could be shown to somehow be related to Commerce.

If Commerce can be interpreted to essentially be any activity between individuals or companies then what cannot be regulated?

Power, in the form of regulation and/or legislation, was steadily siphoned from the more localized governing bodies of towns, cities, counties and states to the centralized Federal Government.

Commerce, which originally meant the transportation of trade goods, was intended to be regulated between states. Over the years it has come to mean nearly _any_ activity _anywhere_ that _may_ have _any_ effect on the larger interstate market in _related_ goods or services.

## The Plan: Result

It proved easiest, especially early after the nation's formation, for central planners to locate loopholes in the Constitution rather than attempt to make grabs for expanded powers not even mentioned in that document.

Not only that, but by early on setting the precedence for using the Constitution itself as a tool of national destruction the arsenal of tools available for future destructive actions was expanded.

It is always easiest to obtain concessions in a negotiation, or engagement, when your opponent is convinced that you cannot exploit such gains. In our case getting Americans to overlook small encroachments, which resulted in numerous new Federal powers, was relatively easy. After all, the new national government was never envisioned to have the fiscal resources to undertake any of them to an appreciable degree.

Imagine the reverse chronology. If the new Federal government had been granted huge fiscal resources and had shown an inclination towards usurping State sovereignty, any attempt to leverage poor Constitutional wording for greater Federal expansion would have been seen as very serious indeed.

Thus the expansion of power—supposedly benign power—in these early years were crucial. Time would surely come when the ability to make use of that power would present itself.

There was a risk of exploiting these Constitutional loopholes while the Anti-Federalists, who earlier warned of such pitfalls, were still alive. But those risks were mitigated by the fact that the Federalists were also still alive. The Federalists had won the ratification debate and enjoyed notoriety as the pre-eminent _Founders_ , so getting them to support these early Constitutional outrages lent credibility to such actions.

By far the majority of the Federalists were well-meaning patriots. Most had their own reasons for rushing into this new system, but there is little doubt they were sincere in their beliefs that it would work.

Whether obtaining Federalist support through corruption, ignorance or guile mattered little in the grand scheme of things, however.

## Quotes

President Thomas Jefferson

"The legitimate powers of government extend to such acts only as are injurious to others. It does me no injury for my neighbor to say there are twenty gods or no god. It neither picks my pocket nor breaks my leg."

"I predict future happiness for Americans, if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."

"Government big enough to supply everything you need is big enough to take everything you have. The course of history shows us that as a government grows, liberty decreases."

"Those who surrender freedom for security will not have, nor do they deserve, either one."

James Madison

"I believe there are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power than by violent and sudden usurpations."

"The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, selfappointed, or elective, may justly be pronounced the very definition of tyranny."

"It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood."

"It is proper to take alarm at the first experiment on our liberties. . . . The freemen of America did not wait till usurped power had strengthened itself by exercise, and entangled the question in precedents. They saw all the consequences in the principle, and they avoided the consequences by denying the principle. We revere this lesson too much, soon to forget it. . . ."

Publius Cornelius Tacitus

"In a state where corruption abounds, laws must be very numerous."

"The more corrupt the state, the more laws."

Justice John Marshall

"No political dreamer was ever wild enough to think of breaking down the lines which separate the States, and of compounding the American people into one common mass."

" _The Constitution is not a panacea for every blot upon the public welfare, nor should this Court, ordained as a judicial body, be thought of as a general haven for reform movements_."

Justice Oliver Wendell Holmes

"This is a court of law, young man, not a court of justice."

**********

# The End of Federalism: Physical Enforcement – 1828 to 1877

## The Plan: Goal

The word federalism refers to the relationship between distributed local governments and a central one. In the case of the United States, the local governments would be the individual states while the central authority would be the Federal Government.

A republic is a form of government in which there is no monarch; in which the people have a say in choosing their leaders.

A Federal Republic is thus a republic in which the people control their local governments and then control (either directly and/or via their local governments) the central (or federal) government. Control in this case means to choose and influence.

For purposes of 'The Plan' it will prove beneficial, if not critical, to redefine this relationship such that the Federal Government is the undisputed master. To see why this is so we should examine the alternative—whereby the states remain largely sovereign. To affect all parts of the nation as a whole the separate state governments would each have to be independently affected. This would undoubtedly prove much harder than influencing events pertaining to a central Federal Government. Thus, the relationship between the states and the Federal Government need to be nurtured and manipulated along certain lines.

During ratification the Federalists were those who argued for the new Constitution; the establishment of a strong central government that would bind the state governments into a strong and functional national entity. The Anti-Federalists feared the idea of an overly-strong central government and wanted to ensure that the states retained sovereignty in most all areas.

In essence the Federalists hijacked the name and hence muddied the debate quite effectively. It was the Anti-Federalists who believed passionately in federalism, and in fact the Articles of Confederation's main weakness was that it was biased too strongly towards federalism and not enough on a central government (even a republican form of government). The Federalists, chiefly orchestrated by Alexander Hamilton, wanted a strong central government that would have supremacy in most areas over the states.

By referring to themselves as Federalists and the central government as the Federal Government they accomplished two goals. They linked their name with the enlightenment-era ideal of federalism while linking the name of their detractors with opposition to that ideal.

In Federalist #46 James Madison wrote " _The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State. The operations of the federal government will be most extensive and important in times of war and danger; those of the State governments, in times of peace and security. As the former periods will probably bear a small proportion to the latter, the State governments will here enjoy another advantage over the federal government._ "

During those early years, the Federalists seemed to feel it evident that the state should be the government most involved with the day-to-day lives of its citizens. Where matters of national security or interactions with foreign governments were concerned the national—or federal—government would present a unified front benefiting all the states and its associated citizens. The most direct influence envisioned by the Federal Government on individual state citizens in peacetime would be when conflicting interests between the various states required an outside arbitrator.

The Anti-Federalists also felt this fact evident but were not willing to trust on goodwill for this situation to persist. They were convinced that the proposed Constitution did not adequately protect against national-government usurpation of what should be state matters.

In Federalist #28 Alexander Hamilton wrote " _Power being almost always the rival of power, the general government will at all times stand ready to check the usurpations of the state governments, and these will have the same disposition towards the general government. The people, by throwing themselves into either scale, will infallibly make it preponderate. If their rights are invaded by either, they can make use of the other as the instrument of redress._ "

Hamilton's words lead to the question of what is meant by 'the usurpations of the state governments'?

The United States Constitution was meant as a contract between the states and a new Federal Government. Individual citizens would be affected mainly by their status as state citizens. In that document there was no defining of rights between any state and its citizens but rather between the states and the Federal Government. The states already existed at the time of ratification and the Constitution was never meant as a vehicle to redefine or reorganize those state governments.

All of the states were different in certain aspects, some more than others. There were tensions between some of them, be it cultural, geographic or trade-based.

In other words, there were existing rifts which could be widened to leverage for greater federal control.

Greater federal control could be realized in many ways. Physical control over the state governments was one. Making the states more reliant on federal 'help' was another. And setting up situations whereby the states 'needed' federal assistances was yet another.

Nor would control necessarily mean the ability of the Federal Government to dictate actions to be taken by the states. It is enough to be able to have significant influence over them. Such influence can be gained through threats of violence, via the promise of fiscal rewards or even the threat of withholding fiscal rewards that the states have been made dependent upon.

But it would not be acceptable, from the viewpoint of 'The Plan', for any states to simply withdraw from the new nation.

For one, it would do no good to destroy that nation if every state were able to slip out of the relationship as they saw the damage being inflicted. Would destroying a nation devoid of many, if not all, of its member states really mean anything?

For another, letting states withdraw from the nation they voluntarily chose to form would mean that power was not sufficiently concentrated at the federal level. Such concentration itself would mean that the United States had morphed away from its moral founding but such concentration would also be necessary for the total destruction our plan calls for.

The Constitution is chiefly a contract between the Federal Government and the state governments. Upholding contracts between members of a society is one of the main functions of a moral government. Individuals must be able to have faith that other individuals in the society will keep their word and adhere to agreements, and governments are formed and given authority to ensure such things.

What would happen if the Federal Government was to make the states adhere to the agreements it wanted them to adhere to but then turned around and violated the contract that brought that Federal Government into existence in the first place?

##  Course of Events

###  Cultural Divide: North vs South

In many ways the northern and southern sections of the United States had distinctly different cultures. By way of generalization when discussing those differences in this chapter, the northern sections will be referred to as the North and the southern sections as the South.

The South revolved mainly around land and agriculture. And although the United States was still mainly an agrarian society, the North's influence increasingly became centered about its cities and manufacturing.

Given its overall more de-centralized way of life, the South saw little to like about concentration of power in centralized government. Anti-Federalist sentiments that may have been equally dispersed in 1789 never really faded in the South. Southerners wanted as little Federal Government as necessary and usually did not much trust the little that they did have occasion to come in contact with.

With its greater reliance on industry, technology and an urban lifestyle the North came more and more to see the necessity and need for a strong Federal Government.

Of the huge numbers of free foreign immigrants that arrived between 1790 and 1860, the vast majority settled in the North. The fact that these newcomers did not have established ties to their states tended to make it easier for them to accept the more centralized form of government they had known in Europe.

The use of the word 'free', of course, brings into focus what was to become a hugely divisive issue—slavery.

Coerced labor was widespread throughout the colonies from its earliest days. The form of this originally consisted mainly of indentured servants. Especially in the North, these were primarily European immigrants who paid for their passage to the colonies by contracting themselves out as unpaid laborers for several years to colonists already in America. At the end of their contract period they usually struck out on their own and bought a farm or business.

By the mid-1700s, for a variety of reasons, settlers had largely stopped choosing indentured servitude as a way to finance their trip to America.

Large farm holdings were far more dependent on labor than could be provided for through indentured servitude. To provide this labor, the colonists made use of chattel slavery; whereby one purchases slaves as one's personal property. Slavery had existed since the earliest recorded history of man and its appearance in America was nothing out of the ordinary.

Slavery in the colonies, especially in the South, primarily involved African blacks. Africans had been selling each other into slavery for centuries, to ancient societies ranging from 7th century B.C. Greeks to 9th century A.D. Arabs. As pertains to the American experience, however, African slaves had been being transported for sale to American ports since the early 17th century. While Europeans mainly profited from such trade early on, many of the largest names in New England shipping were heavily involved in this unseemly commerce.

It is widely estimated that by 1808 Africa slave importation to the North American continent had accounted for roughly 500,000 of the more than 11,000,000 slaves traded worldwide. However, being a slave certainly did not preclude reproduction—which accounts for the huge growth in the slave population in North America even after the slave trade ended that year.

In colonial days slavery existed in the North also, especially in the cities. Often those slaves worked as artisans or craftsmen. However, the practice was much more prevalent in the South with its vast plantations and burgeoning need for laborers.

By the time of forming of the United States, slavery had become mostly relegated to the South. In 1787 the Northwest Ordinance banned slavery from any of the vast new territories—all in the North—annexed by the new nation. The U.S. Constitution did contain a ban on the importation of new slaves as of 1808.

In 1793, just after ratification of the U.S. Constitution, Eli Whitney invented the cotton gin. This single invention vastly increased the economic importance of slave labor in the South, as cotton production increased some 50,000% between 1793 and 1840. The cotton gin greatly reduced the time necessary to remove seed from picked cotton, thus greatly increasing the demand for raw cotton, thus greatly increasing the demand for physical laborers to tend the cotton.

The slavery issue was a problem between North and South, though most northern states were far from open to taking in blacks of any kind themselves. Many had their own laws restricting or outlawing black immigration. But some outspoken northerners saw slavery, and rightly so, as an immoral institution that was against what the United States stood for.

But the chief cultural differences, and they continually got worse, for the next fifty years were related to the widening demographic disparities in population numbers, economics and legislative power.

###  Population Divide: North vs South

The 1808 ban on slave trade was part of the compromise to get North and South to agree on ratification of the U.S. Constitution. The North was given a ban on slave importation after 20 years while the South was allowed federal representation based on not only its free population but 3/5 of its slave population.

But while that compromise seemed fair in 1789 it turned out not so good for the South. While federal representation was roughly equal between North and South at the time of ratification, between then and 1860 the population of the country grew by almost 800%, largely due to immigration.

The vast majority of the new immigrants settled in the North, mainly in its large cities.

By 1860, even counting 3/5 of the South's slave population, the North enjoyed an approximate 2:1 majority in population and thus Federal representation in the House of Representatives. Things were not quite so unequal in the Senate, with its two representatives per state, but even there the years since 1790 had seen a 30% increase in northern representation over southern.

In short, the North dominated the legislative, taxing and spending powers of the Federal Government.

There were from the start attempts at the federal level to halt the spread of slavery into new territories and states. Because of the increasing tilt towards greater northern representation, this was largely successful, and presented a huge problem with the South and its institution of slavery. In 1790 the overall percentage of the Southern population that represented slaves came to roughly 32%. By 1860 that had grown to 43%, a nearly 33% increase. The South was caught in a demographic dilemma in that without the ability to spread slavery into new territories they were fast reaching the point where the slave population would outnumber the free population.

###  Taxation Divide: North vs South

A clear use of this legislative power was in the harsh tariff policies enacted over the years by the Federal Government—tariffs whose main purpose was protectionism to build up the North.

Tariffs, to be sure, had always been the major form of taxation for the Federal Government. This indirect form of taxation was totally in keeping with the Constitution. It was the unequal impact and effect of this taxation which was the problem.

Since the North produced a wide variety of products domestically, its citizens could more easily avoid these tariffs. The South mainly lived off of exporting agricultural products and importing other types of goods. Due to the tariffs on foreign goods, the North could raise prices for its own domestically-produced goods higher than markets would normally bear. The South was forced in most cases between paying high prices for Northern goods (often of inferior quality) and paying even higher prices (after imposition of the tariffs) for foreign goods.

Thus, the South from the beginning paid through the nose for their way of life. They paid a largely disproportionate amount of federal taxes because of their greater need for imported materials and they paid higher prices for domestic goods due to the same tariffs.

When federal expenditures were kept to a minimum this greater burden on the South was accepted as a matter of course. But the industrialization and modernization activities undertaken in the North by the Federal Government (railways, harbors, roads, etc) dwarfed similar activities towards the South. Thus, the tariffs themselves benefited the economics and infrastructure of the North at the expense of the South.

U.S. tariff policy benefited business in the North tremendously by letting them demand higher prices. The higher prices the North paid were balanced by the fact that their economy was the direct beneficiary of the higher prices. The higher prices the South paid went straight into those same Northern coffers. And the reduction in British imports that it caused resulted in Britain having less money to pay for the chief American export; cotton and tobacco from the South.

In many ways the South felt as if the situation was becoming 'taxation without representation' all over again. South Carolina first threatened secession in 1832, in fact, over very punitive tariffs imposed in 1828 and 1832. Tariffs were more than doubled (from roughly 20% to 40%) over a short period. South Carolina passed a Nullification Ordinance declaring the tariffs unconstitutional and unenforceable and even initiated military preparations to resist anticipated federal attempts to force their compliance. The crisis was averted when Henry Clay negotiated a compromise and the U.S. Government agreed to roll back the tariffs to 1816 levels over the next ten years.

If we go back to the 1798 Virginia/Kentucky Resolutions (by Thomas Jefferson and James Madison) they clearly contend that the Constitution was a compact among the states. If the Federal Government passed laws that fail to have equal benefit/hardship effect on all states then individual states had the right to declare such laws null and void within their boundaries. Even though those resolutions were never accepted they did form a major plank of the 1800 election in which the Democratic-Republicans (the old Anti-Federalists mainly) wrested control from the Federalists.

This is important because it points out that two of the most revered Founding Fathers realized back then what was really starting to happen.

Henry Clay, who negotiated the tariff rollback in 1833, was actually a big supporter of high tariffs and federal power. He wanted the tariff system and federal supremacy over the states to not be jeopardized by open secession, however. In the 1830s he formed the Whig party from roughly the Republican half of the old Democratic-Republican party, as an opposition party to the rural-populist Andrew Jackson.

In 1840, Clay's Whig party defeated the Jacksonian rural-populist Democrats and embarked on a plan to modernize the nation thru higher tariffs and federal activism. They attempted to raise tariffs in violation of the compromise Clay had introduced in 1833, but the plans were scuttled by the President Tyler (who was himself a Whig). Tyler did late in his term raise tariffs a little, but never to the heights the Whigs wanted.

In the late 1840s and most of the 1850s, tariffs were actually lowered and resulted in national economic prosperity for the most part. Many Northern businessmen still favored protectionist tariffs, however, in order to expand their economic empires further.

In the late 1850s a combination of Democratic lower-tariff policies and cyclical economic conditions led to widespread financial panic, low government revenues and increasing federal deficit spending.

No matter what the overall level of tariffs were, however, by the 1860 election the South as a whole still accounted for the majority of the federal revenue thus generated as well as the effective subsidization of large chunks of Northern society. Few Southerners felt that they received anywhere close to equal federal services and benefits, however.

###  Early Conflicts

The conflicts over Federalism were waged before the Constitution was even ratified.

A reading of most any of the Anti-Federalist writings were essentially warnings about conflicts that would arise when the Federal Government stepped on the rights of the states.

In March of 1788 the author _A Federal Republican_ (anonymous Virginian) wrote 'The Power Vested in Congress of Sending Troops for Suppressing Insurrections Will Always Enable Them to Stifle the First Struggles of Freedom'.

"They will moreover, have the power of leading troops among you in order to suppress those struggles which may sometimes happen among a free people, and which tyranny will impiously brand with the name of sedition."

At some point maybe the most prolific of the Anti-Federalists, Richard Henry Lee, wrote under the penname _The Federal Farmer_ the essays 'Representation and Internal Taxation' and 'Factions and the Constitution'.

"It is not only unsafe but absurd to lodge power in a government before it is fitted to receive it. It is confessed that this power and representation ought to go together. Why give the power first? Why give the power to the few, who, when possessed of it, may have address enough to prevent the increase of representation? Why not keep the power, and, when necessary, amend the constitution, and add to its other parts this power, and a proper increase of representation at the same time? Then men who may want the power will be under strong inducements to let in the people, by their representatives, into the government, to hold their due proportion of this power. If a proper representation be impracticable, then we shall see this power resting in the states, where it at present ought to be, and not inconsiderately given up."

Each of these essays pointed out the improbability of a central government staying fair and unbiased when granted such great powers to dictate the affairs of such a wide cultural and geographic nation as found in America. Factions whose purpose will be to benefit themselves at the expense of other factions will inevitably gain control. If the factions that gain control can unduly influence the manner in which the republican form of representation is chosen, as the proposed Constitution surely did, then the prospect of civil war would become real.

In December of 1787 the author _Philanthropos_ (anonymous Virginian) wrote 'Adoption of the Constitution Will Lead to Civil War'.

"Of all the plagues that infest a nation, a civil war is the worst. Famine is severe, pestilence is dreadful; but in these, though men die, they die in peace. The father expires without the guilt of the son; and the son, if he survives, enjoys the inheritance of his father. Cities may be thinned, but they neither plundered nor burnt. But when a civil war is kindled, there is then forth no security of property nor protection from any law. Life and fortune become precarious. And all that is dear to men is at the discretion of profligate soldiery, doubly licentious on such an occasion. Cities are exhausted by heavy contributions, or sacked because they cannot answer exorbitant demand. Countries are eaten up by the parties they favor, and ravaged by the one they oppose. Fathers and sons, sheath their swords in anothers bowels in the field, and their wives and daughters are exposed to rudeness and lust of ruffians at home. And when the sword has decided quarrel, the scene is closed with banishments, forfeitures, and barbarous executions that entail distress on children then unborn. May Heaven avert the dreadful catastrophe!"

No reasonable individual will anymore argue that slavery as an institution was either just or moral. One, however, is tempted to point out plenty of other acts today considered immoral that were considered normal in various cultures throughout the centuries.

Was it morally justified for many northern states to have 'Black Laws' that restricted blacks from immigrating to the North? Certainly not, especially not among those who persisted at judging the South for restricting blacks in the manner of their customs.

The fact is that slavery existed in most of the original colonies when both the Articles of Confederation and then the United States Constitution were signed. The states of the South never tried to force the states of the North to keep slavery legal in the North. It was understood that state governments were formed by local grouping of individuals and that unless one state's actions harmed another state the customs and government of the states should be left to the respective populations. There was no possible way that the United States would have been formed without that understanding.

The prime issue was never slavery. The vast majority of Southern whites, some 75%, did not own a single slave. Less than 5% owned as many as 20 slaves and less than 1% owned more than 500.

The fact that there were slaves in biblical times and that the Bible mentions slavery of course caused some Southern zealots to claim that God somehow sanctioned the practice. Equally zealous, or probably more so, were the Northern abolitionists who claimed that God's work entailed violent overthrow of the institution of slavery.

That zealots throughout history have also claimed that God sanctioned the murder, rape and theft of 'non-believers' should be proof enough that zealots are usually weak-willed men that too often substitute the twisting of religious teachings for logical thinking.

Chances are slavery would have largely died out in the United States by the early 1800s if not for the hundred-fold increase in the value of slave labor brought about by the cotton gin. And even then, if this most horrendous of bickerings in 1861 had not resulted in war then it is likely slavery as an institution in the South would have died of its own weight within a few more decades. The fact was that the South either had to modernize or die out as a cultural entity, and slavery meshed not at all well with modernization, urban life, consumerism or non-agricultural economies.

No. The issue was individual rights; the same rights that the Anti-Federalists were afraid of losing during the ratification debates.

The Constitution was a contract between the states. Just as individuals form societies and governments to protect their individual rights, the states formed the Federal Government to protect their individual rights. And just as no individual would form a society or government with anything at all being implied that that society could kill him if he decided to withdraw from it, no state joined the Union with any understanding that it had to stay in that Union forever or be destroyed by it.

It was, and still is, sometimes argued that the Declaration of Independence and its 'all men are created equal' clause was a justification for the War Between the States. This argument, which President Lincoln obliquely referred to at times, is pathetic. 'All men are created equal' may indeed be considered an unalienable right, but Thomas Jefferson goes much farther in that same paragraph.

" _That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government"_.

If rational discussion of the Declaration of Independence is to be made, then it is apparent that this document establishes that the right of secession is among the unalienable rights of men.

As has been mentioned, the Articles of Confederation did explicitly have a prohibition against withdrawing. The reason was necessary so the former colonies would have a united face against her enemy. Paradoxically, if the Anti-Federalists had been heeded and the Articles amended rather than scrapped and replaced then the issue would have been far different. In that case, the contract would have actually prohibited secession. But then again, the central government would not have had the taxing-and-spending powers that became so biased against the South so secession may well never have been considered.

The industrial leaders who formed the Republican Party in the 1850s manipulated Federal Government power—and its quest for more power—as well as the abolitionist movement to vault itself to success. It is doubtful most of them cared a wit about Southern slavery, other than to ensure it did not expand and thus dilute their electoral power.

Abraham Lincoln, the face of that Party, claimed on many occasions that he had no intentions of abolishing slavery. He readily admitted that the U.S. Constitution granted him no right to do so.

But President Lincoln did unequivocally state that he would not allow any state to secede from the Union. The U.S. Constitution, however, granted him no such power—either explicitly or implicitly.

To accept Lincoln's statements would be tantamount to accepting an emperor who could dismiss the Constitution whenever it suited his wishes.

In fact, the case for President Lincoln actually adhering to the Constitution he swore to uphold is far from perfect.

In 1861, in response to Maryland riots protesting the staging of federal troops in that state, Lincoln declared martial law there. He instructed his military commanders to suspend the writs of habeas corpus when necessary if civilians needed to be detained. Habeas corpus is the requirement for a detaining authority to present evidence as to why the detainment was made. A court could demand—via a writ—that the detaining authority either present such evidence or release the detainee.

Since Maryland was not in a state of rebellion Chief Justice Roger Taney, in his role as a Federal District Court judge, cited Article 1 Section 9 of the U.S. Constitution to declare the President's suspension of habeas corpus as unconstitutional. In response to the imprisonment of a Maryland state militiaman named John Merryman in May of 1861, Justice Taney dispatched a U.S. Marshall to the military officials holding the prisoner with such a writ. Citing Presidential orders, the Marshall was turned away by armed federal soldiers.

President Lincoln had chosen to disregard the Constitutionally-mandated check-and-balance system provided for in the U.S. Constitution.

Congress itself refused to pass a law sanctioning such actions by the President. The Supreme Court on several occasions over the next two years affirmed Justice Taney's ruling. But the orders from President Lincoln stood in deference to both the Legislative and Judicial branches until 1863, when the Congress finally passed a bill that itself suspended the right of habeas corpus.

During the course of the war more than ten thousand U.S. citizens in the North were detained, often with no official charges, as political prisoners because of their opposition to what they considered President Lincoln's illegal war.

More needs be said about the afore-mentioned Chief Justice Roger Taney. Appointed by Andrew Jackson in 1836, he tended to be a strict Constitutionalist and favored state's rights over the expansion of federal power. This was a departure from his predecessor, the big-government Chief Justice John Marshall, who presided over most of the early 'implied powers' decisions of the Supreme Court.

The Dred Scott decision of 1857 backfired on Justice Taney's court. At that time the opinion of the Court was that Dred Scott was still a slave even though he had lived for a time in the 'free territories' of Wisconsin and Illinois. The justification for that ruling was that Congress had in 1820 unconstitutionally passed the Missouri Compromise which created those 'free territories'.

While Constitutionally-sound, that decision was certainly not popular with the Northern—especially Republican—attempts to limit the expansion of slavery. The Court also looked foolish when Dred Scott and his family were emancipated anyway within three months of the decision.

Justice Taney, in a 1861 pronouncement which shed some light on his reluctance to get involved with the secession question, stated " _The South contends that a state has a constitutional right to secede from the Union formed with her sister states. In this I submit the South errs. No power or right is constitutional but what can be exercised in a form or a mode provided in the constitution for its exercise. Secession is therefore not constitutional, but revolutionary; and is only morally competent, like war, upon failure of justice_ ". At near the same time he stated that the United States government had " _no rightful power to bring back by force the states into the union_ ".

Basically, the Chief Justice seemed to be saying that neither side in the secession dispute could rely on an interpretation of the U.S. Constitution because there was nothing in that document that could be a basis for determination.

Why Justice Taney would not hold that the absence of such a right in the Constitution would default to a state's right is unclear. This seems the clear intent of the Founders, though as has been discussed the Tenth Amendment seems to be woefully inadequate in its wording.

The section of the Constitution that seems to address secession the most, Article I Section 10, was not really brought up to much at the time.

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; 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, or grant any Title of Nobility.

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

That would have been an interesting debate.

If President Lincoln had wanted to cite Constitutional wording to justify the actions that were soon to come, why did he not cite this passage?

Could it be that he did not feel it could stand up to interpretation the way he wanted?

The first clause in the first paragraph is very puzzling, as it seems to declare that no state shall ever enter into any treaty, alliance or confederation. However, unlike the next two paragraphs, it leaves off the _without the consent of Congress clause_.

The third paragraph does indicate that a state shall not enter into an agreement or compact with another state **unless**

* Congress consents (which obviously it did not) or

* It has been actually invaded (by who is not implied) or

* It is in such imminent danger of invasion as will not admit delay.

Why would that third paragraph have been specified if there was absolutely no way a state could ever join into a compact with other states?

The words of the United States in 1860 surely indicated that they would invade the southern states if they did not halt their secessionist talk and actions, or at least agree to continue paying taxes to the Federal Government.

Those very words surely put the southern states in a position of being in 'imminent danger of invasion'.

Were the southern states in such imminent danger?

Obviously they were. Their neighbors to the north had massive resources that far outstripped anything they could assemble. Those same neighbors continuously told them that they had no rights beyond those _allowed_ them by the United States.

They had every right to feel in danger of imminent invasion; and 'such imminent danger as will not admit delay'.

### Abraham Lincoln and The Republicans

In 1856 the Republican Party was formed. Its supporters for the most part opposed Democrats, opposed low tariffs, supported modernization and supported increased Federal Government intervention. There were some who sympathized with abolitionists—those vehemently opposed to the institution of slavery—but the majority of Northerners did not have particularly strong sentiments on that matter.

In 1858 the incumbent Democratic Illinois Senator Stephen Douglas faced Republican challenger Abraham Lincoln in a series of debates around that state. The main topic was slavery, particularly the expansion of that institution into new territories. Though there is little in Lincoln's background to lend credence to the fact that he was very committed to freedom for slaves he did espouse the Republican line of halting the expansion of slavery. As previously mentioned this position was mainly held to maintain the demographic lead the North, and the Republicans, enjoyed due to this fact.

The Lincoln-Douglas debates resulted in a Democratic electoral victory, but Lincoln gained from the debates in the fact that they delivered widespread publicity for both him and the Republican messages.

Abraham Lincoln in 1860 clinched the Republican nomination for president with a stirring speech before Party leaders at Cooper-Union, New York. In it he reiterated the belief that the Federal Government can regulate slavery insofar as new territories are concerned and that Republicans are not attempting to end slavery in states where it currently exists.

In the general election there were four candidates, the chief ones being Lincoln and Douglas. Ironically, Lincoln did little to no campaigning and let the Republican Party run practically everything.

Lincoln swept the North and the West winning a plurality of the popular vote (40%) and a majority of the electoral vote (60%). His name did not appear on most southern states, though it is doubtful he would have garnered more than a handful of votes there anyway.

To the South the legislative domination by the North had become intolerable. Lincoln had won without even being on the ballot in ten southern states. The Republican platform called for imposition of protective, aggressive tariffs at levels not seen since the South Carolina secession crisis of 1832.

At President Lincoln's inaugural, several monumental events were mentioned in his address.

First, both houses of the United States government had just approved a constitutional amendment which would guarantee forever the right to own slaves in the South. It still had to be submitted to the states for ratification, of course, but its sole purpose was to keep the South from seceding in the wake of the election.

It stated: " _No amendment shall be made to the Constitution which will authorize or give to Congress the power to abolish or interfere, within any State, with the domestic institutions thereof, including that of persons held to labor or service by the laws of said State_ ".

President Lincoln clearly stated his support of this amendment thus.

" _I understand a proposed amendment to the Constitution . . . has passed Congress, to the effect that the Federal Government shall never interfere with the domestic institutions of the States, including that of persons held to service. To avoid misconstruction of what I have said, I depart from my purpose, not to speak of particular amendments, so far as to say that,_ _holding such a provision to now be implied constitutional law, I have no objection to its being made express and irrevocable._ "

Second, outgoing President Buchanan signed the Morrill Tariff, which more than doubled the average tariff rate. The then current 15% tariff would be raised to 37% and then over the next three years to 47%. The South, which had previously supplied the majority of federal revenues, would now start supplying even far more. And there was no doubt that with the Republicans in power few, if any, increased benefits would result for the South.

President Lincoln clearly stated his support of this law and his intent to enforce it in the face of Southern objections.

" _In doing this there needs to be no bloodshed or violence, and there shall be none unless it be forced upon the national authority. The power confided to me will be used to hold, occupy, and possess the property and places belonging to the Government and_ _to collect the duties and imposts_ _; but beyond what may be necessary for these objects, there will be no invasion, no using of force against or among the people anywhere. Where hostility to the United States in any interior locality shall be so great and universal as to prevent competent resident citizens from holding the Federal offices, there will be no attempt to force obnoxious strangers among the people for that object. While the strict legal right may exist in the Government to enforce the exercise of these offices, the attempt to do so would be so irritating and so nearly impracticable withal that I deem it better to forego for the time the uses of such offices._ "

Several other statements in that inaugural address are interesting to note.

" _I have no purpose, directly or indirectly, to interfere with the institution of slavery in the States where it exists. I believe I have no lawful right to do so, and I have no inclination to do so._ "

" _I hold that in contemplation of universal law and of the Constitution the Union of these States is perpetual. Perpetuity is implied, if not expressed, in the fundamental law of all national governments. It is safe to assert that no government proper ever had a provision in its organic law for its own termination._ "

" _Descending from these general principles, we find the proposition that in legal contemplation the Union is perpetual confirmed by the history of the Union itself. ..... one of the declared objects for ordaining and establishing the Constitution was_ _'to form a more perfect Union'._ _But if destruction of the Union by one or by a part only of the States be lawfully possible, the Union is_ _less_ _perfect than before the Constitution, having lost the vital element of perpetuity._ "

The messages to the South were clear.

They would be allowed to retain the institution of slavery in their states as long as they wanted.

They could have nothing to do with the rest of the United States if they so desired.

In return, however, there were things they MUST do.

They would pay the taxes deemed necessary to fund the bulk of the United States government, while decisions on how that government would use those funds would be determined by everyone except themselves.

They would have to accept some **nonexistent** wording in the United States Constitution to the effect that the preservation of the Union is more perfect than the preservation of individual rights of association.

### Birth of A Nation: The Confederate States of America

The message given the South in President Lincoln's inaugural address was deemed unacceptable.

South Carolina, who declared secession just weeks after the election of 1860, was faced with a dilemma regarding an old federal fort off Charleston harbor. A small contingent of federal troops had on December 26th fled a dilapidated fort outside Charleston to the somewhat more defensible Fort Sumter.

There are disputed reports as to whether the United States technically invaded South Carolina in January 1861. An attempted re-supply of Fort Sumter on January 9, 1861 may have violated an armistice agreement South Carolina had entered into with the United States while negotiations were underway about the disposition of United States installations on South Carolina lands. Whether there was a violation or not, that action promptly led six more states (Mississippi, Florida, Alabama, Georgia, Louisiana and Texas) to secede.

In early February a provisional Confederate government was formed. On March 11, 1861 the Constitution of the Confederate States of America was adopted.

The people of the South revered the Founding Fathers of the United States of America. Many of the more prominent (Washington, Jefferson, Madison, etc) had been from the South. The vast majority of the Confederate Constitution was copied straight from the United States Constitution. In keeping with the Anti-Federalist sentiments that had been largely prevalent during the ratification debates, however, safeguards were placed in this new Constitution to protect against central government abuse. A line-item veto was granted the President, whose single term would last six years. Bills must be succinct and apply to only one topic rather than risking all sorts of hidden pork spending. Finance bills must state the specific reason for the expense and the amount being requested. To prevent cost 'overruns' Congress could approve the spending of no more than the stated funds for an approved project.

Interestingly, that Constitution also upheld the prohibition on the African slave trade. While not sure what to do with the private property represented by existing slaves, there was certainly consensus that he further importation of slaves was undesirable.

Jefferson Davis was elected the first president of the Confederate States of America.

Repeated attempts by the Confederacy to pay the United States for any former federal property were rejected by the North. Maybe not so much rejected as ignored, since official policy was that the Confederacy did not exist as an entity separate from the United States and thus would not be negotiated with.

It was always the policy of the Confederacy to enter into a peace treaty with the United States. There were never any words or implications to the effect that the Confederate States of America in any way desired to 'take over' the United States of America or even to cause it harm.

But after months of repeated calls to abandon Fort Sumter, including shots fired to warn off the federal supply ship in early January, President Lincoln sent in a small fleet of warships and troop carriers to relieve the garrison. On April 11, 1861 they began to arrive on scene and local South Carolina troops began a continuous shelling of the fort in the early morning of April 12. On April 13th the fort surrendered and its occupants were evacuated to New York. There were no battle-related casualties on either side.

### The War Between the States

By May, 1861 four more states had left the United States and joined the Confederate States of America; Virginia, Tennessee, Arkansas and North Carolina. This brought to eleven the number of former states who chose to withdraw from the Union. The border states of Kentucky and Missouri are often considered the final two members of the Confederacy though they never actually seceded from the Union.

True to his words, President Lincoln refused to allow any of those states the option to peaceably withdraw from the compact (i.e. the United States of America) that they had voluntary entered into decades earlier.

He called on each of the remaining twenty-three states of the Union to raise armies. The purpose of those armies was clearly not to defend the United States but to invade the Confederacy.

He did this with the full knowledge that the Constitution he swore to uphold in no way forbid a state from withdrawing from the United States and that in no enumerated federal power is there any mention of using power by force of arms to compel a state to remain in the Union.

The Union navy immediately blockaded all Confederate ports and for most of the war the South was largely cut off from foreign commerce. There were private blockade-runners and a relatively small and ineffective Confederate navy but there was never any doubt which side controlled the seas and waterways.

Because of historical and cultural traditions of the American military, the vast majority of experienced officers both came from the South and/or agreed with its decision to break ties with the United States. But because of demographics, the Confederacy had less than ¼ the population from which to draw soldiers from.

Because of the differences in industrial output, the Union enjoyed a 3:1 advantage in railroad infrastructure, a 30:1 advantage in firearms and similarly massive advantages in almost all military hardware.

One may have predicted some early Confederate success until the Union's overwhelming advantages in numbers and equipment kicked in, but overall the Confederate forces succeeded far beyond anything that would reasonably have been expected. Ineptitude at the highest levels of Union military leadership had much to do with early Confederate success also.

For the first two years of the war, Confederate forces in the East—primarily Virginia—completely dominated Union forces. Always heavily outnumbered and outgunned, General Robert E. Lee's Army of Northern Virginia time after time bested Union forces. Because of their poor performances President Lincoln went through five different commanding generals of his Eastern army, the Army of the Potomac, before General Lee made his most tragic blunder of the war at the battle of Gettysburg in 1863.

In fact, the largest Confederate losses during that period came about primarily because of tragic blunders only indirectly related to the battlefields.

For example, in September 1862 at the Battle of Antietam the Army of Northern Virginia ventured into Union territory for the first time in the war when it crossed the Maryland border. Union soldiers during a break had happened to find a set of battle orders from General Lee that had been unknowingly dropped by a messenger. What resulted would be the costliest single day of conflict of the entire war, but even with knowledge of Confederate plans Union General McClellan could not capitalize and Lee escaped with his army intact.

In July 1863 at the Battle of Gettysburg the Army of Northern Virginia again ventured into Union territory, this time Pennsylvania. Under great distress by the recent loss of General 'Stonewall' Jackson, General Lee showed symptoms of at least one mild heart attack during the battle. He made totally uncharacteristic military decisions and rejected sound advice from his primary lieutenant, General James Longstreet. The result was a doomed mass attack (known as Pickett's Charge) on the third day of the battle that resulted in needless thousands of Confederate casualties. But again timid Union leadership allowed the severely beaten Army of Northern Virginia to escape destruction.

If Gettysburg had turned out differently, there was a good chance that Britain would have entered the war on the side of the Confederacy. The difference that this would have made, primarily in lifting the Union naval blockade, cannot be overstated. In many ways, Gettysburg saved the United States of America from having to enter into peace negotiations with the Confederacy.

In the West, primarily Tennessee and Mississippi, things were different. A doggedly determined Union General named Ulysses S. Grant directed superior Union forces to victory after victory. His biggest victory, the Siege of Vicksburg, gave the Union complete control of the Mississippi River on the same day as Lee's forces retreated from Gettysburg.

The year 1864 began with General Grant having been appointed overall commander of all Union forces, East and West.

In the East, the Army of the Potomac spent 1864 in battles of attrition with the Army of Northern Virginia. This was the type of warfare that guaranteed Union victory as they could replace their massive losses while the Confederacy lost fewer men but could not replace most of them. The ultimate example of this strategy was the trench warfare that characterized the nine-month Siege of Petersburg that began in June 1864.

In the West, General William Sherman embarked on destruction of the Deep South in what became known as the doctrine of 'total war'. His goal was to destroy population centers and agriculture and thus deny the Confederacy further will to keep fighting. The ultimate example was the occupation and burning of Atlanta in September 1864.

On April 9, 1865 General Lee surrendered what was left of his Army of Northern Virginia. Within weeks all Confederate forces received the news and surrendered.

The war was over.

The costs had been staggering. Over 1 million casualties suffered, with over 600,000 soldiers having died. Roughly 6% of military age white males died on the side of the Union, while similar Confederate deaths approached 18%. Nearly 65% of all deaths were from disease, which often meant that battle wounds were a lingering death sentence.

It is estimated that the Union spent over $6 billion on the immediate war costs and that the Confederacy spent over $2 billion.

The physical devastation to the South was near total, and would take decades to even approach a decent recovery.

A last point on the issue of slavery is in order.

Many nations that had abandoned slavery did so not because everyone just suddenly agreed it would be right to do so. There were plenty of cases, most notably Britain and Spain, where slave owners were compensated for their loss of property rather than having war waged against them. In fact, Washington D.C. slave owners were compensated some $300 per slave early in 1862.

Many of the northern states had also compensated slave owners over the years as they freed their slaves.

President Lincoln did propose to Congress several times in 1862 to offer compensation to Southern slave owners if their states' would rejoin the Union. The amounts proposed would have covered less than ½ of the estimated cost of capital represented by Southern slaves, and often had the provision that emancipated slaves would be transported to some other land, usually Liberia or Haiti. Some of the proposals didn't require such emancipation for decades, allowing for gradual emancipation.

Even if the offered price had been doubled to more realistic levels, the cost of total immediate emancipation would have ended up being less than the cost to the North of conducting the war. Spread that over 20 or 30 years and the deal would have been a bargain for the North, while achieving the elimination of slavery at far less human cost.

However, Congress never agreed with his plans. Even if they had, it is doubtful the South could have agreed to any such deal that did not address the massive taxation injustice they were being subjected to.

By the fall of 1863 the topic was completely dropped. In 1861 and 1862, it was far from certain if the Northern armies would be able to do anything but continuously dodge the better-led Southern armies. That all changed with Vicksburg and Gettysburg, however, and there was never after any need for the North to contemplate anything but unconditional surrender—and uncompensated emancipation.

###  The Assassination of President Lincoln

On April 14, 1865 President Abraham Lincoln was mortally wounded at Ford's Theater in Washington.

A southern sympathizer named John Wilkes Booth shot the President in the back of the head at close range during a play that evening. Jumping from the Presidential box to the stage, Booth brandished a knife and in Latin yelled 'Thus Always to Tyrants'—the Virginia state motto.

According to records Booth had previously planned and called off at least one attempt at kidnapping the President and had attempted to coordinate the Presidential assassination with attacks on others in the Lincoln administration. One conspirator, Lewis Powell, did storm the house of Secretary of State William H. Seward that night and non-fatally stab him about the head and neck.

Booth was cornered in a barn outside Washington. The barn was set afire and Booth was shot trying to flee, dying several hours later of the wound.

Of the accused conspirators, seven men and one woman were charged and tried by a military tribunal. Three men and the woman were hung in July of that year. Another man died in prison and the other three were pardoned by President Andrew Johnson in 1869.

The goal of the attacks, one would suppose, would have been to disrupt the North and give the remaining Southern forces a chance to regroup. However, there is no evidence that Confederate leaders knew of or had anything to do with these attacks.

###  Reconstruction

Over the next dozen years the South was punished for its deeds during a period known as Reconstruction. The items being reconstructed were not homes and infrastructure so much as the Northern trust that Southerners would never again defy the U.S. Government as they had.

Republican leaders were split over how severely to punish the South.

President Lincoln had wanted to make reconstruction as quick and painless as possible to minimize lingering ill will. He saw such efforts as aimed at reuniting the nation once again, and maintained that the southern states had never really left the Union in the first place. The first parts of his moderate reconstruction efforts actually were put in place while the war was still being waged.

The bulk of Republican leaders in Congress supported a much more radical style of reconstruction, whereby the southern states would have to pay penance in order to rejoin the Union. They were primarily afraid that if southern states were allowed to easily revert to full statehood their influence in Congress would actually increase since negroes would now count as a whole person instead of the 3/5 of a person most of them had prior to the war. And until it was known that the freed slaves would actually support Republican legislators it was not wise to return the southern states to full statehood.

After Lincoln's assassination, President Johnson attempted to see that the moderate plans of his predecessor were followed. This angered Republicans in general, who pointed to the Constitution's guarantee to each state of a 'republican form of government'. The irony was that it was the perceived drift away from a 'republican form of government' that had brought the South to secession in 1861.

By early 1866 President Johnson, a Republican, was allied more with Democrats than with Republicans. The mid-term election of 1866 placed Congress firmly in Republican control and the more radical Reconstruction began.

President Johnson faced impeachment proceedings twice during those next two years because of his intransigence regarding Congress. Both attempts failed.

But the lasting results of Reconstruction were the three Constitutional Amendments which were adopted.

The 13th Amendment was passed quickly after the war.

*** Section 1 ***

Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

*** Section 2 ***

Congress shall have power to enforce this article by appropriate legislation.

There was never doubt, after the Confederacy's defeat, that such action was forthcoming. After all, the Emancipation Proclamation of 1862 freed all slaves in the South anyway. The 13th was primarily to make that action Constitutional throughout the entire nation.

Its ratification, even by the South, was quick and final ratification was proclaimed on December 18, 1865, a mere 12 days after the amendment passed Congress.

The 14th Amendment was much more problematic,

*** Section 1 ***

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

*** Section 2 ***

Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice of electors for President and Vice President of the United States, Representatives in Congress, the Executive and Judicial officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being twenty-one years of age, and citizens of the United States, or in any way abridged, except for participation in rebellion, or other crime, the basis of representation therein shall be reduced in the proportion which the number of such male citizens shall bear to the whole number of male citizens twenty-one years of age in such State.

*** Section 3 ***

No person shall be a Senator or Representative in Congress, or elector of President and Vice President, or hold any office, civil or military, under the United States, or under any State, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may, by a vote of two-thirds of each House, remove such disability.

*** Section 4 ***

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

*** Section 5 ***

The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

The biggest objection of the 14th Amendment was Section 1. The United States Constitution had mentioned 'citizen of the United States' only among the requirements for elected office. It had always been understood that individuals were citizens of their respective states, so 'citizen of the United States' had been assumed to mean that they were a citizen of a state that was itself a member of the United States.

While the Supremacy Clause of the Constitution did proclaim federal laws to have precedence over the laws of any state in the Union, the entire concept of a republican form of government was predicated on individual states having sovereignty over their own affairs as long as that sovereignty did not conflict with federal laws or sovereignty.

For the first time since the nation's founding, a new type of citizen seemed to be being defined; a United States citizen. This new class of citizenship, of which every state citizen was to become, would take precedence over the state citizenship.

Most Southern legislatures, as well as many Northern ones, were very concerned about the ramifications of this. The only way Congress even was able to pass the legislation, to send it out for ratification, was to proclaim that the Congressional delegations from ex-Confederate states could no longer be seated in Congress.

Ratification began in June of 1866. By March of 1867 enough states had rejected ratification that the Amendment was dead. In that month Congress passed the Reconstruction Act of 1867, which among its requirements for states to be fully admitted back to the United States was that they must ratify the 14th Amendment.

President Johnson vetoed the Reconstruction Act. There was no power granted in the Constitution to require a state to ratify a Constitutional amendment. Congress overrode his veto. Ohio and New Jersey withdrew their ratification votes as a result of these actions.

The southern states had no choice. They were told they could not leave the Union without having violence inflicted upon them but that they were required to ratify an amendment they did not agree with before they could be considered part of the Union again.

North Carolina, Louisiana and South Carolina did revote to ratify the 14th amendment in July of 1868. Secretary of State Seward on July 20th proclaimed that the amendment could become part of the Constitution except for the earlier Ohio and New Jersey ratification rescissions. Congress hastily assembled and on July 21st declared that the amendment would be considered ratified anyway.

Apparently state legislatures, even northern ones, were no more allowed to change their ratification votes than they were to choose to secede from the Union.

The 15th Amendment was nearly as contentious as the 14th.

*** Section 1 ***

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.

*** Section 2 ***

The Congress shall have power to enforce this article by appropriate legislation.

Objections may have had as much to do with references to the new 'citizen of the United States' as it did any desire to hinder Negroes from voting.

As with the 14th, Congress had to amend a reconstruction bill to specifically add ratification of this amendment to the requirements for regaining Congressional representation for Texas, Mississippi, Georgia and Virginia.

Reconstruction saw many manipulations of the South by the North, but the South had lost the war and it was understood that the victor always exacts a price from the vanquished.

The requirements levied upon the South by the U.S. Congress resulted in puppet legislatures being set up in most southern states. State taxes were often manipulated to tax large landowners to such an extent that they were forced to sell off their holdings and indirectly distribute land amongst ex-slaves. Laws against ex-Confederates holding public offices were enforced in a non-uniform manner. Graft and bribery were rampant. Carpetbaggers from the North streamed into the South and often took advantage of local conditions being imposed by Washington.

The final four of the ex-Confederate states to comply with its ratification and other re-instatement requirements were Texas, Mississippi, Georgia and Virginia. By the summer of 1870 they were once again allowed representation in the United States Congress.

Ulysses Grant, the victorious Union general, was elected President of the United States in 1868. His administration proved maybe one of the most corrupt ever—as far as graft, bribery and crime are concerned. During the war he had expressed support of President Lincoln's moderate reconstruction plans, but as President he lent full support to the radical plans of the Republicans.

In 1873 a severe economic collapse hit the United States, being especially disastrous to the still devastated southern states. President Grant was widely held in contempt for his handling of the crisis.

In the 1876 election, Rutherford Hayes was elected President of the United States in the closest presidential election in U.S. history—by one electoral vote. His was considered to be the last Reconstruction President, and by 1880 the Democrats controlled both houses of Congress.

###  Later Conflicts/Problems

After the War Between the States the gymnastics undertaken by the U.S. Congress was one huge conflict.

Had the southern states left the Union and were being forced to pay a penance before they were allowed to rejoin the Union?

The North invaded the South because it said that they could not leave the Union, though President Lincoln seemed to say in his 1st inaugural they could effectively leave as long as they kept paying federal taxes.

Could they leave? Did they leave?

If they never left the Union then the U.S. Constitution says they had to be represented in Congress. President Johnson seems to have understood this but when he tried to uphold the Constitution he swore to uphold the Congress attempted to impeach him.

The position presented by the Congress was that the southern states never left the Union but they had to satisfy special requirements before they could 'earn' their Constitutionally-granted rights to Congressional representation. The members of the Congress which made up—out of thin air—these special requirements had also sworn to uphold the Constitution.

Somebody, either President Johnson or the Congress, was wrong. And not just wrong as in mistaken but wrong as in acting in direct violation of the U.S. Constitution.

The U.S. Constitution created the Supreme Court for the purpose of judging such actions against the wording of that Constitution. Who did they say was in the right?

The Supreme Court of the United States effectively recused themselves from doing their Constitutional duty. They never ruled on one of the most fundamental rights possessed by any individual or state; the right of free association.

Or rather, they did not until after the war. In the 1869 case _Texas v White_ , the Reconstruction government of Texas attempted to nullify the war-time sale by Texas of U.S. Government bonds it held. Their case was heard originally by the Supreme Court since it involved a state as one of the parties. The Court ruled that the U.S. Constitution was written to 'make more perfect' the Union that had been formed by the Articles of Confederation. Since those Articles explicitly formed a 'perpetual union' the Union was indissoluble. Secession, therefore, was ruled unconstitutional.

The bond sale was thus nullified because it had been undertaken by an illegal government.

Even at the time this decision was widely viewed as total nonsense. The Constitution of 1789 replaced, not amended, the Articles of Confederation. The Articles specified how to amend it and those steps were completely circumvented in favor of a completely new Constitution.

It is possible the Court was so scared of looking foolish after the debacle of the 1857 Dred Scott decision that they went out of their way to not get involved in the politics of slavery ... or of secession.

Regarding Texas, the state's Constitution of 1876 that seemed to satisfy the U.S. Congress's demands of 'Unionist loyalty' makes a similar secession action open for debate.

**SECTION 1** _. Texas is a free and independent State, subject only to the Constitution of the United States; and the maintenance of our free institutions and the perpetuity of the Union depend upon the preservation of the right of local self-government unimpaired to all the States._

Texas is subject only to the Constitution of the United States, not the Congress or President of that United States. As repeatedly shown, there is NOTHING in the United States Constitution which withholds from any state the right to withdraw from the Union.

These are only some of the Supreme Court decisions of questionable reasoning and precedence for United States government violence.

No slight to any other state should be perceived by the specific mention of the Texas Constitution. Most states have similar wording in their Constitutions. It just seems ironic that the U.S. Supreme Court could justify a ruling (as they did in _Texas v White_ ) not by mention of wording in the Constitution but by a historical falsehood and then the U.S. Congress could allow Texas to satisfy Reconstruction's Union-loyalty mandate by specifying in its Constitution essentially the SAME sentiment that led to the 1861 secessions in the first place.

In 1861, the states and people of the South contended that the U.S. Constitution was being violated and thus they had the right to secede from the Union.

Don't these state Constitutions still say the same thing?

##  The Plan: Result

It is hard to imagine any victory greater than that of destroying the basic core of the United States of America.

At that core, the United States was formed as a Federal Republic.

In 1861 the U.S. central government, the so-called _Federal_ _Government_ , essentially declared that no longer would the term _Federal_ mean the same thing that it did when the U.S. Constitution was developed and ratified. That relationship between state governments and the central government was to be forever after defined as a master-slave relationship rather than the distributed sovereignty it was meant to be.

To be sure, those slaves will still have at least the illusion of being a Republic. That is to say they will still influence the makeup of the central government. But if they, as states, freely choose to no longer participate in the Union then they will be punished severely until they accept that such a decision is not allowed for them to make.

This lack of freedom surely denotes a form of slavery. It would not be so if the slave had freely entered into such an agreement. Thus, there is some argument to be made that the citizens of any territories that voluntarily chose to become a state after 1865 did indeed agree to that Union knowing they would never be free to leave the Union.

But this fundamental, and monumental, redefinition of the relationship between state and national government represented a major victory for the forces set on destroying the United States of America.

Supposedly a value held forth by the United States was that it was a nation of laws. Its Constitution codified those laws. That Constitution was sold to the American people as a contract between the states and a new national government.

Is not the ultimate worth of any contract whether it can be considered null and void by one party if the other party violates its terms? Would a contract have any moral standing if a majority of the signatories could just decide at whim that the contract was no longer worthwhile and that instead of nullifying the contract all the original signatories must accept new terms or face certain destruction by that majority?

Can the phrase 'a nation of laws' in any way remain valid if the national government breaks Constitutional law? It is only a matter of degree whether the reason for breaking such Constitutional law is deemed a moral reason. If the reason is really moral then wouldn't the only moral course be to either invalidate the flawed contract or at least allow the perceived immoral party out of it?

The actions undertaken by the United States government towards its southern states from 1861 till the end of Reconstruction paved the way for every twisting, hedging and invalidating of that phrase 'a nation of laws' that has occurred since.

The period proved the catalyst for the greatest expansion of central government powers, by far, since the founding of the United States. Government financing of both the war and internal infrastructure skyrocketed. Deficit spending and borrowing spiked, of course. Government spending as a percentage of GDP went from below 2% in the 1850s to over 20% during the war years. The first 'progressive' income tax was temporarily imposed. National forced conscription was imposed.

All this reliance on central government meddling in individual liberties and the national economy provided the perfect precedence for greater government control and diminished individual freedoms. Even after 1865, spending as a percentage of GDP stayed relatively high for years afterward and the economic genie/demon of direct non-uniform income taxes prevailed for several years until the Supreme Court finally pointed out that the practice was clearly unconstitutional.

The 14th Amendment began the concept of U.S. citizenship as being more important than being the citizen of any state. Before the 14th most federal activity directed at groups of individuals was limited to indirectly influencing how local states treated its citizens. After the 14th, Congress could pass laws that directly punished or rewarded groups of individuals without the intervening local authority of the states.

It also started the ball rolling as to populist-based government wealth redistribution.

Union war veterans became the first organized 'special interest' group selling its organized voting power to that central government. After all, these men 'fought for their country' so they felt justified in demanding generous support and pension payments from that country's government.

That the Federal Government had to collect that money from other U.S. citizens was popularly tolerated because, after all, who could not want to support military veterans—especially victorious military veterans.

The Republican Congress, who had prosecuted the war and emerged victorious, relied heavily on the electoral support of these veterans. The original terms of the Army's pension program was to compensate those wounded in combat during the war. After the war, the number of veterans receiving pensions would thus decrease every year just from mortality. The Congress, however, embarked on a program of rapid escalation of both the scope and amount of military pensions, such that between 1870 and 1890 the costs increased in excess of 500%. The Congress, of course, kept receiving large and consistent votes from those veterans.

Thus, in addition to all the other mischief caused by this period of Constitutional chaos, we introduce a huge negative of popular democracies; when segments of the voting public demand, in exchange for their votes, that the government take away money from some individuals to reallocate that money to them.

All in all, the strategies employed during this period resulted in destructive success more than could ever have been hoped for when first envisioned.

Now .... if only we could come up with a way to generate more federal revenue to pay for all this vast new federal presence.

## Quotes

Stephen Douglas

"I deny the right of Congress to force a slaveholding State upon an unwilling people. I deny their right to force a free State upon an unwilling people. I deny their right to force a good thing upon a people who are unwilling to receive it. The great principle is the right of every community to judge and decide for itself, whether a thing is right or wrong, whether it would be good or evil for them to adopt it; and the right of free action, the right of free thought, the right of free judgment upon the question is dearer to every true American than any other under a free government."

Anonymous

"War does not determine who is right - only who is left."

General Albert Sydney Johnson

"We may be annihilated, but we cannot be conquered."

General Robert E. Lee

"They do not know what they say. If it came to a conflict of arms, the war will last at least four years. Northern politicians will not appreciate the determination and pluck of the South, and Southern politicians do not appreciate the numbers, resources, and patient perseverance of the North. Both sides forget that we are all Americans. I foresee that our country will pass through a terrible ordeal, a necessary expiation, perhaps, for our national sins."

General Ulysses S. Grant

"When news of the surrender first reached our lines our men commenced firing a salute of a hundred guns in honor of the victory. I at once sent word, however, to have it stopped. The Confederates were now our prisoners, and we did not want to exult over their downfall."

**********

# Direct Taxation Tyranny – 1861 to 1913

##  The Plan: Goal

No matter how effective we are at increasing the power of a central government over the original federal form of government, that power means relatively little unless the central government can obtain the funds necessary to fully exploit that power.

The authors of the Constitution specified manners of federal taxation that provided a check on excessive federal taxation. This was in line with their attempts to provide checks and balances to protect against abuses and power imbalances.

If we had attempted to corrupt such federal taxation provisions early in our campaign, it would likely have made attempts to increase federal power a lot tougher. When there was obviously no way the national government could afford to run amok in regards spending there was no real reason to fear them doing so. They could borrow funds, for sure, but the money to pay the interest on that borrowing must be collected from the general population. Citizens would not long stand for that when they knew they would all be paying the bills.

The goal must be to somehow circumvent the Constitutional brakes on federal taxation so that the central government can then spend public funds on all these new expanded powers they have assumed for themselves.

It will be much easier to increase taxation if we can find a way to do so such that the tax revenue is taken from relatively small numbers of Americans while the resultant spending is perceived as benefiting a relatively larger number. Lucky for us, in a democracy those larger numbers of the population hold electoral sway over the smaller numbers. This provides valuable incentives for elected officials to champion this type of unequal taxation as a means of perpetuating power.

It also, of course, aids us in our ultimate goal of destroying a society who arrogantly proclaims that all men are created equal. Human nature will always need to rely on laws if it hopes to squelch the base instincts of greed and envy – specifically where those 'with less' will always seek to justify stealing from those 'with more'.

##  Course of Events

Constitutional Federal Taxation

In the minds of the United States Founding Fathers, there was only one economic model that a free people could live under.

In the late 18th century, the undisputed authority for the English-speaking world on the issues of economics, finance and taxation was Adam Smith, author of ' _Wealth of Nations_ ' (1776). There is no doubt that most, if not all, of the architects of the U.S. Constitution were familiar with his teachings.

Free market capitalism was not a phrase Adam Smith ever used, he preferred 'the system of natural liberty'. Whatever it was called, it described a system in which individuals would specialize in their productive endeavors in order to maximize their own rewards. The interaction of all these individuals throughout society would establish a system of cost relationships, or a price structure, defining what individuals would be willing to freely trade for their specialized talents.

Such a system, predicated on free and voluntary exchange, harnesses the natural human pursuit of self-interest in the most peaceful means to provide maximum efficiency and overall societal welfare.

The Founders knew also that history proves without a doubt that any government interference in such a 'free market' inevitably favors some at the expense of others, disrupting the natural balance.

The greatest such government interference is taxation.

Of the two main forms of taxation, direct and indirect, direct taxation was the most at odds with the concepts of minimal government interference and maximum individual choice.

Direct taxation is taxes imposed because of one's existence. The size and extent of such taxes has historically been set according to political calculations, such as how to generate the most money from the public (or subjects) while encouraging the least wrath from important power-base groups.

However, efficient political calculations seldom coincide with efficient economic models.

Examples of direct taxes are head taxes, poll taxes and income taxes.

Indirect taxation is taxes imposed because of one's choices. Since capitalism is predicated on the free choice and exchange between individuals, indirect taxation is but another component in the decision-making process that makes that model so efficient for human societies.

Examples of indirect taxes are duties, tariffs and sales taxes.

Direct taxes may be adjusted, by government, to the individual characteristics of the taxpayer. Such characteristics are usually either the amount of money they earn or whether they choose to do with that money what that government wants done. Indirect taxes are levied on transactions irrespective of the circumstances of buyer or seller; ideally all citizens are treated equally.

Obviously the overall size of taxation is important. Governments tend to foment discontent when they tax (i.e. take) too much from the governed.

Likewise, the apportionment of taxes is critical. Direct taxes are apportioned according to political calculations. Because of this very real tendency for governments to curry favor via the distribution of who pays more or less in taxes, the size of overall taxation is not as important. This is because the political calculations will always ensure that the majority of taxes collected come disproportionately from those segments of society who pose the least threat to the government doing the taxing; meaning the government essentially can tax as much as it wants with little fear of rebellion.

Since indirect taxes are essentially a component in free-market decision-making, as overall taxes get too high they will simply influence decision-making such that less economic activity is engaged in. Less economic activity results in less tax revenue. This makes low tax rates necessary to robust economic activity and, thus, greater tax revenues.

Indirect taxation, by its nature, is self-regulating. Direct taxation, by its nature, is corrupt.

Article I, Section 8 of the U.S. Constitution states:

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States."

Article I, Section 9 of the U.S. Constitution states:

"No Capitation, or other direct, Tax shall be laid,  unless in Proportion to the Census or enumeration herein before directed to be taken."

In an unequivocal manner, the Founders wanted to keep the new nation (or at least its Federal Government) off the corrupt course of direct taxation. Duties, imposts, excises are all references to indirect taxation. Such references are mentioned repeatedly in the U.S. Constitution.

And then, to make matters even clearer, they explicitly prohibit Congress from imposing any capitation (poll, head or per-person tax) or any other DIRECT tax.

The Founders did add the loophole that if situations—one would suppose an emergency—made a direct tax necessary it must be laid equally against every citizen since the only thing they feared worse than a direct tax was a direct tax applied in an unequal and unfair manner which would lead to government punishment and rewards.

###  Early Conflicts

The first Supreme Court case involving judicial review, or deciding on the constitutionality of a law, involved federal taxation. In 1796 a federal tax was levied on carriages. In _Hylton v United States_ the court held that " _a tax on the possession of goods is not a direct tax, which must be apportioned under Article I of the Constitution._ ". This led to a lively debate on how carriage taxes could possibly be apportioned by state population, but the Court did rule that such a taxation was more a form of excise tax (an indirect tax) as it was based on the choice of obtaining and operating carriages.

The most interesting lesson from _Hylton_ would seem to be that even indirect taxes can be unfairly administered. Specifically, why were the owners of carriages singled out for paying taxes rather than horse owners who did not bother with carriages?

In general, _Hylton_ pointed out that it was more equitable to have broad-based indirect taxes (such as tariffs on all imported goods or sales taxes on all consumables) than to narrowly-focused indirect taxes that applied to only certain subsets of citizens.

During peacetime the Federal Government met its expenses through relatively modest excise taxes and tariffs. During wars, such as the War of 1812, federal taxes were temporarily raised to finance the war or pay down the ensuing debts. Once the financial crisis passed, taxes were reduced in response to public opposition to high tax rates and the need for increased economic activity.

To finance the massive government expenditures incurred during the War Between the States, Congress not only increased tariffs and excise taxes but instituted the nation's first income tax. Because of the war the fact that such a tax was clearly unconstitutional was overlooked until the early 1870s, when it was removed. In keeping with the non-proportional and unfair nature of direct taxation, the laws were written such that less than 10% of the population actually had to pay such taxes though they usually constituted in excess of 20% of the federal revenue. It was a great deal for the 90% of citizens not paying income taxes, of course.

The Supreme Court in 1881 ( _Springer v. United States_ ) ruled on the constitutionality of an 1864 income tax act. In a convoluted legalistic word-game, they ruled that taxes on income were actually to be considered indirect taxes because .... the judges did not understand economics. Since article 1 section 9 of the U.S. Constitution says 'No Capitation, or other direct tax, shall be laid' the court leaned on a quote by Alexander Hamilton—the biggest big-government central-planning Founder of them all—stating that in his opinion direct taxes meant " _capitation or poll taxes, and taxes on lands and buildings, and general assessments, whether on the whole property of individuals or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes_ ".

So for purposes of U.S. Constitutional law an income tax became an indirect tax, even though in all other venues it is a direct tax. This is ridiculous and embarrassing.

Briefly, here is why.

It is a precept of human nature, as discussed previously, that man exists only by the rational use of his mind. Because men have differing abilities, societies are formed so that men can specialize and freely trade among one another. Mediums of exchange (i.e. currency) are developed to facilitate such trade.

Simply put, income is thus the relationship between a man's productive effort (usually measured in time) and that medium of exchange.

So how does it make sense to say taxing a man's body (e.g. a capitation tax or head tax) is a direct tax but that taxing a man's time (i.e. an income tax) is an indirect tax? Are they not both attributes of man?

The Court tried to explain earning an income as being an activity and a tax on income as an excise tax. The opinion seemed to say that an income tax was an excise tax on the activity of living.

In 1895 another Supreme Court decision, Pollock v Farmers' Loan and Trust, further muddied the income tax waters. Charles Pollock was a small shareholder in the New York based firm of Farmers' Loan and Trust. The Wilson-Gorman Tariff Act of 1894 lowered U.S. tariffs but also imposed the first U.S. peace-time income tax; 2% of any gains, profits and incomes in excess of $4,000. Pollock brought suit against Farmers' to keep it from paying the tax because it was unconstitutional. He lost in the lower courts but the case was accepted by the Supreme Court.

In the decision, the Court found that the Wilson-Gorman Tariff Act was indeed unconstitutional. Most of the income covered in the Act was attributable to real estate, rent or personal property and were thus to be considered direct taxes. Constitutionally, direct taxes must be apportioned according to a state's population.

The ruling made the source of the income (e.g. property versus labor) relevant in determining whether the tax imposed was deemed to be direct, and thus required to be apportioned among the states according to population, or indirect, and thus required only to be imposed with geographical uniformity.

Thus, it seemed that in the opinion of the United States Supreme Court, a tax on income derived from personal property was a direct tax but a tax on income derived from the personal labor expended by that same person was somehow an indirect tax. Was one's time not their property?

The confusion didn't end.

In the 1900 Supreme Court case of _Knowlton v Moore_ the Court said that _"Direct taxes bear immediately upon persons, upon the possession and enjoyments of rights; indirect taxes are levied upon the happening of an event or an exchange_. _"_

How is a tax on income (derived via labor but not arising from physical possessions) an indirect tax if direct taxes bear immediately upon persons and the enjoyment of rights? One would assume that the attainment of food, clothing and shelter (via labor, wages or other income) equates to the ultimate enjoyment of rights!

###  Sixteenth Amendment

The impetus for the modern federal income tax rests not with a wartime emergency but with the Populist movement of the late 1800s. The tax system in place at the time, based primarily on excise taxes applied to alcohol and tobacco, was largely regressive. This meant that, as a percentage of wealth, the wealthier an individual was the less of that wealth was paid out in taxes.

The Populists revived interest in an income tax as a means to introduce a progressive tax based on ability to pay. They saw it as a response to excessive monopoly profits and the concentration of wealth and power. In other words, the tax was not championed as a means to generate significant additional public revenue but as a vehicle of social justice.

In June of 1909, President Howard Taft—a Republican—proposed a 2% federal income tax on corporations. He framed it as an excise tax on the privilege of doing business. He also asked Congress for a Constitutional amendment to allow taxing income from rents, dividends, and interest without the need for apportionment by population.

A Republican-dominated Congress, understandably confused by past Supreme Court rulings as to its definitions of direct vs indirect, passed in July of 1909 a proposed amendment which would render moot Constitutional restrictions on either tax form.

The 16th amendment reads:

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

This one sentence covered several bases. If an income tax was considered direct, it would not need to be apportioned according to population. If an income tax was considered indirect, it would not need to be applied with geographic/demographic uniformity.

This amendment, explicitly nullifying an explicit Congressional taboo as specified in article 1 section 9, had the distinction of being the only Constitutional amendment that did not modify or expound upon the Constitution but directly contradicted the express wishes set forth by the framers of that document.

The income taxes put forth as the impetus for this needed amendment were promised to be very small and applied only to the wealthiest businesses and individuals.

Enough 'enlightened' state legislatures, desiring to respond to the 'social justice' arguments of the time, ratified the 16th amendment and in February of 1913 it became an official part of the U.S. Constitution. This was just in time for the incoming Democratic President Woodrow Wilson.

Immediately thereafter, the Revenue Act of 1913 was enacted. It significantly lowered tariffs and instituted the new federal income as a 1% income tax on personal incomes greater that $3000 (single) and $4000 (married). Additional rates were added for progressively higher income levels, up to a cap of 7% for those earning more than $500,000.

At that time approximately 1% of Americans even met the requirements to pay any income tax.

###  Later Conflicts/Problems

The first Supreme Court case challenging the new income tax situation was _Brushaber v Union Pacific R.R. Co (1916)_. In _Brushaber_ , the Court held that the 16th Amendment was not only constitutional but didn't even actually change the Constitution regarding personal income taxes. They cited the fact that such taxes, as indirect taxes (so defined by _Springer_ ), didn't have to be apportioned as to population anyway.

Justice Edward White attempted to explain some of the Court's ruling thus:

" _The various propositions are so intermingled as to cause it to be difficult to classify them. We are of the opinion, however, that the_ _confusion_ _is not inherent, but rather arises from the_ _conclusion_ _that the Sixteenth Amendment provides for a hitherto unknown power of taxation, that is, a power to levy an income tax which although_ _direct_ _should not be subject to the regulation of apportionment applicable to_ _all other direct taxes_ _. And the far-reaching effect of this_ _erroneous assumption_ _will be made clear by generalizing the many contentions advanced in argument to support it, as follows: (a) The Amendment authorizes only a particular character of_ _direct_ _tax_ _without apportionment_ _, and therefore if a tax is levied under its_ _assumed_ _authority which does not partake of the characteristics exacted by the Amendment, it is outside the Amendment and is void as a direct tax in the general constitutional sense ..."._

Justice White seems to say that there was an erroneous assumption that the 16th Amendment referred to some sort of unknown power to levy a direct tax without apportionment. To clear up this supposed erroneous assumption he states that the 16th authorizes only a particular character of direct tax without apportionment. Any direct tax outside the 'characteristics exacted by the Amendment' is still a direct tax and subject to general Constitutional limits on such.

One has to assume that he is referring to those 'characteristics' exacted as being income and that all other direct taxes still must be apportioned by state population.

Thus, income derived from property could now be treated as indirect vs a direct tax. This direct income tax was what the pre-16th _Pollock_ case found unconstitutional.

Later that year, in Stanton v Baltic Mining Co., Justice White remarked that _"_ _the 16th Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged"_.

Thus, in the opinion of the Supreme Court we seem to be told:

* A tax on income derived from personal labor is an indirect tax. Forget that common sense and most economists do not hold this to be true.

* A tax on income derived from property is a direct tax which must be apportioned according to population. However, such a tax can be treated as an indirect tax as per the 16th Amendment.

* Specifically, both of the above taxes can be treated as excise taxes.

Though it is admittedly a vague term, excise taxes are generally seen to be imposed on either the privilege of performing a particular act or the privilege of purchasing a particular product. It can be rationalized that an income tax on a business entity is an excise tax on the privilege of being allowed to conduct business in a society. It is hard to rationalize how taxing the income from one's own labor—probably one's most intimate property—can be looked at as an excise tax as opposed to a direct tax.

In article 1 section 8 of the U.S. Constitution we are explicitly told that excise taxes must be uniform throughout the United States. So, if the U.S. income tax is some kind of excise tax (strange or not) then it must be uniformly applied and certainly not applied differently depending on income brackets. The Federal Government has gotten around this by stating that income is not the focus or subject of the tax but merely the measurement of the amount of tax to be collected. I guess that is supposed to make it some kind of variably-applied excise tax.

Since 1913 there have been numerous arguments put forth as to why the U.S Income Tax is not lawful.

Because of discrepancies that occurred with several state ratifications, some say that the 16th Amendment was never ratified by the requisite number of states. This claim has never been taken seriously, though the discrepancies seem to have actually occurred. Even if we discount the questionable state ratifications, all that would have happened is that final official ratification may have been slipped a few months. It seems clear that through ignorance or Socialist tendencies the 1913 citizenry of the United States, as represented through their state representatives, were okay with the 16th Amendment.

Because of the definition of income alluded to by the Supreme Court on so many occasions, some say that the 16th Amendment only applied to taxes on businesses (excises on the _privilege_ of doing business) and that individual citizens do not really need to pay taxes on their personal income. Congress keeps this idea alive because they refuse, when challenged, to show any federal law or statute that specifically requires individuals to pay such taxes. Instead, every regulation and form affiliated with the U.S. Income Tax code is worded in a massively convoluted manner that boils down to the implication that individuals _voluntarily_ pay those taxes. And then, if any citizen attempts to stand up and declare that they don't want to voluntarily pay income taxes they are in effect put in the position of proving that they are actually a non-taxpayer. It is nearly impossible to live in the U.S. without using and/or signing documents that can be referred to as proof that you acknowledge being a taxpayer, and trying to prove you are not does not seem possible without referring to the U.S. Tax Code. But just referring to the Tax Code is seen as proof that you are interested in a relationship with the Federal Government as a taxpayer, so that has never worked out well.

But in the end all the mind experiments to try and unravel the enigma within a puzzle that constitutes the rationalization of the U.S. Income Tax are for naught; after the 16th Amendment there seems to be no way around the Federal Government laying claim to a citizen's income—if they report that income. And if you don't report the income in the first place then you are considered guilty of trying to evade legitimate income taxes; because why would you try to hide what you were not liable for paying in the first place?

##  The Plan: Result

This achievement, the attainment of the near-limitless means to fund federal activities, was a masterpiece.

We achieved not only the stated primary goal, but also

* Made a mockery of the U.S. Constitution and it's concept of individual property rights and individual liberty. Semantic and logical mazes were constructed to twist Constitutional interpretations into something that could support an official policy of grand theft. Wandering those mazes made it difficult, if not impossible, to maintain the concepts of both property rights and liberties as they pertained to the individual.

* Introduced the always-present specter of mob rule to the vaunted Federal Republic model. Policy would forever after be mainly determined not by the rule of law but by the rule of numbers. Promises to steal money from the few and give it to the many would rule the day.

* Leveraged the always-present human attribute of envy; class envy and wealth-envy. The 'majority' would always be made to feel justified in their immoral acceptance of stolen property by the age-old tactic of demonizing the 'minority'.

The Sixteenth Amendment, while the crown jewel in this coup d'état, is only one component in this massive victory. If it were somehow repealed there is still such a multitude of legal precedence that an abandonment of progressive federal taxation would still be very problematic.

As suspected, the people of the United States were not moral enough to maintain the Republic that those high-minded men in Philadelphia gave them. When push comes to shove most of them throw individual rights to the wind and resort to force to take what they need from others. That they steal through their government in no way changes the outcome.

Sure, we need all these huge sums of money to enable and finance our central-government transformation. But this is much better than most of us had hoped for back in the early days of 'The Plan'. Essentially we have Americans cannibalizing each other, and the eaters feel perfectly justified doing the eating. Even the ones getting eaten in some cases feel they are performing some sick social good.

It's beautiful when a plan comes together.

## Quotes

Plato

"When there is an income tax, the just man will pay more and the unjust man less on the same amount of income."

 Will Rogers

"The income tax has made liars out of more Americans than golf."

"If you make any money, the government shoves you in the creek once a year with it in your pockets, and all that don't get wet you can keep."

**T. Coleman Andrews (Commissioner of the IRS - 1956** )

"I don't like the income tax. Every time we talk about these taxes we get around to the idea of 'from each according to his needs'. That's socialism. It's written into the Communist Manifesto. Maybe we ought to see that every person who gets a tax return sees a copy of the Communist Manifesto with it so he can see what's happening to him..."

Albert Einstein

"The hardest thing to understand in the world is the income tax."

Ron Paul

"1913 wasn't a very good year. 1913 gave us the income tax, the 16th amendment and the IRS."

Rush Limbaugh

"If Thomas Jefferson thought taxation without representation was bad, he should see how it is with representation."

Vanya Cohen (Concert Pianist)

"When there's a single thief, it's robbery. When there are a thousand thieves, it's taxation."

Robert Brault (Author)

"U.S. Internal Revenue Service: an agency modeled after the revenue raising concepts of the 19th century economist, Jesse James."

President Ronald Reagan

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

"America was born in the midst of a great revolution sparked by oppressive taxation. There was something about the American character—open, hard-working, and honest—that rebelled at the very thought of taxes that were not only heavy but unfair. Today the proud American character remains unchanged. But slowly and subtly, surrendering first to this political pressure and then to that, our system of taxation has turned into something completely foreign to our nature—something complicated, unfair, and, in a fundamental sense, un-American. Well, my friends, the time has come for a second American revolution."

**********

# The End of Federalism: Constitutional Enforcement – 1913

##  The Plan: Goal

While the War Between the States effectively neutered the concept of state sovereignty, or State's Rights, there still remained the structural legislative split meant to strengthen state representation in the Congress.

The authors of the Constitution structured the Senate as the body which most represents the state governments, as opposed to the individuals residing within those states. There were two senators for each state, with those senators being appointed directly by the state legislatures.

Article I Section 3 states that " _The Senate of the United States shall be composed of two Senators from each state, chosen by the Legislature thereof for six Years; and each Senator shall have one Vote._ "

Indeed, the state legislatures were elected by citizens so senators would still represent individuals. But that representation would be more indirect, and somewhat filtered to the interests of the entire state rather than individuals residing within the state.

In a republic it was recognized that having elected representation come solely from individual citizens allowed for the possibility of a central government whose members came to power primarily because of their appeals to pure populism. As an extreme case, members could get elected because of promises to give all citizens a free house.

By allowing for one chamber of Congress, in many ways the more powerful chamber, to represent the states themselves this problem was diminished. In our 'house' example, senators would represent the state governments who would not themselves receive the promised house and who would recognize that the resources needed for all these houses would have to impact state tax revenues.

The Senate would hopefully be the more deliberative and 'wiser' of the Congressional chambers.

For purposes of 'The Plan', we neither want 'wise' central government officials nor ones who look out for state rights over federal usurpation of power. Rather, what is desired is a strong central government who tramples upon the rights of the individual states. This goal was achieved in the greater part by denying the states the ultimate recourse—secession. Best would be to achieve it by more legislative and systemic methods that would alleviate the messy drama that comes with all the secession issues.

##  Course of Events

###  Steady Erosion

An axiom of liberty is that for it to exist people must have an equal right to make bad decisions as well as good decisions.

From 1789 until 1866 there had been a handful of instances whereby various state legislatures had chosen not to elect a U.S. senator. Such cases usually were very short in duration and many occurred when the U.S. Senate wasn't even in session.

For whatever reason, though, it was generally considered that it was the state's task to explain to its citizens why they were being temporarily under-represented.

The most famous case occurred in 1866. John Stockton of New Jersey had been selected by that state's legislature to temporarily fill a vacancy left by the illness of another New Jersey senator. Stockton won that seat by a plurality vote, as opposed to the state-required majority vote. Due to circumstances, probably the vacancy appointment, the New Jersey legislature voted to seat Stockton anyway.

During the buildup to the proposed 14th amendment that year, Republicans in Congress took note of the unorthodox circumstances surrounding Stockton's (a Democrat) election. It happened that Senator Stockton was a vocal opponent of the proposed amendment. In late March they held a vote on whether he should be expelled from the U.S. Congress because of the election circumstances, though New Jersey had legislatively decided to seat him in 1865. The proposal was defeated by a single vote. But, since it was decided that Senator Stockton obviously did not vote to expel himself, the Republican-dominated Senate decided that his vote should be disqualified.

Thus, Senator Stockton was expelled from the U.S. Senate. It is interesting to note that the supposed outcry was over whether he had been elected in a way not in accordance with New Jersey rules, but Senator Stockton was expelled in a way certainly not in accordance with United States rules. Article I Section 5 of the U.S. Constitution says a Senator can be removed only by a two-thirds vote of the Senate; there is no stipulation about his vote not being counted.

Congress then passed a package of legislation stating the methodology by which U.S. senators were to be elected by state legislatures, primarily because one of Senator Stockton's arguments was the inconsistency among states of U.S. senatorial elections. This apparently tended to make matters worse, as the number of temporary vacancies in the Senate seemed to increase over the next several decades.

###  Election of Senators

In the late 1890s, at the start of what became considered the Progressive era, several attempts were proposed for direct election of senators. All such attempts at nation-wide changes in this regard were rejected by the Senate itself. A small handful of western states did go ahead and, by state referendum, choose to elect their U.S. senators directly.

By 1911 there was populist support in the U.S. Senate for a direct-election amendment. It is interesting to note that the bulk of opposition came from the southern states who had been most devastated by the earlier meddling with states' rights 50 years earlier.

In June of 1911 the Republican-controlled Senate passed legislation to propose the 17th Amendment. The Democratic-controlled House, seemingly more concerned about this massive systemic change to the Constitution, finally passed the same legislation in May of 1912.

The 17th Amendment was sent to the states for ratification. It was ratified by the requisite number of states in April of 1913.

And what exactly did the 17th stipulate?

" _The Senate of the United States shall be composed of two Senators from each State, elected by the people thereof, for six years; and each Senator shall have one vote"_.

##  The Plan: Result

This action was mainly to consolidate our victory, but also to press another massive structural modification to the U.S. Constitution.

After 1865 there was really no such thing as states' rights, but in the words of the Constitution and the makeup of the Federal Government that charade was perpetrated still. After the 17th Amendment the hollowness of that mirage was shattered.

The Federal Government now had the legitimate Constitutional right to directly punish enemies and reward supporters. And those individuals it chooses to reward or punish get to directly elect all the members of Congress.

It was difficult to accomplish our goals at first.

Little or no way to fail now.

##  Quotes

Roger Sherman (to John Adams)

"The senators, being . . . dependent on [state legislatures] for reelection, will be vigilant in supporting their rights against infringement by the legislative or executive of the United States."

Edward Gibbons (about the Fall of the Roman Empire)

''The fine theory of a republic insensibly vanished.''

Zell Miller

"The 17th amendment was the death of the careful balance between State and Federal Government. As designed by that brilliant and very practical group of Founding Fathers, the two governments would be in competition with each other and neither could abuse or threaten the other. The election of Senators by the State legislatures was the linchpin that guaranteed the interests of the States would be protected."

**********

# The Plan: Mission Accomplished?

It can be argued that 'The Plan' to destroy the United States of American succeeded in 124 years, starting in 1789 and ending in 1913.

It can also be argued that everything since 1913 has been exploitation of that victory ... and a massively successful campaign to deny that any victory was even reached.

If it had been made obvious enough that the United States no longer existed in a recognizable form of its former self there was always the remote possibility that attempts would be made to resurrect it. But subtlety lies in subterfuge, and for as long as possible we must make every attempt to guard against the realization of our triumph.

Political landscapes must shift from time-to-time. Whereas the chief vehicle of our victories has in the past been that political party labeled Republicans we should ensure that Democrats, or any other transient political group, takes its hand at trying to achieve our aims. If the strivings for those aims do not continue unabated, we risk having the clarity of the situation becoming apparent to those who just might desire to oppose our purpose.

Every so often we should allow an apparent setback for our forces. After all, we do not wish to dampen the fighting spirit of those who are erroneously fighting the wrong battles for the wrong purposes.

With 1) a near-infinite ability to impose legislation and/or regulations effecting American life, 2) no recourse for states to do anything about it and 3) a near endless stream of tax revenues, examples abound of instances of clear waste, graft and incompetence in the spending of all those 'public funds' by the U.S. Congress. Spending that with few exceptions works to destroy the original essence of the United States. Spending that, because of the purposes it is meant to further, continuously pounds nails into the coffin of that original intent.

Before continuing the examination of the downfall to play out in later years, it is critical to reiterate that they were ALL the direct result of three systemic cracks introduced to the system at various points prior to the year 1914.

These were:

1. Federal assumption of powers the Constitution did not grant to them,

2. No viable state recourse (namely the threat of secession) **and**

3. The new federal power to impose non-uniform taxation

Without ALL THREE of these perquisites it is very doubtful that many of the later problems to be examined would have come about. They are all examples of federal meddling in activities that should have been handled all or in part by the states, private industry or regular individuals.

In every case, even with Congress possessing the power to affect the legislation/mandates mentioned, there would be no possible way to afford any of it if they had to adhere to the pre-1913 U.S. Constitution. No amount of excessive federal spending would long be tolerated if EVERY citizen had to surrender the same percentage of their income as taxes. Pretty much ANY excessive federal spending is deemed okay in a democratic society where the minority of the citizenry pays the majority of the taxes.

Likewise in every case, even with Congress being able to manipulate federal taxes as the 16th Amendment allowed, there is no possible way they could justify any of these activities without the broad interpretations granted them via 'implied powers' and the ability to usurp local state's rights.

And in every case, even with Congress possessing the power to affect the legislation/mandates mentioned AND being able to manipulate federal taxes as the 16th Amendment allowed, it is likely that one or more states would have cried foul and refused to be part of this charade. The actions described are beyond the covenant that the U.S. Constitution originally represented.

Most, if not all, of the downfalls after 1913 were enabled by these powers—to act AND to tax WITHOUT fear of state secession—and performed for the claimed good of the national collective.

What makes it better is that the citizens of the United States for the most part celebrated these very activities that their Founders would have taken up arms to fight.

Why?

They supposedly proved that the U.S.

* is compassionate

* is altruistic

* tries to help the downtrodden

* tries to help the children

* tries to help the environment

Often, the imposition of these measures did not even require new federal laws.

A lynchpin of federal power accumulation, redistribution of taxpayer money, makes that largely unnecessary. As discussed, such redistribution began in the Washington administration, when Alexander Hamilton pushed through his plans to socialize debt that individual states incurred in the Revolution. The idea behind this and any such redistribution scheme is to build dependence and gain leverage. Make state and local governments, or even individuals, dependent on federal 'gifts' and the Federal Government can then influence events to their benefit by threatening to cut off those 'gifts'. The 'gifts', of course, are directly appropriated from taxpayers from all over the nation and then distributed to targeted areas. For Hamilton, such distribution meant using money from states that had paid their debts to subsidize the states that had not paid off their debt. In the years after 1913 the practice became much more widespread given the wide-open taxing policy allowed by the 16th Amendment.

So American society gives its government tacit approval to pool money from all American taxpayers and then distribute the money to target areas chosen by that government in order to gain power for that government to do more of the same. And this from a concept that began as individuals wishing to establish a moral government that would allow them to live in a moral society that would let them lead moral lives.

What better measure of destroying the fabric of the United States?

The fools don't even realize that they have been beaten .... nor apparently even what they were supposed to be defending.

## Philosophical Musings

Soon after the turn of the 20th century a variety of economic and philosophical giants began to preach the moral underpinnings of Capitalism and Classical Liberalism. Most were not native citizens of the United States, but all ended up living there at least part of their lives.

History will remember these individuals as heroes who attempted to reawaken the spirit of what had once, to many, made the United States the last best hope for mankind.

Let's briefly visit a few of the afore-mentioned giants in this area and then look at the linkage between Individual Liberty and Capitalism for a bit.

### The Warriors

####  Ludwig von Mises

Born in Austria in 1881, Ludwig von Mises became one of the influential guiding forces behind what would become famous as the Austrian School of economics.

While a philosophy more than any physical school, the Austrian School is largely responsible for theories explaining the relationships between a society's actions and their economics.

In some contrast with the earlier economic thoughts espoused by Adam Smith, the Austrians focused more on a subjective valuation of items in the marketplace whereas the earlier focus was on the value of the labor put into an item's production. This subjective view is more in line with the concept of free exchange, where each individual values a particular good or service differently and always trades such that the item received is valued more than the item given up.

Thus, Austrians focus more on the marginal utility any particular item is perceived to give to any particular individual as the basis for market costs rather than a more static labor cost plus profit formula. The first view lends itself more to a market-based economy.

Educated at the University of Vienna, von Mises became greatly influenced by Carl Menger ('founder' of the Austrian School). Von Mises effectively become the de-facto 'head' of the 'School' in the years following World War I. At that time the economic/social theory of Socialism was sweeping much of the world and he seems to have taken as his mission the opposition of this unnatural and inefficient set of ideas.

Fearing the rise of Adolph Hitler in Germany and Joseph Stalin in the Soviet Union, both competing nationalistic views of Socialist theory, von Mises (a Jew) first moved to Switzerland in 1934 and then the United States in 1940.

The main tenants, as far as we are concerned here, expressed by von Mises and the Austrian School are as follows.

In any society, the only true sovereign entity is the consumer. Consumers, as a group, determine what needs to be produced, how much needs to be produced and what quality is needed. The whims of this group are defined as a 'free market'; and any governmental meddling—laws, regulations, etc—with this market necessarily harms society as a whole.

In any society, market forces alone dictate efficient commerce and the efficient utilization of capital. Commerce is the free exchange between individuals and/or businesses while capital is the finite measure of wealth possessed by the members of the society.

The cost of capital is one of the chief decision-making factors for efficient economic activity in a society, given the fact that access to capital is what drives business growth or contraction. Misinterpretations of the costs of capital lead inevitably to bad decision-making and mal-investments. These misinterpretations are chiefly a polite way of referring to governmental attempts to manipulate market forces as a means of regulating credit and money supply. Such interference invariably leads credit and rates to artificially deviate from what the market dictates in support of societal economic activity. The results are generally very bad for the economy.

If capital costs, as measured by interest rates, are made artificially high then the money supply shrinks and legitimately-needed business growth is curtailed. The supply of in-demand goods and services shrink and consumers face rationing in the form of higher prices and/or scarcity.

If such capital costs are made artificially low then the money supply increases and legitimately-unneeded business growth and consumerism is encouraged. Because of the increased supply of otherwise unneeded goods and services, as well as the greater money supply to purchase them, unsustainable demand (or bubbles) are created. These bubbles inevitably crash in on themselves when real market forces are allowed to work and reality sets in.

The results are bad enough in the domestic economies of any society, much less when the effects of currency valuation and foreign trade are factored in.

As a result of all this it is impossible for the centrally-planned economies of Socialist ideology to succeed. There is simply no imaginable way that any central planners can do as good a job of managing efficient capital utilization as a free market.

Ludwig von Mises remained an American citizen till his death in 1973.

##### Quotes – von Mises

"Man thinks not only for the sake of thinking, but also in order to act."

"Action is an attempt to substitute a more satisfactory state of affairs for a less satisfactory one. We call such a willfully induced alteration an exchange."

"A lasting order cannot be established by bayonets."

"Human civilization is not something achieved against nature; it is rather the outcome of the working of the innate qualities of man."

"If history could teach us anything, it would be that private property is inextricably linked with civilization."

"Manufacturing and commercial monopolies owe their origin not to a tendency imminent in a capitalist economy but to governmental interventionist policy directed against free trade and laissez faire."

"The worst evils which mankind has ever had to endure were inflicted by bad governments."

"Whoever wants peace among nations must seek to limit the state and its influence most strictly."

####  Friedrich Hayek

Born in Austria in 1899, Friedrich Hayek closely paralleled the philosophy of von Mises. In fact, they were colleagues and friends throughout significant stretches of their lives.

Graduating from the University of Vienna, Hayek briefly worked for the Austrian government—von Mises was his boss—and then for the U.S. Government doing research for the newly-formed Federal Reserve. He founded and served as director of the Austrian Institute for Business Cycle Research, helping to understand the business cycle theory espoused by the Austrian School of economics.

Hayek taught economic theory in London from the early 1930s till 1950, in effect escaping the nightmare of Hitler. For a dozen years or so starting in 1950 he taught in the United States, but spent the last few decades of his life in Germany and Austria.

He was a staunch opponent of collectivism, a staunch champion of Capitalism and a vocal critic of the British economist John Maynard Keynes (1883-1946).

Keynes, often hailed as one of the greatest economists of the 20th century, championed a mixed economy. 'Keynesian economics', in fact, is often described as a capitalist economy that is raised to its most efficient form by government intervention and guidance. Strict Capitalism proponents, however, consider it just a stepping stone to Socialism.

In 1944 Hayek's first major book, ' _The Road to Serfdom_ ' was published. In it, he warned of _"the danger of tyranny that inevitably results from government control of economic decision-making through central planning"_. This book is considered one of the most important treatises of classical liberalism and modern libertarianism.

In 1960 Hayek's second major book, ' _The Constitution of Liberty_ ' was published. In it, he proposed that civilization was made possible by the fundamental principles of liberty and that it was this liberty that made wealth and economic growth possible. In 1975, the new British Prime Minister Margaret Thatcher brandished a copy of that book and declared to her new cabinet that she wanted it to be the basis for her government's economic policies.

In 1974, Friedrich Hayek won the Nobel Prize in Economic Science. In a strange move, both Hayek and a decidedly socialist-leaning Swedish economist were praised for their work in 'analysis of the interdependence of economic, social and institutional phenomena'. It would seem that both would have differing conclusions in this area, but for whatever reason the Nobel committee decided both made significant contributions.

Friedrich Hayek died in Germany in 1992.

##### Quotes - Hayek

"A claim for equality of material position can be met only by a government with totalitarian powers."

"I have arrived at the conviction that the neglect by economists to discuss seriously what is really the crucial problem of our time is due to a certain timidity about soiling their hands by going from purely scientific questions into value questions."

"'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded."

"Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one's government is not necessarily to secure freedom."

"He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants."

"Even the striving for equality by means of a directed economy can result only in an officially enforced inequality—an authoritarian determination of the status of each individual in the new hierarchical order."

"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."

"To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm."

"We must face the fact that the preservation of individual freedom is incompatible with a full satisfaction of our views of distributive justice."

"It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only those individuals know."

####  Isabel Paterson

Known as one of the three founding mothers of American Libertarianism, Isabel Bowler was born in Ontario, Canada in 1886. She lived most her childhood on a cattle ranch in Alberta, Canada with her large—and very poor—family. She was largely self-educated, attending a formal school for only about three years as a child. In her late teens, the diminutive Isabel left the ranch and took up a variety of odd jobs.

In 1910 she entered into what was to turn out to be a short-lived, unhappy marriage to a Canadian by the name of Paterson.

In 1914 Isabel Paterson submitted her first novel for publishing but found little success. A few years later she found greater success with her second novel, and thus began her writing career.

She moved to New York in the years after World War I, writing for various newspapers. In 1928 she became an American citizen.

Paterson became a noteworthy literary critic and soon became famous for her outspoken commentary on politics and current events. She was a fierce proponent of free trade as well as a critic of the big-government policies of U.S. President Franklin Roosevelt in the 1930s and 1940s.

In 1943, her most famous novel was published; ' _The God of the Machine'_. In it she traced mankind's history through various important stages whereby political ideologies and societal structures facilitated the technological advancements of the period. She linked these stages with individual rights, and the ability of societies to support new innovations rather than merely copy off of the works of others. She often used the analogy of society as a machine and its rules (laws, government structure, freedoms, etc) as the circuit that controlled and channeled its energy flow.

Her hypothesis was simple but profound; great societies rise and thrive because their governmental structures foster an environment where individuals are free to pursue success. The more controlling a society's government is allowed to become the less liberty is maintained by society in general.

In ' _The God of the Machine'_ , the Machine represents the workings of society and the God is represented by the aggregate of its members operating for their own benefit. Government exists only to provide the structure and rules necessary to let the members of that society interact without harming each other.

Or, put simply, government is a necessary evil and the government that rules least rules best.

Paterson maintained good relations with Ayn Rand—whom we'll discuss later—during the 1930s and 1940s, though quarrels over religion ended that relationship on a bitter note in 1948. Paterson was a Deist who tried often to link Capitalism with her beliefs regarding God, while Rand was a staunch atheist who did not want any sort of linkage with religion.

Of ' _The God of the Machine'_ , Rand wrote soon after its publication that it " _does for capitalism what Das Kapital does for the Reds and what the_ _Bible_ _did for Christianity_ ".

In the 1940s and 1950s Isabel Paterson corresponded, and it seems had some influence, with the original founders of the modern American Conservative movement, Russell Kirk and William Buckley.

True to her convictions against collectivist government action, Ms. Paterson refused to even enroll in the Social Security system. She would not condemn the actions of her government while at the same time partaking in the benefits of such a state-sponsored wealth-redistribution (i.e. theft) scheme.

Isabel Paterson died in 1961.

##### Quotes - Paterson

"A tax-supported, compulsory educational system is the complete model of the totalitarian state."

"No law can give power to private persons; every law transfers power from private persons to government."

"Most of the harm in the world is done by good people, and not by accident, lapse, or omission. It is the result of their deliberate actions, long persevered in, which they hold to be motivated by high ideals toward virtuous ends."

"The humanitarian in theory is the terrorist in action."

"In the Society of Contract man is born free, and comes into his inheritance with maturity. By this concept all rights belong to the individual. Society consists of individuals in voluntary association. The rights of any person are limited only by the equal rights of another person."

"In the Society of Status nobody has any rights. The individual is not recognized; a man is defined by his relation to the group, and is presumed to exist only by permission. The system of status is privilege and subjection. By the ultimate logic of the Society of Status, a member of the group who has not committed even a minor offense might be put to death for "the good of society."

"In an earlier day, monopolies were granted by kings to their favorites. It was evident that a law aimed at individuals would be absurd; the effective course was to prohibit the political power from granting monopolies."

"But the proposal to "regulate" corporations to prevent monopolies seemed plausible. If it were mere folly, it would leave things no worse than they were but it contains another element—it reintroduces status law."

"This was done by diverting attention from the cause to the effect, and finally legislating against the natural process which had been injuriously affected—a triple perversion."

"As freak legislation, the anti-trust laws stand alone. Nobody knows what it is they forbid."

####  Rose Wilder Lane

Another of the afore-mentioned three mothers of American Libertarianism, Rose Wilder was born in 1886 in South Dakota. Her family moved around a lot when she was young but by 1894 had settled in Missouri, where her family established a dairy farm. There she stayed most of her childhood, though she did attend her last years of high school in Louisiana while living with her aunt.

Even though she exhibited a quality intellect—graduated top of her high school class in 1904—there was no way her poor family could ever hope to send her to college.

She married a man name Claire Gillette Lane in 1909 and in 1910 bore a son who did not survive early childhood. Rose and Gillette moved about the country for the next several years engaging in various jobs, and she taught herself several languages as well as becoming a part-time writer.

In 1915 she began her official journalism career with the San Francisco Bulletin, writing of such notables of the time as Henry Ford, Jack London, Charlie Chaplin and Herbert Hoover.

In 1918 her long-troubled marriage was officially ended and Rose began a free-lance writing career that spanned decades. She quickly became one of the highest-paid female writers in America but reportedly suffered periodic bouts of depression. In addition to her own writing she often, seemingly more so during her depressed periods, did 'ghost-writing' to help other friends and writers. She traveled abroad, especially to Albania and France, but in 1928 returned to her parents' farm in Missouri to live.

It is unclear how much Rose Wilder Lane helped her mother, Laura Ingalls Wilder, with the writing of the ' _Little House'_ series of books that she would become famous for. Starting with the first book in 1930 there probably was some aid, most likely in polishing the final products, but neither woman ever said. It is known that the series generated much-needed revenue for the Wilder family, including Rose Lane, through the Depression years.

In 1938, Rose bought a rural farm in Connecticut and became largely self-sufficient. She despised what she saw going on with President Roosevelt's New Deal policies, with social collectivism such as Social Security and federal taxation in general.

In 1943 she released ' _The Discovery of Freedom'_ , a profoundly important novel about individual freedom, self-reliance and the human spirit. In it she highlights the ways in which these concepts took fruit in the United States and made it the greatest nation ever known.

Actually, ' _Freedom'_ takes its name from the historical journey Ms. Lane guides us on as human beings come to the realization that they are the controlling authorities of their lives and not rulers or governments. That path leads from Divine Rulers whose main object is to use individuals for the good of the kingdom to Living Rulers whose main object is to use individuals for the good of the state and ultimately to Representative Governments who's main objective is to let individuals strive for the good of themselves.

She ties man's early futile attempts at realizing the power and worth of the individual to early Christianity _—"Christ came not to bring peace, but a sword that would destroy kingdoms"_ —and the 7th century Islamic Saracen cultures around the Mediterranean.

Man's most successful attempt, in her opinion, occurred with the rise of the American experience in the 18th and 19th centuries. She was very passionate in wanting Americans to recognize what they were letting slip away.

Rose Lane could be very vocal and abrasive regarding what she saw as unwarranted government intrusion. At one time in the 1940s the FBI began a file on her because of her active and vocal opposition to Social Security as a moral disgrace and a national ponzi scheme.

She became a leading—if not the leading—power behind formation of the American Libertarian movement.

Rose Wider Lane died at her Connecticut farm in 1968.

##### Quotes - Lane

"Making the best of things is... a damn poor way of dealing with them. My whole life has been a series of escapes from that quicksand."

"The need for Government is the need for force; where force is unnecessary, there is no need for Government."

"The greatest good to the greatest number will obviously be reached when each individual of the greatest number is doing the greatest good to himself."

"Men in public office do not use their energy productively; that is not their function. Their function is to use human energy as force to stop the uses of human energy that a majority does not approve, or at least does not defend."

"Police can no more control any man's working than they can control his drinking or his breathing. The whole of history proves this, if common sense does not. Government regulation, government "control," slows down production, hinders it, prevents it, reduces it, and can not possibly control it."

"The increasing belief that everyone has a natural right to vote, because voting is mass-control of a Government that controls individuals, is counter-revolutionary in these states. It is a revival of the ancient Old World superstition. It threatens every American's home and liberty and life; it threatens the existence of the Republic and the survival of the Revolution."

"American educators ... try to make schools so enjoyable that the children will not realize that the police compel them to be there. (But the children know it.) The teachers try to make learning easy, a game. But real learning is not easy; it requires self discipline and hard work. The attempt to make learning effortless actually keeps a child from discovering the pleasure of self-discipline and of the mental effort that overcomes difficulties and does a thoroughly good job."

####  Ayn Rand

The last of the afore-mentioned three mothers of American Libertarianism, Ayn Rand, was born Alisa Rosenbaum in 1905 in St. Petersburg, Russia.

Her Jewish parents were relatively successful in her early years, but in the 1917 Russian revolution they were all disrupted greatly by the rise of the Bolsheviks under Vladimir Lenin. They were forced from St. Petersburg for a number of years but returned in 1920.

Alisa attended Petrograd State University from 1920 to 1924, majoring in history. She was purged from the university shortly before graduation, as she refused to join the Communist Party, but was allowed to complete her course studies anyway.

In 1925 she obtained a visa to visit relatives in the United States, but she never intended to return to Communist-controlled Russia. She left Russia in January of 1926 and arrived in New York City in February. She spent some months with relatives in Chicago and borrowed money from them to move to Hollywood, California. There she hoped to start her desired career—writing.

She had decided, reportedly before leaving Russia, to use the name of Ayn Rand for her profession. Whether that name had some significant meaning is unclear.

In Hollywood Rand struggled for several years at odd jobs and at several movie studios, meeting along the way a young movie actor named Frank O'Conner. She and Frank were married in 1929 and she became an American citizen in 1931.

During the 1930s Rand made several attempts to bring her parents to the United States, but they could never obtain permission from the Soviet authorities. That Ayn Rand published several anti-Soviet stories during those years, most notably ' _We the Living'_ and ' _Anthem'_ , probably didn't make the Soviet government very amenable to helping her or her parents.

' _We the Living'_ (published in 1936) is essentially about the struggles between the individual and the state in Communist Russia. Rand said it was semi-autobiographical, in that the plot was fictitious but the circumstances and background reflected her early years.

' _Anthem'_ (published in 1938) was the dark tale of a future society where collectivism had triumphed over freedom. Members of society were known only by numbers and individualistic words (I, mine, etc) were banished from language. Every action was taken for the good of the collective. It was initially published in England but was also released in the U.S. in 1945.

In the early 1940s, Rand became acquainted with both Ludwig von Mises and Isabel Paterson. She especially became close to Paterson and the two shared many philosophical ideals. Rand and her husband became very involved with the political campaign of Republican Wendell Willkie, and Rand's first public speaking engagements were for the 1940 Willkie campaign against President Franklin Roosevelt.

In 1943 she published ' _The Fountainhead'_ , a romantic and philosophical novel of individualism. Specifically it was about the virtues of individual achievements rather than living off the accomplishments of others. The novel, which she had worked on since the mid-30s, was rejected by a dozen or so publishers before its 1943 acceptance. A major reason for the rejections was that at that time in U.S. history anti-Soviet—and thus anti-collectivist—sentiments were publicly frowned upon. Communism was widely seen as an acceptable ideology and the logical progression of society.

' _The Fountainhead'_ fast became a worldwide success. Early on Rand sold the movie rights to a movie studio and she began to work on a screenplay. The film version was released in 1949 but Rand disliked the final product, most probably because she had to shorten so much for the screenplay that it lost much of its philosophical underpinnings.

She increased her free-market and anti-Communist involvements during the late 1940s, participating with the Motion Picture Alliance for the Preservation of American Ideals and testifying before the House Un-American Activities Committee.

In 1951, Rand and her husband moved to New York City where she concentrated on finishing what was to become her greatest literary accomplishment; the monumental ' _Atlas Shrugged'_.

The environment Rand made for herself in New York led to both great intellectual interaction as well as large-scale criticism of her in later years. Many young intellectuals flocked around Rand and an almost cult-like atmosphere developed. Almost daily brain-storming sessions would run well into the night with discussions of philosophy. The group would review ' _Atlas Shrugged'_ and even type up Ayn's handwritten notes. A philosophical movement called Objectivism arose from this group, almost as if it were a new religion. That Ayn Rand was a life-long atheist added to the perceived cult atmosphere, it seems.

In 1957 the long-awaited ' _Atlas Shrugged'_ was published. It, like _'The Fountainhead'_ 14 years earlier, was savaged by literary critics but became a near instant world-wide success. It is a sweeping epic that deals with the role of the mind in man's existence, as well as the morality of rational self-interest versus collectivism. The plot was set in a surreal version of the United States where individualism and self-interest were slowly being crushed by a socialistic intelligentsia and a fascist government. The individualists, depicted by inventors and industrialists, attempt to fight the inevitable but then begin asking the question " _What if we, the men of the mind, simply withdraw from society?_ ".

Can society exist in the hands of parasites who use the products of other men's minds but contribute nothing of their own? Will men produce not for their own profit but to serve their neighbors?

The novel blended Rand's Objectivist philosophy with elements of mystery, romance and mild science fiction.

The cult that grew around Ayn Rand both immediately before and after ' _Atlas Shrugged'_ in some ways got way out of hand, resulting in both excessive intellectual conformity and even reverence for all things Rand. There were even some strange sexual relationships that developed, which provided fuel for Rand's critics.

After 1957, Ayn Rand ended her career as a novelist and focused on her growing role as a popular philosopher. She was, by most accounts, brilliant and could logically dominate most any philosophical discussion. She gave lectures at prominent universities and compiled many Objectivist articles and books. In 1964 she was a vigorous supporter of Republican candidate Barry Goldwater.

A heavy smoker, she began having serious lung cancer problems in the early 1970s and never seemed quite the same from that time on. Her husband Frank died in 1979 and she succumbed to heart failure in 1982.

##### Quotes - Rand

"A desire presupposes the possibility of action to achieve it; action presupposes a goal which is worth achieving."

"Wealth is the product of man's capacity to think."

"Achievement of your happiness is the only moral purpose of your life, and that happiness, not pain or mindless self-indulgence, is the proof of your moral integrity, since it is the proof and the result of your loyalty to the achievement of your values."

"Every man builds his world in his own image. He has the power to choose, but no power to escape the necessity of choice."

"Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority; the political function of rights is precisely to protect minorities from oppression by majorities (and the smallest minority on earth is the individual)."

"Run for your life from any man who tells you that money is evil. That sentence is the leper's bell of an approaching looter."

"I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine."

"In order to live, man must act; in order to act, he must make choices; in order to make choices, he must define a code of values; in order to define a code of values, he must know what he is and where he is – i.e. he must know his own nature (including his means of knowledge) and the nature of the universe in which he acts – i.e. he needs metaphysics, epistemology, ethics, which means: philosophy. He cannot escape from this need; his only alternative is whether the philosophy guiding him is to be chosen by his mind or by chance."

"Do not let the hero in your soul perish, in lonely frustration for the life you deserved, but have never been able to reach. Check your road and the nature of your battle. The world you desired can be won, it exists, it is real, it is possible, it's yours."

"But to win it requires your total dedication and a total break with the world of your past, with the doctrine that man is a sacrificial animal who exists for the pleasure of others. Fight for the value of your person. Fight for the virtue of your pride. Fight for the essence of that which is man: for his sovereign rational mind. Fight with the radiant certainty and the absolute rectitude of knowing that yours is the Morality of Life and that yours is the battle for any achievement, any value, any grandeur, any goodness, any joy that has ever existed on this earth."

###  Liberty and Capitalism: Inseparable Virtues

The term capitalism, describing an economic philosophy involving the free utilization and exchange of private property, first came into use in the early to mid-nineteenth century. It is not that the system was misunderstood before that time, but rather that seldom had man experienced the individual liberties that allowed him to examine philosophically the manner of manifesting those liberties.

We have seen that man's mind is what sets him apart from other animals, and that the rational use of his mind is what allows him to even exist. The key word in that statement is 'rational'.

Individual rights refer to how we describe the freedom to exercise one's mind, while we can view private property as the fruits of such rights. We have seen that without the right of private property any use of man's mind, rational or otherwise, is meaningless. If there is nothing to gain or no reason to act then action won't occur. Or worse—man's actions would be totally random. There would be no trade; trade involves exchange and without private property why would there be any such need or any such concept.

As a related aside, the ultimate private property is innate to our own mortality; time. Since each individual has a finite lifetime each second of that time is of value to him; it is his private property. His time can be used to produce the means of his existence, produce items for trade or be itself traded for items of greater perceived value.

History has always involved property rights. For most of that history, however, the rulers of society claimed ownership of most property and they granted varying degrees of partial rights over _their_ property to _their_ subjects. The reason to act, for the vast majority of people, was simply not to die. As one rose in the socio-economic ranks the reason to act was to gain favor of the rulers by managing _their_ property and then hoping that _they_ would allow you to enjoy the favors _they_ bestowed.

It can be argued that engaging in actions for the main purpose of not dying and of pleasing your rulers may be rational courses of action—for slaves!

Slavery denotes the need for violence to induce men into slavery. Thus arguing that such acts are rational presupposes that slavery is an acceptable action and that essentially all earlier discussion of moral behavior is invalid.

The only rational use of one's reasoning faculties is in pursuit of one's own happiness. Whether that happiness is for yourself only, for your family or for your community is not up to anyone other than you. Whether that happiness takes the form of financial gain or just a sense of goodwill is not up to anyone other than you.

This can also be stated that the only rational use of one's reasoning is in pursuit of egoism. If the goal of an action is not something you value—to satisfy your ego in some manner—then the only reason you'd be doing it is because you are being forced.

Let's lay to rest the widely prevalent, mostly religious-based, conception of altruism. Altruism is defined as a motivation to help others, or a want to do good, without reward. Or sometimes it is put as the motivation to voluntarily give up something you value greater than the value you assign to what you are receiving.

Nonsense! The clearest definition of altruism is self-sacrifice. And there is no such human motivation. Never has been and never will be.

This strange concept was 'invented' to explain why man acts in ways that are not readily attributable to his own immediately selfish greed. After all, many of the major world religions assert that man is by nature incapable of a moral life and must instead rely on God (via his representative priests, of course) in order to escape what they claim are the 'sins' of avarice and greed.

But if individuals could, as part of their nature, voluntarily choose to value things other than those centered on their own immediate gratification then the whole concept of man's need for religion to 'show him the way' would be diminished.

Is it altruistic if a man chooses of his own free will to go out of his way to help a stranded traveler? If he values the self-worth such an act gives him more than the effort it takes to help the traveler then the answer is by definition no.

Is it altruistic for a parent to forgo luxuries to care for their child? If the parent values their child and feels the proper responsibility—for the life they created—more than the luxuries they want to indulge in then the answer is by definition no.

To believe in the myth of altruism is to believe that man is incapable of moral values.

Why the rant on altruism?

From the earliest days of capitalism, even before it had that name, it was widely regarded as some sort of sin against nature, or at least man. There was little doubt it was always the most effective system of managing the scarce resources of a society and its economic system. But for some there was always this troubling paradox; that private greed and selfishness could not be reconciled with overall public good or compassion.

Because true capitalism depends on absolute human freedom man has never known true capitalism. Not once.

But the closest to it he ever achieved was in the first 125 years or so of the United States of America. If we accept that individual liberties are what define morality then truly we can say that the United States was man's best hope. For more than anywhere else in the world, at any other time in history, the United States was the nearest thing to the embodiment of true capitalism.

But it is precisely the never-overcome, nagging sense of capitalism as some sort of necessary evil that threatened to doom the United States after that time.

That capitalism is the only economic system that successfully leverages man's egoism—his own innate desire to pursue his own happiness—to benefit the entire society is not in question, or at least should not be to the rational mind.

It succeeds by satisfying the needs of all participants in the system. This is not to say that all participants in the system achieve all they desire. But every participant freely entering into a trade within a capitalist system receives something that for them is of greater value than what they are giving in exchange. The value of what they have to trade is determined by the market mechanisms of supply and demand, as described by such men as Adam Smith, Ludwig von Misses and Friedrich Hayek. An individual may disagree with the valuation society puts on what he has to trade; in which case he refuses to trade. The value of what he wants to trade for is determined by no one other than himself.

Capitalism is about freedom; the freedom to do what you will, with what you have, to get what you want. No coercion. No violence. Freedom.

It is just such freedom that Rose Wilder Lane wrote about, and lived, so eloquently.

The valuation society places on your private property, including your own time, are determined by many factors. What skills _you_ have developed as a result of choices and investments _you_ have made. How well _you_ have utilized the reasoning ability of _your_ mind to adapt to a changing society. And yes, sometimes luck.

The valuation that adherents of altruism—the philosophy of self-sacrifice—place on your private property is chiefly determined by the perceived need of _others_.

The first instance is _moral_ and _just_. The second is _moral_ only to cannibals and _just_ only to moochers and parasites.

No economic system has raised the standard of living of all members of a society that practices it more than capitalism. There is not even a close second place. None!

But ask many proponents of capitalism why it is they support it.

In nineteenth century America the most prevalent answer would have been that it is analogous with freedom. In America after the mid-twentieth century the most prevalent answer would be that it results in societal prosperity.

In their writings, Isabel Paterson and Ayn Rand repeatedly tried to warn why that transition in perceptions was so evil.

The 'freedom' answer reflects the prime result; that capitalism is synonymous with individual freedom and liberty and allows pursuit of one's own self-interests.

The 'societal prosperity' answer reflects a secondary result; that capitalism enables the attainment of prosperity to society as a whole.

A moral society is one in which all members are free to exercise their individual rights, at least to the extent that they do not deny other members the right to exercise their own such rights. If in the process of everyone exercising their individual rights, and pursuing their own self-interests, society as a whole succeeds then that is a great by-product.

Societies can define morality as all members getting guaranteed a level of success. Such a morality would also deny its members the opportunity to pursue their own interests, and instead assure stagnation in a shared communal purgatory. Only in some socialistic dream could such a definition of morality—with everyone getting guaranteed success while individuals also get to freely exercise their individual rights – begin to make sense.

If, as is actually the case, individuals are motivated to act in pursuit of their own self-interests then the inverse is also true; there is no motivation to act when their own self-interest is not served. As mentioned in the earlier discussion on altruism, such self-interest oftentimes involves the value the individual places on intrinsic goals such as goodwill, inner peace, responsibility and honor.

The individual is motivated by how _his_ actions affect the pursuit of _his_ happiness.

It is only the parasitic moochers of society, the bottom feeders, who demand that an individual be motivated by how _his_ actions affect the pursuit of _someone else's_ happiness. To such beings, the perceived need of others is in some demented manner a claim against all.

Such immorality is known by many names; collectivism, welfarism, socialism, egalitarianism and statism. It invariably involves society forcibly curtailing the individual rights of some members—mainly involving control of their private property—to give unearned benefits to other members of society.

In some cases a society's government through totalitarian measures inflicts this immorality upon the society as a whole. Usually, however, the government just reflects societal wishes for such an orgy of short-minded platitudes and self-devouring cannibalism.

When there is a distinct contrast between those who stand on the side of Capitalism and Freedom and those who stand on the side of Socialism and Tyranny one can but look at the entire spectrum of human history to show without a doubt which set of principles work.

Socialism and/or Tyranny have never made a society last without the constant application of violence.

Capitalism and Freedom allow every citizen the free expression of their rational mind. Every citizen benefits from their interactions and without fail the society as a whole benefits and grows stronger.

But as with any value, to stand for something with no clue as to why you are doing so does not reflect a principled position but rather a robotic, follow-the-herd mentality that leaves your 'values' for sale to the most persuasive snake-oil salesman.

Too many of capitalism's supporters and proponents have forgotten what it really means. To them it is just an efficient economic system that enriches their lives and the welfare of society.

The secondary result, the by-product, is to them the reason capitalism is to be admired.

What happens with such people when they begin losing money, or when society as a whole suffers an economic downturn?

Oh, they say, we can just confiscate more private property from the rich and invest it for the common good. It'll just be a temporary violation of individual liberties. After all, we can't let everyone go down the tubes just because some greedy folks won't share what they have.

But a temporary violation of individual liberties is synonymous to being a little bit pregnant. The definition of either state is pretty clear and do-overs never work in either case. The difference is that a pregnancy, unless tragically ended, results in a new beginning. After a violation of the capitalist ideal, which goes hand-in-hand with individual liberties, the result is always tragic and always headed downhill.

There is no tinkering with freedom, either it IS or it ISN'T. Black or white! No greys!

Capitalism is either an ideal to be followed or it is not. The fact that its supporters sometimes lose personal or societal wealth is itself a by-product of individual freedoms. Freedom means just that; individuals are free to make good decisions but just as free to make bad decisions. It is impossible to only have the freedom to be right.

Relatively few so-called supporters of capitalism equate such support with morality anymore. This is disturbing and their insincerity is quickly apparent. Something that is valued only when it serves one's purpose was really never a value for that person in the first place.

But that is what Capitalism means; Freedom. Because of that it is the only moral economic system. To say you support one but not the other means that you understand neither.

## The Plan: Adaptation

Seeing as how our Plan was aimed to destroy this upstart United States primarily because of its philosophical differences with the world, we need to re-examine some aspects of that Plan due to underlying currents of change to world civilizations in general.

At the time of its founding, the United States represented the greatest experiment to date regarding individual liberties.

The question, in short, was that given such liberties could its citizens keep them?

Maybe for a while they could. But it wouldn't last long.

Our Plan, after all, relies on no foreign interference or outside agitation. No, the downfall of the United States must come at the hands of its own countrymen. The devastating actions that matter, for the most part, will come not at the hand of terrorists or foreign agents but from the good intentions of the morally confused and/or the rationally incompetent.

By the start of the twentieth century 'The Plan' had worked magnificently. As has been reviewed already, the main goals from that time forward were to be consolidation of our victory and subterfuge to keep our victory if not totally secret at least questionable.

But the growing linkage between capitalism and individual liberties on the one hand and capitalism and the United States on the other hand has shown the need to expand our goals.

The enemy can no longer be limited to the United States but must be extended to include capitalism itself. The reason is that even with the weakening of the United States social fabric there is still no place on Earth where capitalism is practiced with as much fervor.

If the United States were to be mortally wounded but still in existence there was always a chance that the inherent success of capitalism would be held out as a lifeline to resurrect the fallen nation.

The way to achieve this goal is not to directly confront this economic system that so best fits the nature of man. It is instead to incrementally sway proponents and supporters of capitalism away from the moral underpinnings of the system, much as we have had to do to the United States in the first place. Using many of the same tools, what is needed is to introduce enough ambiguity in the fundamental tenants that proponents will continue to claim support for capitalism even as it is transformed into something else entirely.

**********

# Antitrust Madness – 1890 to 1920

## The Plan: Goal

Leveraging the U.S. Government's newly-appropriated powers to .... well .... do essentially whatever it wants to, we'll focus on individual liberties and the economy.

One of the chief reasons for a society, especially one such as the United States, to be formed among men is to allow for the free and efficient pursuit of commerce. Specialization of labor, the free exchange of goods and services, as well as the respect of property rights are the embodiments of an individual's innate right to exercise his own reasoning.

The ability for individuals to cooperate in the formation of businesses, and later corporations, is an extension of those individual rights.

It is the main component of what capitalism is about—freedom.

The goal of a business entity is no different than that of an individual; to succeed and be the best at whatever your goals happen to be. And as we have seen, a free society must allow such entities, individuals or businesses, to both reap the benefits of their good decisions and suffer the consequences of their bad decisions.

Everyone strives to be 'the best'.

So what if being 'the best' is considered by society, or at least the most vocal in society, as an evil? Wouldn't this mean the rewards for making good decisions are considered evil?

If corporations, or groups of individuals, can be presented as themselves the violators of individual rights a huge blow would be dealt to capitalism. And as we have seen, any damage to capitalism damages what makes the United States what it was originally intended to be.

##  Course of Events

###  Early Conflicts

A monopoly is defined as having exclusive control of a commodity—either the means of its production or some other segment of its market. Market competition in the monopolized area is thus severely curtailed.

Usually, such a condition comes about through the use of explicit or implicit force.

A natural monopoly, minus any use of force, is more theoretical than real. It is possible because of geographical reasons or sheer talent to dominate a market segment for a short time. However, if someone is making a profit providing a product or service customers want to buy then someone else will always be willing to try and provide the same or similar product or service for slightly less profit.

That is called competition, and in any market where humans are involved the only effective way to eliminate competition has historically been thru force.

Monopolies have existed since the earliest governments. Why the linkage? Because early monopolies almost always existed in the form of royal charters, nobility deeds or titled holdings. After all, if society's entity with the monopoly on legal force (i.e. the King or government) granted a right in trade, production, or the like to a favored subject then it's not likely others in that society would be allowed to fairly compete in that area.

The Egyptians and Greeks had their monopolies, of course, but the real growth resulted from the great administrators of antiquity; the Romans. The Roman Empire can actually be said to have grown and flourished not so much by military power but by facilitation of commerce between far-flung parts of their empire. Roman citizens, especially nobles and senators, enjoyed empire-imposed monopolistic control of most aspects of this commerce. The fall of the Roman Empire also coincides a lot with its subjects getting fed up with the inefficiencies and lack of freedom resulting from a lot of this political patronizing.

At some point around the 15th or 16th century monopolistic practices began to migrate from outright government grants involving individuals to outright government grants of exclusivity involving private business interests. Think Dutch East India, British East India, Hudson Bay, etc. Usually these private concerns were well represented by relatives or close associates of nobility.

With the experiment of the United States in the late 18th century there were hopes that the new government would stop this history of supporting monopolies.

It didn't quite work out that way, though it can be argued that the magnitude of the situation was less in the new nation.

Monopolies have sometimes advanced the fortunes of a society. With consolidated economic power there often came conquest and exploration that would not be as justified, or possible, otherwise. Oftentimes the costs, from the standpoint of consumers, actually were kept low because of efficiencies brought about by the monopoly.

But except in the case of the rare natural monopoly, it would be difficult to argue that monopolistic practices were compatible with the concept of liberty and freedom. Who is to say what alliances and discoveries were never made because of suppressed competition? Are low prices for consumers—at least some consumers—the only costs to be considered in societal fortunes?

And even if a monopolistic situation were deemed good for society, isn't liberty the freedom to succeed or fail? The competitive forces held in check by such practices certainly can be viewed as a coercive denial of liberty.

Alexander Hamilton's pet project, the Bank of the United States, can be said to have helped solidify the early Federal Government's role and legitimacy. It can also be said to have been a monopolistic creation to aid the centralization of power for select New England merchants and bankers. It certainly brought to ruin many of the smaller state and local banking institutions as well as riches to those who knew how to take advantage of its nuances.

Government contracts awarded during the War Between the States were rife with graft and corruption. It can be argued that the huge amounts of war material required of the armies necessitated contracts that often were judged more by sheer volume than costs or quality. There is certainly a school of thought that the war itself was largely brought about and prolonged by the desire for business profits and lucrative Army contracts.

As governmental laws and regulations in the new nation proliferated, impediments to competition arose because of the legal and financial thresholds necessary to enter the marketplace as any serious player. This is unavoidable to some extent; copyrights, patents and trademarks are arguably forms of government regulations that are certainly worthwhile for individual rights. However, with these regulatory impediments usually comes a greater bias towards larger and better-capitalized businesses that can find it easier to meet those ever-climbing entry-costs into a market. It is seldom the smaller players in a market who champion greater government involvement, be it regulation or legislation, but rather the larger players who can more easily absorb and take advantage of the increasing costs of doing business that such government meddling invariably brings about.

Government desires to link the vast expanses of the United States resulted in the granting of literally hundreds of millions of acres to a relatively small number of large railroad concerns during the 19th century. It would be hard to deny that this was a pure monopolistic practice; it's sort of difficult to compete when the U.S. Government picks the winners in advance and gives them free land. The lucky railroads pre-picked to be the winners had to lay track and administer the railroad traffic; but they also got to charge fares and then sell off the vast bulk of land they didn't use—at vastly appreciated value since it now had rail lines running through it.

To think that government officials weren't getting all sorts of kickbacks for awarding this land is fantasy; and the big railroads with existing lobbyist structures and existing abilities to payoff politicians made off like ... well ... bandits.

Did all this railroad expansion in general help the fledgling nation? Yes. Could similar results have been accomplished without the Federal Government curtailing the freedom to compete in the manners that they did? Probably.

### Sherman Antitrust

As more and more industries either benefited from government subsidies, of which both land grants and contracts would certainly qualify, or legally consolidated into larger-and-larger business entities to take advantage of economies of scale and increasing regulatory hurdles, the public fear of big-business grew.

As we have seen, this fear was justified to the extent that public monies were often being lost through graft and unconstitutional manipulation of markets. However, there were often claims about some businesses being 'bad' for the sole reason that they controlled a large market share.

Some businesses in the late 19th century centralized control in entities that became known as 'trusts'. Normally a trust involved multiple individual companies setting up arrangements whereby control of their companies would be consolidated into a centralized committee that would orchestrate actions to try and maximize profits for all of them. The name comes because the separate entities had to 'trust' the central committee, usually deeding their shares in the individual companies to the committee in exchange for well-paying dividend certificates. Trusts were felt to be necessary in some cases, maybe most, because many states were passing legislation designed to limit the scale of local businesses. This was, of course, a reflection of the public distrust of 'big business'.

In and of itself, the running of companies via trusts was usually not 'wrong' or 'illegal'. It seemed, however, the initial reasons for doing so were to circumvent government action. This is not to say that illegal and immoral activities were not sometimes attributable to large companies controlled by a trust—but the same could be said of any individually-controlled large, or small, company.

In the vast majority of cases involving such business trusts, production saw greater growth than demand which resulted in markedly lower consumer prices as well as increased job growth. It is true that the most inefficient competitors in a market often dropped out for economic reasons, but that is what is supposed to happen in a free market.

The most famous of the trusts at this time were probably Standard Oil.

Standard Oil was an American company formed by John D. Rockerfeller in 1868 to compete in the fledgling oil and gas industry. At the time that market was mainly kerosene for heating oil. Rapidly the company dominated its native market in Ohio and expanded to such a stage that by 1882 Rockerfeller orchestrated the forming of a trust to manage Standard Oil Company's affiliated affairs spread over more than a dozen states.

Because of its size and vertical control of the market (e.g. controlling companies not only in its core area but also supporting entities that it needed for marketing its goods) Standard Oil was able to get product to consumers at lower prices. In the course of doing this, it acquired many rivals and sometimes sold off the assets of ones that it perceived as not worth keeping. Production, refining, transport and sales were all controlled by the Standard Oil trust and allowed huge efficiencies that its rivals could not enjoy.

The sheer size of Standard Oil gave it leeway to make business investments and undertake projects that none of its competitors could tackle. For example, seemingly little actions such as the disposal of oil wastes were handled differently. While other oil companies dumped waste products into the environment, Standard Oil came up with processes to reutilize the waste into new spin-off products because of the sheer volumes it was dealing with. They did this not because of any concern for the environment but because of simple economics.

However, many of the before-mentioned inefficient competitors apparently found it easier to lobby Congress to act as protectors rather than work on getting efficient enough to allow themselves back in the game.

Because of Standard Oil and several other similar large business interests, Congress overwhelmingly passed legislation giving it broad and unspecified powers to break up businesses that it felt were getting too large for the public good. This was the Sherman Antitrust Act of 1890.

The Sherman Antitrust Act was introduced by Senator John Sherman of Ohio. Senator Sherman—younger brother of the Union general William Sherman—was a very established Congressman who had been seeking the Republican nomination for President throughout the 1880s. The Act passed both Houses with only a single vote in opposition and was signed into law by President Benjamin Harrison in 1890.

The main sections of The Sherman Antitrust Act are:

Section 1 - _Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal._

Section 2 - _Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony._

There are limits placed on fines and punishments, as well legal jurisdiction matter, but those two sentences are the gist of the Act.

Simple .... but extremely vague and open-ended.

No definition as to how much of any market can be dominated before being considered a monopoly. No distinction between a natural monopoly and monopolies attributable by force. No identification of the lines that can or cannot be crossed with respect to competitive business practices.

The justification of the Act was said to be Article 1 Section 8; the infamous Commerce Clause. " _To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;"_

It is likely that the populist anti-trust legislation was more justified by the desire to appease the American public. There was increasing opposition to the decades-long Republican campaign of raising and maintaining tariffs on foreign goods as high as possible. During the Harrison administration average tariff rates peaked at above 48%, helping domestic businesses—but not necessarily domestic competition—immensely and leading to such a surplus in federal revenues that for the first time the United States budget topped $1 billion. Because such tariffs severely reduced foreign competition, curtailing imports via high tariffs is analogous to encouraging domestic monopolistic activities. Consumer prices were kept artificially high largely because of this.

Actually the early wielding of the Act was against labor unions, specifically Eugene Debs' American Railway Union. The Pullman Palace Car Company in 1894 responded to a union strike by attaching its passenger cars to U.S. postal cars, resulting in some delays in mail delivery. Congress authorized action by President Grover Cleveland, citing the Sherman Antitrust Act as justification, to break up the strike with a combination of U.S. marshals and U.S. Army troops.

There was an attempt to use Sherman to block so-called monopoly activities in 1895. Congress tried to block acquisitions of the American Sugar Refining Company that would have resulted in an overwhelming domination of the sugar refining industry. However, the Supreme Court in _United States v E.C. Knight_ ruled that the Sherman Antitrust Act only applied to interstate commerce and not any production or manufacturing activities. This ruling, while consistent with the actual wording of the Constitution, was a bit unexpected as it retreated on some of the earlier broad interpretations of 'commerce' expressed by the Marshall Court earlier in the century.

An interesting case in 1898— _Addyston Pipe and Steel Company v. United States_ —brought into play the Sherman Act. A group of large pipe manufacturers formed an unofficial alliance, or cartel, to manipulate city contracts for pipe by agreeing to select one member as the designated winner and then all other members would submit higher bids to the 'target' city. This was done at several cities within several states and usually resulted in the pre-designated winner actually winning the bid. All the cartel members would then share in the proceeds from the winning bid and of course provide unofficial assistance to the winner if needed.

This practice would become known as bid-rigging.

It was not contended that this cartel prohibited outside pipe manufacturers from engaging in the bids. Any non-cartel manufacturer would presumably have begun bidding on the contracts if the cartel-picked 'winning' bid was determined to be outrageously high. In most cases, however, the size of those contracts probably prohibited serious bidding by outsiders.

In a series of court cases culminating before Sixth Circuit Judge William Howard Taft—later to become President—and then the U.S. Supreme Court, it was ruled that the defendants (i.e. the cartel members) were ordered to desist in this practice. The reasons given were mainly that the private agreement among themselves had as its chief purpose the restraint of commerce among the states where the municipalities in question resided. The 'restraint' in this case was not so much the prevention of other competitors but the 'unreasonable' costs charged for the awarded bid.

In the Court's opinion, the prices determined by Judge—not pipe manufacturer—William Howard Taft was more reasonable than the contracted price that the cartel winner usually charged for their pipe.

The principal of 'rule of reason' first came to be applied regarding the Sherman Act during the _Addyston Pipe_ case. This stated that any _unreasonable_ restraints of trade are subject to actions under the anti-trust laws, not merely the attainment of monopoly powers.

Of course, any _unreasonable_ criteria would have to be determined by United States prosecutors and, if questioned, be verified by the United States Supreme Court.

But it was with the first of the true so-called Progressive Presidents that the Sherman Antitrust Act began to be widely used.

###  Later Conflicts/Problems

President Theodore Roosevelt in 1903 established the Department of Commerce and Labor to impose federal guidelines on businesses to 'promote job creation and increase living standards'. Of course, an unstated goal was to reign-in big businesses and trusts and the specter of monopolies. This job of tracking down and nipping monopolies in the bud was given to a sub-department called the Department of Corporations.

One of President Roosevelt's claims to 'fame' was his image as a 'trust-buster'. His Justice Department prosecuted over 40 cases against alleged monopolies or aspiring monopolies.

His successor, President William Taft bested that record with over 70 prosecutions.

The Taft administration's most famous trust-busting case was Standard Oil, whose empire-building trust went a long ways to bringing about the Sherman Antitrust Act in the first place. As pointed out earlier, John D. Rockerfeller's Standard Oil had since the 1870s been growing steadily by buying out competitors and expanding not only in refining (its core business) but into exploration and distribution (its supply-side) as well as retail and service outlets (its demand-side).

There were allegations, never proven, that Standard Oil owed part of its growth to secret price arrangements with railroads and other concerns regarding oil supply. What was known was that through a variety of means, control of its supply chain certainly being one, Standard Oil was able to produce product cheaper than its competition and sell that product at cheaper prices.

John Rockerfeller retired from active control of Standard Oil in 1897 but remained its largest shareholder.

By 1904, Standard Oil controlled approximately 90% of oil-related production and some 85% of oil-related sales. President Roosevelt's Department of Corporations began going after the company aggressively. By 1911, the company had backed off of its policies such that its market shares in refining had fallen to approximately 65% and its branches into oil drilling were barely 10%.

But that was not enough for the administration of President Taft, he of the 'rule of reason' interpretation of the Sherman Antitrust Act.

The Taft administration engaged Standard Oil in court cases throughout 1909 and 1910 trying to force its breakup under Sherman's 'rule of reason' interpretation. They charged that the transportation deals it could broker with railroads due to its large volume shipments were unfair to smaller competitors and that the resulting lower priced kerosene and other oil-based products it produced were sold at rock-bottom prices _only_ when there was competition to be undercut.

In 1911, the United States Supreme Court upheld the last in a series of federal monopoly cases against Standard Oil and ordered it broken up into 30-plus independent companies that were monitored to insure no additional 'trust' arrangements were created. Some of companies would later become known by names such as Exxon, Mobil, Chevron and Amoco.

The prices for oil products soon rose, making all companies in the market happy. Ironically, the companies that emerged from Standard Oil rose in value dramatically, making their major stockholder, John D. Rockerfeller, the wealthiest man in the world.

#### The Clayton Act

In large part to codify the 'rule of reason' vagueness into actual legislation, Congress in 1914 enacted the Clayton Act as a way to expand its new powers under the Sherman Antitrust Act. Another reason for the Clayton Act was to show the public that Democratic President Woodrow Wilson could be as tough on monopolies as his Republican predecessors.

The Clayton Act was aimed at identifying and halting emerging monopolistic activities. It called for Congress to halt price discrimination between producers if such pricing is felt to lessen competition within that market. It also called for Congress to disallow mergers and acquisitions that it felt would lessen competition within the applicable market.

It called basically for Congress to put the brakes on pretty much anything it feels could lessen competition. It also codified the 'rule of reason' as put forth by Judge—and former President—William Taft.

As an interpretive agency for these new anti-monopoly statutes Congress created in that same year the Federal Trade Commission (FTC). Its principal mission was to be the promotion of consumer protection and the elimination and prevention of perceived anti-competitive business practices.

Even with the more officially spelled out vagueness provided by the Clayton Act the U.S. Government lost its share of antitrust cases early on. Often they were stymied when the Supreme Court decided to actually rule on laws as written rather than laws—and the Constitution—as the Federal Government might have liked them interpreted.

In a number of cases throughout the 1920s and 1930s the Court sided with companies who decided to fight the Federal Government over its anti-monopoly zeal. In many such cases the decision boiled down to the government's lack of a proof that the targeted activity was either a direct or substantial impact on _interstate_ commerce.

But the time and money of fighting the Federal Government was seldom a profitable one and most businesses lived in fear of pursuing the type of success in competition that the Feds could at a whim decide was detrimental to the market segment as a whole.

##  The Plan: Result

With this notion of antitrust we have accomplished more truly remarkable damage to this upstart—relatively speaking—nation who so grandly proclaimed the concept of individual freedoms.

By allowing individual citizens to form business enterprises for the pursuit of success, and then introducing retroactive and capricious regulations to limit that success, uncertainty as to the meaning of 'success', 'liberty' and 'freedom' have been raised.

Any bully or tyrant can impose harsh laws on those they control, or govern. But to be really successful at grinding away at the human spirit requires more than that. Activities allowed in the past must every once and awhile be punished with no advance warning, and in a manner which leaves only the vaguest of notions as to how to escape punishment in the future. Actions deemed acceptable in the past must every once and awhile be retroactively deemed unacceptable and merit punishment. Fear of 'crossing the line' must be real .... though defining that 'line' must be left to the whims of the punishers.

This arbitrary punishment must be meted out with little regard to uniformity. Achieving success should still be rewarded; but not to the point of becoming 'too successful'. Competition should still be encouraged; but not to the point where you become 'overly successful' regarding your competitors.

And what is the definition of these terms 'too successful' or 'overly successful? Why, if you have to ask then you probably are guilty and it's most likely too late to rectify your sins. Instead, you will be made to atone for them as a lesson to others and as a means of righting the wrongs inflicted on those whom wished for, but could not achieve, the goals you sought and won.

In a government _of the people_ there will always be that slippery slope whereby the liberties of the few _too successful_ are sacrificed at the jeering of the many _less successful_.

This assault on capitalism is a logical follow-up to our successful campaign to destroy the framework of this United States of America.

**********

# American Progressivism – 1901 to 1941

##  The Plan: Goal

People like to believe they are special .... which is for the most part true in that they are all unique. But many—usually very many—believe that they deserve more than what they have and owe any bad lot in life that comes to them from either just bad luck or the unjust advantage taken by that shadowy group known as 'others'.

Many false and/or weak leaders throughout man's history have taken advantage of this truism to rally their followers against these 'others'. Whether these 'others' are found among groups that look and act different or are guilty of the sin of being visibly more successful than the majority is usually immaterial. Such a leader (i.e. false and/or weak) needs a cause to lead people against, as opposed to a true/strong leader who tends to lead people towards a goal.

Combining these two facets of the human condition, a useful way to attract followers is to focus on the disparities between unique individuals and champion the cause of righting the imagined wrongs inflicted on the below-average folk by all those above-average ones. Lead the charge against the oppressors, real or imagined, of the downtrodden rather than towards increasing the opportunities for those downtrodden to better themselves.

Actively utilizing government to provide such aid fits nicely into our destructive goals for the United States of America. It is true that the Constitution does not mention this responsibility of government nor allows the Federal Government to engage in such taking of sides, but by this new century the precedence and framework for such meddling has been well laid.

Springing mainly from the mid-to-late 19th-century philosophical teachings of Karl Marx and Friedrich Engels, the concept of socialism was obviously appealing to the masses of people in countries where society was structured to keep power and wealth concentrated in the hands of the privileged ruling class. However, even with the blows dealt to the United States since its founding, there was never the same obstacles erected to keep its citizens down to the extent that existed in most societies. Sure, the obstacles to success were greater for some based on their beginning station in life, but overall there was more upward mobility possible in the United States than most other places in the world.

But for many unfortunates and underachievers the call for government-sanctioned activism towards greater social equality had much the effect as the Sirens of Greek mythology which lured hapless seafarers to their doom. And as we have pointed out on numerous occasions, the downfall of a democratic society is too often caused by the foolish 'will' of the majority to use government against the minority.

The stage has been set; the U.S. Government had, going into the 20th-century, powers far beyond anything envisioned at its founding. Its citizens now had several decades of experiencing federal incursions into their lives which would have astounded their forbearers.

##  Course of Events

###  The Last of the non-Progressive Presidents?

We will briefly here touch upon arguably the last of the non-Progressive presidents for purposes of contrast.

Grover Cleveland, former mayor of Buffalo and governor of New York, served as U.S. President from 1885 to 1889 and again from 1893 to 1897.

President Cleveland was the only Democratic President between 1860 and 1912. He won the popular vote in all three Presidential elections he ran in, but losing the electoral race in 1888. One would hope that his popularity was because of his forthright adherence to the U.S. Constitution and his staunch opposition to foreign imperialism, taxes, subsidies and inflationary policies.

In his first term, President Cleveland was known for leaving many Republicans in office rather than automatically replacing them with members of his own Party. He took on the previously-mentioned military pension boondoggles that had been going on since the War Between the States ended. He fought Republicans in the quests to raise even more protectionist tariffs. He championed limiting tariff levels to that necessary to cover federal outlays only, because the United States found itself running a surplus at that time. His Republican opponents wanted instead to increase those outlays by growing the Federal Government.

He vetoed more bills than any previous President, often accompanying the vetoes with written notes explaining that there was nothing to be found in the Constitution to justify the expenditures being sought.

In his most famous veto, the Texas Seed Bill, he refused to okay federal payments to drought-stricken Texas farmers. His accompanying note is indicative of his values.

"I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood."

In his second term, President Cleveland shortened the Panic of 1893 by backing efforts to return to a gold standard after a disastrous experiment with silver. Proponents of the silver 'currency' had intended to introduce inflation to make it easier for them to pay off their debts.

He used federal troops to break up the Pullman Strike of 1894 that threatened to paralyze interstate commerce—doing so not because of a desire to impose federal power but rather from his constitutional duty to keep interstate commerce free and open.

President Cleveland developed cancer early in his second term but for the most part hid that fact from the public. He was urged to run again in 1896 but declined.

He died in 1898.

###  Progressive Theory

In general, Progressive Theory can be said to be the concept of an evolving government. The popular notion in the late 19th century was that scientific progress was rapidly enhancing the lives of humankind and that it was naïve not to evolve all of society, including its governance, to take advantage of this scientific progress. Modern philosophers evoked social theories whereby all members of society prospered equally, spreading the benefits of progress among even those who didn't care to take advantage of the new opportunities and inventions. It was felt that the utopia of universal peace could be better realized when there was more equality among the peoples of the world.

In the United States such progressive ideas had populist appeal especially among citizens who saw in them the hope of combatting the excesses they saw, or imagined, in the rich and powerful. The poor saw in such ideas a way to escape poverty. Many intellectuals saw these new ideas as a means to bring harmony to a society they often saw as backward and violent. Quite a few businessmen were enamored of the modern concepts of efficiency and were convinced that what would increase workplace productivity must be applicable to the running of government.

Progressives believed avidly in the application of modern techniques. They were convinced that education was the key to a better society, that centralized control provided efficiency of resources and that direct democratic control was preferable to concentrated power. They also felt that governments should actively work to better the lives of its citizens and that, since a society shouldn't favor individual citizens to the exclusion of others, 'collective good' should take precedence over the 'individual good'.

The concept of federal regulations was envisioned as a means to get around the static concept of an old-fashioned 'dead' Constitution and evolve it as a 'living' Constitution. It wasn't always necessary to pass a law to mold society but instead agencies could be empowered to control through regulations—or persuasive coercion.

The concept of 'social justice' was envisioned as a means to get around the oft-outdated concept of black-and-white adherence to rules. It was felt, especially among many Christians, that preferential treatment of the poor and vulnerable was more important than equal treatment among everyone.

###  Political Beginnings

#### Theodore Roosevelt

In the 1900 presidential race, President William McKinley was running for re-election on the Republican ticket. His vice-president, Garret Hobart, had died in late 1899 so for the 1900 campaign he had to choose a new running mate.

Famous New York political boss Thomas Platt was so tired of trying to deal with a young governor by the name of Theodore Roosevelt that he was successful in convincing the GOP to put the charismatic young war-hero on the ticket.

The McKinley-Roosevelt ticket won in 1900. But less than a year into his second term, in September 1901, President McKinley was assassinated. Thus Theodore Roosevelt became the 26th President of the United States.

Theodore Roosevelt came from a wealthy New York City background. He attended Harvard, was by all reports very intelligent and loved high adventure. In 1898, after the outbreak of the Spanish-American War, Roosevelt formed a volunteer cavalry unit called the 'Rough Riders' and gained much notoriety in that conflict. Later that same year he was elected Governor of New York, where he was when he was picked for President McKinley's running mate barely a year later.

Extremely headstrong and sure of himself, President Roosevelt made no secret of the fact that he intended to do what he felt was right regardless of any perceived limitations imposed by the Constitution. He certainly seemed a strong advocate of both 'implied powers' and a very activist presidency.

One of the new president's earliest large-scale actions was his intense backing of the Panama Canal, even to the point of staging what many saw as a clear military coup to wrest control from Columbia of the territory which would form the Panama Canal Zone. His aggressive foreign policy was often referred to as the Big Stick Policy in reference to his famous quote of 'speak softly but carry a big stick'. The Monroe Doctrine of 1823 fame, declaring the U.S. right to intervene against encroachment by any European nation in the Americas, was forever modified by the Roosevelt Corollary which declared the right of the United States to intervene against any perceived flagrant and chronic wrongdoing by any existing Latin American nation.

There can be little doubt that President Roosevelt's foreign policy and military actions were aimed at expanding American influence abroad, a distinct departure from the traditional purpose of U.S. defense. His fame in that area was not so much the expansion under his presidency but the precedence it set for future presidents.

His trust-busting fame has already been discussed and the creation in 1903 of the Department of Commerce was proclaimed not so much as an attack on corporations but rather an endeavor for doing away with the evil inherent in them. It is not certain when he became so untrusting of big business but this became a hallmark of his years in office. In many ways it is ironic that the head Republican of his time had such a problem with big business, as it was largely the major policy accomplishment of the GOP throughout the proceeding century for American businesses growth to be accelerated through punishing tariffs on foreign goods.

He referred to his overall policies as the Square Deal and he genuinely seemed to be convinced that one of his greatest responsibilities was to balance out perceived disparities between business and labor, mainly organized labor. Even though a son of wealth himself, he seemed disdainful of acquired wealth in others. He was a vocal advocate for special taxes on the estates of the rich—after they died of course. Before it became constitutionally legal for Congress to levy taxes on income President Roosevelt began the push for a progressively-graduated income tax, whereby not only would incomes be taxed but the more income one made the higher would be the percentage of taxes collected from it.

Both the inheritance tax and the progressive income tax stemmed from his populists views that income earned by 'honest work' was far superior to that obtained from higher-level business pursuits, especially investments—which he sometimes equated with gambling.

President Roosevelt also felt it his responsibility to share his love of the outdoors with the country at large. He somehow convinced the Congress to allow him to commit millions of taxpayer dollars to purchase large tracts of land (approximately 200 million acres) to be managed as national parks by agencies of the Interior Department known as the National Park Service and the U.S. Forest Service. As with his overall view of business in general, he was convinced that land and timber management by a well-meaning benevolent government was much better than private management with profit in mind.

President Roosevelt issued more executive orders than all of his 25 predecessors combined, with the exception of his proclaimed hero President Lincoln. Executive orders are orders by the Chief Executive Officer on how his Executive Branch—responsible for enforcing laws—should interpret those laws. This would become a favorite tool of all future presidents as a means to expand on, in their own image, legislation passed by Congress—the only branch that is constitutionally authorized to pass laws.

Theodore Roosevelt declined to run for a third term in 1908, thought he later did run for the Presidency again in 1912 under a GOP spin-off party called the Progressive Party.

In 1910, he gave a speech in which many of his more socialistic views were showcased. Some samples follows.

"I stand for the square deal. But when I say that I am for the square deal, I mean not merely that I stand for fair play under the present rules of the game, but that I stand for having those rules changed so as to work for a more substantial equality of opportunity and of reward for equally good service...."

"The absence of effective state and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power...."

"We grudge no man a fortune which represents his own power and sagacity, when exercised with entire regard to the welfare of his fellows.... We grudge no man a fortune in civil life if it is honorably obtained and well used."

"It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community."

"This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary."

"No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar's worth of service rendered—not gambling in stocks, but service rendered."

"The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective—a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate."

#### William Howard Taft

President Roosevelt's Secretary of War, Howard Taft, became the 27th U.S. President in 1908. He was more or less hand-picked by the popular Roosevelt, who later regretted he had ever had anything to do with Taft.

Taft, a former federal judge, had wanted to be appointed to the Supreme Court and never seemed too enamored of the job of President. He in many ways outdid President Roosevelt in his trust-busting quest against American business, though he seldom engaged in the public and verbal berating of those businesses which Roosevelt was known for.

President Taft's foreign policy would generally become known as 'Dollar Diplomacy'. The goal was to increase U.S. influence by increasing American economic investments (grants, subsidies, etc) abroad to both increase influence and give a valid pretense for using military and diplomatic pressure to protect what he saw as American interests.

Of the most infamous domestic 'achievements' of the Taft Presidency was his passage of the 16th (income tax) and 17th (direct election of Senators) amendments.

President Taft wasn't especially liked by the GOP or the American people and he essentially had to wrest control of the GOP from former President Roosevelt in 1912. Roosevelt, who felt Taft was not being progressive enough, lost the support of many in the GOP because of his frequent disdainful treatment of the Supreme Court. The Supreme Court was supposed to rein in the Executive and Legislative branches when they strayed too far from the Constitution, but as we saw earlier Roosevelt didn't appreciate attempts to limit him doing whatever he felt was the right thing to do.

After a bitter deadlocked Republican primary—won by President Taft—Roosevelt formed the Progressive Party. Both men ended up losing the election.

William Taft, by the way, would be appointed Chief Justice of the Supreme Court in 1921.

####  Woodrow Wilson

The Republican Convention was not the only contentious one of 1912. The Democrats', after a bitterly-contested contest, nominated the highly-educated son of a Southern preacher. The Republican vote ended up being significantly split by the afore-mentioned Taft-Roosevelt feud and the Democratic nominee, Woodrow Wilson, won the general election with only 42% of the popular vote.

Woodrow Wilson had a Ph.D., in history and political science, from John Hopkins University. He taught and/or lectured at several universities in the 1890s and for most of the first decade of the 20th century was president of Princeton.

Early in his academic career he was a vocal proponent of the British parliamentary style of government, feeling that the separation of powers in the U.S. system allowed for too much indecisiveness and made it too hard to assign blame when policies really went bad. He became a proponent of a strong and vigorous presidency as being needed to assert control over this disarray.

Wilson ran for governor of New Jersey in 1910 and won. His reformist policies focused on wresting control from the established system of party bosses. By the start of the 1912 presidential campaign he was becoming very popular in the national media, his local constituency and in his native South.

Capitalizing on uneasiness towards the relatively far-left leanings of Roosevelt's Progressive Party and Eugene Deb's Socialist Party, Wilson garnered majorities in most of the southern states and a plurality in most of the others. Of the 48 states in the Union, the Wilson ticket carried 40. With 42% of the popular vote, he ended up with 80% of the electoral votes.

Though President Wilson had campaigned against Theodore Roosevelt's collectivist platform, he quickly began governing much like the earlier Progressive presidents.

The 16th Amendment, allowing Congress to impose direct non-proportionate taxes on income, was ratified less than a month before Wilson took office. Less than a year into his presidency he led Congress into passage of the Federal Reserve Act, which established the system of central banks known as the Federal Reserve.

He was tough on perceived monopolistic business practices himself and ushered in the overly-powerful (and vague) Clayton Antitrust Act.

True to his southern roots he did fight for and win a reversal of the high-tariff policies that the Republicans had championed ever since their Party beginnings in the 1850s. But rather than scale back the Federal Government along with those tariffs he ramped up federal expenditures and made up for the difference by rapid increases in the new Federal Income Tax. For purposes of enforcing this increased taxation he established the Internal Revenue Service.

In the first 3 years of this new graduated income tax, rates ranged from 1% (lowest bracket) to 7% (upper bracket). In 1916 all rates effectively doubled and with the onset of war in 1917 the top bracket quadrupled to over 65%. In 1918 more increases were imposed, this time mainly on the lower brackets. In the last two years of this administration rates ranged from 4% (lowest bracket) to 73% (upper bracket).

President Wilson saw the establishment of federally-managed agricultural extension agents and federally-backed loan programs for farmers through the Federal Farm Loan Act.

It is ironic that the first southerner to be elected U.S. President since before 1860 presided over ratification of the 17th Amendment (direct election of Senators), legislatively destroying states' rights.

President Wilson did veto the bill for the 18th Amendment, that being prohibition of the manufacture, transportation and sale of alcohol. This seemed not to be because of the obvious curtailment of personal liberties but because the bill came to him just after the Great War and he was mainly concerned with the impact of such a ban on the armed forces during any future wars. Prohibition was in reality the merging of progressive theories of government enforcement of 'social virtues' with the evangelical desires to rid society of sin.

He supported, with some early trepidation, the 19th Amendment (woman's right to vote).

One of President Wilson's main roles in his first term was to keep the United States out of the Great War, which began in 1914. That conflict, later to be known as the First World War, began as a convoluted series of national entanglements of the great European powers (Germany, Great Britain, France, Russia, Austria, etc) that rapidly spread across the globe. Though American public sentiment generally favored Great Britain and France there were no clear reasons why the United States should favor any of the sides in the conflict. The shipment of goods from America greatly supported the British and French, so Germany became increasingly willing to block naval shipping from America, sometimes resorting to violence.

In the 1916 elections President Wilson campaigned on his success in keeping America out of the war, but he did begin more vocally to warn Germany that its actions were making such restraint difficult. The Democrats narrowly carried the election, one of the closest in U.S. history, and President Wilson began his second term in the face of increasing German U-boat activity against American shipping and overt diplomatic/military cooperation between Germany and Mexico.

In April of 1917 he asked the Congress to declare war against Germany and by extension her Central Powers allies—Austria-Hungary, the Ottoman Empire and Bulgaria. The United States entered the war as a declared associate ally of the Entente Powers—Great Britain, France, Russia, Serbia, and others—and rapidly began conscripting men into its Army. Some 3 million Americans were drafted between June 1917 and November 1918.

President Wilson largely left conduct of the war to his generals, mainly American Expeditionary Force (AEF) commander John J. Pershing. General Pershing angered some Entente commanders by refusing to commit American forces as replacements for their forces and instead keeping his forces intact as relatively self-contained American units.

What President Wilson did do is impose severe curtailments on American freedoms. Justifying these as essential to the war effort, he pushed through the Espionage Act of 1917 and the Sedition Act of 1918.

The Espionage Act made it a crime to be involved in such activities as aid to America's enemies or hampering military recruitment. In 1919, ruling on a conviction under that act, the Supreme Court asserted that in times of war certain forms of speech posed a clear and present danger and as such were not protected under the First Amendment.

The Sedition Act, actually just amendments to the Espionage Act, was far more onerous. It made it a crime to even use words that could be construed as disloyal, profane, contentious or abusive towards the U.S. Government, its flag or it's military as long as the country was at war.

In all approximately one thousand individuals were convicted under these statutes in the roughly eighteen months that the United States was involved in the war. And this was in a democratic nation who for over two years strove to maintain neutrality in the conflict. Many newspapers around the country, while not outright censored, faced federal pressures—financial and otherwise—to curtail speech found offensive by the government.

President Wilson also believed that he could broker a peace between the warring parties and that if they would all just accept his progressive social and national aims then the war could be ended well for all sides. In a plan referred to as the Fourteen Points, he laid out to Congress in January of 1918 what he felt would be fair conditions for an end to the war and the basis for a lasting peace. Examples of these Points were no more secret treaties/arrangements, freedom of the seas, free/equal European trade, recognition of pre-war political boundaries while allowing for greater ethnic autonomy and the establishment of a League of Nations as a means of mediating disputes and avoiding conflicts.

As pointed out, however, the war had begun more as a series of secret, convoluted national treaties than any explicit aims of aggression. These Fourteen Points laid out by American President Wilson were really the only articulated aims having to do with why the war—chiefly European—was being fought in the first place or what needed to be done for it to end.

The other Entente Powers did not much appreciate an American President telling them how they should end a conflict that had devastated mostly European territory for the last four years. England especially wanted to come out of the war as undisputed master of the seas in and around Europe, while France insisted on massive reparations from Germany.

After a near-successful, but ultimately disastrous, offensive campaign in 1918 Germany and others of the Central Powers began overtures as to an armistice. With Wilson's Fourteen Points as the only real cards on the negotiating table they saw this as an acceptable way to end the hostilities. Unfortunately, none of the Entente leaders other than President Wilson felt the slightest need to honor any of his Fourteen Points.

Grasping at what they hoped could be the least painful way out of the madness, the Central Powers began that Fall to make separate peace overtures. This piecemeal deal-making accelerated until finally Germany itself was politically transformed by a coup and a few days later signed a cease-fire—on November 11, 1918. A formal treaty did not come about until July of 1919. This formality was called the Treaty of Versailles, though various participants had signed separate smaller treaties as well.

President Wilson, facing political opposition both at home and from former allies abroad, found his Fourteen Points largely ignored in Versailles. The Central Powers had largely disintegrated into political upheaval and the Entente Powers pressed upon them totally unreasonable demands in exchange for not resuming the destruction of was left of their devastated countries.

Germany bore the brunt of the Entente demands at Versailles. In the treaty Germany was made to acknowledge full responsibility for the war, pay reparations far beyond anything conceivably possible for it to be able to do, keep its military machine at relatively nonexistent levels and give up huge chunks of territory to neighboring countries.

The United States Congress wouldn't even sign the Treaty of Versailles, though whether because of conflicts with President Wilson or acknowledgement that the Treaty was an impossible burden for Germany was not clear.

Nor would it allow the United States to join the new League of Nations, one of the few of Wilson's Fourteen Points which were adapted by the Europeans. Congress felt that after a war largely fought because of interlocking national treaties and alliances the formation of an organization that would embody one big alliance was a good way to end up in another war.

In truth it was not the short-lived League of Nations but the horrendous penalties levied on the German people that would largely lead to the next world-wide wars—in 1939.

President Wilson tried to drum up support for U.S. involvement in the League of Nations for much of the rest of his presidency. In the process, he seemingly over-extended himself and suffered a stroke in the fall of 1919. He was incapacitated for most of the remainder of his term in office.

####  Harding-Coolidge-Hoover

The next 12 years saw a series of Republican presidents who, it can be said, were not relative Progressives when compared to the previous three.

Warning Harding was inaugurated in March of 1921 and died in office in August of 1923.

The most significant event of his presidency was the economic depression of 1920-21. The causes of this seemed to stem mainly from returning soldiers after the Great War and aftershocks of the new national monetary policies of the Federal Reserve. Following the November 1918 armistice the U.S. armed forces rapidly returned over two million soldiers to the labor market, where wages fell drastically—due to increased labor supply—and a deflationary price spiral resulted. At the same time, the still-young Federal Reserve was rather new at manipulating bank interest rates for its new fiat money (i.e. money not fully backed by physical assets). In any case, the depression was fairly severe—unemployment rates around 10% and stocks plummeting nearly 50%—and lasted from January 1920 to July of 1921.

President Harding's time in office was marred by numerous political scandals, most involving financial misappropriations. He did slightly cut income tax rates, whose top brackets were after less than a dozen years already approaching 73%. He brought all the rates down by roughly 20%.

After Harding's death in August 1923 his Vice-President was sworn in as the 30th President of the United States.

President Calvin Coolidge had been a fairly activist governor in Massachusetts but proved a champion of limited Federal Government while in the oval office. With a lift from the recovery starting in 1922, the term Roaring Twenties best described the country.

If President Coolidge erred in federal activism, it was probably in being a bit too pro-business. He allowed his Secretary of Commerce, Herbert Hoover, to promote private business growth more than some thought proper or wise for the Federal Government to be doing. He oversaw dramatic reductions in income tax rates, roughly 50% across the board, while drastically reducing the number of citizens who had to pay federal taxes at all. At the same time, he retired nearly 25% of the nation's debt while cutting the size of the Federal Government.

His policies tended to shift government services from federal to state governments and thus the power of state governments generally expanded during his term in office. The economy benefited from all the money citizens were allowed to keep—as opposed to being confiscated via income taxes. However, the practice of reducing the tax base would backfire dramatically as Americans of future generations would began feeling justified in letting a small minority of 'the wealthy' pay the vast bulk of federal taxes to support the entire country.

In 1928 President Coolidge declined to run for another term, which he likely would have won. He gave tepid endorsement to Herbert Hoover as the Republican nominee.

President Herbert Hoover was elected in 1928 as the 31st U.S. President. An engineer in earlier days, he was a great believer in modernization and efficiency. He also wanted a return to more of the Progressive theories of Roosevelt and Wilson, especially regarding the benefits of increased federal regulatory powers and federal encouragement of national service through volunteerism. His expansions of civil service and national land protections were reminiscent of Theodore Roosevelt's.

Unluckily for President Hoover, the Roaring Twenties came to a crash in the fall of 1929. This economic catastrophe became known as the Great Depression.

Ignoring advice to leave the crisis to right itself out—as largely happened in 1921—Hoover tried to foster public-private cooperation to stem job loses. He realized the dangers in direct public assistance, especially financed through incurred debt, and generally avoided such actions. He supported the Smoot-Hawley Act of 1930 which mandated sharply higher tariffs on foreign goods, but that action triggered a world-wide retaliatory increase in tariffs on American goods. Over the next two years his administration tried pouring federal funds into public works programs, though nothing like would be seen by the next administration, and encouraging large banks to voluntarily help keep smaller banks afloat.

By 1932 the unemployment rate was near 25% and millions were homeless. The Federal Home Loan Act of 1932 was enacted as the first federal foray into a policy of influencing Americans to buy homes.

To pay for this government intervention the Congress and President Hoover agreed that many of the taxes cuts during the Roaring Twenties needed to be reinstated. This did not help the business climate, chiefly in the area of job creation.

In 1928 graduated income tax rates ranged from 1.5% (lowest bracket) to 25% (upper bracket). In 1932 rates were raised dramatically. The lowest bracket jumped to 4% while the upper bracket ballooned back to 63%.

#### Franklin D Roosevelt

1933 - 1941

The Crash of 1929 and its aftereffects virtually assured that President Hoover would not get re-elected. The eventual Democratic nominee, Franklin Roosevelt, was the popular governor of New York. A distant cousin of President Theodore Roosevelt, Franklin had been involved with government affairs in the Great War as Assistant Secretary of the Navy. As the result of an illness contracted in 1921 he was paralyzed from the waist down, but refused to let his condition limit him.

In November of 1932, Franklin Roosevelt handily beat out President Hoover to become the 32nd president of the United States.

President Roosevelt faced huge difficulties from his first day in office. At that time, March of 1933, unemployment stood at over 25% and the Gross Domestic Product (GDP) had fallen some 50% since 1929. Over half the banks in the country had shut down.

From the start he made it clear to a troubled citizenry that he felt the main problem in the country was the financial institutions, banks and in many ways the self-interest motives of capitalism. It was competitive forces run amok, according to him, that were responsible for low wages and unemployment because businesses wanted to lower product costs to get advantages over their competition.

His famous words at that time to the nation were " _the only thing we have to fear is fear itself_ ". He called his campaign to bring recovery to the United States the New Deal, and few in Congress defied him as the nation was in such dire straits they dared not oppose a president who seemed confident in his abilities to set things right.

One of the President's first acts was to exercise control over the form in which Americans held their wealth. To better allow the Federal Reserve to influence inflation of that wealth, and thus counter severe on-going price deflation, President Roosevelt in April of 1933 issued an Executive Order requiring all citizens to surrender privately held gold to the Federal Government for a fixed compensation. Any American citizen not turning in their gold, exempting small holdings and special collections, by May 1st would be prosecuted under the Trading with the Enemy Act of 1917. Most citizens with substantial gold holdings transferred their gold outside the country because of this, but the precedent early on was established that the new president meant to have his way. However, this large transfer of real wealth from the United States probably did far more harm than any good it was intended to do.

Banks in the 1920s often made overly risky investments with depositor's money and early in 1933 President Roosevelt sought and obtained from Congress the Glass-Steagall Act which chiefly separated financial institutions into commercial and investment banks and also created the Federal Deposit Insurance Corporation (FDIC) to renew confidence in commercial banking. The idea was that commercial banks should earn their money making loans, as they had traditionally done, rather than using depositor money to engage in riskier investments. Some of the inflated prices on Wall Street, which contributed to the 1929 Crash, were directly tied to depositor assets being used by banks to 'play the market'. Glass-Steagall would ironically turn out to be maybe the most beneficial of all Roosevelt-era legislation, resulting in the enforcement of conservative banking principles for decades to come—till messed with by so-called 'Conservatives' later in 1999.

President Roosevelt began many public works programs meant to get Americans back to work in various ways. Among these were the Civilian Conservation Corp and the Public Works Administration. There is no doubt that these programs did provide work for some Americans, though whether the jobs 'created' were ever worth the costs exacted from the American taxpayer was an area of debate.

To force private industry into actions he deemed preferable various regulatory agencies of heretofore unimagined mandates and powers were formed. Chief among these were the several oversight agencies of the National Industrial Recovery Act (NIRA), which aimed to coordinate prices and activities—essentially forming cartels—among businesses. The word emergency was used a lot in Washington, mostly to justify actions such as how monopolies evolved from evil to necessary in the span of such a few short years.

To pay for all these federal programs the Roosevelt administration began distinguishing between a normal budget and an emergency budget. The normal budget was kept fairly balanced by federal taxes but the emergency budget was mainly financed through U.S. debt obligations in the form of new bonds. The reason behind this slight-of-hand was to hide large and controversial Federal outlays as much as possible.

To address the security issues of millions of Americans living through the troubled times, the administration pushed for and obtained the Social Security Act 1935 to provide aid for the elderly, infirm and sick. A new tax on income was added in addition to the existing income tax to fund this program, such that current workers would in effect be forced to forever subsidize the living expenses of current retirees. As will be examined later, President Roosevelt could never have imagined the expansion in government power that his relatively small social program spawned over the next half century.

Also in 1935, the National Labor Relations Act was whole-heartedly signed by President Roosevelt. In keeping with his conviction that prices and wages needed to be kept high to bolster economic growth, he had asked Congress for legislation to strengthen the power of organized labor. One side-effect of the Progressive zeal towards pushing antitrust rules was that courts too often had tended to recognize that organized labor was actually little more than large trusts themselves. Thus the growth of organized labor's power was often curtailed, or at least kept limited. With the Labor Relations Act unions were essentially exempted from many applicable antitrust rules and allowed much more power. This resulted in more collective bargaining for even higher wages.

From 1933 till 1936 GDP increased by over 30%, accompanied by a 25% increase in Federal Government spending. The national debt increased by some 20%. But unemployment did decrease from 25% to under 15%.

Variously criticized as a Marxist, communist or fascist by many conservative Americans, the vast majority of citizens hailed President Roosevelt as a hero of the working class. He was easily re-elected in 1936. A large factor in this was the overwhelming support of labor unions.

Little was introduced in the form of new programs in the second term when measured relative to President Roosevelt's hectic first term. Instead, the Supreme Court held many of his programs to be unconstitutional. In 1937 there arose quite an uproar, even from within the President's own political party, when he proposed appointing new judges to offset any judges he deemed too old; thus packing the Court with more 'modern' appointments that would see things his way. President Roosevelt did not get his way in that matter.

Unemployment did rise again in 1937 and 1938 but not to the levels seen in the earlier years of the decade. A large factor in this was the huge number of federal regulations imposed during the depths of the Depression that resulted in labor costs rising faster than demand; the result being job layoffs. This unemployment resurgence leveled off in 1939 and 1940 at around 15%.

So by 1940 the country was more than 10 years into the worst economic Depression in U.S. history. Unemployment was still historically high—but relatively low compared to the early 1930s. The people with jobs were paid relatively well—especially compared to those with no jobs. Businesses were getting relatively high prices for their products—though the unemployed couldn't buy anything and American products were often too expensive for successful export. Smoot-Hawley tariffs were helping domestic prices to remain high but foreign retaliation was hurting American exports. Labor unions were aided by the National Labor Relations Act in 'bargaining' for higher wages, adding to price pressures and depressing much thought of greater employment numbers. The National Industrial Recovery Act was giving federal encouragement to the formation of business cartels for the purpose of reducing competition and keeping prices high.

But compared to the period 1929-1935 things were going well.

1941 – 1945 (World War II)

President Roosevelt decided to run for an unprecedented third consecutive term in 1940. Rather than actively campaign for the nomination, his campaign arranged 'draft Roosevelt' demonstrations at the Democratic Convention and he overwhelmingly was 'drafted'. Especially in the light of developing tensions around the world, he was again easily re-elected.

World economic unrest and the severe penalties imposed on the German people after the Great War led to the ascendency of Adolph Hitler and the Nazi Party during Franklin Roosevelt's first two terms. That same economic unrest coupled with world preoccupation with Nazi Germany gave cover for a resource-starved, expansionist Japan to attempt a takeover of the Far East. European appeasement of German territorial 'acquisitions' and demands in 1938 along with President Roosevelt's pledge to not be part of a stop-Hitler bloc further emboldened Adolf Hitler. Security arrangements between Germany and the Soviet Union were the last encouragements Hitler needed before actively launching a conquest of Western Europe.

An aside regarding the Soviet Union is in order, as it was by far the largest and most populous European power. It was formed in 1922 following the Russian Revolution of 1917 and that country's successful exploitation of Eastern Europe's post-War turmoil. Based on the socialist philosophy of Karl Marx, the Soviet Union was ruled as ruthlessly—or more so—as was Germany under Adolph Hitler. The Soviet's called their interpretation of Marx's 'idyllic' socialist government Communism. Germany, under Hitler, opposed the idea of Communism and in the early 1930s formed a socialist government coalition called National Socialism. While Germany had what would later be thought of as a monster leading it in the form of Adolph Hitler, the Soviet Union's monster was its General Secretary—Joseph Stalin. Both men were ruthless authoritarian dictators and mass murderers.

World War II began officially in Sept of 1939 with the invasion of Poland. After a seemingly endless string of victories essentially conquering all of Western Europe, except most notably Britain, Hitler reneged on his 'treaty' with the Soviet Union in early 1941 and invaded Russia. The United States increasingly provided material aid to the Allied Powers—primarily England, the Soviet Union and China—during 1940 and 1941, and became a formal participant on Dec 7th, 1941 when the Japanese attacked the U.S. Pacific Fleet at Pearl Harbor.

Within months after the U.S. declaration of war, President Roosevelt signed an executive order allowing for the Secretary of War to designate any areas of the country as military areas off limits to whomever he deemed a security risk. What followed was the forced internment of American citizens of Japanese descent; the majority of whom had been born in the United States. More than 120,000 such citizens were evicted from their homes and relocated to guarded camps operated by the Federal Government. American citizens of German and Italian ethnicity were similarly interred, though their numbers were only around 15,000.

President Roosevelt was far more involved in strategic war-planning than President Wilson had been in the Great War—now referred to as World War I. With hostilities taking place world-wide, the focus was to contain Japan while concentrating chiefly on Germany and the European theater of operations. The main Allied strategic differences in Europe revolved around the British, who favored operations against southern Europe, the Americans, who favored attacking the Germans in France across the English Channel, and the Soviet Union, who just wanted the British and Americans to do anything to open a legitimate Western Front to lessen the German pressure against Russia.

Britain and America did concentrate on northern Africa and southern Europe for more than two years while letting the Soviets hold off the bulk of the German Army as best they could. In secret, however, they were preparing for the massive cross-Channel invasion of France that was needed to establish an effective Western Front against Germany. The military might of Germany was such that the only realistic chance of Allied success in the West was for the Soviets to continue to hold out in the East—in what had become the largest and most intensive fighting the world had ever known. In many ways Hitler's decision in 1941 to turn on its loose alliance with the Soviet Union was proving the undoing of an all-but-certain German European conquest.

In June 1944 American, British and Canadian forces crossed the English Channel at Normandy, France. At the same time Soviet forces launched a massive campaign on the Eastern Front. By the winter German forces were rapidly evacuating both Europe and Russia and consolidating back around Germany.

Because of his popularity and the need for wartime continuity, Democratic leaders persuaded President Roosevelt to run for a fourth term in 1944 even though it was widely known that he was unlikely to live another four years. His health had dramatically gotten worse since 1940 and an important consideration seemed to be who to pair with him as Vice-President. It was finally decided that the current Vice-President, Henry Wallace, was too unlikely to stand up to the Soviets after the by-then certain Allied victory. President Roosevelt jettisoned Wallace from the ticket and chose a little-known Senator from Missouri by the name of Harry Truman.

The Roosevelt-Truman ticket won.

Early in 1945 Roosevelt, who had tended initially to trust Soviet leader Joseph Stalin, began more and more to realize that the man was every bit the tyrant that Adolph Hitler was and that post-war relations would have to focus on containing the spread of Soviet domination of Europe.

President Franklin died of a massive cerebral hemorrhage on 12 April, 1945. Less than a month later Germany surrendered to the Allies.

Allied military might swung to the opposite side of the world to face Japan. But by that time, however, U.S. Navy and Marine forces had all but destroyed the Japanese military machine and largely had it confined to the Japanese home islands. It was decided, however, that it was not enough to bottle up the Japanese on their islands and let them decide between surrender and starvation.

In an executive order, President Truman—in his role as U.S. Commander in Chief—authorized the use of newly-developed atomic weapons against Japan to force their surrender. On August 6 a single atomic bomb was detonated over the Japanese city of Hiroshima. Approximately 75,000 people died directly as a result while another 100,000 died from complications in the months following the attack. On August 9 another atomic bomb was detonated over the city of Nagasaki. The deaths in this somewhat smaller city were relatively as dramatic.

The Japanese Emperor announced to Japan and to the Allies on August 14th his intentions to surrender. The fact that in August massive numbers of Soviet forces had begun attacking Japanese forces in eastern Asia may have scared the Japanese nearly as much as the atomic bombs.

Formal Japanese surrender was on the U.S.S. Missouri in Tokyo Bay. The date was September 2nd, 1945.

Between 1942 and 1945, U.S. GDP grew rapidly as the vast bulk of production went to supporting the war effort. With millions of young men 'employed' in the military, unemployment at home plummeted to less than 2% and millions of women entered the workforce to take up the slack in the wartime labor force. The national debt, as measured as a percentage of GDP, skyrocketed from below 50% to roughly 120% as the nation's priority was clearly winning the war as compared to saving money.

During the 1930s federal income tax rates had remained fairly constant. This changed dramatically with the need to fund the war effort. Between 1940 and 1944 the lowest tax bracket jumped from 4% to 23% while the upper bracket jumped from 79% to 94%.

The massive debt run up as a result of World War II was reduced over the next decade back to its 1941 level, around 50% of GDP. Income tax rates would stay roughly the same till the 1960s, reflecting the realization that a new national priority was to be paying down the debt run up during the war.

###  Later Conflicts/Problems

The rapid expansion of federal activism in the 20th century had profound consequences regarding political and economic philosophy, constitutional interpretations and precedence for the future of the United States.

As the Federal Government assumed more of a role in effecting the day-to-day lives of American citizens the relative importance of state governments diminished. The concept of the United States as a Republic seemed to be diminishing even more than it had with the dramatic drops under the leadership of the Republican Party in the last half of the 19th century. It was true that states were still having to be responsive to their citizens but as the relative importance of federal power increased those same states were often subjected to increasingly invasive actions by federal mandates. Sometimes such mandates came with federal money attached but too often they were at least partially unfunded, essentially becoming a hidden federal tax that citizens were forced to pay as state taxes.

The unlimited taxation power Congress obtained via the 16th Amendment opened the gates of federal spending to support the broadest of interpretations regarding the General Welfare and Interstate Commerce clauses of the Constitution. As was seen with Woodrow Wilson and Franklin Roosevelt, the temptation to compromise personal liberties for the security of collectivist federal social programs was adopted as firmly by the Democratic Party as it had been introduced by the Republicans.

This unlimited spending power gave rise to new economic theories as well. John Maynard Keynes was a British economist who strongly supported the move away from a specie (commodity backed) currency to a fiat (government-promise backed) one. A primary reason to have a fiat currency is to make it easier for the issuing government to engage in spending money without necessarily having to collect it in taxes before-hand. Keynes advocated increased government spending during economic cycles of low societal demand as a means of countering that cycle and increasing the health of the economy. The government spending was claimed to have a multiplier effect such that the stimulative value on the economy was greater than the cost of the stimulus. Since the stimulus cost was actually born by society the net effect on society was claimed to be positive.

Keynesian economics had limited influence on the United States efforts to climb out of the Great Depression, though President Roosevelt tried many programs hoping to provide such stimulation. The greatest impact of Keynesian theory, though, was to come in the latter half of the 20th century by the successors to the Progressive mantle.

The impact of fighting imagined monopolies among private business concerns has already been discussed. However, a paradox began to present itself as the Federal Government seemed to support real monopolies when it was in its best interests to do so. As already pointed out, President Roosevelt's National Industrial Recovery Act (NIRA) was expressly aimed at organizing cartels of private business to do the bidding of the Federal Government. That the Federal Government's bidding was supposed to be bettering the collective national economy does not change the fact that it in effect violated existing anti-trust laws.

Actually it was worse than that. What Congress had done with the NIRA was to allow industries to decide how to form these cartels and then have President Roosevelt approve them as 'codes of fair conduct' via executive order.

Some examples are in order.

In 1934, the president approved the Live Poultry Code for the New York City area. The poultry industry claimed that in the nation's largest poultry market, New York City, they needed to avoid uncertainties introduced because of uncontrolled business practices. Pursuant to that it was deemed necessary to standardize on workweek hours, minimum pay and other labor-related factors.

Though the regulation of chicken slaughter had never before been assumed to be a federal concern, there was a loose constitutional basis for regulating interstate commerce regarding those chickens—whether dead or alive.

A.L.A. Schechter Poultry Corporation and Schechter Live Poultry Market were two corporations, owned by brothers, who bought live chickens raised in New York and sold dead chickens out of their Brooklyn area slaughterhouses. After being convicted of various infringements of the Code, they appealed those convictions to an Appeals Court which upheld the majority of the convictions. In two cases the Appeals Court did hold that Congress had exceeded its authority, however, which prompted the Federal Government to appeal the decision to the Supreme Court. The Schechter brothers also appealed their convictions.

In 1935 the U.S. Supreme Court heard the case of _Schechter Poultry Corp. v. United States_. There was clearly no interstate commerce involved, but the Federal Government argued to the Court that desperate times called for desperate measures.

Chief Justice Oliver Wendell Holmes delivered the majority opinion in the ruling, stating that " _extraordinary conditions do not create or enlarge constitutional power_ ".

While the Court would grant some validity to an indirect interstate connection—by buying Schechter chickens costumers were not buying out-of-state chickens—they did not see any significant impact in this case.

Their ruling was that Congress could not use this 'law' to expand upon the Commerce Clause of the United States Constitution.

In 1936 the Supreme Court again entered the fray regarding the Commerce Clause.

In 1935 the Bituminous Coal Conservation Act, another NIRA offshoot, was enacted to stabilize the mining industry. A cartel of miners, producers and consumers was authorized and a commission was established to regulate labor costs as well as minimum and maximum prices for the cartel. To force 'voluntary' participation in the cartel, a series of government-authorized excise taxes were established, with cartel members getting rebates covering the vast majority of those taxes.

Stockholders of the Carter Coal Company, especially the primary shareholder James Carter, brought a lawsuit challenging the government's ability to regulate an industry in this manner. The case would thus be called _Carter v. Carter Coal Company_.

In 1936 the Court found that the purpose of the Act was not to regulate interstate commerce but rather to regulate the mining industry regardless of whether the product was to be involved in interstate commerce or not. If local companies were acting in a manner that violated local laws then local governments should deal with that. The Federal Government had no jurisdiction in the matter either before the coal was transported between states or after such transportation had taken place.

In the Court's opinion it was invalid for the Federal Government to assume that local problems could not be controlled by the states and use that as an excuse to claim powers for themselves that rightly belonged to those states.

Another example of the Supreme Court rulings in regards 'Progressive' federal activism was in the matter of contract law.

Consider what was meant to be a bedrock foundation of 'rule of law'—the legal contract. The Contract Clause states, in Article 1 Section 10, that:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; 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, or grant any Title of Nobility."

In 1895 the state of New York, in an attempt to regulate what it saw as bad and possibly unsanitary working conditions, passed an ordinance restricting the number of hours that bakers could work per week. By 1901 a baker named Lochner had been convicted twice for requiring and/or permitting employees to work longer than the limit of 60 hours per week. He brought suit against the state, asserting that it had no right to deprive him of property—his money—without due process of law. The right to enter into a free contract was supposedly a right that the law is supposed to uphold. But a New York appellate court ruled that his right to free contract was subordinate to the 'police power' of the state.

In 1905 the case, _Lochner v New York_ , was heard by the United States Supreme Court. Essentially the question was whether the New York law was enough of an exercise of 'police power' to justify taking away the constitutionally-protected individual right to expect freely-entered contracts to be binding.

Lochner won.

By way of contrast, in 1934 the Supreme Court upheld a piece of New Deal legislation that explicitly abrogated legal contracts.

By federal decree in 1933 a national emergency was declared and mortgage holders were forbidden from finalizing foreclose on mortgages during the emergency. Though implemented differently in different states, a Minnesota Mortgage Moratorium Law stated that the emergency period was to last until 1935 and that mortgage holders could not foreclose on mortgages during that period. The Home Building and Loan Association brought suit before a Minnesota District Court and lost its case asserting that the law violated the Contracts Clause of the U.S. Constitution.

The United States Supreme Court, in _Home Building and Loan Association v Blaisdell_ , upheld the lower court ruling and stated that legally-binding contracts between private parties could by broken by a government for 'emergency purposes' as part of the government's 'valid police purpose'.

Who decides what an emergency purpose is? The same government that decides which 'emergency' falls within its 'valid police purposes'. What happens to the income the mortgage holder is forced to forego because the state says he has to let someone continue to use his property for free?

Apparently it is supposed to be contributed to the cause of the 'public good'.

As mentioned previously, three remarkable women who lived through this Progressive era all ended up, coincidentally, releasing scathing novels of this moral battle between the concept of Liberty and Progressivism. All three (Isabel Paterson, Rose Wilder Lane and Ayn Rand) published works that defied contemporary critics and became instant, and classic, masterpieces. The titles were The God of the Machine, The Discovery of Freedom and The Fountainhead. All three works sought to explain, or re-explain, the meaning of liberty to an American populace who seemed to have forgotten the concept.

The causes for the Great Depression, and why it lasted at least 10 years longer than was historically the case for a normal cyclical economic recession, will likely never be known. There is however a case to be made that it should be known as the Progressive Depression.

Such policies may have caused that Depression and certainly prolonged it far beyond any reasonable period of time.

Normally, a combination of events occur which negatively effects capital allocations in the economy. In the late 1920s it may well have been a combination of tariffs wars—initiated by the United States—and widespread European adoption of fiat currency leading to large migrations of hard assets (gold, etc) to the United States. These could explain the unsustainable stock market bubbles going into 1929. No doubt there were other contributing factors.

In either case most, if not all, were acts not of the marketplace but of government decrees.

And to correct this, market forces were not allowed to work.

Normally, reduced economic activity leads to lower employment and/or lower wages and lower prices. Consumption stays relatively level for a time—usually a year or so—until productivity and demand increase due primarily to the lower prices. This increased demand results in higher employment and/or higher wages which support higher prices. Profits increase and the normal cycle of a growing economy result.

During the Progressive Depression the Federal Government's answer to reduced economic activity was to try and hold prices and wages steady, resulting in labor cuts as the only means for businesses to survive.

The Federal answer to massive unemployment was to massively increase government funding of work projects of various kinds; as if government spending decisions were somehow more effective than the decisions of the private sector.

The Federal answer to antitrust rules applied to businesses was to give government endorsement to monopolistic practices that they felt were needed.

The Federal answer to antitrust rules applied to unions was to declare that such rules didn't apply to unions.

The Federal answer to the binding legality of contracts was that such contracts should be broken if the government arbitrarily decides such contracts are no longer good for the nation as a whole.

The Federal answer to obstacles such as the Constitution of the United States was to try and pack the Supreme Court to change the interpretations of such contracts.

##  The Plan: Result

What a magnificent start to the 20th century!

Right off the bat Teddy Roosevelt comes riding from popular hero-worship status and grabs the reign of the American socialist movement. It does appear as if the Republican Party was caught a little unawares of his socialist agenda but saved a little face by changing the name from Socialism to Progressivism.

Progressivism, it seems, is a word with much more positive connation than Socialism. That there was never a clear difference between the two matters little, as the great multitudes of the American populace tended to claim allegiance to passing theories which they felt provided them short-term personal gain rather than to those they actually internalized. That may sound harsh but the same can be said for the vast majority of humans on this Earth. For citizens of a country that declares that it is the chief bastion of individual freedom in the world, however, there deserves a more pointed irony to their proclamation of ideals that most embrace in name only.

When speaking of ironies it must be pointed out that this notion of progressive taxation was pitched as a vehicle for ensuring fairness. Fairness to thieves has always and will always be deemed as the proposition that they should get away with more and better theft.

Progressive taxation has as its major goal the redistribution of wealth from those with 'more wealth' to those with 'less wealth', thus ensuring equality of condition. This is only a means to the ends regarding Progressivism/Socialism. Thus, by embracing the Progressive philosophy of taxation the people of the United States officially cut all ties with that tried but discarded concept begun by their 18th century ancestors (i.e. fair taxation).

The reason we focus on progressive taxation has been explained before but as way of review we will reiterate it here.

Few, if any, Progressive agenda items would have the support of society if the members of that society were all required to fund that agenda. Since Progressivism is about achieving greater equality of condition it by definition means shifting wealth from upper-level wealth holders to lower-level wealth holders.

Taxation is the means by which governments confiscate wealth to fund their activities. Progressive governments promote activities which promote Progressivism, which means shifting wealth as described above. For such a government to shift wealth in this manner depends on increasing confiscation of wealth from the upper-level entities and decreasing confiscation from lower-levels.

Everything depended on the 16th Amendment and its declaration that federal taxation need not be proportional to population. This allowed thieves and pimps to in effect take control as they could always convince the week-willed, morally-bankrupt and/or fairy-tale-believers that it was only fair to 'take from the rich and give to the poor'.

It was not enough that making more money meant paying more in taxes, which is the case if all citizens are confiscated from at the same rate. That would just be a natural consequence of mathematics.

No—much better in the socialist mindset to confiscate at higher rates for the wealthy and thus twist the mathematics towards punishment for the sin of actually possessing time valued more highly than their neighbors. Since every person has a fixed 24 hours per day, it follows that if one person receives $100 for compensation in exchange for a day's worth of time then his time is valued more than a person only receiving $50 for the same time period. With a goal of equality of condition this is a socially unacceptable situation.

A limitation to pure Progressive taxation is that it did not allow the outright theft of accumulated wealth but only of income. Enter the expansion of the Estate Tax.

Estate Taxes have been around for many thousands of years of course, but mainly justified because kings and rulers really owned all property. If the subject overseeing the king's property died the king was often magnanimous and allowed the deceased subject's heirs to become the new overseers, though often demanding a fee for this magnanimous gesture.

In a democratic government such as the United States there is no such reasoning. Rather, the reasoning is simply that the dead cannot vote nor do they any longer possess property rights. That and the fact that most people were increasingly having no qualms about letting the government steal for them.

Progressive thinkers posed the question "why should someone have the right to have a say over who gets their private property after their death? If it's not fair for some people to have more valuable time than others it certainly can't be fair for dead people to decide who gets the wealth they used to enjoy when alive."

Though Teddy Roosevelt campaigned hard for both a non-proportional income tax and an estate tax it wasn't until his immediate successors that the dream came to fruition.

The Democratic Party—tired of the GOP getting all the accolades from an American public eager to turn the other way as its Federal Government committed crimes in the name of Progressivism—began competing for the crown of Head Thief.

After Republican President Taft pushed through the 16th Amendment and non-proportional income taxation Democratic President Wilson introduced the modern embodiment of the Estate Tax as part of the Revenue Act of 1916. All these tax rates jumped around (mostly up) in the 13 years before the Great Depression, but then took off in earnest with the top-dog Progressive of the era—FDR.

Corporations in the United States have enjoyed a mixed bag under the Progressives. Early on, Presidents Teddy Roosevelt and Howard Taft made sport of finding monopolies under every corporate rock and to some extent President Wilson and his successors did likewise. Again, that was to change with FDR as he found that legal federal monopolies weren't providing him with enough tools so he encouraged corporate monopolies that would follow his dictates.

The real problem with corporate/Progressive marriages, however, is that the economy gets forever distorted when corporations succumb to being used as federal pawns through regulation, taxation, exemptions and collusion.

FDR claimed corporations—acting as capitalistic actors—caused the Great Depression he inherited. He then used corporations—acting as federal puppets—to try and control that Depression and through his arrogance prolonged it far beyond anything it would have been. Progressives tend to see themselves as gods who know so much more than 'the markets' and try to manipulate wages and prices and interest rates and corporate behavior and...well...pretty much _everything_ in the spirit of 'fairness for the country'.

U.S. corporations did a good job of learning to manipulate the puppet masters, however, though not to the betterment of anyone but themselves. As the waves of federal regulations rolled in over the years, federal officials had little to no knowledge of business so they became increasingly dependent on business to itself write the regulations the federal officials would use to control them with. What resulted was massive intermingling of the interests of the Federal Government and big business—because of course only big business had the resources to win a seat at the federal table. Big business got out of that deal thousands of regulations which mainly acted to raise costs relatively higher for new and small competitors, thus decreasing competition and increasing the influence of big business.

As is always the case, monopolies ONLY exist with the active involvement of the government. Whether Progressives planned this or were just ignorant of history and logic is unknown. Nor do we care for our purposes.

The widespread acceptance of the theories of economist John Maynard Keynes cannot be overemphasized. His main claim was that the effects of spending by the government-sector had a more pronounced beneficial effect on the national economy than the same level of spending by the private-sector. Not that he advocated replacing all private spending by government spending—but rather that when there was deemed, by the government, too little spending by the private-sector the government-sector should increase spending to compensate. The leap of faith was to accept that the decisions an individual or corporation made regarding the utilization of their own wealth was somehow inferior to the decisions the government would make regarding the utilization of that same wealth (i.e. the wealth that they would first steal from the individual or corporation).

Keynesian Economics would become the pseudo-scientific justification for all manner of socialist spending for decades to come. And since governments don't really provide any tangible service themselves this spending would go to corporations. Thus corporations—FDR's before-mentioned capitalist actors—came increasingly to rely on government spending for their success.

The intertwining relationship between the very concepts of Capitalism and Socialism were wound closer all the time. The Federal Government would justify socialistic policies by any of a number of previously-covered precedents (inter-state commerce, general welfare, etc). They would then refer to Keynesian Economics to 'prove' that the cost of those policies were really strengthening the American economy, and then spend the money that it had confiscated broadly from the private-sector by funneling it to a few specific favorites in that same private-sector.

The secret, of course, to flourishing in this mixed Capitalist/Socialist economy was to be one of those few favorites that the Federal Government funneled the money to. And then once a corporation became one of those select favorites they also received a main role in writing the federal rules to 'regulate' their own competition.

Another parallel thread of our Plan was at work with the introduction and manipulation of fiat money with no real essence to it except the promises of the Federal Government. After all, one weapon of the Progressive movement has to be the manipulation of private property. In societies of any complexity the bulk of the citizens' private property needs to be in a form conducive to flexible trade—hence the concept of money. The accumulation of government power requires the accumulation of money. The accumulation of money is made so much easier when you can print it and easily manipulate the value of it.

FDR went so far as to make it a federal crime to hold hard, non-fiat currency—not even feigning legitimacy when he sent thugs to rob the citizenry of their gold!

As with so many of the degenerative paths down which the United States has slid since 1789, this specter of Progressivism is far more insidious than the initial actions of a few socialistic American presidents. The allure of collectivism is such that many people, who otherwise would be responsible and productive, justify the immorality of what they know is wrong by the words their leaders tell them; " _no . . . living off others is really a virtue_ ".

There was no way liberty and individual rights could survive in an environment like that.

One more step on our road to victory.

##  Constitution for the New Deal - SATIRE

by H. L. Mencken

THIS SATIRICAL PIECE FIRST APPEARED IN The American Mercury,, 41 (June 1937), 129-36, and was reprinted in condensed form by The Reader's Digest, 31 (July 1937), 27-29. In order to indicate what reached the widest audience, the condensed version appears here.

The principal cause of the uproar in Washington is a conflict between the swift-moving idealism of the New Deal and the unyielding hunkerousness of the Constitution of 1788. What is needed, obviously, is a wholly new Constitution, drawn up with enough boldness and imagination to cover the whole program of the More Abundant Life, now and hereafter.

That is what I presume to offer here. The Constitution that follows is not my invention, and in more than one detail I have unhappy doubts of its wisdom. But I believe that it sets forth with reasonable accuracy the plan of government that the More Abundant Life wizards have sought to substitute for the plan of the Fathers. They have themselves argued at one time or another, by word or deed, for everything contained herein:

PREAMBLE

We, the people of the United States, in order to form a more perfect union, establish social justice, draw the fangs of privilege, effect the redistribution of property, remove the burden of liberty from ourselves and our posterity, and insure the continuance of the New Deal, do ordain and establish this Constitution.

ARTICLE I

The Executive

All governmental power of whatever sort shall be vested in a President of the United States. He shall hold office during a series of terms of four years each, and shall take the following oath: "I do solemnly swear that I will (in so far as I deem it feasible and convenient) faithfully execute the office of President of the United States, and will (to the best of my recollection and in the light of experiment and second thought) carry out the pledges made by me during my campaign for election (or such of them as I may select)."

The President shall be commander-in-chief of the Army and Navy, and of the militia, Boy Scouts, C.I.O., People's Front, and other armed forces of the nation.

The President shall have the power: To lay and collect taxes, and to expend the income of the United States in such manner as he may deem to be to their or his advantage;

To borrow money on the credit of the United States, and to provide for its repayment on such terms as he may fix;

To regulate all commerce with foreign nations, and among the several states, and within them; to license all persons engaged or proposing to engage in business; to regulate their affairs; to limit their profits by proclamation from time to time; and to fix wages, prices and hours of work;

To coin money, regulate the content and value thereof, and of foreign coin, and to amend or repudiate any contract requiring the payment by the United States, or by any private person, of coin of a given weight or fineness;

To repeal or amend, in his discretion, any so-called natural law, including Gresham's law, the law of diminishing returns, and the law of gravitation.

The President shall be assisted by a Cabinet of eight or more persons, whose duties shall be to make speeches whenever so instructed and to expend the public funds in such manner as to guarantee the President's continuance in office.

The President may establish such executive agencies as he deems necessary, and clothe them with such powers as he sees fit. No person shall be a member to any such bureau who has had any practical experience of the matters he is appointed to deal with.

One of the members of the Cabinet shall be an Attorney General. It shall be his duty to provide legal opinions certifying to the constitutionality of all measures undertaken by the President, and to gather evidence of the senility of judges.

ARTICLE II

The Legislature

The legislature of the United States shall consist of a Senate and a House of Representatives. Every bill shall be prepared under the direction of the President, and transmitted to the two Houses at his order by their presiding officers. No member shall propose any amendment to a bill without permission in writing from the President or one of his authorized agents. In case any member shall doubt the wisdom of a bill he may apply to the President for light upon it, and thereafter he shall be counted as voting aye. In all cases a majority of members shall be counted as voting aye.

Both Houses may appoint special committees to investigate the business practices, political views, and private lives of any persons known to be inimical to the President; and such committees shall publish at public cost any evidence discovered that appears to be damaging to the persons investigated.

Members of both Houses shall be agents of the President in the distribution of public offices, federal appropriations, and other gratuities in their several states, and shall be rewarded in ratio to their fidelity to his ideals and commands.

ARTICLE III

The Judiciary

The judges of the Supreme Court and of all inferior courts shall be appointed by the President, and shall hold their offices until he determines by proclamation that they have become senile. The number of judges appointed to the Supreme Court shall be prescribed by the President, and may be changed at his discretion. All decisions of the Supreme Court shall be unanimous.

The jurisdiction and powers of all courts shall he determined by the President. No act that he has approved shall be declared unconstitutional by any court.

ARTICLE IV

Bill of Rights

There shall be complete freedom of speech and of the press – subject to such regulations as the President or his agents may from time to time promulgate.

The freedom of communication by radio shall not be abridged; but the President and such persons as he may designate shall have the first call on the time of all stations.

In disputes between capital and labor, all the arbitrators shall be representatives of labor.

Every person whose annual income fans below a minimum to be fixed by the President shall receive from the public funds an amount sufficient to bring it up to that minimum.

No labor union shall be incorporated and no officer or member thereof shall be accountable for loss of life or damage to person or property during a strike.

All powers not delegated herein to the President are reserved to him, to be used at his discretion.

**********

# Federal Inflation Machine – 1910 to 1978

##  The Plan: Goal

As has been discussed before, the idea of a nation being governed by all of its citizens is preposterous. To halt the spread of this experiment in anarchy was one of the chief reasons our Plan was set in motion.

Any pluses to such a system of government—and there admittedly are some—are vastly overshadowed by the minuses.

Historical attempts at a democracy always seem to devolve into an oligarchy in which power rests in the hands of a relatively small group of powerful people. This is not because 'the best of the best' rise to the top. The fact is that certain individuals can better convince the masses to vote for them than can others, and many of these then devote their political power to convincing the masses that they should stay in power forever.

Once in power, the surest way to convince an electorate to let you stay in power is to keep promising the impossible.

Why promising the impossible works so well is not entirely clear. That the promise works best to the irrational mind is a given, but the vast majority of those who see themselves in the rational camp have little trouble in deluding themselves that what is promised to 'others' is clearly impossible but what is promised to them is not only possible but fully moral and just.

The impossible goals of providing everything for everyone—or having your cake and eating it too—was a common theme of the American Progressive movement. The oligarchs of the time, the wealthiest of the American wealthy, were targets of the Progressives. But those targets quickly learned to split their financial empires into smaller kingdoms, for purposes of anonymity, and to themselves champion Progressive causes in order to garner popular support.

Something was needed to solidify this self-destructive cycle of the governing powers making impossible promises to the masses to enable their perpetual status as governing powers.

Into the breach stepped the financial elites.

After all, they didn't get to be so wealthy by not recognizing opportunity. Impossible promises require impossible conditions to thrive as even remotely viable theories.

There was only so much wealth that could realistically be accumulated in a world where

1. there was a finite supply of money,

2. governments had financial limits **and**

3. individuals had no reasonable expectation that their governments were going to produce manna from thin air to pursue impossible promises.

Private oligarchs needed to get into partnership with political oligarchs and see what kind of power would develop.

##  Course of Events

###  Federal Reserve Bank

#### History

In the winter of 1910 a group of seven men traveled to an exclusive social club in Georgia by the name of the Jekyll Island Club. Great pains were taken at the time to hide the fact that they were gathering at all—they traveled under false names, used misleading travel agendas, etc. What they did over the course of little more than a week would forever change the financial landscape of the United States and, to a large extent, the world.

The unofficial leader was Senator Nelson Aldrich, the Republican Whip and chairman of the National Monetary Commission. Aldrich was a powerful, well-connected man who was charged with breaking the grip of what had become known as the Money Trust. This referred to the small group of bankers and financiers who controlled an inordinately large portion of the country's wealth. Sometimes they worked together, sometimes they were bitter competitors—but the American public was very distrustful of them.

Senator Aldrich, close friend of J.P.Morgan and father-in-law to John D. Rockerfeller, Jr., staunchly believed that America should adapt a strong central banking system along the lines of Europe. He had followed closely the traditional GOP model of high tariffs, which greatly benefited American business but kept consumer prices inflated because domestic products did not have to compete as much with foreign goods.

In Aldrich's view, the best way to overcome public distrust of the Money Trust would be to get its powerful members together and come up with a plan that would benefit both themselves and the U.S. Government. If this same Money Trust were seen as helping the government 'of the people' then obviously 'the people' would come around.

Also present was Abraham Andrew, the Assistant Secretary of the Treasury.

Four of the other men present would be considered members of the Money Trust itself.

* Frank Vanderlip was President of the National City Bank of New York, the largest bank in America. He and his bank represented the financial interests of the Rockefeller dynasty.

* Henry Davison was a senior partner of the J. P. Morgan Company. J.P. Morgan, at the time, was the largest of the American financial giants.

* Benjamin Strong was head of J. P. Morgan's Banker's Trust Company, another J.P. Morgan firm.

* Charles Norton was President of the First National Bank of New York, another giant banking firm.

The seventh man, Paul Warburg, was thought to be possibly the richest man in the world at that time. He was a representative of the Rothschild banking dynasty in England and France and his family operated its own giant banking concern in Germany. It was Paul Warburg who was to supply the knowledge of European central banks.

Together, these last five men were thought to represent over one fourth of the wealth of the entire world.

Competition had worked well for these men and institutions. But the world in general, and the United States specifically, was changing more towards a focus on centralized control and private-public cooperation. Most would call such arrangements a cartel or monopoly. Too often, however, the mere fact of government involvement prevented the 'monopoly' label from being applied.

The plan these men came up with was to in effect put their banking institutions in charge of a national reserve banking system that would control the money creation and intra-bank lending they felt necessary to maintain a steady money supply for the entire United States of America.

This goal of a steady money supply had been the Hamiltonian idea behind the first two national banks; the First Bank of the United States (1791-1811) and the Second Bank of the United States (1816-1836).

The country as a whole had grown dramatically in the near 80 years it had been without a central bank, but it had also undergone periodic recessions that caused much economic pain.

Over two dozen economic recessions, most lasting an average of 15 to 20 months, occurred during this period (1836-1913). These downturns in the normal business cycle would occur every couple years.

The idea of a new central bank would be sold to the public as a stabilizing force to lessen the pain of such recessions, even though during the years 1791 to 1836—when there had been a national bank—recessionary periods were just as numerous and lasted just as long.

Senator Aldrich proposed their plan to Congress but it was largely felt that the public would not support such blatant control by private banks. Instead, the plan was modified such that there was more of a government face to it. The brief description that follows is of the resulting Federal Reserve Act, though it differs from the Aldrich Plan little other than that the later gave more control of the Federal Reserve Board to the private banks themselves.

All nationally-chartered banks would be required to join a new Federal Reserve System, with state-chartered banks encouraged to join. A series of privately owned and controlled Federal Reserve Banks would be established in various regions of the country. All Federal Reserve System member banks would be required to purchase non-transferable stock in their regional Federal Reserve Bank (so they had a stake in the entire system) and also set aside a portion of their bank reserves with that regional bank. The Federal Reserve stock held by the member banks would pay a 6% annual dividend.

The Federal Reserve Banks would make short-term discounted loans, as needed, to member banks in their region to ensure that no member bank ever ran short of money to service their customers. The system would serve the banking interests of the U.S. Government; processing financial transactions, processing payroll, auctioning debt instruments, etc.

The private Federal Reserve Banks were to be largely controlled by a Federal Reserve Board. Board members would be appointed by the U.S. President and confirmed by the Senate. This Board would set discount rates for inter-bank loans, dictate he amount of reserves to be held in deposit at the regional banks and control how much of the newly-created Federal Reserve Notes were to be maintained in circulation. It was decided that these Federal Reserve Notes, originally to be financial obligations of the private Federal Reserve Banks, were instead to be direct obligations of the United States Treasury.

Money in the United States became by law fiat currency printed by the Treasury Department and backed by 'the full faith and credit' of the United States of America. The word fiat literally means 'let it be done' in Latin. In this context it refers to currency that has value solely due to government decree.

Fiat money in one form or another had been experimented with at various times in the nation's history. It was always in the past been backed by at least some gold or silver, however.

Federal Reserve Notes were to be the sole valid U.S. currency, with the exception of United States Notes issued directly (in smaller quantities) by the U.S. Treasury. The notes were not to be constrained by possession of physical commodities such as gold—though Congress early on did say that the amount of these notes did need to be backed by some fraction of their worth in gold. These notes were essentially IOUs against the United States Treasury. The Federal Reserve Banks would 'purchase' these IOUs, usually by assuming some small fraction of that amount in U.S. debt, and then lend them to member banks and collect interest on the loans. The member banks in turn would lend the notes to customers and collect more interest on those loans.

Between controlling the amount of these notes in circulation and controlling intra-bank interest rates, the Federal Reserve System would have a huge influence over national interest rates and monetary inflation.

The elections of 1912 were largely about this issue, with Republicans backing the Aldrich Plan and Democrats backing the Federal Reserve Act. It is doubtful the large banks cared which was adopted because both plans differed very little in substance. In the end some of the original backers of the Aldrich Plan began decrying it as inflationary and too beneficial to banks when compared with the Federal Reserve Act. This was ridiculous since those charges could equally hold for both plans, and their actions were meant to throw public opinion to the Democratic plan to at least get something passed.

Democratic President Woodrow Wilson was elected that year. The Federal Reserve Act won the day as a 'compromise' between the Republicans, in control of the Senate, and western-state Democrats led by William Jennings Bryan—who wanted more government control than called for in the Aldrich Plan. The Act passed Congress and was signed into law December 23, 1913.

So the largest banks in the world got the largest customer in the world; the entire United States economy.

It isn't entirely accurate to say the Federal Reserve was 'owned' by these banks because the stock in the Federal Reserve Banks is non-transferable, which excludes them as private property. After all, to say you 'own' property that you cannot dispose of as you see fit is a contradiction. But American banks, especially the large ones that have the largest say in controlling the Federal Reserve Banks, enjoy plenty of other benefits—mainly financial.

The new way for banks to make money was thus to charge interest on IOUs that they sold as debt against not themselves but the United States government. The old way that they made money, mainly through something called fractional reserve banking, was greatly enhanced because all this creation of 'money', arguably out of thin air, meant more lending and thus collecting more interest. And of course each member bank held stock in the new Federal Reserve System that paid a steady 6% annual dividend.

The banking industry in the United States benefits greatly from the Federal Reserve. Not only is there a huge lender of last resort to backstop the industry from periodic difficulties, the Federal Reserve ensures an ever-increasing supply of money. More money in the system most always means more financial transactions, which is of course how banks grow their businesses. Fractional reserve banking, which will be discussed later, allows banks to leverage many times over the amount of new money coming into the system.

And of course the banking giants have a large say over the setting of policies for the Federal Reserve.

As for the U.S. Government, they get much easier access to the money they need to keep the public happy. No longer would they have to rely on raising taxes every time they run short of money. Instead they would just print up national IOUs, in the form of Treasury bonds or other debt instruments, and sell them, by way of the Federal Reserve. The buyer would pay for those national IOUs with Federal Reserve Notes—themselves being IOUs against the U.S. Treasury. If the market for such IOUs weren't as large as the U.S. Government needed, however, Federal Reserve Banks could just assume the new national IOUs and credit the 'purchase' price to the U.S. Treasury.

This practice of the Federal Reserve, paying for U.S. Treasury IOUs (i.e. Treasury Bonds) with other U.S. Treasury IOUs (i.e. Federal Reserve Notes), is referred to as 'monetizing the debt'. Some have also called it 'Quantitative Easing'.

The U.S. Treasury does receive the profits of the Federal Reserve Banks, which after operating expenses and salaries as well as the 6% dividends to member banks still amounts to a substantial sum. This 'profit' does go a small way towards offsetting the massive debt the United States government runs up because of the ease and 'convenience' provided by the debt-based monetary system the Federal Reserve System enables.

Though the original 'compromise' provided for—at least officially—large U.S. Government control via the Federal Reserve Board, by 1945 decisions about U.S. monetary policy were being made by a Federal Open Market Committee (FOMC) composed of a combination of politically-appointed Federal Reserve Board Governors and board-appointed Federal Reserve Bank presidents. The FOMC is composed of 12 voting members; the seven Governors appointed by the U.S. President and five bank presidents representing a rotating subset of the 12 Federal Reserve Banks. Interest rate targets are set by the FOMC and the Federal Reserve Banks are directed to take actions towards meeting those targets.

Treasury bonds, like most any bond, are an IOU to pay a certain face value at a certain time in the future. The interest rate of the bond is thus the difference between that face value and the price paid for the bond, divided by the price paid for the bond. Interest rates are heavily influenced by the 'open-market' purchases of Treasury bonds by Federal Reserve Banks; rates being pushed lower when the Federal Reserve buys more—bidding prices up—and conversely rates being pushed higher when the Federal Reserve sells its bond holdings—bidding prices down.

As mentioned before about 'monetizing the debt', such Federal Reserve purchases of U.S. Treasury bonds can only marginally be called 'open market' since the non-Fed parties are paying with their own wealth while the Feds get to pay with IOUs against the very Treasury whose bonds they are buying.

The Federal Reserve, via FOMC directions, was becoming more and more involved with not only influencing interest rates and inflation in the United States but to some extent in foreign countries via actions with the central banks of those countries.

With the Federal Reserve thus becoming more a tool of the United States government's domestic and foreign policy, there was a problem with auditing its activities because of the unique relationship between the two. It is doubtful most Americans would approve of what in effect was a private banking monopoly established by government decree, no matter the supposed benefits the government received from such an arrangement. That fact, as well as the sensitive nature of monetary manipulation, made it touchy what details could be revealed to the public.

The Federal Reserve Board itself is tasked with auditing the activities of the Federal Reserve Banks, which make sense since those Banks exist to implement the policies determined by the Board. Audits of the Federal Reserve Board were conducted by the Treasury Department until 1921 at which time Congress created a General Accounting Office (GAO) and turned over auditing activities to them. From the early 30s till early 50s the Federal Reserve Banks themselves were given responsibility to audit the Federal Reserve Board, which was a strange situation given that the Board's role was to set directions for those Banks. As seen during the New Deal, however, private industry was allowed many government-sanctioned monopolistic actions as long as they were deemed by the Roosevelt administration to be in the nation's interests. Even stranger was the period between 1952 and 1978 where Congress gave the Board the responsibility of employing private auditors to audit itself. In 1978 the GAO once again was given the task of auditing the Federal Reserve Board, though its name was later to be changed to the Government Accountability Office

However, the meaning of 'audit' as applied to the Federal Reserve as a whole is very limited. Formalized in 1978 with the Federal Banking Agency Audit Act, which returned auditing authority to the GAO, the areas _excluded_ from Federal Reserve audits were:

* Deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, open market operations.

* Transactions made under the direction of the Federal Open Market Committee.

* Transactions with a foreign central bank, government of a foreign country, or non-private international financing organization.

These exclusions encompass the Federal Reserve's chief reason for existence; determining and implementing monetary policy. Thus it could be said that auditing does occur but not on the primary activities for which the Federal Reserve even exists for.

Codified in 1978, such secrecy has always been a trademark of the relationship between the United States government and the private banking cartel it makes use of.

For the first 65 years of its existence the goals of the Federal Reserve were to provide for price stability and sustainable economic growth. The natural determinants of prices in a free market, supply and demand, were felt by many populists as being too subject to manipulation and too apt to periodic swings of inflationary or deflationary economic recessions. Progressives felt that in order for greater overall federal influence and to make society more efficient, the Federal Government needed to have more influence over monetary policy. It was felt that an important goal was to manipulate monetary supply, interest rates, inflation, etc so prices for goods and services in the United States remained stable.

For those 65 years these goals were pursued with mixed success by the Federal Reserve. The price variations inherent with a relatively fixed monetary standard (e.g. gold) could be largely controlled by making the monetary supply less fixed and allowing manipulations of that supply via the Federal Reserve. Productivity increases that would normally result in decreased prices were balanced with increases in money supply to facilitate price stability and business growth given an expanding population base and standard of living.

In 1978 Congress gave the Federal Reserve another goal—provide for full employment.

Though largely off of a gold standard since creation of the Federal Reserve, the United States in 1971 officially dropped any requirement for gold backing of its Federal Reserve Notes. That total break between dollar and gold was a unilateral action taken by Republican President Richard Nixon. In short order, government spending and high inflation were resulting in relatively high unemployment. In 1978, President Jimmy Carter signed into law the Humphrey-Hawkins Full Employment Act. This Act charges the government to pursue—using primarily the Federal Reserve—price stability, growth in production and full employment. It also charged the government with taking all reasonable means to balance the budget and balance foreign trade, though using the Federal Reserve for these goals was never indicated and there has never been serious action—by **any** government entity—in that regards.

So now the Federal Reserve officially was supposed to pursue the often conflicting policies of price stability, sustainable economic growth AND full employment.

It was to do this with essentially the same tools that it had always had—influencing interest rates and inflation.

####  Inflation as Policy

As the productivity in society rises the members of that society should be able to purchase more goods and services given the same amount of money.

As productivity increases more and/or better products or services are produced given the same capital invested in any enterprise. The increase in production, measured in quantity and quality, results in lower prices given the same demand.

Demand rarely stays static, however, as more people want the better and relatively cheaper products. Also, in a successful society the number of consumers is usually rising over time. This higher demand results in higher prices, offsetting the price decreases due to productivity growth.

Thus there are essentially three main components to prices in this situation; supply, demand and the amount of money in the system.

A standard supply-demand curve is shown here. The concept is simple. Take a particular good or service. As prices, measured by the vertical axis, rise consumers demand less. Conversely, as prices rise producers will supply more. As quantity available, measured by horizontal axis, increases the prices producers can demand falls.

The product price as well as the quantity to be produced is settled on in such a market supply-demand situation by the intersection of the two curves.

This of course assumes a free market with perfect information available to all parties. But even in the real world this explanation holds much credence.

Governments can—especially with an adherence to Keynesian Theory—manipulate this model.

The dynamics of both the demand and supply curves can be influenced by government policies. Governments can enter the market as a consumer; increasing demand by shifting the demand curve to the right. Governments can enact regulations to make business tough on producers; increasing prices by raising the supply curve. In both of these cases overall prices increase. Conversely, governments can lower demand and prices by forgoing government purchases and backing off on regulation. This is much more theoretical because it has seldom been attempted.

The Federal Reserve can also influence the supply-demand model in a major way; altering the price axis by altering the value of the United States Treasury Notes.

If we were to hold the supply and demand curves steady but shrink each unit represented by the price axis then the absolute prices of everything would rise. There would be more money in the system overall to pursue the same amount of goods. This is called price inflation caused by monetary devaluation.

Such inflation has many side effects. Free-market interest rates have to rise because lenders know they will be getting repaid in devalued currency. Consumers, both individual and corporate, have to make decisions that include whether to spend/invest capital sooner rather than wait for it to be worth less later. Individuals on fixed incomes are relatively hurt more because their fixed incomes have steadily diminishing purchasing power.

Winner: Debtors

One of the two main winners in this inflation scenario is the debtor. The less valuable a currency becomes, the less value the debtor has to repay. The original agreed-upon loan payments apply but each payment is with dollars less valuable than the previous payment.

An extreme example shows this. A debtor borrows $20,000 for ten years at a total cost to him (principle plus interest) of $25,000. $20,000 at the time could be traded for one decent family automobile. Say the dollar falls in value 50% during those ten years. Total cost to debtor is still $25,000 but each payment is in dollars that are worth less than the previous payment. By year ten that same class of automobile cost $40,000, not because it is twice as good of an automobile but because there is now twice as many dollars in the economy. The lender in year one gave up his ability to use that $20,000 for ten years for the $5,000 in interest he would make. Instead, at the end of ten years he is stuck with a sum that will buy barely 60% of what it would originally. The debtor in year one received the ability to buy a whole automobile and by year ten has paid off his loan with, in effect, little over ½ of a comparable automobile.

Remember that a major reason the United States government participated in this quasi-governmental banking cartel was to facilitate its own greater spending, which was bolstered greatly by rules benefiting its ability to become a large debtor.

To explain the second major winner in the inflation game, the banking industry, will require an aside about the wonderful—for them—world of fractional reserve banking. Along the way, it will hopefully become clear why the Federal Reserve System was such a coup for the banking industry.

Winner: Banks

The primary way that banks became so profitable in the last few centuries was from something called fractional reserve banking.

Though a fascinating subject in itself, fractional reserve banking essentially boils down to the practice of banks 'putting to work' the majority of money they are supposed to be holding for their depositors.

If the reserve they are required to maintain is 10%—a common requirement—this means that if depositors have $1 million in a bank's accounts then that bank has only to maintain reserves of $100,000 readily available in case those depositors wanted to withdraw their money. They can use the other $900,000, called _excess reserves_ , for investments or loans.

Making loans can be especially profitable. They not only generate revenue for the bank, but if the amount being loaned out finds itself being deposited back to the bank—by a merchant, for example—then 90% of those deposits can in turn be loaned out again.

Thus modern banking is built on investments, primarily loans, which are backed not by tangible assets of the banks but by what in reality are liabilities of those banks.

In the above example the bank had a $1 million liability balanced by $1 million in bank assets. By only being required to hold 10% of those assets in reserve, however, they actually could keep $100,000 cash while using the other $900,000 to generate profits.

Since the bank makes vast amounts of money in this deal—lending out money that isn't ultimately theirs—it entices customers by paying interest to 'safeguard' their money. The interest it charges for bank loans is always quite a bit greater than the interest paid on deposits, of course. The real wealth-builder for the bank, however, is the fact that it can loan out other people's money and charge for it at all.

The problems would arise if depositors decided to withdraw from their accounts more money than the bank held in reserve. The bank would essentially be forced to liquidate assets rapidly—sometimes at a loss—to repay the customers who are demanding their money. Loss or not, funds would not be readily available for those customers. Such a situation, called a 'run on the bank', often panics other bank customers who rush to get their money out and thus force the bank to liquidate even more assets.

The bank can go insolvent—liabilities exceeding assets—if this goes on long enough. Remember, the vast bulk of a bank's assets _are_ no more than its liabilities in the first place.

What were needed were large, central banks that would function as a lender of last resort to the smaller banks when 'bank runs' like this occurred. This would allow the banks to weather the rare depositor panics when large numbers of withdrawals took place. These were tried, with various degrees of success, by both the two early Hamiltonian 'Bank of the United States' experiments and later by larger private banking concerns.

The ultimate in central banks was conceived and implemented with the Federal Reserve System. It greatly lessoned the probability of depositor panics because it could quickly shift money to cover most 'bank runs'. Another private-public agency, the Federal Deposit Insurance Corporation (FDIC), would be created later—in 1933—to further calm the fears of depositors by insuring all deposits.

The Federal Reserve was given authority to set the fractional amount of deposits (i.e. liabilities) that had to be backed by real assets. This has usually been set at 10%, allowing for a higher amount of 'asset leverage' than many banks used to attempt.

Most of what we in this modern society think of as money is not even the IOUs printed up by the United States Treasury. It is simply debt backed by other debt. Or, you could say, money created by banks.

This ability to loan to others money that the banks do not own is a double-edged sword. The claim is often made that banks create money out of thin air. While there is truth to this, expansion of the money supply in an economy usually facilitates economic growth. But with so much of modern economies depending on debt there arises the specter of catastrophe if widespread loan defaults occur.

Thus, the Federal Reserve was needed because of the importance of a growing facilitation of debt (i.e. a vigorous banking sector). It was meant to ensure maximum efficiency between U.S. society and U.S. banks.

Effects

What is the impact of all the money the banks create out of thin air in the form of loans?

Inflation! Specifically, price inflation caused by the introduction of more money into the economy.

Recall the earlier discussion on productivity. As productivity increases more and/or better products or services are produced given the same capital invested in any enterprise. The increase in production, measured in quantity and quality, results in lower prices given the same demand.

But demand does not stay the same. Because of normal demographics, chiefly population growth, demand for everything tends to increase. Money supply must increase to keep pace.

The combination of productivity gains, population gains and monetary devaluation (inflation) ideally work in tandem to keep prices stable and the economy growing. But if the money supply increases at a faster rate than demand then each unit of money not only supplies the money for those added consumers but also adds to price inflation.

Some examples are in order.

If the entire economy consisted of 10 people, 10 widgets and $100 dollars, there would be nothing else to spend the money on and each widget would be worth $10 dollars. This assumes, of course, the money was perceived as having no intrinsic use such as firewood or toilet paper. If wealth were distributed equally there would be enough for each person to consume one widget.

Scenario 1. If an 11th person (with another $10) showed up in the economy (simulating population growth and inflation) along with an 11th widget (simulating productivity gain), each widget would still be worth $10. All 11 people would be as relatively well off as before.

Scenario 2. If an 11th person (without money) showed up in the economy (simulating population growth) and an 11th widget is introduced (simulating productivity gain), each of the widgets would now be worth $9.09. _The new person without money is out of luck, though._

Scenario 3. If an 11th person (with another $10) showed up in the economy (simulating population growth and inflation) but no additional widgets are produced, each of the 10 widget would now be worth $11. _There will not be enough widgets to go around, however._

Scenario 4. If $10 showed up in the economy by itself (simulating pure inflation) but no additional widgets are produced, each widget would now be worth $11. All 10 people would be as relatively well off as before, **but** _only because they don't need their money for anything else_.

In scenarios 1, 3 and 4 (the inflation scenarios) each dollar is worth 10% less. The only scenario in which this seems an okay deal is in scenario 1 when the effects are balanced by population growth (increased demand) and productivity growth.

So society is damaged when inflation outweighs population growth and productivity increases. If banks inflated the money supply too much then society would suffer.

Wouldn't that phenomenon hurt banks as much as the general public? Not so much.

Banks, being the initial creators of this money, receive much the same benefits from this money as do counterfeiters. Loans are used by borrowers to pay for something. The amounts of these loans quickly become assets to the banks as the merchants enriched by these payments increase their bank accounts. As shown earlier, banks are allowed to show both loans and deposits as their own assets. To a large extent a percentage of bank loans thus end up as new assets to either the same or other banks. The results are that debt itself —not counting any interest that will be collected on it in the future—quickly ends up as increasing the assets of the banks and that this occurs prior to most of the inflationary effects of the newly-created money (i.e. when the money is more valuable then it will be later).

In any confidence game or Ponzi scheme the winners are always those in on the game early. The latecomers usually lose.

The benefits—real and/or perceived—to net borrowers in the society are several. The money available to be borrowed is more readily available and less interest (per borrowed dollar) can be demanded for loans. Each dollar paid back to a lender is less valuable than the dollar borrowed.

The real dangers to all of society are many. Consumer prices rise. Economic decisions have to take into consideration greater complexities as to the time-value of money. Risky use of capital tends to increase because of the relatively lower costs of borrowing that capital. The normally virtuous behavior of thrift is punished because current consumption at least seems to be preferable over future consumption due to ever-rising prices. The normally virtuous behavior of saving is discouraged because money saved will be less valuable in the future.

Banks, however, increase their wealth primarily because of inflation. They get to create money out of thin air, which to some extent causes the inflation, and collect interest from lending it out. Most of the created money then ends up as legal assets to the banks. Each ten dollars in increased assets the banks show is seen as license to create nine more dollars out of thin air to start the cycle all over again.

The old-fashioned rule was that money was something physical—traditionally gold or silver. Money = Money. Borrowers could only borrow what the lender owned.

The new-fangled rule was that money was a collection of IOUs treated by people as though it was something of value. Money = Debt. Borrowers could borrow what banks pretended to own. And the banks would then treat the new debt not just as something to be repaid but also as new money itself.

To fine-tune and perpetuate this new 'modern' scheme was the chief reason something like the Federal Reserve System was desired by banking interests.

This private-public banking partnership supercharged banking and the amounts of loan turnarounds (i.e. money creation) they could engage in. Inflation is to the benefit of both banks and the Federal Government—banks because they realize the initial value of the money before devaluation and the Federal Government because they are the nation's biggest debtor.

###  Later Conflicts/Problems

Article 1 Section 8 of the United States Constitution grants Congress the right:

* To borrow Money on the credit of the United States;

* To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

It is hard to interpret these rights as the right to pass the right of currency control, albeit with federal guidance, over to a private cartel of banking interests.

In the 1982 U.S. Federal Appeals Court case _Lewis v. United States_ , regarding a traffic accident involving a Federal Reserve Bank vehicle, the Court affirmed the following:

"Federal Reserve banks are not federal instrumentalities for purposes of a Federal Tort Claims Act, but are independent, privately owned and locally controlled corporations in light of fact that direct supervision and control of each bank is exercised by board of directors, federal reserve banks, though heavily regulated, are locally controlled by their member banks, banks are listed neither as "wholly owned" government corporations nor as "mixed ownership" corporations; federal reserve banks receive no appropriated funds from Congress and the banks are empowered to sue and be sued in their own names."

Little wonder that some American citizens have expressed dismay, since 1913, that their government would essentially entrust the monetary system of the United States to a group of privately owned and controlled banks.

Inflation historically spiked in positive and negative cycles, the negative cycles being referred to as deflation. From 1789 to 1913 this cyclic inflation had largely cancelled itself out, averaging less than 0.1% per year. A lot of this was attributable to the American Revolution war debt, however, and between 1800 and 1913 the inflation rate actually averaged about -0.2% per year.

However, since 1913 things have been quite different. From 1913 to 1978 inflation averaged roughly 3.0% per year. From 1978 to 2010 inflation accelerated to roughly 3.9% per year.

While comparing goods and prices over time is not exact, let's look at some rough approximations of this. The assumption in these examples is that a basket of goods can be gathered that will be standardized as to keep the same relative value over the years.

In 1800, $1 in specie (hard currency) would purchase a basket of goods with a standardized worth of $1. By 1913, $1 in specie (hard currency) would purchase a basket of goods with a standardized worth of roughly $1.60. That's a 60% **rise** in the value of the dollar over 113 years.

Productivity increases seemed to outweigh demand increases.

By 1978, $1 in United States Treasury Notes (fiat money) would purchase a basket of goods with a standardized worth of roughly $0.25. By 2010, that would drop to $1 buying less than $0.08 of those standardized goods.

That's more than a 95% **drop** in the dollar from 1913 to 2010 (97 years). To buy $1 worth of 1913 goods with 2010 dollars you'd need about $20.

Productivity increases were dampened by demand increases, chiefly population growth, but swamped by monetary devaluation, chiefly Federal Reserve actions.

When currency was synonymous with gold these fluctuations were largely caused by misallocations of capital in the marketplace and the resulting corrections. After 1913 there were still misallocations but the Federal Reserve System acted to try and smooth out the corrections. They did this mainly by increasing the money supply either directly—distributing Federal Reserve Notes to member banks—or indirectly—purchasing Treasury bonds with the Federal Reserve Notes. If there were any periods of decreasing the money supply those were few and far between.

After 1913, with the minor exception for a while of U.S. Notes, the only legal currency in the United States was Federal Reserve Notes. Anyone other than the U.S. Treasury caught printing money was vigorously punished by the U.S. Government.

For the Federal Reserve to contend, as it often does, that it is controlling inflation is a strange concept. To 'control' would imply taking actions to increase and decrease currency inflation to keep the monetary value stable. This is widely thought to be a main purpose of the Federal Reserve; maintain a stable monetary value.

What has been done consistently since 1913 is that the Federal Reserve 'oversees' inflation. They are in the business it seems of being the Federal Government's inflation machine.

As we have seen, inflation is a debtor's best friend. Since 1913, and the forming of the Federal Reserve, U.S. debt has literally exploded.

Federal debt as a percentage of GDP has performed as follows since 1913:

* Started at around 10%

* Rose to about 30% by 1918 (WWI)

* Paid down to about 20% by 1929

* Rose to over 120% by 1947 (Depression & WWII)

* Paid down to about 35% by 1978

* Rose to over 90% by 2010

That is an increase of over 800%. Examination of similar figures between 1792 and 1913 show a **decrease** of over 300%.

The United States of 2010, largely facilitated by its arrangements with the Federal Reserve, is by any measure one of the world's largest debtor nations.

##  The Plan: Result

The tendency that had been growing in much of Europe since the 1600s, fractional reserve banking, was an indirect but major reason the American colonists broke with England. More specifically, the reasons had to do with money manipulation by European banking interests.

Take the Currency Acts of the 1750s and 60s as an example. The American colonists were fiddling with inflation back then to devalue the debts owed to Britain while the British responded by forcing the colonists into the debt-cycle modern banking depends on.

There were two main dynamics in this area.

The first was that by issuing colonial 'fiat money' (usually called 'bills of credit') price inflation resulted and British merchants ended up having debts paid off with devaluated currency. This of course benefited the colonists. In 1751 British authorities brought a halt to the practice of using this local money to pay off debts to British merchants.

The second was the 1764 British outlawing of such colonial money, usually issued interest-free, for any financial transactions. The resulting shortage of money resulted in many colonists having to go into debt to British banks to obtain legal currency to repay the loan and the associated interest. This benefited British banking interests greatly and caused severe economic upheavals in the American colonies.

The 1764 Currency Act probably had more to do with colonial resentment of British rule than any tea or stamp taxes ever did. Benjamin Franklin stated these sentiments as " _The_ _refusal of King George III to allow the colonies to operate an honest money system_ _, which freed the ordinary man from the clutches of the money manipulators, was probably the_ _prime cause of the Revolution_ _._ _"_

Thus, the nation formed out of American victory in that revolution would supposedly be wary of the modern banking industry and the debt it depended on.

But an early order of business for the first Secretary of the Treasury, Alexander Hamilton, was to talk the very first Federal Government into establishing a central bank. The rumors of Hamilton's linkage to the Rothschild family—the world's largest banking power—may be just so much rumor but Rothschild money seemingly did play a large part in the First Bank of the United States (1791 to 1811) and the subsequent War of 1812.

How sweet it was to see bankers in the U.S. playing their countrymen and national governments as well or better than their European counterparts. All the talk of democracy and individual rights but so much stays the same! Society depends on trade and trade depends on money. Control the money and all else is secondary.

While generally considered to be rather harsh, American statesman and first Secretary of State Thomas Jefferson stated his feelings on the matter thus: " _Banking institutions are more dangerous to our liberties than standing armies._ " Later, he would amplify these sentiments. _"_ _If the American people ever allow the banks to control the issuance of their currency_ _(instead of Congress), first by inflation and then by deflation, the banks and corporations that will grow up around them will_ _deprive the people of all property until their children will wake up homeless on the continent their fathers occupied._ _The issuing power of money should be taken from the banks and restored to Congress and the people to whom it belongs._ _"_

All of this seemed to take a fantastic leap in the early 20th century. The deceptions by both the banking industry and the U.S. Government in selling the idea of the Federal Reserve System were legendary.

They got a nation of sheep to buy the lie that a private banking cartel—operating under federal charter—could and would protect the public from any evil private banking industry operating with no federal charter.

The U.S. Government would get to be at the head of the line in the inflation game, making it easy to borrow money in quantities it could never convince the American public to willingly fork over. It could more easily finance wars and expand federal control.

And with the concept of a Republic having been crushed in the 1860s, and populism (i.e. mob rule) gaining strength as Progressivism in the early 20th century, it was becoming more important that the flames of the Constitution's funeral pyre be kept steadily fed.

Also, by getting more power concentrated not only in the Federal Government but in the hands of a powerful financial oligarchy the goal of crushing the national ideals expressed in 1789 marched steadily onwards.

## Quotes

President John Adams

"All the perplexities, confusion and distress in America arise not from defects in the Constitution, not from want of honor or virtue, so much as down-right ignorance of the nature of coin, credit and circulation."

Rothschild banking dynasty (various members)

"Permit me to issue and control the money of a nation, and I care not who makes its laws"

"The few who understand the system, will either be so interested from it's profits or so dependant on it's favors, that there will be no opposition from that class."

Congressman Louis T. McFadden

"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it."

Henry Ford

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

Robert Hemphill

"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."

**********

# Socialism and Security – 1935 to 1979

## The Plan: Goal

Fostering dissention in an enemy camp is always a good idea. After all, why spend your own resources in a conflict when your opponent's resources can be used against him.

Converting the United States into a mass of collectivist goo is one thing but a systemic system change to institutionalize Socialism is really needed for our Plan to prosper.

At some point you would have to expect the surviving Americans who still have an inkling of the Liberty that was their birthright to just up and stop feeding the parasitic hordes who have no compulsion about demanding to be given what they won't earn themselves. Maybe a group of them might decide to just up and withdraw from the system. It is certainly true that doing so would prove difficult given the precedence of the 1860s—with the Federal Government claiming the right to hang dissenters rather than letting them just leave the nation. But nonetheless, some brave souls might just try again to withdraw from the morass they see around them.

It would prove beneficial if we could broaden the base of Americans who are dependent on government assistance. People who have become part of the mooching problem themselves tend to

* moderate their complaints about moochers and

* become very adamant about the fact that their dependencies are not moochings but rather entitlements.

So what is a common attribute—shared by every American—that we can suck into the Socialist mindset? It has to be something that is not a set attribute so much as one which everyone shares at some phase of their life, for even to the true believer the collectivist theory can only work if there are enough 'producers' to be leached off of without imminent system collapse.

And while that imminent collapse is our goal we don't want everyone to realize the collapse is coming beforehand but rather get sucked in once the collapse becomes inevitable.

One such common attribute is **age**.

Time is linear and we all start out young and, unless dying early, end up old. If we can nudge the system into getting the aged to feel entitled to live off the productivity of the young then we may well have something that can't be easily stopped. The young would resent the demands of the aged but those same young would know that a few years down the road they would be the aged and 'entitled' to forced support by the next generation of youngsters. The aged by that time would have expired and the cycle could keep going.

Eventually, of course, demographics will destroy the system.

If the birth rate of any generation drops significantly, resulting in fewer of the aged down the road, there is a crisis in that there will be several generations with too few young to support the demands of their parents and grandparents. The only possibility of reducing the elderly population without preceding that by a decrease in the young is so dark a path that no nation could ever engage in such evil and survive.

But birth rates cannot increase forever!

The inevitable endgame is defined by straightforward mathematics and certainly an enlightened society would be able to foresee the crisis and appropriately link the level of support expected/demanded to demographic factors such as birth rate.

But remember that in the United States this democracy thing has modeled itself such that every citizen has an equal say in their government.

There may be a few moral citizens who oppose this forced wealth-transfer from young to old, but the elderly will seldom support reductions in the goods they feel entitled to from the younger generation. And for those currently supporting the elderly, the older they are the less likely they are to support reductions in what they see as the upcoming promised payoff they earned by living long enough to be considered elderly.

Our old friend at work—the democracy of mob rule!

It is the ultimate conundrum. Continue on the path, realizing that the only escape from total ruin is for mathematical laws to somehow get repealed, or veer off the path and ensure that the saviors will be vilified—at least in the short run—by the citizens of the country they are saving.

And of course in a democracy perceived villians don't get re-elected.

##  Course of Events

### Social Security

The concept of national governments providing for the social economic security was practiced by many nations going back to at least the Greeks. Foodstuffs and material were oftentimes stockpiled for emergencies to the state, and provisions for distributing such supplies to widows, orphans and the like have cropped up at various times in history.

Taking care of children and the aged were situations common to most humans and thus extrapolation of this to charities and the like were largely accepted as means for societal bonding.

By the later parts of the 19th century many nations, mainly European, were experimenting with various forms of national welfare systems. These were the first organized attempts at 'forced charity'. In 1889, Chancellor Bismarck of Germany became highly regarded in Europe and the Americas for being instrumental in adoption of the concept of 'social insurance'. In 1881, Bismarck had told the German Parliament that " _those who are disabled from work by age and invalidity have a well-grounded claim to care from the state_ " and tasked them with working with him on develop a system to insure such care. A large incentive to do so was to try and match the rising national Socialist movement's appeal (e.g. Karl Marx) without sliding down the road into the full madness of Socialism. Germany's Social Insurance policy mandated that workers, employers and the government all contribute to a national fund for providing basic subsistence assistance.

Enter the United States.

President Theodore Roosevelt had been a strong advocate for such a national social insurance program but had never received enough support for the idea. A generation later, with another President Roosevelt, the time was deemed right.

In 1935 the nation was gripped in a massive period of economic upheaval. As we have seen, what started as out as a fairly common economic downturn was greatly worsened by the actions of a Federal Government which thought it was powerful enough—and smart enough—to direct market forces like an orchestra.

In addition to the overwhelming problems posed by unemployed Americans there was the further problem of those who did not even fall into the employable ranks. Few companies provided any sort of pension plans as part of employee compensation, and many Americans had simply not saved enough to provide for themselves or members of their families who found themselves in this situation. Chiefly here we are speaking of the aged, the very young and the disabled.

Several states had previously experimented with welfare pensions but often with ineffective results. By 1935, some 30 states had functioning old-age pension laws but because of ineffective implementation less than 10% of elderly were getting any assistance at all.

President Roosevelt, in August of that year, signed into law the Social Security Act. He had been pressuring the Congress for such a bill, patterned off the Bismarck model, for over a year.

The Act provided assistance to the states for care of " _aged persons, blind persons, dependent and crippled children, maternal and child welfare and public health_ ". It provided assistance to the states for " _administration of their unemployment compensation laws_ ". To see to these tasks it called for establishment of a Social Security Board. To pay for all of this it provided for Federal powers to raise more revenue for this cause. And, of course, the bill stated the ubiquitous " _and for other purposes_ " clause.

The Act allowed for subsidizing a portion of a state's old-age assistance costs, though that state's plan had to be approved by the Social Security Board and such subsidies were capped to a per-person limit. Similar subsidies were promised the states as to unemployment compensation, aid to needy dependent children, maternal and child health services, services for crippled children, aid to the blind, child welfare services, vocational rehabilitation for the disabled and other public-health services.

It established a Federal Old-Age Reserve Account from which it directly distributed old-age assistance monies.

To fund these new federal obligations a new tax was levied against every American employee, to be deducted from his/her wages by the employer. A matching tax was imposed on the employer.

The Act had several interesting features which makes one wonder what the real intent was and how universal the coverage was to be.

As specified in section 202: _"Every qualified individual (as defined in section 210) shall be entitled to receive, with respect to the period beginning on the date he attains the age of sixty-five, or on January 1, 1942, whichever is the later, and ending on the date of his death, an old-age benefit . . "_

Then, as specified in section 210: _"The term employment means any service, of whatever nature, performed within the United States by an employee for his employer, except- (1) Agricultural labor; (2) Domestic service in a private home; (3) Casual labor not in the course of the employer's trade or business; (4) Service performed by an individual who has attained the age of sixty-five; (5) Service performed as an officer or member of the crew of a vessel documented under the laws of the United States or of any foreign country; (6) Service performed in the employ of the United States Government or of an instrumentality of the United States; (7) Service performed in the employ of a State, a political subdivision thereof, or an instrumentality of one or more States or political subdivisions; (8) Service performed in the employ of a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual."_

Of particular interest are items 1 and 2 of section 210.

The effects of these were to exempt from any benefits the vast majority of minorities, chiefly women and blacks. It could be argued that agricultural and domestic-worker jobs were subject to much less stringent bookkeeping and thus collecting the new taxes would prove very difficult. However, it can also be argued that extending benefits outside of the mainstream white-male voting public would not provide much in the way of bang-for-the-buck (i.e. vote buying).

The mention of age 65 was because the Social Security benefits applied to those 65 and over.

Items 6 and 7 prohibited federal and state employees from receiving benefits. This was presumably to keep Americans from wanting to make a career out of working for the Federal Government, as doing so would preclude Federal Social Security coverage. States could follow suit or not with their own plans, but it seems some politicians of the time knew there was the potential of conflict when federal workers oversaw programs that they themselves would profit from now or in the future.

All together, the 1935 Social Security Act applied to roughly one-half of all Americans.

Social Security taxes were to begin being withheld at the start of 1937, with the first federal checks to be sent out in 1942. The subsidies to the state plans began immediately, however, and were largely meant as a means of some federal help until 1942. However, in 1939 the Act was amended such that checks would begin to be sent out starting in 1940.

Also in 1939—remember that this is before the first benefit check was even paid—amendments to the Act increased benefits to women and children, mainly in response to concerns about the male bias in the initial 1937 version. There would not be a real addressing of the white bias until the 1950s.

From 1940 until 1950, Social Security benefits stayed the same each month. Then, in 1950, Congress authorized a massive 77% increase to those benefits to take into account the cost of living increases—due to inflation primarily caused by government action—over the previous decade. They authorized smaller increases some seven times over the next 22 years.

To have any reasonable expectation of viability one would expect that the percentage increases in overall social insurance payments would need to remain at or below the percentage increase in overall social insurance recipients, with maybe some adjustments for demographic factors such as birthrate and life-expectancy.

If such would have been the case.

It may prove helpful to refer to these charts as we review the history of the Social Security system.

In the provided chart, costs are expressed as a percentage of GDP. Otherwise the chart becomes meaningless due to inflation of the U.S. dollar.

From 1940 till 1950 the number of beneficiaries jumped from 225,000 to nearly 3.5 million. The amounts paid out went from $35 million to nearly $1 billion. Those initial numbers basically represented some lump-sum costs to help out until the program was rolled out in 1940. Even in the first decade the rate of increase in payments was thus about 2 times the rate of increase in recipients.

The 1950s saw a broadening of the beneficiary base as domestic laborers, agricultural workers and others were added. This significantly addressed many of the minority discrimination in the original Act but required increasing the payroll deductions somewhat. Social Security was running healthy surpluses due to demographics and life expectancy—lots of young people and relatively low life expectancy.

From 1950 to 1960 the number of beneficiaries jumped from 3.5 million to nearly 15 million. The amounts paid out went from $1 billion to over $11 billion. Thus, in the second decade the rate of increase in payments was about 3 times the rate of increase in recipients.

The 1960s saw the retirement age for men lowered from 65 to 62. A similar change for women had taken place in 1956. Given this lowered age the number of Americans receiving benefits increased and the length of benefits being paid out to any one of them increased.

President Johnson in 1965 added health care for the elderly to the Social Security mix in the form of Medicare—direct federal aid—and Medicaid—federal aid to state plans.

In 1968 Congress adopted a budgeting gimmick that, even though Social Security was supposed to be separate from the Federal Government's 'general fund', allowed surpluses in the Social Security system to reduce the overall federal debt. This allowed the government to claim that Social Security was a fund reserved for its specific purposes but also be used to make the overall federal budget appear healthier than it really was.

From 1960 to 1970 the number of beneficiaries jumped from 15 million to nearly 26 million. The amounts paid out went from $11 billion to nearly $32 billion. This third decade saw a rate of increase in payments of about 2.5 times the rate of increase in recipients.

In 1972 Congress approved huge increases in payments and also established automatic annual cost-of-living (COLA) increases beginning in 1975. During this initial effort to compensate for the high inflation in the economy at that time, several miscalculations were made which resulted in Social Security benefit increases being quite a bit higher than were warranted.

In the 1970s, the specter of unsustainability first became widely apparent. With the huge increases in beneficiaries and the rapidly growing size of the payments, Social Security could no longer be portrayed as a system that could exist many more years without extreme changes. The ratio of workers paying into the system to retirees taking out of the system was steadily shrinking with no good end in sight.

From 1970 to 1980 the number of beneficiaries jumped from 26 million to nearly 35 million. The amounts paid out went from $32 billion to over $120 billion. This represented an unbelievable rate of increase in payments of over 7 times the rate of increase in recipients.

The demographics of aging in America coupled with the increases in benefits—whether due to inflation or not—were clearly marking Social Security as a huge long-term financial catastrophe for the United States.

### Medicare

The 1935 Social Security Bill did not include provisions for providing general medical care. President Roosevelt had wanted to include such provisions but felt that the odds were high that including such provisions would have scuttled the entire bill. President Truman championed the idea during his administration but the pressing needs of paying off World War II debts precluded serious consideration.

During the 1950s and early 1960s, when more conservative forces held majority in Washington, such expansion of the Social Security network was likewise shelved.

In 1964, however, with the election of President Lyndon Johnson, the topic again came to the forefront. The new President's legislative programs were termed The Great Society, and the first piece of Great Society legislation placed before Congress was the administration's so-called Medicare Bill.

The chief opposition to Medicare came from the American Medical Association (AMA). They, of course, opposed any socialized healthcare because of its infringements on the livelihood of their member doctors. When it increasingly became evident that some form of socialized healthcare would be adopted, they switched from opposition to proposing alternatives. Their plan, called Eldercare, differed from Medicare by generally limiting government subsidies to only poor elderly Americans and providing for such subsidies from the Federal Government's general fund as opposed to a separate 'dedicated' fund. In hindsight, Eldercare would likely have avoided many of the more ruinous economic problems introduced with Medicare.

Medicare passed Congress and was signed into law by President Johnson on July 30, 1965. It amended two sections of the Social Security Act of 1935. One was Medicare, to provide benefits to the vast majority of American citizens over the age of 65. Medicare provides full or partial medical payments (Part A) as well as an insurance supplement to cover the patient portion when required (Part B). The second section was to establish Medicaid, to subsidize state medical payments for poor Americans of any age.

Medicare and Medicaid, along with a related program called State Children's Health Insurance Program (SCHIP), were funded by the same payroll taxes used to fund Social Security. Such taxes are called Federal Insurance Contribution Act (FICA) taxes.

In 1965, ex-President Truman was the first enrollee in Medicare. More than 19 million more Americans followed suit within the year. The monthly premium for the Part B insurance was $3. Total cost was about $3 billion.

In 1972, with Medicare paying for some 21 million Americans, Congress extended coverage to disabled Americans of any age. This added another 2 million enrollees at the time, and remained at about 10% of total enrollees from then on. The monthly premium for Part B insurance was about $6.

Throughout the 70s Congress steadily added more benefits directly to Medicare and indirectly to Medicaid. With Medicaid, states were not required to make the additions to their programs but had to if they wanted to continue receiving any Federal Medicaid subsidies.

By 1980 Medicare was paying for over 28 million Americans. The monthly premium for Part B insurance was about $10. Total cost was about $34 billion.

Even greater than the mathematical disparities seen with Social Security, this 15-year period represented a rate of increase in program costs of some 20 times the rate of increase seen in program beneficiaries.

###  Later Conflicts/Problems

The Constitution of the United States in no way grants to the Federal Government the right to use taxpayer money to run a 100% monopolistic insurance business, especially one designed to never earn a profit but only to accumulate guaranteed losses.

This was the main reason that the Social Security budget was meant to be kept separate from the national budget. The argument was that FICA payroll taxes were not regular taxes but 'premiums' for Social insurance. That this 'insurance' was not voluntary but mandated by the Federal Government was thus the constitutional question.

The precedent for broad Congressional interpretation of General Welfare had been upheld at various times by the Supreme Court and continued to be. Even though the Court in 1936 ( _U.S. v Butler_ ) had ruled against the Federal Government the issue there was not against the right to provide for General Welfare but rather over federal usurpation of state jurisdiction.

In the 1937 case _Steward Machine Co. v Davis_ the Court upheld the constitutionality of federal imposition on businesses of unemployment taxes for their workers, as legislated under the Social Security Act. Justices actually cited as valid reasons the facts that the Federal Government

* could use taxation as a means to regulate economic activity and

* that there were just too many unemployed Americans.

The Social Security Act specified that businesses were to pay an excise tax, based on employee compensation, for federal unemployment insurance but that this payroll tax could be offset by payments to a qualified state unemployment program. Thus the Act not only expanded Congressional power to interfere with societal employment relationships but also to indirectly force individual states to do the same. After all, if a business were going to have to incur this added labor cost in any case then it behooved individual states to do whatever the Feds said had to be done so that the tax revenue could be kept as local as possible.

The Court ruled that federal taxes did not have to be for the purposes of collecting revenue for current use—supposedly the unemployment 'fund' was insurance in case employees became unemployed—but could legitimately be used as a tool to influence and regulate activity.

In _Steward_ the Court also seemed to be expanding the role of the U.S. Supreme Court to that of managing unemployment, apparently bringing employment under the General Welfare umbrella.

In the same year (1937) the case _Helverling v Davis_ dealt with a challenge of the Social Security Act's mandate of taxes to pay benefits to workers based on nothing but their age.

The Court in this case ruled that Congress, representing the people, could better determine what activities constituted General Welfare than could the Supreme Court. Since the problem of elderly workers was important and national in scope then they in effect said that Congress could define the issue to be in the General Welfare without worrying further about what the Constitution may or may not say in this regard.

The dissenting Justices in these cases became known as the Four Horseman—a reference to the Four Horseman of the Apocalypse. This was because of their general opposition to the Progressive policies of the Roosevelt administration during this time of looming national apocalypse. These four were the chief reason that President Roosevelt in 1937 tried to dilute their votes by packing the Supreme Court with additional members.

The early decision to move up, and expand, benefit payments from 1942 to 1940 put the Social Security system in a hole from the start. When originally conceived, the idea was to collect the 'premium payments' for five years before paying out on the 'insurance policies' to a limited number of recipients. In 1939 the rules were changed, the first of many such changes, such that the 'premiums' were only allowed to accumulate from that initial 'limited' group for three years before beginning to be paid out to an even larger number of recipients than what was originally conceived.

Voters rewarded legislators for all the 'benefits' they were either getting now or were being promised. Relatively few of those voters cared about details such where those 'benefits' were coming from or how viable this social experiment really was.

Congress, needing to keep voters happy in order to stay in office, saw both a golden opportunity and an insurmountable obstacle in this Social Security system. They saw in it the ultimate campaign promise—to lavish monetary gifts on their constituents—with voters not even wanting to question the realities of this too-good-to-be-true scenario. Conversely, they saw grave consequences to those who opposed this form of wealth transfer even when such opposition was clearly in their job description to " _support and defend the Constitution of the United States_ ".

The increase in the number of Social Security beneficiaries from 1939 to 1980 necessitated greater increases to the FICA payroll taxes than were actually made. And that was providing that the level of benefits paid stayed the same, or at least grew no more than the general inflation rate. However, as has been shown, the growth in benefits paid far exceeded the growth in either beneficiaries or inflation.

At the same time, the rate of increase in the number of Social 'insurance' beneficiaries far outstripped the rate of increase in the number of American workers paying for those benefits. This was, and still is, due to the funding source for both programs; FICA payroll deductions.

In 1935, when such payroll deductions were to fund Social Security benefits for non-working Americans over 65, the ratio of workers paying into the 'fund' to beneficiaries taking out of the 'fund' was approximately 20:1. By 1950, with increased longevity, this ratio was approximately 16:1. By 1990, demographics—namely the 'Baby Boom' phenomena of the 50s and 60s—had offset longevity somewhat and the ratio was still around 13:1. Due to drastic decreases in the U.S. birth rate following the early 1960s the ratio of younger workers paying to support the exploding numbers of older retirees plunged by 2005 to below 5:1 and will certainly fall further as 'Baby Boomers' begin retiring beginning in 2008. This payer:payee ratio will probably stabilize around 2:1 somewhere around 2015.

Remember also that the original Social Security Act envisioned most of the money paid out to come from a fund that was being 'fed' by the FICA taxes. This never materialized, however, and monies paid out have always been a hybrid of current FICA taxes as well those accumulated in this fund. Corresponding to the decreasing ratio of payers-to-payees throughout its history, each year the percentage of payouts from current FICA taxes must increase. By the early 21st century, around 2012 or so, virtually all monies paid out will come straight from current FICA taxes. Since this situation is impossible to be sustained for very long, by most definitions this will mean the system is financially bankrupt.

Medicare is by far the worst problem in the entire Social 'insurance' scheme of Social Security, Medicare and Medicaid. In 1970 Medicare represented roughly 16% of the total cost of those programs. By 1980, it represented about 20%. By 1990, that had risen to 28% and by 2000 Medicare represented roughly 33% of the total outlays. With healthcare inflation far outstripping general inflation every year there is no reason to assume that the share of total Social 'insurance' represented by Medicare will ever level off, much less decrease.

But yet, the 'social insurance' pool is funded by FICA payroll taxes. And FICA was, and is, setup so that less than 20% of the funds are meant to cover Medicare and Medicaid while the bulk of what's left covers Social Security.

In 1965 healthcare costs were rising slightly higher than other costs in the economy. This made sense since healthcare tends to be more inelastic a demand than other goods—meaning cost increases in healthcare will tend to decrease demand for that product less than for other consumer products because of its relative higher importance.

In the years since 1965, however, the rate of healthcare price inflation averaged several times that of price inflation in other markets. It is doubtful that healthcare became so much more important during those years, but rather that the supply-demand curves that largely determine prices in a free-market were severely distorted by the new federal programs.

Federal projections of Medicare-related costs have been nowhere near accurate since the program came into existence. In the late 1960s Congressional budgeters said that the costs would be $12 billion in 1990. Actual costs were around $100 billion.

Actual costs associated with Medicare have grown from approximately $3 billion in 1965 to $7 billion in 1970 to $16.3 billion in 1975 to $34 billion in 1980 to $72 billion in 1985 to $100 billion in 1990.

The 1966 projections of a 1990 price tag of $12 billion assumed inflation of Medicare costs would mimic those of overall price inflation in the American economy. This would have been a good estimate ---- for cars or sewing machines or bread. But not even close for healthcare in general or Medicare specifically.

Roughly doubling every five years, or about 15% growth per year, Medicare costs grew at roughly 300% of the rate of inflation during that time.

The problem was that unlike cars, sewing machines or bread the costs to elderly individuals greatly decreased because the Federal Government in essence heavily subsidized their healthcare. When the costs of a product are reduced the demand for that product will always increase in anything approaching a free market. Increased demand for Medicare-covered services resulted in raised medical prices for all Americans.

What started out as subsidies to the relatively few Americans over 65 years old increased drastically over time. In 1965 the average lifespan was 70 years while by 1990 it was 75. So not only were the numbers of Americans covered by Social Security and Medicare substantially higher just from the fact that they were living longer, this longer lifespan also meant that the Federal Government had now agreed to pay their health expenses for twice as long on the average.

To put this Social Security and Medicare scheme into another perspective, consider the promises that have been made to the American public. As of 2008, the amount of money needed to service those social 'insurance' promises was estimated to be at or over **$100 trillion**. This represents national unfunded liabilities, the 'unfunded' meaning that we are not setting aside any money for these pension-type promises but instead counting on paying year-X recipients entirely from tax monies collected in year-X—essentially from the children and grandchildren of those recipients.

The only way to service those promises are to continue accumulating greater and greater such unfunded liabilities. Demographically this is impossible to be able to continue indefinitely.

By the way, in 2008 the GDP of the entire world was estimated to be the equivalent of only **$60 trillion**.

##  The Plan: Result

This phase not only accelerates the cannibalistic frenzy of 'Democracies' but plugs what could be seen as a gap in our Plan.

A major point our Plan aimed to demonstrate was that democratic governments will inevitably result in nothing less than the organized disintegration of a society from producers into one of plunderers and producer-victims.

Tyranny of the masses!

But when laws change at the whims of those masses who is to judge that the entire system is no longer working? If a society chooses Socialism then how could it be judged a failure if it achieves the slow death such a system ensures? If that society so weakens itself that it is destroyed by outside enemies then can the society said to have been a failure or simply a victim?

But if an entire society could be made to destroy itself, unequivocally, of its own volition then certainly that society would be deemed a failure.

It would be much the same if a species thrived awhile and then was wiped out by predators or environmental changes. Could the species be called a failure? Certainly it failed to survive but there is a difference. 'Failure' denotes a systemic internal flaw as the cause whereas 'failed' denotes a condition but does not necessarily imply the cause.

To get a majority to justify to itself that it has the right to demand the property of a minority is not difficult. To get a majority to justify to itself that a minority has the right to demand the majority's property is insanity. The justification, for such a majority, is that at some future time they will be part of the minority and can then themselves start demanding property from others. This is still insanity and the fact that the future majority they will be demanding stuff from are their own children makes it some sort of incestual insanity.

This is certainly defining societal failure as opposed to simply a failed society.

Add to this situation another mind-twisting piece of the puzzle. It is a certain, known fact that the amount of unearned property being demanded from each member of the majority at any given time is greater than that which was demanded from the majority at any earlier time. If we define demanding unearned property from someone else as an immoral act, then we are stuck with what seems to be a perverse paradox added to what we have already termed a failure situation.

The people who are having their property taken are in effect MORE immoral than the people who are demanding their property.

Do you doubt that the members of the minority, in this case Americans over 65, are demanding property that is not theirs? They will justify their actions by saying they paid into some Social insurance fund for all the years they were working. But that same system pays, more and more each year, not from this elusive fund but from the monies that current workers are told they are paying into the same fund.

At any time American workers are paying not into an actual fund established for them but for the future RIGHT to demand private property—money in this case—from future American workers. And those future Americans are their own children!

Do you doubt that the private property demanded from any one American worker by his elders is always more than similar property demanded the previous year? To do so is to stick your head in the sand and ignore either the demographics of the United States since the 1940s or basic math.

Whether paid for in current funds or via borrowed funds, any amount divided among N workers will be less than that same amount divided among N-1 workers. And the number of workers to divide this Social insurance bill between has been definitely shrinking each year.

To put this feeding frenzy in motion required much more than any single political party. While it is true that this Social insurance scheme was begun and expanded mainly under the Democratic Party, most of the earlier enabling framework was the work of the Republican Party. This political shift was most fortuitous for our Plan in that it is always so much better if your opponent gets confused about who friend and foe are.

The result is as inevitable as a wounded shark that robotically begins eating itself. Or, to adapt an old saying, the most efficient way to consume an elephant would be to convince the elephant to eat itself one bite at a time.

## Quotes

President Franklin Roosevelt

"We can never insure one-hundred percent of the population against one-hundred percent of the hazards and vicissitudes of life. But we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age. This law, too, represents a cornerstone in a structure which is being built, but is by no means complete.... It is...a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness."

President John Kennedy

"The Social Security program plays an important part in providing for families, children, and older persons in times of stress. But it cannot remain static. Changes in our population, in our working habits, and in our standard of living require constant revision."

President Richard Nixon

"I have today signed legislation which . . . constitutes a major breakthrough for older Americans, for it says at last that inflation-proof Social Security benefits are theirs as a matter of right...."

President Ronald Reagan

"This law assures the elderly that America will always keep the promises made in troubled times a half century ago.. . . The Social Security Amendments of 1983 are a monument to the spirit of compassion and commitment that unites us as a people."

**********

# American Conservatism – 1950 to 1988

##  The Plan: Goal

There would inevitably be some resistance to 'The Plan'.

That resistance would never succeed, not after the 150 year head-start we've enjoyed in ripping apart the fabric of this nation. So, when faced with the inevitable we could choose to fight it ... or define it. Why engage in an open fight against a war we've waged in secrecy and obscurity for so long?

The American implementation of democratic government has provided concentration of power into political factions that have proved quite pliable. Given factional bickering at every major stage of our plan, targeted pressure on a small number of influential politicians usually sufficed to start avalanches in the directions we desired.

The Republican Party, from its 1860 beginnings, destroyed any vestige of a Republic whose power was spread across mostly autonomous states. The irony that they could have even chosen that name is even now lost on most Americans.

The people seemed on the verge of actually resisting this central, all-powerful Federal Government at the end of the 19th century with the massive support shown Democratic President Grover Cleveland for so long. But any idea of meaningful resistance died when the Republicans again seized power in the name of Progressivism with President Theodore Roosevelt. From then on few politicians dared bring up the subject of actual Liberty—instead offering meaningless platitudes using that word.

In the 1930s, however, the slow plunge into national suicide advocated by the Progressives was adopted with zeal by the Democratic Party as they watched President Franklin Roosevelt attain worship-status in the eyes of so many Americans.

There was no seriously-organized attempt to resist the clear transformation of the supposed light of capitalism into the swamp of socialism that the United States was becoming.

But there were always a few resisters. Without clear leadership, however, too many of those espoused Liberty in only selected areas. The areas of collectivized control (i.e. non-Liberty) that happened to personally benefit many of these citizens were deemed not only acceptable but beneficial.

To ensure effective leadership for the goals of Liberty, Capitalism and Individual Rights did not emerge, it would be to our advantage to establish a 'home' for such pseudo-rebels. It is always good, when possible, to gain control of your enemies and guide them along twisting paths rather than confront them in the open.

American had early on wandered into the moral vagueness of political parties, with two or three such parties at any period of time acting mainly as the competing mobs in a national herd mentality. The constant attribute—and the one President Washington tried early on to warn about—was that for any political party the primary goal was not the betterment of the nation but rather to gain power over the other parties.

No matter what the actual history was, by the late 1940s the party most resented by the pseudo-rebel potential enemies we wished to control was the Democratic Party. Thus, the obvious choice for controlling this rabble would be the GOP.

##  Course of Events

###  American Conservatism vs Classical Liberalism

The term Liberalism, in its classical sense, meant a focus on individual freedom and liberty free of undue government interference. This was the Liberalism of John Locke and the Founders of the United States. Moral governments existed only to help ensure that individual liberty was not trampled by violence within society (i.e. crime) or outside violence against society (i.e. war). To the crime issue laws were instituted and to the war issue armed forces were maintained. In any event, the institution of government was considered a necessary evil whose scope had to be kept limited.

In later years the term 'negative liberty' would be used to describe this classical definition. It was ascribed to by such philosophical giants as Thomas Hobbes, John Locke, Adam Smith and Thomas Jefferson.

Negative Liberty referred to the need for individuals to be free to exercise their natural rights with as little interference as possible from government. The only need for government was to protect the individual from usurpation of their natural rights. For government to be able to provide such protection entailed the curtailment—or negation—of certain individual liberties.

Largely arising from the philosophy of Karl Marx, the concept of 'positive liberty' described liberty in an entirely different way.

Positive Liberty referred to the need for society—via government—to collectively provide the power and/or resources for individuals to fulfill their potential. In this definition individuals possess liberties because government grants them those liberties.

Even though these terms were not defined till the mid-20th century, the concept of positive liberties began to be more prevalent in American culture following the rise of Progressivism in national politics beginning with President Theodore Roosevelt in the early 1900s.

The word conservative as an adjective means " _disposed to preserve existing conditions, institutions, etc., or to restore traditional ones, and to limit change._ " As a noun it means " _a person who is conservative in principles, actions, habits, etc._ "

Regarding political thought, early American Conservatism had to do with trusting long-established patterns of thought and conduct over new societal ideas.

The problem with that admittedly simplistic definition of American Conservatism was the word 'long-established'. The related problem with the adjective definition was the Conservative focus on the word " _existing_ " while overlooking the phrase " _restore traditional ones_ ".

American Conservatism ideally would have championed 'negative liberty' over 'positive liberty'. But once 'positive liberty' began to be the accepted societal role of the Federal Government—refer to Progressivism in general, Social Security and Medicare in particular—then a movement professing a desire to " _preserve existing conditions, institutions, etc_ " was at odds with the part of the definition that says " _restore traditional ones_ ".

In fact, if the word 'traditional' is to have a meaning of greater than a few generations then there is a case to be made that the reality of American Conservatism is a logical contradiction.

###  Transitions

In the United States, the first group to be called Conservative would have to be the Anti-Federalists. They certainly believed in the negative liberty that was the main reason the Revolution was fought. As we have seen, Thomas Paine and Thomas Jefferson fought against this hastily-conceived plan called the Constitution. That they were spot-on in most of their warnings is a historical fact.

The next group of Conservatives would be the Democratic-Republican Party of Thomas Jefferson and James Madison. Both groups matched perfectly with the definition of the word. They championed the negative role of government in liberty; that of staying as small as possible and letting the individual pursue their lives as they saw fit.

The Whig Party of the 1830s and 1840s are often classified as Conservatives, though this is far more a Republican re-write of history than fact. Championing high tariffs and big business, the Whigs seemed to have little room for the traditional rural roots of the nation.

The Republican Party formed in the 1850s as a collection of ex-Whigs and abolitionists. Having as a primary platform the accumulation of greater centralized control over both states and individuals in no way could be considered Conservative.

However, as often happens in history, the winners write the history books.

The Republican-controlled government destroyed, and then redefined, the words 'Federation' and 'Republic' in the War Between the States. From then on they made all the rules and it was supposed to make perfect sense to refer to the central government of the United States as the Federal Government.

The so-called Gilded Age (1870-1900) saw expansion of industrialization that far outpaced the rest of the world. America became known not just for its industry but for the wealth and opulence of its industrialists.

The Conservatives of this period championed laissez-faire capitalism. Most often they were Democrats who objected to federal attempts to influence business-growth via protectionist tariffs or play favorites in the marketplace. It became accepted that the Federal Government was far bigger than the anti-Federalists would have ever dreamed and the War Between the States had erased any concept of it somehow shrinking. The Conservative goals now mainly revolved around keeping the Republicans in check in their Reconstructionist power frenzy.

The Progressive era from 1900 to 1920 seemed to confuse Conservatives, with many becoming enamored with the business and societal efficiencies promised by the Roosevelt, Taft and Wilson administrations.

The Socialist-like excesses of the 1930s and 1940s did seem to consolidate Conservatives against the New Deal policies but there were relatively few of them who would dare to take a stand against the FDR political juggernaut. The ones who did were often referred to collectively as the 'Old Right'.

The 1950s and 1960s saw a growing split between those who called themselves Conservatives and those who called themselves Libertarians. The Conservatives—referring to themselves as 'The Right'—seemed more concerned with pragmatic approaches to counter Liberalism—referred to as 'The Left'—while Libertarians argued for more absolute liberty such as existed at the time the U.S. was formed.

The modern incarceration of American Conservatism can be said to have begun in the early 1950s, and its founder was a political theorist and moralist named Russell Kirk.

Kirk published ' _The Conservative Mind'_ in 1953, providing a basis for the longed-for—by many—melding of traditional Conservative ideals and religion-based interpretations of morality. While Libertarians felt that individuals should be free to act in their own interests as long as they did not initiate violence against other members of society, the new Conservatives felt that this freedom should be limited to activities that society as a whole found morally acceptable. Libertarians felt the freedom of individual action, as long as it harmed no one, trumped whatever personal sense of morality they themselves may hold. Conservatives felt that the collapse of societal morals, at least those they believed were righteous morals, was a contributing cause for the loss of individual freedoms.

A big contention between the two factions was the issue of foreign military intervention. Though traditional Conservatives had opposed use of the military unless it was to counter direct attacks, the more pragmatic modern Conservatives tended to support the use of military force as a foreign policy tool. Libertarians maintained the older ideals of much more restrained military use. In 1952 Dwight Eisenhower, a Republican, won over Conservatives by opposing the 'isolationist' policies of his political opponents. But President Eisenhower, interestingly, received little in the way of Conservative opposition to his administration's vast expansions of Social Security.

Another founder of modern Conservatism, William Buckley, emphasized conservative 'morals' through even more directly religious-based methods than did Russell Kirk.

Buckley's 1951 book, ' _God and Man at Yale'_ , set the tone for his later leadership role. In 1955 he formed National Review, which would become the leading Conservative periodical for decades to come, and in 1964 founded the group Young Americans for Freedom. Along with his linkage of religion with conservative principles he also was a vocal advocate of a strong and active military in the face of the Soviet Union.

In 1964 Senator Barry Goldwater unsuccessfully ran a mostly Libertarian campaign as Republican candidate for president. He was defeated in an electoral landslide by President Lyndon Johnson. Many Republicans largely abandoned his campaign because, other than his strident opposition to the Soviet Union, he was felt to be too Libertarian in his views on individual liberties and freedoms. Many Libertarians abandoned his campaign because of his implied support of increased military usage.

The Vietnam War in the late 1960s and early 1970s saw bigger splits between Conservatives and Libertarians, with consolidation of the new Conservatives almost exclusively within the Republican Party. Conservatives unwilling to surrender the ideals of personal liberty to political pragmatism tended toward the Libertarian cause, though as a late-comer in the entrenched Democrat-Republican American political arena the Libertarian Party never really threatened the big parties.

The man that was to be considered the greatest Conservative icon of modern times, Ronald Reagan, was a liberal Democratic supporter of FDR in his younger years. He began to embrace some conservative ideals in the 1950s and became a Democratic supporter of Republican Presidents Dwight Eisenhower and Richard Nixon. An actor by profession, he made a name for himself in Conservative circles in 1961 as a vocal opponent of what would become Medicare. In 1962 he switched to the Republican Party and was a staunch supporter of the failed Goldwater campaign.

Reagan was governor of California from 1966 to 1975, when he left office to seek the Republican nomination for President. In a close primary, he lost the nomination to President Gerald Ford who in turn lost to Democrat Jimmy Carter.

Reagan began stressing religion and military strength in the years running up to the 1980 elections. Having been divorced previously the capture of the strong 'Religious Right' faction of the Conservative movement was important to his hopes, and a big part of his election strategy was to stress his intent to aggressively confront the Soviet Union.

American evangelical Christian groups, such as the Moral Majority and American Christian Cause, were rapidly gaining political power at this time. These groups applied very substantial political pressure—primarily organizing churches and preaching to their congregations on how best to elect 'Christian' candidates. The approved candidates were almost exclusively the new 'Conservative' Republicans.

The election of 1980 was won by Reagan—then 69 years old and the oldest man to be elected President of the United States.

President Reagan immediately began leveraging his huge popularity with both Conservatives and Libertarians to institute relatively draconian policy decisions as regards federal taxation. The economic theory he espoused was referred to as 'Trickle-Down Theory' and stressed greater percentage-wise tax cuts to the upper tax brackets—and thus wealthier Americans—as opposed to the lower tax brackets—and thus poorer Americans. The idea was that money spent and invested by the wealthy would mean more jobs and prosperity for less-wealthy Americans.

Those tax cuts, combined with a tightening of the money supply by the Federal Reserve, brought inflation, standing at 12% in 1981 to 4.5% by 1988. Unemployment fell from near 10% to under 6% and GDP rose fairly dramatically each year of his term. The series of tax cuts made it more profitable for individuals and businesses to increase productivity. The economic expansion provided a use for increasing amounts of capital other than that of just bidding up prices, and inflation plummeted as a result.

Unfortunately, what is emphasized most about President Reagan's economic legacy is tax cuts. While they certainly had the effect of stimulating the economy, they were unfortunately never balanced by real spending cuts. The disastrous legacy of cutting taxes without cutting spending has plagued Conservatives and Republicans ever since.

Military expenditures rose dramatically under President Reagan—nearly 40%—and almost certainly resulted in the collapse of the Soviet Union shortly after he left office.

Spending on social programs, mainly Medicare and Social Security, continued their relentless rise. President Reagan's refusal to fight the growth of these Socialist expenditures disappointed the more Libertarian of his supporters, and largely contributed to the then unprecedented rise in national debt from roughly $1 trillion to almost $3 trillion during his presidency.

President Reagan talked a lot about traditional conservative principles—such as " _government is not the solution to our problems; government is the problem_ ". However, traditional Conservatives (i.e. Libertarians) were again largely disappointed. He instituted, and funded, large federal increases in the 'War on Drugs'. He said he would decrease federal spending, but spending as a percentage of GDP rose approximately 3% during his administration. He preached American responsibility, but the Federal Government increased the spending of money they did not have (i.e. deficit spending) by nearly 300% during his watch.

President Reagan did, however, defeat the Soviet Union without a major war. To accompany that achievement a hope was that United States military spending could be sharply reduced. This was referred to as the 'peace dividend'.

The 'dividend' was never realized.

###  Later Conflicts/Problems

Two long-standing fiscal policies of modern Conservatism illustrate the mixture of statism and capitalism, and sometimes just plain illogic, that have dogged the movement since the 1980s. These are the 'Trickle-Down Theory' and 'Starve the Beast'.

Trickle-Down Theory refers to the belief that if tax policy is modified to allow higher-income Americans to retain more of their money—as opposed to having it confiscated via government taxation—then they will largely put that money to productive use and grow the economy, raising the economic conditions of everyone below them on the economic ladder. It rests on the premise that the wealthier one is the more likely extra capital will be invested than spent for living expenses, and that invested capital has a greater impact on economic growth than consumer spending.

Trickle-Down can be seen as a corollary of a more general economic theory called Supply-Side.

Trickle-Down has been around for many years and was often the butt of jokes for its opponents. The American humorist and social commentator Will Rodgers said about The Depression " _The money was all appropriated for the top in the hopes that it would trickle down to the needy._ ". An even older joke about such a theory was that " _If you feed the horse enough oats, some will pass through to the road for the sparrows._ ".

The problem was not that with the theory per se but its implicit acknowledgement of the right of the Federal Government to impose a non-proportional tax burden in the first place. Even manipulating such an unjust system, rather than working to make every American pay proportionately the same amount in taxes, is tantamount to manipulating an evil to make it a little less evil.

The Starve the Beast Theory, first referred to in the Reagan administration, was that the growth of the Federal Government could be halted not by insisting on spending cuts but rather by reducing tax revenues first to force deficit spending which would force the Federal Government to act responsibly and cut spending.

Trickle-Down was a mixed bag during the Reagan administration, but to the extent that it hastened the economic recovery of the mid-to-late 1980s lends it some credence as an economic manipulation technique at best. Its biggest problem was in the legacy it left modern Conservatives, who chant it like a mantra to champion their primary economic message of " _Tax Cuts and more Tax Cuts_ ".

Starve the Beast was a total, unmitigated disaster. How any rational person could have thought that a society irresponsible enough to support a government that spent more money than it took in would suddenly be responsible enough to reduce spending because it took in even less money is beyond comprehension.

Modern Conservatives championed both of these theories. Nor did they recant after the explosion of federal debt during the 1980s. Actually they turned with a vengeance on the next Republican president, George H Bush, who actually tried to responsibly cut some of the massive debt accumulated by President Reagan.

Trickle-Down and Starve the Beast were collectively referred to by both opponents and/or doubters of the time as 'Voodoo Economics'. The reason why this was the case is illustrated in the figures below.

Even after Democratic President Bill Clinton cut the debt (measured as a percentage of GDP) in the period 1993 to 2000 by largely abandoning both of those theories, Conservatives again embraced them under President George W Bush (2001-2008) and again saw debt-to-GDP rise substantially.

The meteoric rise even after 2008 is immaterial to the fact that the Conservatives since 1980 were fully aware—and equally responsible—for what was going on. Either that or they were busy wishing away reality.

Another supposed Conservative ideal has been to reduce the size of the Federal Government. How did that work out?

First, we must determine how to measure the size of government. That can best be measured by Federal Government spending, measured either as a total or more relevantly as a percentage of GDP. The figures below indicate these measures.

The growth in federal spending clearly rose during periods when the new Conservatives held control of the Federal Government.

When confronted by such data, and/or claims of hypocrisy, Conservatives often claim that they did not really control the Federal Government during the periods in question but only the Presidency. This argument is a double-edged sword for them to utilize, since though at times they held the Presidency but not Congress there were also times—times they complain about—when they held the Congress but not the Presidency.

How valid is this?

The Republican Party, which Conservatives supported almost exclusively during these times, clearly held the majority of federal control during the huge increases—in spending and debt—from 1981 through 1986 and again in the period from 1995 through 2006.

Even with popular Conservative figures, it is telling to see how their fellow Conservatives treat them when they stray from the modern 'relative' Conservative line and espouse 'too much' liberty.

Barry Goldwater was turned against by the new Conservative movement beginning in the early 1980s. His staunch support of individual liberties did not set well at all with the new religious-based leanings of the movement. Goldwater repeatedly criticized the Republican Party for its opposition of abortion rights and for foreign military interventions such as those in Iraq, Iran and Nicaragua. He supported relaxing federal restrictions against marijuana use and was against military policy banning homosexuals in the military.

Barry Goldwater died in 1998—viewed as an aged embarrassment by much of the new Conservatives.

David Stockman, regaled as the wonder-boy of Reaganomics during the early years of President Reagan's administration, was vilified by Conservatives after he in 1982 began telling the truth about what rising federal deficits were projected to do. This was, however, his job as director of the Office of Management and Budget. He warned of the projected consequences of tax cuts, for the wealthy or otherwise, without spending cuts.

Not until more than two decades later, during the term of Democratic President Barack Obama, did Conservatives start taking Stockman seriously. Of course, they seldom mentioned that he had been mainly talking about Republican irresponsibility.

Ron Paul, Congressman from Texas, was and is a thorn in the side of the Republican Party and their new Conservative supporters. A doctor by profession, Paul was first elected to the House as a Republican from Texas in 1976. Losing a bid for a Senate seat in 1984, he ran for president under the Libertarian Party in 1988 in an attempt to bring to light the hypocrisy of out-of-control spending and government expansion. He lost.

Deciding he could best have some influence on events from inside the Congress, he again ran for his old House seat as a Republican in 1996. Outraged by his audacity at comparing traditional Conservatism with modern Conservatism, Paul was fiercely opposed by the GOP itself. Aided by traditional-style Conservative figures such as Pat Buchanan and Steve Forbes, Ron Paul won the 1996 election and returned to the U.S. House of Representatives.

In 2008 he tried to run for U.S. President again, this time as a Republican. In the primaries he was consistently snubbed by the GOP and ridiculed by modern Conservatives for his purely Libertarian stances, primarily his opposition to the military occupation of Iraq and Afghanistan.

A huge shift in Conservative philosophy was the rise, and some say outright subversion, of the movement by aggressive anti-Soviet liberals who promoted the use of U.S. power to bring their version of democracy and human rights to foreign countries. Starting in the 1970s but gaining huge influence after 1980, these Neo-Conservatives saw little problem with the growing welfare state or expanding federal powers as long as it did not interfere with their molding of the world in what they saw as 'the American image'.

Neo-Conservatives were often upfront about their belief that America had a 'divine purpose' to spread freedom and liberty—their versions, of course—to the rest of the world. This 'divine purpose' was more often than not decidedly Christian in nature, and the ancient Biblical lands of the Middle East were often prominent in their plans.

A common phrase used by Neo-Conservatives in describing U.S. foreign policy that ran counter to their desires was that the opposition lacked 'moral clarity'. Obviously their definition of morality differed quite a bit from the individual-liberty definition that more appropriately defines a moral society.

Neo-Conservatives were big proponents of using military power not only to protect U.S. interests but to engage in nation-building, which became another glaring dichotomy of modern Conservatism. The Republican Party, which criticized President Clinton at various times in the 1990s for committing U.S. forces without 'exit strategies', by 2004 was supporting far greater foreign adventures in the Middle East while claiming it was unpatriotic to even dare ask about 'exit strategies'.

Some examples of the Orwellian double-speak adopted by American Conservatives due to Neo-Conservative influence follows.

The United States has not been in a Constitutionally-defined war since 1945. Korea, Vietnam, Iraq, Bosnia and Afghanistan are all examples of prolonged military conflicts that could be legitimately argued to be unconstitutional. Congress never declared war in any of those conflicts, though the U.S. Constitution grants to that branch the sole power to do so.

However, American Conservatives have routinely denounced any American opposing such military actions to be either a traitor and/or someone who wishes harm to come to American troops.

Where is the logic in that? Americans that want the U.S. Constitution followed are 'bad' Americans .... according to some 'good' Americans.

If the Neo-Conservatives who worked so hard to get America in those conflicts could have convinced Congress that the United States was being endangered there is little doubt that Congress would have declared war. But that never happened because there was no direct threat to the United States.

Congress, in those instances, was certainly complicit in wrong-doing. They would not declare war but they would approve the use of funds to pay for the military actions. There seemed to be an agreement not to ever have a Declaration of War vote come up so that no Congressman could hypocritically have to vote _against_ war but _for_ 'war-like' funding.

Of course, American Conservatives denounced any members not approving funds as 'unpatriotic' and not 'caring for the troops'. They said that a vote against funding the military conflict in question was tantamount to wanting to have U.S. troops fight without proper support.

No ... it meant that the troops should stop fighting and be brought home.

Another example is the so-called Flag Desecration Amendment.

During the Vietnam conflict almost every state passed some form of law against desecrating the U.S. flag. This was in response to widespread demonstrations against that conflict by protesters, many of whom felt it was unconstitutional. In a relatively few instances the protesters would burn, or otherwise desecrate, a U.S. flag. Most of these laws stood until 1989, when the Supreme Court ruled on a case ( _Texas v Johnson_ ) of a demonstrator arrested for flag-burning at the 1984 Republican Convention in Dallas, TX.

The Supreme Court said that desecration of the United States flag is considered disrespectful certainly but such action was protected under the First Amendment. While not speech itself the act was clearly attempting to convey a message. State laws against flag desecration thus violated the First Amendment and were declared unconstitutional.

The Republican Party, by now deeply controlled by Neo-Conservatives, decided that the way to best appease its new base was to make a show of amending the Constitution to 'de-protect' the right to desecrate the U.S. flag.

It was a ridiculous spectacle of pandering to emotions. And that this near-nonexistent 'problem' needed to be 'halted' via amending the United States Constitution made a mockery of the amendment process.

During the 12 years that the Republicans controlled Congress, 1995 through 2006, this Flag Desecration Amendment passed the House of Representatives all six times it was voted on. It was defeated by the Senate, also controlled by Republicans, every time.

It could have been worse, they could have really submitted the amendment to the states for ratification.

##  The Plan: Result

This phenomenon of modern American Conservatism brings to light the grand theory behind 'The Plan' to have the United States destroy itself.

It is probably safe to assume that in none of the time periods reviewed thus far were there ever nefarious attempts being made to harm the United States society. To be sure, the case being made here is that harm was done in every instance—but what harm was being perpetrated was done so because of short-sightedness and/or arrogance.

The damage done to the American society was for the most part orchestrated by groups of individuals who sincerely thought that what they were doing was right. It was seldom a case of not knowing right from wrong or freedom from tyranny, but rather a series of deliberate violations of individual freedoms undertaken by groups who convinced themselves that their feelings trumped morality.

In short, the culprit has always been the transition from a Republic based on laws to a Democracy based on fads, fancies and feelings.

Modern Conservatives will never be convinced that what they 'feel' is anything other than moral and just. Neither will modern Liberals. Nor should they be expected to—it is largely immaterial. That the course of U.S. society has become nothing more than a contest of competing feelings is the reason why that course has long been a series of bad decisions mostly leading downhill.

The irony, however, with modern Conservatives is clear to most everyone but them. It was expected that Progressives—first Republicans and then Democrats— would act against individual liberties, since their philosophical bent is essentially Socialism anyway. Modern Conservatives, especially the vast majority claiming allegiance to the Republican Party, almost always talk as if they cherish liberty and individual rights and Capitalism ... but then run up Federal deficits as big or bigger than Democrats, champion foreign military adventures and try to legislate their own personal versions of morality.

Morality as defined by the Enlightenment philosophers, and embraced by most of the U.S. Founders, transcends the relative quagmire of rule by individual feelings in favor of a set of rules strictly supporting individual liberty.

It is the relative interpretation of morality that causes the problems, especially in this popularity contest known as Democracy. In the following chapters we'll highlight the chief dangers the United States has found regarding the misunderstanding of moral virtues: Moral Relativism and Moral Hazards.

Progressives and Liberals are philosophically opposed to the ideas which the United States was founded upon, but that opposition is usually clearly expressed. They say that they are just 'adapting to the times', and one can either agree or disagree with them. However, when you elect one of them to office you know basically what you're getting.

Modern Conservatives more often than not campaign on traditional ideals but somehow end up voting essentially the same as Progressives when in office. And they seldom get voted out of office due to their hypocritical acts.

Obviously Republican voters don't have too much trouble with this hypocrisy. A review of some of the earlier periods of American stumbles point out that this has been characteristic of Republicans since their beginnings as a political party in the 1850s.

The War Between the States (i.e. the destruction of Federalism) was clearly a Republican event. The birth of Progressivism in the early 1900s was overwhelmingly Republican (chiefly Theodore Roosevelt). The progressive income tax (16th amendment) was passed by a Republican President and Congress, as was the direct election of Senators (17th amendment). The Federal Reserve was conceived by Republicans even though Democrats were the majority power by the time it was officially formed.

Though the largest and most obvious Socialist programs in the United States, Social Security and Medicare, were both put in place by Democratic Presidents and Congresses both programs have regularly been expanded when Republicans held power.

U.S. debt has never been reduced by a Republican-controlled Congress, nor a Federal budget ever been balanced, since the rise of modern Conservatism in the 1970s.

As far as 'The Plan' is concerned, this Conservative movement is a great thing. It allows Americans to express uneasiness about what they perceive is happening and yet guarantees that no true opposition will ever even get started.

##  Quotes

William Buckley

"Back in the thirties we were told we must collectivize the nation because the people were so poor. Now we are told we must collectivize the nation because the people are so rich."

"I won't insult your intelligence by suggesting that you really believe what you just said."

Barry Goldwater

" Equality, rightly understood as our founding fathers understood it, leads to liberty and to the emancipation of creative differences; wrongly understood, as it has been so tragically in our time, it leads first to conformity and then to despotism."

"I think every good Christian ought to kick Falwell right in the ass."

"Where is the politician who has not promised to fight to the death for lower taxes- and who has not proceeded to vote for the very spending projects that make tax cuts impossible?"

President Ronald Reagan

"Concentrated power has always been the enemy of liberty."

"Government always finds a need for whatever money it gets."

"Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves."

**********

# The Plan - Secret Revealed

In the 1928 Supreme Court case _Olmstead v. United States_ , dissenting Judge Louise Brandeis wrote the words which maybe best described what 'The Plan' had been all about. It expressed a truth that was evident, or should have been, back in 1789 but one that the majority of Americans never grasped.

"Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding."

It boils down to the fact that most Americans have apparently never understood the virtue of morality as applicable to a society or government.

Morality is most often equated with spiritual beliefs and values. If an individual chooses to accept this as a definition of their own individual morality there is no problem. The problem arises when society, and the government necessary for maintaining that society, tries to define morality in such a way for society as a whole.

##  Moral Relativism

There was no reason to believe, back in 1790, that American society would for some reason lose its moral compass just because of the passage of time.

There was, however, every reason to believe that basic human nature would not change because that society thought they could form a better government than anyone else had.

Governments are formed among men because most men are not moral, or at best because most men do not trust each other to act morally all the time. Without the limits and sanctions that can best be enforced by a government, the majority will always tend towards immorality. That the government formed is a Democratic Republic does not change this fact.

It is this arrogance of superiority that prompted 'The Plan' in the first place.

Of course, no one at the time used the word democracy to describe the new government. A republic was formed. But from the start this republic was said to be democratic in nature—with the government to be a republic but chosen via democratic means.

It is thus fair to describe the new nation as a Democratic Republic, and that it was designed to be such from the moment the coup was finalized in Philadelphia back in 1789.

The implied assertion was basically that a Democratic Republic is not only moral but also transforms its citizenry into moral conduct. This was, and is, ridiculous! If it could not accomplish the later—the citizen transformation part—then its democratic attributes would surely transform the government itself into immorality. Thus, the real assertion was that this 'magic' government could transform human nature.

If it were true that such a government could cause the members, or even the majority of members, of a society to change their basic nature then such a model would probably spread like wildfire and become mankind's future.

For those who had managed to attain positions of power and influence through manipulations of standard hierarchical governments (e.g. monarchies or empires) such transformative powers would for the most part have been extremely disturbing.

Hence the early interest in guiding this experiment to utter failure.

The societal limits and sanctions that are the responsibilities of a moral government are:

* To prevent anyone from initiating force against any of its citizens. That force would include

** Physical harm.

** Denying any other citizen the right to pursue life as they please—as long they are not themselves initiating force against other citizens.

** Theft of private property.

* To enforce contracts between citizens, though such an abridgement of a contract by one party could itself be argued to be an instance of _initiating_ force against the other party.

That's pretty much it!

But the idea of a moral government being sustainable as long as immoral citizenry have a voice in its makeup is ..... ludicrous.

Consider the idea that a moral government can be formed and maintained by a society not itself predominately moral. Why would such a society do this?

Do people suddenly realize that they covet what is not theirs so they decide to form a government to banish their own impure thoughts? Do thieves and murders lobby for a government to protect their victims?

No! People want to protect what is theirs from their immoral thieving neighbors—many of whom think that they are justified in taking what they _need_ rather than what they _earn_. People want to be sure the party on the other end of a contract will actually keep their word. People want to feel safe—from their fellow citizens—in doing what they please as long it doesn't infringe on anyone else's rights.

Attempts at forming moral governments are made by moral members of society to protect themselves from the immoral members and also to protect them from foreign societies.

Consider the idea that a moral government can transform the immoral members of society into becoming moral. How would that be accomplished?

Do people get thwarted in their desire to steal from their neighbor and suddenly realize that they shouldn't ever have those sinful impulses again? Do liars and cheats get punished for their despicable deeds and because of this decide to turn their lives around?

No! The most a government can do is see to it citizens _act_ morally, whether they have moral souls or not.

It is for this reason that a government is entrusted by its citizens with the society's sole, legal monopoly on the initiation of force.

Democratic governments are maintained by the will of some subset of its citizens. They may differ as to how often that will is sampled, how big the voting subset is, etc.

However, all human societies have in common the fact that a very substantial portion of its members are imperfect. They are either immoral in some way—the definition of which is unfortunately rather subjective—or their particular moral code conflicts with that of their fellow citizens.

The term 'moral' as used here refers to its use as a societal attribute, both by citizens and government, measuring how well fundamental individual liberties are supported. Refer to various earlier discussions on the meaning of moral societies and moral governments, especially _Philosophical Musings -- Extrapolation: Individual Rights and Government_.

If immorality in this sense could somehow be banished from the electorate a democratically-maintained government could in theory remain moral.

Would it still be called a democracy? Who would be the omnipotent judge of who was moral and who was not? What if no moral voters were found?

So we are left with the foregone conclusion that in a democracy some percentage of the electorate will be, to varying degrees, immoral.

In a democratic process voters cast their support not by flipping coins but by voting for the candidate they want to see win. Voters make that decision based on whether the candidate in question will benefit _them_ the most. Such benefit is ideally measured by the standard of the voters' moral code. That moral code, however, is far from consistent in most of the electorate.

On one end of the spectrum you have people who just by consensus would be considered immoral (e.g. thieves, con men, etc). They initiate force to take what they desire from others. How they make their decision is beyond reasonable speculation.

On the other end you have people who will consistently adhere to their own morals and will always vote for the candidate who best represents those same morals.

The majority in the middle will adjust their moral code depending on which candidate promises to better their own personal circumstances. There may be limits to how much 'adjusting' such voters will do and still be able to justify to themselves what they have done. But, of course, what is really done in such a case is to be untrue to one's own internal morals.

It is just a matter of time, then, before some candidate decides that to garner support of the electorate it would behoove him to support governmental actions that endear him to those multitudes in the moral middle ground.

If we refer to the components of an individual's moral code by the terms 'moral values and principles', then the following question is both profound and disturbing to reflect on.

Is a stand principled if one only takes it when that stand provides personal benefit? Or, expressed as a statement; a real moral value can only be determined when an individual adheres to it even to his own personal detriment.

Few, if any, individuals of any human society can claim to have consistent moral character. All that can be realistically hoped for is that _most_ behave morally _most_ of the time.

To those that recognize this fact of the human condition, rational thought accepts this shortcoming and strives to move back to the moral path even after they stray from it.

For those that refuse to recognize this shortcoming, the striving is rather to internally rationalize their adjustments and accept the newly altered course as their new path.

The former have to live with the fact that they have acted immorally and try to 'go forth and sin no more'. The shame of their transgressions often hardens their resolve to stick to their principles in the future.

The later feel morally justified in their actions even though _they themselves_ would have found many of their own actions morally repugnant in the past.

Throughout human history, the vast majority of people fall into the second category. We will call this human attribute one of _moral relativity_.

The following concepts thus describe Moral Relativity.

* Adjustments, specifically violations, of one's moral code based on if such adjustments enhance personal gain

* Abandonment, or adjusting, of proclaimed values when such values fail to bring personal gain

Given that moral relativity is the default condition for most members of any society, a society started on a moral path will thus drift from that path naturally. If we assume most members of a society to be considered 'good', then this phenomenon can be described by a quote often attributed to the 18th century Irish statesman Edmund Burke.

"All that is necessary for evil to triumph is for good men to do nothing."

There have been several distinct periods of seismic deviation from the course undertaken by the United States of America. But the real weapon of choice utilized in 'The Plan' has been this human tendency towards moral relativism.

To illustrate this will require the use of a graph as shown.

The sloping line will be used to plot Federal Power vs Individual Liberty. With it we'll visit various points in U.S. history and try to visualize moral relativism.

Realizing that the ratio of Federal Power to Individual Liberty to be considered 'moral' is subjective, we will nevertheless for illustration purposes use the line shown as a constant measure of such societal morality.

The gauge on the left also represents individual liberty. The dashed-line box will depict, at the time of any snapshot, the range between what is perceived as a high amount of liberty and what is perceived as a low amount of liberty.

Societal morality will be depicted by a liberty icon representing the U.S. Constitution. Its position will depict the intersection of the values assigned for both Individual Liberties and Federal Power.

This combination of graphics will depict 'The Plan' in action. The sloping path downward will represent the gradual accomplishment of our goal while the gauge will both measure loss of liberty in absolute terms and illustrate the corresponding decrease in expectations that help fuel the downward slide.

1789

As a baseline we will depict the United States as it was in 1789, with few Federal Powers but a great amount of Individual Liberty.

The range of perceived liberty would represent something like the near-absence of any federal government (as with the Articles of Confederation) to the British-like central planning advocated by Alexander Hamilton.

The bulk of American society realized that some federal government control was needed, probably more than they had under the Articles of Confederation. However, they had fought a war against a distant centralized government and would not accept the new U.S. Government trying to control their lives any more than necessary.

1828

Between 1789 and 1828 we can attribute the changed societal morality to several factors.

One. As the Federal Government flexed more muscle and declared itself to possess new and varied implied powers it gained the popular support of many citizens who liked the idea of federal action against competitors and powerful interests whom they didn't feel they could succeed against themselves.

Two. When the young Federal Government started assuming some of the debts and responsibilities of the states, many people in the more irresponsible states thought that was a great deal. With the Federal Government financing the assumption of these debts and responsibilities from everyone, this was a clear subsidization of the irresponsible members of society by the responsible ones.

The perceived range of liberty was lowered _in absolute terms_ because things that were considered unthinkable back in 1789, like Virginians helping pay off Massachusetts debt, was a reality. There still were lower limits to what was acceptable, but that horizon of 'unthinkable' was expanding.

If going along with the Federal Government getting a little more powerful benefitted them personally, then what was the loss of a little individual liberty? The beneficiaries thought it was just fine. Citizens who had 'no dog in the hunt' figured why raise a fuss over such a little issue. Society as a whole seemed fine with accepting the new status quo as the new definition of societal morality.

## 1861

Between 1828 and 1861 the demographic and economic rise of the northern states was the main impact to societal morality.

The majority in the North saw no problem with the fact that the Federal Government's main financing mechanism—tariffs on foreign goods—aided the growth of the North while imposing a clear non-proportionate financial burden on the South.

That the benefits of this lopsided taxation was a clear federally-imposed transfer of wealth from South to North was not a cause for alarm for many Americans.

If going along with the Federal Government getting a little more powerful benefitted them personally, then what was the loss of a little Individual Liberty for their neighbors in the South? The beneficiaries thought it was just fine. Citizens who had 'no dog in the hunt' figured why raise a fuss over such a little issue. Society as a whole seemed fine with accepting the new status quo as the new definition of societal morality.

The perceived liberty limits, as before also slid with the loss of liberties. In the early 1800s few Americans would have believed the influence that the Federal Government would be exerting on both state governments and private institutions. But as those new realities took hold, the bar for what would be considered intolerable was lowered.

1877

Between 1861 and 1877 the War Between the States was the main impact to societal morality.

The majority in the North saw no problem with the fact that the Federal Government was entirely making up a power never hinted at in the Constitution—that of initiating military force to prevent a state that had voluntarily joined the United States from voluntarily leaving the United States. Things were going well for the country; why would anyone ever try to leave?

Unlike the previous slides down our graph, this one was cataclysmic. The original liberty 'limits' will from now on be displayed for a sense of perspective.

There was more of a drastic slide than previously because this one involved massive amounts of blood and treasure. It was complicated by the moral component of slavery, though this institution was fully known and allowed for in the Constitution. Even if one felt slavery wrong, did that justify abrogation of the contract that was embodied in that Constitution?

The obvious and fair(er) answer to the slavery situation, if one didn't want to let the South just up and leave, would have been to offer financial restitution to the southern slave owners for loss of their private property.

The bulk of northern citizens, however, neither wanted freed slaves running around their own states nor wanted to be financially burdened by purchasing their freedom. Let the Federal Government do what it needed to do to keep those unpleasantries from happening!

And if in the process that government insisted that states had no right to secede then who were regular citizens to question things?

After the inevitable southern defeat the citizens of the North felt justified in supporting a victorious federal government. After all, northern boys had died. Yes, the Congress was doing all sorts of unfair things to the defeated South in order to have them pay their dues for rejoining the Union that they of supposedly never really left, but it was not a cause for alarm; this was the U.S. Government after all!

If going along with the Federal Government getting a lot more powerful allowed people in the North to feel righteous and victorious, then what was the loss of any or all Individual Liberties for their former enemies in the South? The beneficiaries thought it was just fine. Citizens who weren't fine with what was happening got the clear message that opposing the Federal Government meant incarceration and/or death. Society as a whole just accepted the new status quo as the new definition of societal morality.

Notice the perceived limits to liberty and how those limits (i.e. expectations) keep steadily falling.

In 1789 few Americans could conceive of a central bank, but once established they came to accept it. Most thought they had fought a war against England for the right to speak out against a central government control, yet by the turn of the century they came to accept laws by their own federal government outlawing such 'seditious' speech.

In 1820 few Americans would have found thinkable the massive tariffs imposed several years later with the 1828 Tariff of Abominations. But due to the disparities in industrialization between North and South the majority of Americans apparently saw nothing wrong in such one-sided protectionism. By 1860 they were electing to power a new political party whose main promise was to raise tariffs even further and faster.

As late as 1861 citizens considered themselves primarily citizens of the state in which they chose to live; a member of a community. By 1868 they were ordered to consider themselves citizens of the United States first and citizens of their own state second.

And they best not dare think that states were free to dissociate themselves from a Federal Government they may not agree with!

It seemed as if the definition of liberty was changing all the time, and always towards less Individual Freedom and towards greater Federal Power.

1913

Capitalism, immigration and a relative lessoning of federal encroachment was the order of this period's early days. Maybe it was the lull after the partying and over-reaching of the victors once the War Between the States was concluded.

Later, there were rumblings from those Americans who saw in Socialism an easy path to a better life but for the most part the Constitution still posed at least a substantive barrier. There arose populist movements calling for the acceleration of Federal Power increases to continue—of course only to help 'the downtrodden'.

And if in the process such a 'Progressive' government helped the many by stepping on Individual Liberties of the few, it was not a cause for alarm; this was the U.S. Government after all!

As late as 1900 few thought it possible that the Federal Government could even consider directly taxing Americans on the fruits of their labor. The Constitution explicitly forbid doing so.

In the first 40 years of the nation it was a contentious, big deal that the United States chartered two private banks to act as _national banks_. By 1913 the Federal Government had turned over the reins of the entire national monetary system to a cartel of private bank interests known as the _Federal Reserve_.

Expectations among the American populace of what the Federal Government should be allowed to do just kept growing by leaps and bounds.

1950

Between 1913 and 1950 two World Wars and the Great Depression hurried America down the slope of societal morality.

Emergencies became the impetus for society to trade off even more Individual Liberties for the security and collective cohesiveness represented by Federal Power.

The Feds needed money to 'help all its citizens'; that sounded reasonable—more power was granted.

The Feds needed increased police powers to 'protect its citizens'; that sounded reasonable—more power was granted.

The Feds needed to work closer with banks and create controlled monopolies to 'provide economic stability'; that sounded reasonable—more power was granted.

It was all for the good of the country; it was not a cause for alarm; this was the U.S. Government after all!

No one would have thought the Federal Government could convince its working-class citizens to _allow_ it to confiscate their money and distribute it directly to other Americans whose only claim was that they were past the age of 65.

But America stood by while its Federal Government steadily increased the taxes stolen from its citizens each year. It stood by while that same government paid some workers to not work and paid some farmers not to farm.

Was rewarding some Americans to be able to survive into old age such a leap?

1988

Between 1950 and 1988 the twin specters of fighting Communism abroad and adopting Socialism at home was the impetus pushing America down the slope of societal morality.

The contest between the United States and the Soviet Union for world domination prompted massive federal spending. One reason was to ensure America came out the victor. The other reason was to keep the American populace pacified and prosperous so it would be obvious which side took care of its citizens better.

For the first time without the 'emergency' of a declared war, the Federal Government started consistently spending more money than it took in. The money was borrowed—the bills to be paid back by future generations.

The new federal power was thus to transfer wealth to pay for currently-living adult Americans from both _born_ and _unborn_ American children.

As incredible it had seemed at first to _socialize_ the living expenses of the elderly, a Great Society decided it was fine with the idea of _socialized_ health care—for those same elderly.

America did a much better job in this Socialism stuff than the Soviet Union ever did! And by 1988 both nations were largely bankrupt; but the Soviet Union collapsed first.

It was all for the good of the country; it was not a cause for alarm; this was the U.S. Government after all!

If one were to examine in 1988 the relations between Federal Power and Individual Liberty of 1789 compared with 1988 the differences would be profound. Far less in Individual Liberties remained and far more Federal Power was the norm.

The erosion of liberty has several analogies to this graph.

The slippery slope analogy fits. Stand by and watch ANY liberties violated or ANY government powers increased and the effort to push liberty back on track—back up the slope—almost always proves too hard to accomplish.

The path of least resistance analogy fits. Stand by and do nothing about a MINOR loss of liberty and those who want to violate individual rights find their task much easier to accomplish. Liberty keeps slipping away because it's 'too hard' to prop up.

Most Americans felt that the liberty icon in our example was placed where it started in 1789 by their revered Founding Fathers. Many recognized that the Constitution enacted in that year was meant to be the blocks to keep liberty from sliding down the slope depicted in our graphs. Over time it appears an increasing number of Americans thought it periodically convenient to remove small chunks out of those blocks, but they were only small chunks that taken individually weren't worth fighting over. As those blocks were whittled down, liberty slowly slid down the slope.

Whenever anyone took notice of what was happening, their calls for help in pushing liberty back up were largely ignored or ridiculed. They were decried as old-fashioned and out of step with the times. The effort needed to push liberty back up the slope was immense—and far more than most Americans even cared to contemplate.

An inclined plane makes use of force vectors to manage the movement of an object between two points separated by vertical distance. If the object is to be moved from a higher level to a lower level, the incline aids in masking the amount of vertical movement. The steeper the incline, the more notice and impact the object will make coming down. If the object is to be moved from a lower to a higher level, the incline also lessons the amount of work to do so—but the effort is still much greater than moving the object downwards.

Since the U.S. Constitution was meant to define the makeup of a moral government, the destruction of that Constitution can be viewed as making that government less moral. It is likewise safe to assert that since the Constitution described a government of many individual liberties but limited federal powers, moving the U.S. society in the opposite direction (i.e. few individual liberties and near-unlimited federal powers) can be viewed as destructive.

The destruction of these ideas the United States purported to represent—morality, superiority, whatever—was what 'The Plan' was about. A coup that drastically curtails individual liberties over a short period of time would not have accomplished that. Romantics would later say that the American dream was working well but had been overtaken by catastrophe, as in the tales of Atlantis or the ancient Mayans. Likewise, the rapid accumulation of federal power—at the expense of individual liberties, of course—would be viewed as an idyllic society that just got overwhelmed by bad leaders.

No, what was needed was an inclined plane; a means of falling just as far but in a controlled and far-from-spectacular manner. A means to fall—lose individual liberties—and run—accumulate federal power—in perfect lockstep with one other.

No conspiracy, no coup, no rebel forces nor terrorist hordes.

Just man's tendency to immorality.

The force to propel America down that slope had to come from the American people themselves. And it did.

The United States was formed as a Democratic Republic. Democratic was the key word that allowed 'The Plan' to succeed. The vision of the American Founders was of propertied Americans maintaining a government whose main job was to protect individual liberty and private property. 'The Plan' relied on American rabble capturing and maintaining a government whose job increasingly was to steal private property from the 'haves' and give it to the 'have-nots'.

In the first 40 years of the United States who could vote was controlled by the states and largely limited to white males who owned land. By the 1830s when all white males were eligible to vote, elections were largely determined by which political parties could do better at enticing these largely uneducated and uninterested men to the polls to vote for their candidates. Black males were granted the right to vote in 1870 but didn't do so in large numbers till the middle of the following century. Women gained the right to vote in 1920.

This 'enfranchisement' expansion was easy to predict—with Americans leaders early on championing the virtues of equality, egalitarianism and the like. They were stuck in a conundrum of fearing democratic rule and espousing democratic principles.

There is a direct correlation between the percentage of Americans eligible to vote and the slide down our government 'morality' scale.

As pointed out numerous times, humans by nature will act in their own interests. The problem is when their interests conflict with the interests of others in their society. One of the main reasons societies institute governments is to handle such conflicts.

Moral societies recognize that these instances when individual interests conflict define the essence of morality. The choice is rather to take an action because it provides personal benefit or rather to forgo personal benefit because the action itself is immoral.

**Example 1.** A man has not enough money to feed his family. He is presented with the opportunity to steal food from a neighbor. His personal benefit is served by stealing the food. Morality says he cannot take—by force, subterfuge, false pretenses, etc—the private property of another except in trade.

**Example 2.** A woman's business partnership has gone bad. She can abandon her partner and leave him with all the business debts they together accumulated. Her personal benefit is solved by running away. Morality says she voluntarily entered a contract and has to abide by the terms of it.

A moral government could be viewed as the guardian entity for a society that wants to act morally but recognizes that something is needed to arbitrate and enforce such conflicts between individual members according to agreed-upon societal rules.

This is fine in theory, as long as the societal rules that the government enforces remain largely fixed and reflect society's moral precepts.

The problem occurs when society routinely changes those rules based not on moral precepts but rather on subjective samplings about how members feel about the conflict situations.

**Example 1 revisited.** The man in question is unemployed. The majority of citizens decide that this situation represents a valid claim by him for unearned money. Rather than personally stealing it, however, the government should appropriate the money needed by force and distribute it to the man. The force is required because not everyone in society can be counted on to voluntarily _contribute_ money to the man.

**Example 2 revisited.** The woman in question is a minority. The majority of citizens decide that the historically-persecuted background of her sex and/or race represent a valid reason why she should be 'cut some slack' and relieved of some of her obligations. The government should appropriate money needed for this relief and distribute it to the woman. The force is required because not everyone in society can be counted on to voluntarily _contribute_ money to the woman.

The applicable rules or laws—created when such situations were evaluated in a more absolute interpretation of moral conduct—over time tend towards becoming less rigid. They become more relative to individual situations.

Hence the term Moral Relativism.

So we have humans acting in their own interests finding that those interests necessarily conflict at times with their concepts of morality. Given the large percentage of citizens eligible to vote on government makeup there will necessarily be a large number of these conflicting interests. We also have the fact that every increase in enfranchisement tends to be composed of citizens of less means (i.e. less property ownership).

Otherwise-moral citizens with little in the way of private property often find it difficult to understand the concept of private property rights, much as citizens with little in the way of individual rights (in Somalia, for example) often find it difficult to understand the concept of individual rights and liberty. To them it is something abstract that they find hard to conceptualize because it is not really part of their experience.

Thus an American with $1000 to his name will often tend to feel it is morally justifiable to take $1 apiece from 1000 of his wealthier neighbors because they 'can afford it' whereas he would feel wrong about taking $100 apiece from 10 of those same neighbors.

The moral precept against stealing has not changed to somehow specify that stealing is acceptable if it involves less than some arbitrary amount.

The man in the above example doubled his wealth in either case; he took $1000 that he did not earn. The fact that he did not earn it means it was taken by force, for even begging can be viewed as earning money if the donor voluntarily surrenders it.

Stealing is stealing—the amount should not enter into the morality of the act.

The reason that the man feels more justified the less money he steals from each person is that the disparity between the private property between himself and his neighbors is so great. He can't comprehend their wealth and thus cannot understand why they would _need_ to have so much.

Humans are creatures of emotion. If the man is old or supporting a family, then many Americans will feel compassion for him.

In 1789, many Americans might choose to give the man money from their own pockets.

In 1988, most Americans are more likely to choose to give the man money from the pockets of their neighbors.

Stealing may still be considered immoral, but if the majority agree to have government—with its monopoly on the initiation of force—steal the money from _other_ Americans then that is somehow considered all right.

There was an election. The majority agreed. It was all for the good of the country; it was not a cause for alarm; this is the U.S. Government after all!

'The Plan' had to be the result of the American people for it to be meaningful.

And it was.

It is as easy to blame that nebulous entity called _the Federal Government_ for what is perceived as the immorality of decreasing liberties and increasing federal power. Likewise it is easy to see some sort of difference between a thief _stealing_ $1,000 from an American citizen and the Federal Government—in the name of the American people— _appropriating_ the same $1,000 from that same American citizen.

In both cases, given a democratic form of government, the American people and the Federal Government are the same.

It is harder, but still a fact, to admit that the blame for all immorality in the United States lies in its citizens. The Federal Government reflects the wishes of those citizens; it ultimately does what the people want.

There is little difference between an immoral act committed by an individual citizen and the same act committed by the Federal Government on behalf of the citizen.

The one difference is that the individual act of immorality is an individual affront that calls for individual punishment while the governmental act of immorality is a joint affront that calls for shared punishment by all.

Another difference is that the individual act results in someone to blame while the government act allows the misdirection of blame from 'We The People' to whichever 'dastardly politician' is chosen to be the scapegoat.

Another difference is that 'immorality by committee' diffuses the once-natural human virtue of shame. Immoral behavior by an individual results, hopefully, in shame. Immoral behavior by a group spreads the shame among all members of the group such that individual shame is diminished.

In many ways, the individual thief is more honorable than the looters who demand the Federal Government do their stealing for them. At least the thief has some responsibility for his actions. And ... the individual thief usually steals once and leaves whereas the political looter steals time after time—all the while bragging about how good you should feel about him doing it.

Apparently shame and guilt, as with morality, is relative.

##  Moral Hazard

Individuals, and by extension businesses, depend on the concept of risk to make rational decisions. Decision-making is generally weighing the potential benefits of an action against the potential risks of that action. If there is no consequence, ie no danger, of making a bad decision then the only limiting factor to keep one from doing anything would be the limit of a finite amount of time.

From _Philosophical Musings – Rights, Society and Government_ :

If one does not have the right to pursue happiness then he does not have the right to live for his own sake. What else besides happiness would one pursue? Each individual may measure happiness in differing ways but it is that pursuit which is the reason we exist at all. And the term pursuit denotes the risk of failure. If there was not that risk, or we knew we would be sheltered from that risk, then what would be the point in pursuit? Can reward exist without failure? If no matter what the decision or effort one was guaranteed to succeed then would success have any meaning?

Moral Hazard, then, is the very real concept that by doing something to shield an individual from bad consequences the tendency is to make them more reckless and irrational in their decision-making.

The inverse of this is the argument about why Socialism never has produced a productive society. Taking away from an individual the good consequences of productive effort tends to make them less productive.

For the most part, those who understand and believe the argument against Socialism understand—or at least say they do—the concept of Moral Hazard.

The concept of Moral Hazard most often revolves around insurance.

Insurance in and of itself is a vital component of free-market Capitalism, and thus Liberty. It is how we manage risk—taking prudent precautions in case events don't unfold as we hope they might. In the absence of being able to hedge using insurance, there would be far less engagement in risk-taking. Increased avoidance of risk-taking would most surely result in decreased advances in technology and other areas.

The fact is that obtaining insurance does alter your decision-making. You become less risk-averse in your decisions, since the consequences of those risks are at least partially mitigated by the insurance.

In effect, the saying 'if you break it you own it' becomes 'if you break it someone else will own it'. It is human nature to tend to be more careful with your own property than someone else's. This is related to the entire concept of individual private property. Thus, the presence of the insurance policy in itself increases risk-taking.

Pricing insurance takes into account not only the probability of the insured event occurring under normal circumstances but of it occurring under circumstances where the insured individual has become less risk-adverse. In a capitalistic market, however, both the insured and the insurer negotiate the price of the insurance contract. There is no coercion one way or another. An individual can freely choose his level of risk protection.

As foreseen by 'The Plan', any society that convinces itself that society members will all act in a moral manner will be sorely disappointed. We have pointed out the very real immorality of wealth redistribution. But just as immoral, or in some ways even more so, than coerced redistribution of wealth is the providing of societal insurance that is being paid for by others.

If we accept that entities take riskier behaviors when insured then having society collectively provide any kind of insurance is encouraging risky behavior and distorting rational decision-making. And just as the private purchase of insurance is simply a component of rational decision-making, the more subsidized insurance becomes the greater is the distortion of that decision-making.

In the extreme case, if a society provides insurance to citizens who pay no taxes then those individuals are essentially being insured for free. In such a case the incentive is great to be making irrational decisions because the risks of incorrect decisions are being mitigated at no personal cost to the decision-maker.

From _Philosophical Musings – Rights, Society and Government_ :

It follows that since reason is the primary sustaining force of man's existence, individual rights necessarily mean the right to exercise that reason. Specifically, it means the right to freely and effectively exercise that reason. To exercise reason means the ability to take independent action on that reasoning.

And . . .

Individual 'morals' are the standards or ethics that the individual's reasoning tells him is consistent with the manner in which he, for whatever reason, wishes to live his life.

Distortion of an individual's decision-making (i.e. reasoning) is corruption of his morals.

Thus, the concept of Moral Hazard refers to the distortion of an individual entity's moral behavior by the act of trying to mitigate risk from the decision-making process.

Another aspect of Moral Hazard is that by not suffering the consequences of a bad decision the decisions leading to such consequences are less likely to be avoided in the future.

The concept of Moral Hazard was never foreseen in 'The Plan' until Moral Relativism reached the inevitable point where the U.S. Government gained the ability to access unlimited funds to greatly expand upon its wealth-redistribution activities.

Providing insurance to citizens who don't pay for it is really no difference than providing them money or services they don't pay for. In either case, the wealth of others is being redistributed to them.

So examples really didn't start appearing until after 1913 and the 16th Amendment (i.e. non-proportional direct taxation).

Look at Social Security—Old-Age, Survivors and Disability Insurance or OASDI. While paid for somewhat by workers, the program soon began paying out more in benefits than beneficiaries paid in. The insurance is improperly priced and thus highly subsidized.

Americans don't have to worry so much about saving for retirement since the American society has agreed to provide them with adequate care whether they save or not. Young Americans worry less about their elderly parents for the same reason.

The results: Americans decided to save less when they're young. Individual savings rates fell, interest rates rose, American dependence on the Federal Government skyrocketed.

Look at Unemployment Insurance. While paid for somewhat by workers, benefits have often, by federal decree, been extended for periods longer than provided for in the unemployment insurance contract.

Unemployed Americans don't have near as much incentive to find a job since the American society decided the unemployed should receive taxpayer money for no other reason than being unemployed.

The results: Americans feel they can stay unemployed longer and look around more for the job they want rather than take whatever they can find. They also tend to be less worried about losing a job if they know unemployment insurance is available as a safety net.

Look at Medicare and Medicaid. Like Social Security, while it is paid for somewhat by workers, Medicare and Medicaid soon began paying out more in benefits than beneficiaries paid in. The insurance is improperly priced and thus highly subsidized.

Americans for the most part don't worry much about healthcare costs since either their private insurance covers the cost or, if they are elderly or poor, Medicare and/or Medicaid will cover the costs at a highly-subsidized rate.

The result: skyrocketing healthcare costs.

Look at the Federal Reserve. It was rationalized as a guarantee against bank runs, a form of bank insurance which could act as the 'lender of last resort'.

American banks became much less worried about traditional banking virtues because they were insulated from the risks of abandoning those virtues. The emphasis was placed on _what is legal_ rather than _what is ethical and sound._

The results: larger and more systemic cycles of economic failure along with greater price instability.

Look at the myriad of times the Federal Government bails out selected business entities—banks, investment firms, railroads, airlines, auto manufacturers, etc—with taxpayer money.

Each occurrence introduces moral hazard, as other businesses are told they don't have to be as careful about managing risk because of the likelihood of federal bailout.

The result: corporate America takes more chances with less thought to mitigating risk themselves.

Not only are these situations, both for individuals and corporations, exacerbated by federal actions meant to lesson risk but the scope increases tremendously when the Federal Government gets involved at all. What would have been a failure isolated to a small number of entities becomes a systemic failure of massive proportions.

This increase in scope is itself caused by what could be described as a societal moral hazard; perceived _fairness_. Such perception is pure Socialism.

In a moral society _fairness_ means every citizen having equal opportunity to pursue happiness, whatever that means to them. It implies nothing about equal means or equal outcome.

In the modern American society _fairness_ increasingly means every citizen should have the means for undertaking that pursuit of happiness and that they actually reach the happiness they are pursuing.

Who changed the definition? Society itself did, by letting itself be governed as a democracy.

In no society of moral individuals is it to be expected that every member

* wants the same goals,

* starts from the same point to reach those goals,

* has the same resources to pursue those goals and

* can utilize those resources with equal effectiveness.

Examining each of these four items points out what is required if all members are to achieve the modern definition of fairness and how that relates to the concept of a moral individual.

**Every member wants the same goals.** This is a contradiction of the nature of man and individuality. That every individual—moral or not—has distinct skills, desires and goals is a fundamental fact. _For purposes of this exercise however, let us pretend that this nonsense about equal goals has merit._

**Every member starts from the same point to reach those goals.** Making the rational assumption that 'point' in this case does not necessarily mean the same physical point, the above contradiction about goals would still apply. For every individual to start from the same 'state' or 'point' would have to mean that this initial condition would have had to be a goal of each individual. _Again, for purposes of this exercise, let us pretend that this nonsense about equal goals has merit and somehow everyone starts towards their same_ _new_ _goal from their same_ _old_ _goal._

**Everyone has the same resources to pursue those goals.** This is beyond even somehow pretending it can be the case. It would violate the entire concept of not only individuality but of private property rights. So, the only way the same resources can be assigned to each individual would be for force to be initiated against individuals with more than the needed resources in order to give those resources to individuals with less. Since we stated this was to be a society of moral individuals there could by definition be no such initiation of force. _Once again we have to suspend reality to pretend that this theft among moral individuals is possible._

**Every member can utilize those resources with equal effectiveness.** That would imply that every individual had the same skills and background— _again a contradiction of the nature of man._

**The only conclusion that can be reached is that this** modern **definition of** _fairness_ **is total nonsense. It cannot exist. It is an illogical illusion created by a society which is no longer moral but rather strives to justify its immorality.**

**********

# Total Meltdown – 1960 to present

##  Ideals and Morals Revisited

It is time to restate our defining ideals of morality (see _'The Plan': Blueprint of Destruction_ ) and then examine some examples of the moral decay that has befallen the United States as a society.

Ideal 1

The individual is the most important entity and his rights are paramount. A moral individual is one who chooses to exercise his rights without initiating physical force to deprive any other individual of his rights.

Ideal 2

Moral societies are formed to allow the most effective and efficient environment for moral individuals to thrive.

Ideal 3

All governments exist to facilitate functioning societies. Moral governments exist to facilitate moral societies and to minimize the violation of individual rights within those societies. Moral laws are ones which deter men from infringing on individual rights of other men.

Ideal 4

Any government holds society's monopoly on the legal use of physical force.

Ideal 5

Any government action is ultimately backed by physical force.

Ideal 6

Governments are themselves simultaneously the greatest protector and the greatest danger to individual rights.

Ideal 7

Government force is necessary for society to remain functional but should always be cautiously feared and vigorously limited.

Add to that some axiomatic facts (see _Philosophical Musings_ ).

Fact 1: Private Property Rights are Paramount

If one does not have the right of property he does not possess the means of translating his rights into reality. No amount of effort will amount to anything if the result can't be said to 'belong' to you. Why even expend effort in such a case? If we accept man's rational mind as allowing him to mold his environment to serve his needs then it must be reasonable that he has to have the right to use, dispose of or keep the things of that environment that he has produced. That is, he owns what he produces. He has the right to that property and to do with it as he pleases.

Fact 2: Taxation = Confiscation

Confiscation is the act of seizing private property for public use without compensating the owner.

Taxation is the means by which governments confiscate wealth to fund their activities.

Moral governments keep such confiscation to an absolute minimum.

Given the structure of the Federal Government in the United States the examples in this chapter are all representative of an immoral society and should not be hypocritically attributed to a detached immoral government. The mistake of assigning blame incorrectly—to 'them' rather than 'us'—is a large part of how the United States got so messed up.

In other words, the examples that follow are an indictment of the American society. To assign blame to the American government as an entity is to abdicate responsibility for the democratic one-person-one-vote style of government Americans chose—some would say foolishly—to institute.

In each of these examples it should be clear that the major factors behind them are the direct result of three systemic cracks introduced to the U.S. system throughout its early history.

These are:

1. Federal assumption of powers that the Constitution did not grant to them,

2. no viable state recourse **and**

3. the new Federal power to impose non-uniform taxation

In every case, even with Congress possessing the power to affect the legislation/mandates mentioned, there would be no possible way to afford any of it if they had to adhere to the pre-1913 U.S. Constitution. If EVERY citizen had to surrender the same percentage of their income as taxes, few would agree to pay for these actions which benefit only a few.

Likewise in every case, even with Congress being able to manipulate federal taxes as the 16th Amendment allowed, there is no possible way they could justify any of these activities without the broad interpretations granted them via _Implied Powers_ and the ability to usurp local states' rights.

And in every case, even with Congress possessing the power to affect the legislation/mandates mentioned AND being able to manipulate federal taxes as the 16th Amendment allowed, it is likely that one or more states would have cried foul and refused to be part of this charade. Most actions imposed by Congress are clearly beyond the covenant that the U.S. Constitution originally represented, but President Lincoln and the first Republicans wiped away any thought state refusal.

The first two examples will be Hate Crimes and the Americans with Disabilities Act.

These examples are representative of a society that has become confused as to the purpose of a moral society. Rather than providing an atmosphere where moral individuals can interact safely with one another, the intent appears to be to micro-manage the manner in which such individuals relate to—or even feel about—one another.

The next three examples will be Public Education, Public Transportation and Federal Housing.

These examples are, while also representative of the above-mentioned moral confusion, indicative of gross misallocation of capital. Misallocation of one's own capital is not immoral. Misallocation of other people's capital is—especially when it is done through force of Law.

The next example will be Growth of Government Unions.

This is an example of government malfeasance for the sole purpose of buying votes in a democratic system.

The next two examples will be Personal Responsibility and the Economy in general.

These all represent the direct moral breakdown that tries to justify government-sponsored theft for the purpose of redistributing private property.

The last example is Foreign Entanglements, which will entail its own more detailed chapter.

The earlier examples are relatively self-contained in that they represent American society's masochistic destruction of itself. This last example shows the direct effects of that nation's attempts to affect the governance of others outside its borders.

##  Moral Relativism Examples

###  Hate Crimes

In a society, moral laws are ones which deter men from infringing on individual rights of other men. A number of federal laws since 1964 have created an entirely new class of laws which apparently go beyond social morality.

Hate Crimes are essentially activities that are illegal—or somehow _more_ illegal—based not on the actions themselves but on who those actions are perpetrated against.

There are essentially two types; hate crimes and illegal discrimination. Hate crimes are activities already classified as a criminal act but considered to be more heinous because the perpetrator hated the victim. Illegal discrimination is an activity not considered a crime unless it happens to be exercised against certain classes of people whom society determines worthy of special protection.

Some examples of hate crimes are

* Physical violence, by a white American against a black America.

* Physical violence, by a heterosexual American against a homosexual American.

* Physical damage, inflicted by an American of one religious belief towards a house of worship affiliated with any other religious belief.

These crimes—and they are all crimes—are considered, by consensus of the American society, to represent situations that call for more sanctions than would normally be applied. Why? Because American society says it is wrong for whites to hate blacks, heterosexuals to hate homosexuals and Christians to hate Jews.

Whether hating someone is wrong, illogical or just stupid is a matter for debate. But it is clear, or certainly should be, that the perpetrator of any crime never has good feelings towards his victim.

Does the concept of hate crimes imply that black Americans that kill white Americans do so with a sense of love in their hearts while only white killers of black Americans do so out of hatred? Is the beating of a 'straight' American by a 'gay' American somehow less wrong than the beating of a 'gay' American by a 'straight' American? And apparently it is less wrong to burn your own church or synagogue than to burn one you don't attend.

The United States prides itself, or used to, as a nation of laws and as a nation where 'no man is above the law'. Its laws were supposed to be applied equally. The track record is not perfect, but nothing is perfect.

But to have an official policy of applying laws differently depending on particular physical attributes is clearly wrong.

Another related class of insanity is illegal discrimination. Some examples are

* An employer chooses to hire a man for a job rather than a young woman primarily based on the fact that he is afraid of the impact on his business if he has to let the employee take maternity leave.

** The employer is the 'perpetrator' here.

* A landlord refuses to rent a house to two men in a homosexual relationship.

** The landlord is the 'perpetrator' here

* An employer with two employees doing the same job gives the male employee a 5% raise while giving the female employee a 2% raise.

** The employer is the 'perpetrator' here.

None of these acts are by themselves crimes. They by definition cannot be. A crime is doing something to physically harm someone or steal their property. In all three instances cited above, the 'victim' is no worse off after the situation than before. No one was physically hurt nor was there any property stolen.

But in each instance the 'victim' could bring charges of illegal discrimination against the 'perpetrator'.

The private property in each case belongs to the 'perpetrator' actually; the employer's business or the landlord's rental house. So in reality such discrimination laws deprive an individual from managing his private property as he wishes. A case can be made that this is the real crime being committed.

Both types of hate crimes are instituted by government to elicit or maintain the support of members of selected 'victim' groupings. Laws or statutes are modified in order to reduce the possibility of offending specific groups of people—most often such groups being identified for political reasons.

Both types of hate crimes are instituted by society not because of anything approaching fairness or equality but because of two reasons. Members _not_ of the 'victim' groups in question

* have guilt they want to somehow relieve and

* feel that not granting special 'victim' status will offend members of the 'victim' group.

Apparently American society at some point decided that a new individual freedom was the freedom to not be offended or disliked; therefore a new crime category was created to punish offenders and haters.

### Americans with Disabilities Act

A great example of society, via its government, wanting to show compassion by acting utterly foolish is the American with Disabilities Act (ADA). Enacted in 1990 by Republican President George H Bush in concert with a Democratic-controlled Congress, this set of laws has forced American businesses to incur billions in wasted expenses and actually hampered the hiring of disabled Americans.

Provisions of this Act were:

* Employers shall not discriminate against a qualified individual with a disability. This applies to hiring, firing, advancement, compensation, training, etc.

* Public transportation—local or state—shall not discriminate against individuals with a disability.

* No individual may be discriminated against on the basis of disability with regards to the full and equal enjoyment of the goods, services, facilities, or accommodations of any place of public accommodation.

* All telecommunications companies must take steps to ensure functionally equivalent services for consumers with disabilities, notably those who are deaf or hard of hearing and those with speech impairments.

The obvious problems were:

* As with all illegal discrimination laws, the employer is directly denied the right to manage his own private property (i.e. his business) as he thinks best. In all decisions an employer has to make, some individuals are always treated—hired, rewarded, fired, etc—differently than other individuals. ADA just added a costly new difficulty to those employer decisions.

* Costs of most everything go up.

** Most buildings have to have various modifications made, both for employees and customers.

** Disabled employees often require redefined job duties, revised work schedules, special training, special equipment, etc. This often affects not just the employee but the overall business environment.

By 2000, after the first decade of the ADA, there were many statistics objectively showing many negative consequences that should have been foreseen all along:

* Most of the complaints about employer discriminations fell into two categories:

** Wrongful termination.

** Failure to provide for enough physical accommodations in the workplace.

* The employment rate of disabled Americans fell significantly.

** Younger disabled Americans seemed to be effected more than older Americans; probably because younger Americans were proving more likely to bring charges of discrimination.

** Mental disabilities seemed to be more effected than physical disabilities, probably because needed accommodations were harder to predict with those employees.

* The cost per all American employees rose significantly.

Employers that used to be willing to hire qualified disabled Americans could no longer treat them as regular employees. In addition to paying for their regular compensation employers now had to reorganize the workplace to accommodate the relatively tiny number of disabled employees. And if the employee needed to be terminated, for whatever reason, the business ran a substantial risk of being brought up on ADA discrimination charges.

The solution was a purely business one—all other things being equal, do everything possible to find as valid reason not to hire a disabled worker.

In 2008, Republican President George W Bush, again with a Democratic-controlled Congress, expanded on the Americans with Disabilities Act.

The definition of _disability_ was broadened to mean ' _a physical or mental impairment that substantially limits one or more major life activities_ '. According to the new definition

* 'major life activities include, but are not limited to, caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working'.

* 'major life activities also include the operations of a major bodily function, including but not limited to, functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions'.

Essentially this amended the ADA such that a disabled American could, if he chose, bring suit against an employer—prospective, current or past—for ANYTHING.

Of particular note in this open-ended list is the 'and working' reason. This seems to say that a disabled employee can legitimately claim workplace discrimination if he is terminated for the reason of not working.

The question is not whether this is an insane piece of legislation—it certainly is—or whether such legislation is the work of a moral government—it is certainly NOT—but how any American employer could ever hire any American again given this broad definition of disabled and this near-endless expansion of discriminatory acts.

###  Public Education

Nowhere in the Constitution is it even inferred that the Federal Government should have anything to do with education. If local communities wish to indulge in communal education there is nothing to dissuade them from doing so. Referring to the _implied power_ of satisfying the _common good,_ the Federal Government in 1979 created an executive-branch Department of Education.

Its stated purpose was to ensure that all education institutions—mainly, but far from exclusively, primary and secondary public schools—followed federal guidelines and mandates in their operations.

Its actual purpose is to indoctrinate young Americans into the type of citizens which would be less likely to recognize the ways their country had been transformed.

The Department of Education is not the only federal agency that expends federal funds for collective education goals, but it is the main coordinating agency. There was some federal involvement even prior to 1979. A National Bureau of Education existed from 1867 to 1929 and then a Department of Health, Education, and Welfare from 1953 to 1979. Because various agencies get involved it is difficult to come up with accurate figures, but we do know that over $2 trillion dollars was expended between 1965 and 2008.

The money for achieving this overall goal comes from the Federal Treasury, an analogy of which would be taking money appropriated from citizens in Texas and Nevada and using it to 'aid' schools in Pennsylvania. But individual states could not exempt themselves from either being the giver or receiver of such funds because ... well ... the Federal Government established absolute state subservience in 1865. The federal funds could be appropriated by the Congress for the sole reason that the majority of children 'benefiting' from the 'aid' belong to citizens who think it completely justifiable that their kids are being educated with other people's money.

The terms 'aid' and 'benefiting', by the way, are loosely used because no objective measures show that all this federal involvement does either. While the official goal is _to "promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access"_ the actual results are abysmal.

U.S. students have, since the mid-1970s, consistently scored lower on math and science scores when compared to most every other developed country in the world. _Global competitiveness_ is meaningless outside those hard sciences. Nearly every year since then, higher percentages of college freshman find it necessary to take remedial education classes just to get caught up with what they should have learned in high school.

SAT scores within the U.S. have **fallen** on the average some 3% from 1972 to 2008. And it's worse for the so-called smartest kids. Of those scoring above 600 on their verbal SAT (a fair measure of high achievement), the numbers plummeted over 10% during that period.

Less students every year can intelligently answer such basic questions as 'what were the fundamental principles that the United States was founded upon' and 'what are fundamental individual rights'. Few have any concept of the history of either their country or indeed the world itself. Is it any wonder they cannot tell they are morally lost if they don't know where they come from or where they originally were headed?

What rational reason could there be for spending $2 trillion over 40+ years to achieve worsening metrics of success each year?

None! But the Federal Government can do it and make voters happy about it.

Why? Because Americans like to see money 'invested' in their children ... especially when the money comes from their neighbors.

###  Public Transportation

Nowhere in the Constitution is it even inferred that the Federal Government should have anything to do with providing personal intra-city and inter-city transportation, or arguably ANY personal transportation. It may make sense for local communities to facilitate efficient transportation among its boundaries, but the only Constitutional interpretation that would seem to apply would be that of regulating commerce among the states (i.e. inter-state commerce).

But through the auspices of an executive-branch Department of Transportation, created in 1966, federal funds are expended toward massively subsidizing both intra-city and inter-state personal transportation.

Its stated purpose is to serve the United States by ensuring a " _fast, safe, efficient, accessible and convenient transportation system that meets the vital national interests and enhances the quality of life of the American people, today and into the future._ "

Its actual purpose is to ensure effective transfer of wealth to best achieve pacification of the collective.

Amtrak, established in 1971, has as its purpose to provide inter-city passenger train service in the United States. It is not as if private concerns were incapable or unwilling to provide such services, but by providing (at low-cost fares) that need to centralized population masses the Federal Government keeps them passive and gains the political support of many. The cost to the passengers is kept low not because of efficiency but because of massive subsidies from all U.S. taxpayers.

Amtrak has been given over $32 billion in subsidies since 1971, having turned a profit not once in all that time. Even at that, its trains are seldom full because the truth is Americans don't choose to use that mode of transportation. No private business could justify existing with such a pathetic record or outlook.

But as with any government-backed entity, Amtrak has never once had to rely on something as mundane as making a profit.

In the arena of intra-city personal transportation, with absolutely no possible connection to the Constitution, the Federal Government has pumped additional billions of dollars into bus and light-rail systems in many metropolitan areas. Beyond the fact that there is no Constitutional justification for these actions, doing so disrupts the individual rights of private concerns who would instead expend their own capital in profitable enterprises to satisfy such needs (where they exist). Of course, when government subsidizations play a role rather than true consumer decision-making any attempt to measure actual need is distorted beyond reality so there is no way private industry could even tell anymore the level of market demand.

Air transportation, especially airport infrastructure costs, are also subsidized by the Federal Government. However, measured on a per-passenger-mile basis, air travel is far less subsidized than is urban mass transit and Amtrak.

A large part of theses modern-era federal subsidies come from excise taxes on gasoline, mostly representing a tax on use of private vehicles. Given the small percentage of public transportation passengers to total commuters, what that means is that the services public transit passengers enjoy are largely paid for by all the other commuters who choose not to partake of public transportation.

We begin to see a trend here. The relatively few Americans who use public transportation really like it ... especially when the costs are borne by their neighbors.

### Federal Housing

Nowhere in the Constitution is it even inferred that the Federal Government should have anything to do with providing or promoting personal housing. That is an individual economic decision just as much as food or clothing is.

But through the auspices of the Federal Housing Administration (FHA), created in 1934, federal funds are expended toward distorting this economic decision

Its stated purpose was to improve housing standards and conditions; to provide an adequate home financing system through insurance of mortgage loans and to stabilize the mortgage market.

Its actual purpose is to manipulate the housing market and increase dependence on the Federal Government.

The FHA became part of the executive-branch Department of Housing and Urban Development (HUD) in 1965. Through these agencies, housing loans are insured against default by the U.S. Government. Between 1938 and 2010, FHA was directly responsible for insuring over 30 million single-family residences and approximately 50,000 multi-family dwellings. In most cases, these loans were deemed to need federal insurance because the mortgage applicants were either someone whom banks would not lend to without such guarantees or businesses who were constructing low-income housing in which the rent payments were planned to be insufficient to pay the mortgage. In either case, the mortgage payments are subsidized—often heavily—to make up the difference between what the mortgage payer can afford to pay and what the mortgage holder actually requires.

FHA loans were generally made via a governmental agency known as Federal National Mortgage Association, or FNMA. It is often referred to as Fannie Mae. In 1968, in order to remove Fannie's assets and liabilities from the federal budget, FNMA was converted into a government-sponsored entity, or GSE. A GSE is not directly a part of the Federal Government but is a private entity that is very heavily controlled by the Federal Government.

Direct FHA loans have, since 1968, been made via a governmental agency known as Government National Mortgage Association, or GNMA. It is often referred to as Ginnie Mae. In 1968, when FNMA was converted from direct federal involvement, GNMA was created to take its place.

To further confuse the alphabet soup, in 1970 Congress commissioned the Federal Home Loan Mortgage Corporation, or FHLMC, as a GSE to 'compete' with Fannie Mae. FHLMC is affectionately known as Freddie Mac.

The roles of Fannie and Freddie were to provide a secondary market for mortgages in the United States. They would buy conventional mortgages from mortgage lenders and market securities representing those aggregated mortgages. The purpose was to spread risk exposure.

Even though not directly subsidized by the U.S. Government, Fannie and Freddie certainly have implicit backing. The Feds do provide substantial non-direct support—mainly lower capital requirements for their mortgage-backed security instruments—which run into billions of dollars annually. There were never official promises to step in and bail out either institution if they got in trouble, but it was common knowledge this would indeed happen.

Fannie and Freddie would group the mortgages they bought into pools and sell bonds backed by these groupings. Their packaged bonds—a means of spreading mortgage risk—had a substantial market.

And the purpose behind spreading mortgage risk—to increase the propensity of lenders to provide housing loans. By lessoning the risk posed by individual mortgage defaults, mortgage lenders would be more likely to loan money in the first place. In fact, they could afford to be less picky about who they lent their money to.

The Federal Government, by influencing the rules on how Fannie and Freddie could purchase conventional mortgages and sell collateral-backed securities, indirectly increased mortgage risk to support its underlying policy of promoting private home ownership as a means to stimulate national economic growth. As requirements were lessoned on mortgages that Fannie and Freddie were to purchase, there was greater reason for mortgage lenders to make riskier loans since they could turn around and immediately sell those loans to Fannie and Freddie.

The demand for housing increased because mortgages were easier to obtain. Home prices inflated because of the increased demand. Both of these measures, home ownership and home prices, were widely touted as signs of government success.

Worked good ... till the mortgage rules were relaxed so much that the inevitable increased mortgage defaults cascaded and threatened to bring down the U.S. economy.

Which is what started happening in 2006.

When mortgages started going south all the collateral-backed securities scattered throughout the U.S. investment universe became impossible to truly value. How much of them represented risky or bad mortgages? Valuations of both the securities and physical homes plummeted.

In 2008 alone the Federal Government, no longer able to let market forces correct since they had interfered with it for so long, had to pour hundreds of billions of dollars into financial institutions—most notable Fannie and Freddie—to keep them solvent. In September of that year the Federal Government took legal conservatorship of both Fannie and Freddie.

The result of all this was that the Federal Government transferred TRILLIONS of dollars taken from Americans who lived responsibly and made good economic decisions to other Americans who lived irresponsibly and made questionable economic decisions.

But the U.S. Government received overall praise leading up to the crisis for 'helping the poor afford decent housing' ... using other people's money.

And even after the crisis they received overall praise for 'saving the U.S. financial system' ... from the ruin that they largely caused.

### Growth of Government Unions

There was a time when a job was a contract between one employer and one employee. The employee agreed to trade some of his time to work for an employer's benefit in exchange for an agreed-upon wage. Beginning in the late 19th century, however, many U.S. workers began to organize in unions for the purpose of obtaining greater influence for themselves.

A major role of such unions was engaging in collective bargaining with employers. For providing this role members had to pay a small percentage of their wages to the union as dues.

The idea behind collective bargaining was that a large group of the employees at a company could collectively bargain for pay or work conditions with much greater leverage than any individual employee. They could threaten severe disruption to the business if their demands were not met.

With a contract between the employer and a lone employee the negotiation is a free capitalist market—if the individual did not like the terms he could refuse and the employer would then look to the next best potential employee. The impact to the employer of refusing to come to terms with the individual was that the employer needed to keep looking for one employee. An individual priced his own talent and shopped around until an acceptable market was struck.

With a contract between the employer and a large group of individuals (i.e. a union) the negotiation was with a cartel. If the employer didn't agree to proposed terms he had to look not at the next best potential employee but rather at finding dozens or hundreds of employees. A union represents a cartel of numerous individuals colluding on the marketability of their skills. The market price is set not by individual skills but by

* a collective skillset and

* the leverage obtained by forcing the employer into an 'all-or-nothing' decision.

The price of labor is thus not determined by any individual's perceived worth but the perceived worth of the union collective. That collective worth would theoretically be less than what the most productive and valuable employees were worth but more than the least productive could reasonable demand. Such an arrangement benefits the least productive and desirable employees by averaging their 'worth' with their more productive co-workers. It also diminishes any incentive for greater productivity by individual workers.

This situation resulted in many tensions between the labor community and the business community. Labor had in the past been taken advantage of by many businesses, and labor started flexed their newfound power to an extreme. Businesses soon were being extorted by labor unions.

The unions became extremely powerful. Member dues provided large amounts of money, which attracted organized crime. After all, extortion was extortion.

But the bargaining, however conducted, between private industry and American citizens did not really involve anyone but themselves. If unions pressed for too many concessions businesses failed and the represented workers lost their jobs. If businesses gave in too much to the unions then the business would fail and no longer need to worry about union demands.

The increasing size of government—federal, state and local—meant that an increasing number of American voters were public employees, so-called because the primary source of their pay was the American public. Those public employees voted, and courting those voters became increasing important in American politics. Between 1950 and 1979, for example, the number of state and local public employees nearly tripled.

The Democratic Party had linked itself with private-sector unions with the actions of President Franklin Roosevelt, especially his 1935 Labor Relations Act. From that time on organized labor was the staunchest of Democratic power bases and monetary donors.

However, even Democrats were generally opposed to the idea of allowing public-sector unions to engage in collective bargaining. This opposition was best summed up by a New York Supreme Court judgment in 1943.

"To tolerate or recognize any combination of civil service employees of the government as a labor organization or union is not only incompatible with the spirit of democracy, but inconsistent with every principle upon which our government is founded. Nothing is more dangerous to public welfare than to admit that hired servants of the state can dictate to the government the hours, the wages and conditions under which they will carry on essential services vital to the welfare, safety, and security of the citizen. To admit as true that government employees have power to halt or check the functions of government unless their demands are satisfied, is to transfer to them all legislative, executive and judicial power. Nothing would be more ridiculous."

Private-sector unions really achieved high growth after World War II, as the American economy essentially needed to supply a devastated world with products. Ranks swelled, unions engaged in aggressive collective-bargaining tactics and industries found themselves having to give generous employment terms so they could keep up the rapid pace of production.

The politics of appealing to all those union voters was too much. Several localities, most notably New York City, began allowing public-sector employee unions to engage in collective bargaining beginning in the 1950s. This all but guaranteed that public-sector employees could demand and get better wages, benefits and working conditions. It also, of course, guaranteed near-unanimous voting blocs for politicians who were giving all these benefits to those public-sector employees.

As the world rebuilt after World War II, foreign competition forced greater American competitiveness and unions stopped enjoying quite so much power as they had the last couple decades. Union power, at least in the private-sector, began a downward trend.

In 1962, Democratic President John Kennedy signed Executive Order 10988. The prime purpose of this executive order was to allow public employee unions at the federal level to engage in collective bargaining. It is widely thought that the recognizable trend of decreasing private-sector union membership was a major factor in the decision of President Kennedy to open a new front for union power.

The impact of this 1962 action cannot be over-emphasized.

The precedent had repeatedly been set for federal influence over state and local affairs, through direct legislation or via threats to withhold federal funding. Within a relatively short time public-sector unions in many more state and localities, mostly in the North, were allowing their public employees to engage in collective bargaining.

Between 1958 and 2008 the union ranks reversed. Over 33% of private-sector workers were members of unions in 1958, while very few public-sector workers were unionized. By 2008, that private-sector number had dwindled to about 8% but public-sector unions claimed almost 40% of workers in that sector.

In the private-sector negotiations, the union represents one side and the business the other side. There is a distinct demarcation between the parties at the table.

In the public-sector negotiations, the union represents one side while the other side is composed of members _who are largely elected by the union members_. Money, which unions have lots of, goes into campaigns to elect government representatives most friendly to the public-sector unions they will be dealing with.

Public-sector unions, to a large extent, _bargain with themselves_! Is the outcome of any negotiations seriously in doubt?

Recall that governments are granted a monopoly over the use of legal force. Add to this the fact that over the years governments at all levels have essentially gained monopolies in a multitude of other areas. There are some services that are accepted, rightly or wrongly, as being a public service and therefore no competition exists. Think fire departments, police departments, public schools, court house staffs, etc.

In the United States public service means a service paid for wholly by the _public_ , via their elected government. The workers in a public service position—themselves being members of that public—thus have a say in the makeup of the organizations responsible for determining their job compensation and work conditions.

And that role is very large.

More and more public-sector employees joined their respective unions as the attractive wage and benefit packages being negotiated became known. During the 1958–2008 period previously mentioned the number of American public service employees swelled from around 8 million to over 20 million, 150%, but public service union membership jumped from barely 1 million to some 8 million, or 700%.

While 80% of the American workforce is still considered in the private sector, government at all levels is increasingly defined by the 20% that have so much control over government operations (i.e. public employees).

The vast majority, over 80%, of public service jobs are in state and local governments rather than at the federal level. After all, no matter how encompassing the Federal Government becomes the bulk of public service work involves where the public is .... which means in states and localities.

Since the voter participation in state and local elections is far lower than in federal elections the relative importance of these public-sector union members is much greater at the state and local levels. The lower the rate of overall voter participation means that an organized and motivated group can have tremendous impact. Unions organize and its members have a high motivation to vote _since the official being elected will likely be someone they will be dealing with on labor negotiations_.

Comparing compensation for public-sector jobs with private-sector counterparts is interesting. Less-specialized jobs (janitors, clerks, bookkeepers, etc) in the public-sector on the average pay considerably higher than comparable private-sector jobs. At the same time, more-specialized professions (economists, engineers, accountants, etc) in the private-sector on the average pay somewhat higher than comparable public-sector professions. This is to be expected, since the more professional positions are more competitive and have never been very associated with unions.

The majority of public-sector positions, however, are those less-specialized jobs.

2008 Statistics from the U.S. Bureau of Economic Analysis show that public-sector employees are paid, on the average, over 34% more than private-sector employees in comparable positions. To be fair, this is hard to judge as many of the positions are in government monopolies where 'comparable position' is hard to measure.

It is in two areas, however, where the big difference between compensation stands out; medical and pension benefits. Add in these facets of compensations and the above 34% figure jumps far higher, and poses and far greater threat to the nation.

Here are some figures comparing the hourly compensation between private-sector and public-sector workers in 2008. These are also from the U.S. Bureau of Economic Analysis.

Public employees receive ¾ more paid days-off than private-sector American employees.

They receive more than twice the medical benefits. Medical benefits are available for approximately 24% more public employees than private employees. Most of those public employees are even eligible to retire prior to age 65 and receive full medical benefits until Medicare—also paid for by the _public_ —takes over the payment of their medical benefits.

And the individual contributions public-sector employees pay for these superior medical benefits are almost always lower than what private-sector employees have to pay.

Retirement benefits are a huge problem and require added explanation.

There are two basic classifications of retirement plans associated with employment compensation.

The plan most private-sector workers have available to them is called a _defined contribution plan_. At retirement it pays the individual based on how much the individual and/or employer funded an individual account in that employee's name. Like any other investment, this individual account grows—or sometimes shrinks—depending on investment decisions made.

The plan most public-sector workers have available to them is called a _defined benefit plan_. At retirement it pays the individual according to a fixed formula which usually depends on the member's salary and the number of years in the plan.

The key word is _funded_. Defined contribution plans are by definition funded. Defined benefit plans _may_ be funded. Private employers are forced to fund whatever defined benefit plans they offer. For the most part, public employers (i.e. governments) either **do not** **fund** their retirement plans or severely **under-fund** them.

Governments generally call such unfunded plans _pay-as-you-go_ (or PAYGO) because it sounds more responsible than _unfunded pension plans_. Whatever it is called, a significant portion of the funds being paid out to public-sector retirees come directly from taxes being paid by current taxpayers.

The main result of these extremely **generous** unfunded defined benefit retirement plans is that many states and cities continuously rack up enormous amounts of liabilities—as public workers retire—that can only be honored by continually having to

* raise current tax burdens **or**

* cut current spending.

As shown in previous discussions on the federal socialistic plans known as Social Security and Medicare, there are few ways out of this cycle-of-debt Ponzi scheme.

Public employees, from clerks to teachers to firefighters to police, usually are eligible to retire much earlier—and with far greater benefits—than similar private-sector employees. In fact, many public employees engage in a practice referred to as double-dipping. They will retire from one public service job as early as they can, collect retirement benefits from that job and immediately start another public service job. After a number of years they retire for good and start getting additional retirement benefits from the second job.

And few public employees pay near as much for their greater benefits as do private-sector employees for their benefits. Their portions of health care premiums are almost always lower and any co-payments they make for medical visits are often less. They seldom are required to pay much, if anything, towards a guaranteed retirement benefit. Yet private workers have the bulk of their benefit tied up in 401K plans that they have to not only contribute to but have to risk in the stock market.

In any case, the bottom line is that the average public-sector employee is compensated for their job quite a bit better than the average American private-sector employee is.

For a small number of high-responsibility positions, such as President and Congressman, this may be acceptable. But the vast majority of public servants require no more of a skillset than the average private-sector worker.

So why does it make any sense for the servants of the public to make more money than members of the public who are paying them?

It does not make any sense. It never did make any sense.

According to research by the Pew Center on the States, in 2008 state governments had a total of $3.35 trillion in pension, health care and other retirement benefits promised to their current and retired public employees.

According to the same study, the states had funded those promises to the amount of $2.35 trillion.

That $1 trillion shortfall is ONLY _if no further public employees are added to the payrolls_.

Several major points need to be pointed out:

1. This figure reflects circumstances as they existed in the summer of 2008, before the massive market crash of that Fall.

2. The funding situation with state liabilities has been accelerating downward. In 2000, some 27 states had fully-funded pension plans. By 2006, only six did. By 2008, there were only four.

3. The shortfall is in no way uniformly distributed among all 50 states. At the time of the report the retirement funds in

*** 21 states were less than 80% funded

*** 8 states were less than 67% funded

*** 2 states were less than 60% funded

Government officials who okay the lucrative compensation packages prefer to give extravagant benefits over salaries because it somewhat lessens their having to explain their actions. The average American voter doesn't care so much about financial liabilities in the future—as evidenced by the decades of deficit spending at the federal level. Most states and localities are forced to keep their state operating budgets balanced, which is accomplished by keeping salaries relatively under control. Future pensions and medical payments don't effect current budget-balancing requirements ... and are usually considered to be someone else's problem.

In addition to the financial problems caused by government unions, there is the real phenomena of a degraded public workforce. As seen by the comparison of higher-level job salaries, individuals who can thrive in fields where there is a high degree of competition tend not to gravitate to unions. Why should they? The goal of a union is to bargain on behalf of a collective, which means that individuals are treated as if they are all the same. For those who feel themselves more marketable than their average co-worker joining a union would make no sense. Thus a unionized workforce will tend to be clearly less innovative, motivated and competitive. In fact, the leadership of most unions tend to discourage individual members from acting in methods that would distinguish them from the collective.

Governments, at all levels in the United States, are bloated and wasteful to a large extent because of the lack of innovation and competitiveness pertaining to its workforce. Unions put in place work rules as part of their collective bargaining that makes disciplining or firing employees extremely difficult. Often emphasis is placed on assurances of manning limits and allowable work hours. Overtime or extra effort is discouraged in most unionized workplaces because individuals that 'stand-out' tend to raise expectations for the collective group.

This entire situation is maybe the most poignant example of the drawbacks of a democracy. It is indicative of a loss of common sense and accountability.

However, the common sense lost is not that of the average public-sector employee. He or she is getting the most they can for their labor . . . while expending the least amount of effort. That makes sense.

No, the loss of common sense refers to _everyone else_ in the United States who stood by and allowed this situation to develop.

It was not some secret conspiracy that allowed the National Educational Association (NEA), the American Federation of State, County & Municipal Employees (AFSCME), Service Employees International Union (SEIU), the American Federation of Teachers (AFT) and other public employee unions to take control of the public-sector.

It was their stated purpose—their job. And they did it well!

The loss of accountability does not apply to the unions. They are accountable to their members, whom they serve extremely well.

No, the loss of accountability refers to _everyone else_ in the United States who for years saw their political representatives selling them out to those unions and then re-elected those same representatives by 90% or better margins.

The job to halt corruption lies not with the agencies benefiting from the corruption. The job rightly lies with the people losing treasure and rights _because_ of the corruption.

And that is what makes a democracy so dangerous.

Democracy is mob rule. In a democracy the most determined gang rules. Gangs need to be faced down. Laws don't face down the kind of political gangs we have been discussing—these gangs usually have the most influence in writing the laws. In a democracy these gangs can only be brought down via the ballot box—by moral individuals.

In the moral degradation of the American society spoken of in 'The Plan', the problem has usually been citizens forgetting what it means to be a moral individual.

In this situation the problem seems to be nothing more than citizens being too lazy to participate in the democracy that they chose—not always wisely—to institute. No one other than the public-sector employees represented by those unions benefited. Everyone other than the public-sector employees represented by those unions lost, both in money and quality of service.

In general, this issue is the problem of state and local governments. It was those citizens' _right_ to engage in such short-sighted stupidity and the good news is that this was not an example of the Federal Government usurping their rights. The bad news is that the Federal Government has increasingly gotten involved in every aspect of American society and may very well decide to provide federal taxpayer money to selected communities to 'bail them out' of the problem they incurred.

The Federal Government has no right to bail out individual states, you say!

And thus we come full circle.

The first United States Congress was persuaded (see _Implied Powers: Early Conflicts_ ) by Alexander Hamilton to bail out individual states who had failed to pay their Revolutionary War debt. The states that had been responsible and paid off their debts were forced to subsidize those who had done neither.

How is this pension situation different? The states that have been responsible and funded their pension plans—and/or faced down their unions—are in danger of being forced to subsidize those who had done neither.

###  Personal Responsibility

If a moral individual exercises his rights then he is also responsible for any consequences of those actions.

This simple concept at one time was common sense—not only in America but everywhere.

At least in the United States, it seems responsibility is not considered a 'modern' concept. This has largely led to a loss of individual character and a spread of widespread immorality.

In 2008 easily 60% of all expenditures the Federal Government incurred, as reflected by budgetary breakdown, were examples of the immoral behavior of evading personal responsibility.

**Social Security** (~21%) – Instituted so individuals can better evade the responsibility of paying for their own living expenses after age 65. Responsible acts would be saving for old age and/or fostering family culture that encourages care of elderly parents.

**Medicare** (~15%) - Instituted so individuals can better evade the responsibility of paying for their own health care after age 65. Responsible acts would be same as for Social Security.

**Medicaid** (~9%) – See Medicare.

**Welfare** (~14%) – Government handouts instituted so individuals can better evade responsibility of caring for their own families. Examples are food stamps, Aid to Dependent Children and other social programs to 'aid' the poor. Responsible acts would be to get a job—even if that means settling for anything you can get.

**Education** (~1%) – Instituted primarily to force central control on states and localities. Responsible acts would be to let states and/or localities run their own schools as local families see fit.

Individuals do not enjoy being in situations where they are poor, unemployed, have inadequate housing or have illiterate children. If they somehow felt good with those situations it is highly unlikely they would ever aspire to be wealthy, employed, have a good house or have smart kids.

But it is in no way any moral individual's responsibility to . . .

* give anyone else money out of their own pocket

* give anyone a job

* buy anyone else a house

* educate someone else's kids

. . . nor to expect anyone else to do that for them.

If any person wishes to do those things (i.e. take care of their neighbor) then they are perfectly within their rights to do so. But it in no way is it their responsibility to do so.

For a society to empower its government to do those things is immoral.

While the forced appropriation of wealth from its citizens to fund such activities is certainly not good, in societies such as the United States the government is only implementing the expressed will of society. In this sense Americans get what they deserve.

The real immorality is that by assuming a societal responsibility to ensure citizens 'feel good' that same society removes the incentives to change behavior—which could be viewed as providing incentives to fail.

Such a society does not exist to provide the most effective and efficient environment for individual members to thrive. Instead, it supports individual failure while striving to make such individuals 'feel good' about their failure.

Far from moral, such a society is sick.

### Economy

Arguably the most important aspect of individual liberty is private property rights. Private property pertains to what an individual owns while private property rights pertain to the ability to do with that private property what that individual wishes to do with it.

Private property is first and foremost your own self; body and mind. If other people control what you can and cannot do with your own body and mind then any argument about further property rights is irrelevant. Obviously societies have rules placing limitations on how individuals can interact with one another and such rules have some bearing over this ultimate freedom—but a moral society has to keep such rules to the barest minimum.

Most private property rights derive from this ultimate idea of possessing one's own body and mind.

Wealth is the accumulated results of utilizing one's body and mind; whether that be physical labor, intellectual 'trade' or free decision-making. As discussed in the section on _Philosophical Musings_ , man exists by use of his mind—and by extension his body.

Money is what we call the medium of exchange for the utilization of individual talents. It is different than barter mainly in that is allows far more efficient utilization.

The environment that encompasses this exercise of private property rights is what is referred to as an economy.

One of the most important duties of government, especially one purporting to be the guardian of a moral society, is the protection of private property rights. This primarily means the assurance of a free and open economy.

To be considered _free_ a society's economy must represent as ideally as possible the decisions and actions of the individuals making up that society. The 'invisible hand' of Adam Smith needs to be allowed to operate.

From _Philosophical Musings - The Enlightenment_ :

It was in 1776 that Adam Smith published 'An Inquiry into the Nature and Causes of the Wealth of Nations'. We will, as has most everyone since, shorten that title to 'The Wealth of Nations'.

A major theme was that of the 'invisible hand' that guides economies in the most efficient use of resources. This can be loosely described as an early reference to what would become known as laissez-fare economics.

Smith felt that the interplay of wages, prices and return on capital investments would result in the best allocation of resources—if left alone, especially by governments. That productivity can (within limits) be maximized by the efficient specialization, and division of, labor. That the influence of factions, or special interests, were harmful in that their actions usually resulted in higher prices due to unnatural wage inflation and/or government manipulation of markets.

And that is, and has been, one of the biggest problems in the United States—government manipulations of the world's largest economy.

There was a time in the United States when fiscal discipline was a given.

If an individual or family spent more wealth than they had then the consequences were direct and dire. They went without food, without clothes, without shelter ... without a lot of things. The incentive to not live beyond your means was great—it kept you and yours in food, clothing, housing, etc.

If a business conducted itself in such a way that it did not make a profit then it would soon have to go out of business. This was simply an extension of the consequences described for individuals and families.

The bedrock principle behind the American Progressive movement, beginning in the early 20th century, was that in a moral society an important role of government was to free Americans from the shackles of such discipline. Just because someone, for whatever reason, spent more than they took in was not a reason for society to sit idly by while they paid the consequences for their actions. It was, Progressives felt, incumbent on government to provide assistance to these unfortunates to spare them the indignities of struggle.

We have shown time and again the fact that government has NO wealth of its own. Any wealth controlled by the United States government was forcibly taken—not donated, invested or lent—from the American citizens from whom it collected taxes.

Thus American Progressives have always wanted nothing more than to have government take wealth from some Americans and give it to other Americans. More specifically, government was to take wealth from successful Americans and give it to unsuccessful Americans. In most cases, that tasking could better be described as to take wealth from responsible Americans and give it to irresponsible Americans.

The concept of fiscal discipline was thus severely weakened as the logical consequences (e.g. hunger, hardship, etc) of abandoning such discipline was largely countered by the new Progressive morality.

Primarily because of federal tax credits and deductions handed out to entice support from selected voting blocks, the number of U.S. taxpayers has decreased every year since 1984. Since total federal spending has skyrocketed in those years it is clearly the case that the Progressive wealth redistribution plan has progressed remarkably well, with the 'haves' paying an increasing share of the taxes while the 'have-nots' reap ever-increasing benefits while paying nothing.

In 1985—the year President Reagan's second term began—the number of U.S. citizens that paid NO Federal Income Taxes stood at about 13%. By 1993—at the start of President Clinton's first term—that number had risen by over 1/3 to 18%. By 2001—at the start of President George W. Bush's first term—nearly 24% of Americans paid NO Federal Income Taxes. This again was approximately 1/3 more than the 1993 number.

As if 1/3 was some magic fraction, roughly the same increase in non-taxpaying Americans was attributable to the Bush Administration. When President Obama entered office in 2009 approximately 31% of Americans either paid NO Federal Income Taxes or received direct payments from the government as a form of 'negative tax'.

That figure is sure to rise—probably at an even faster rate—because of the massive bail-out attempts by the Federal Government following the 2008-2009 economic crisis.

How was this situation reached and more importantly how was it justified? In well over half of this time-period Republican administrations were in power so obviously it can't be, as is often claimed, a case of 'Democratic pandering to their constituency'.

The Earned Income Tax Credit (EITC) is the main culprit. Enacted by President Ford in 1975 and greatly expanded upon by President Reagan in 1986, this refundable tax credit is a 100% offset to any amount owed as Federal Income Tax. It is 'earned' solely by how little in the way of income an individual claims at tax time. But since it is refundable the 'earned' credit not only can offset all income tax owed but can also result in a tax refund.

Thus the EITC's sole purpose is to remove U.S. taxpayers from the lower-end of the tax rolls, even as government outlays aimed largely at these lower-income Americans is increasing at a rapid rate. If that isn't a clear definition of direct socialistic wealth transfer it would be hard to think what is.

At the same time, U.S. politicians—usually invoking the phrase 'Family Values'—introduce and expand on other credits that one 'earns' for no other reason than the number of children present in the family. This, like any other tax credit, decreases many individual tax bills and drops even more lower-income Americans off the tax rolls entirely.

In 2010 the official U.S. poverty level for a family of 4 was $22,000. In that same year the various tax credits allowed a similarly-sized family earning $50,000 to escape paying any U.S. personal income taxes. And those earning less than $50,000 were sent refunds—on taxes they never paid in the first place—totaling over $50 billion.

Keep in mind that these are people who actually file federal tax returns and thus take advantage of all the credits. Millions more don't even file returns because they have so little income. And we won't even consider all the criminals who don't file. Added together, the actual number of Americans who pay $0—or less— in federal income taxes is estimated at over 45%.

The decrease in the percentage of Americans who actually pay personal income taxes has been intentionally chipped away at—in large chunks—by every U.S. president and every U.S. Congress for decades. It was completely planned and relentlessly carried out. This was done in plain sight of, and with overwhelming support of, the American public.

Of course, that would be the same American public that periodically expresses outrage at the number of citizens who don't pay any taxes.

Have no illusions about a separate 'Progressive political faction' vs some non-existent 'non-Progressive political faction'. The United States had fully adopted the concept of Progressivism as its new societal moral code by the late 1960s. There was no turning back the inevitable after 1913 (see _Direct Taxation Tyranny_ and _The Federal Inflation Machine_ ), President Roosevelt officially proclaimed the philosophy in 1934 (see _American Progressivism_ ) and President Johnson hammered the final nail in the coffin in 1964 (see _Socialism and Security_ ).

Have no illusions that there exist any substantive difference between American Progressives and American Conservatives. They are essentially two heads of the same coin (see _American Conservatism_ ).

Have no illusions about any substantive difference between Progressivism and Socialism—there is none!

Have no illusions that the ideals of a moral American society as envisioned in the late 18th century is in any way related to the ideals of a moral American society in the late 20th century. One revolves about _individual rights_ and the other revolves around _collective spoils_.

And finally, have no illusions that 'The Plan' was not fully achieved.

From ' _The Plan: Blueprint of Destruction – Goals_ :

Our ultimate goal we know; to destroy the very idea of the United States of America.

.

It is our goal to destroy the United States of America. Whether this means that the nation is to be put in total ruin or to be replaced, through violence or transformation, into a new nation matters not.

#### Budget ... We Don't Need no Stinking Budget

The following narrative comes from the Executive Office of the President of the United States, via the Office of Management and Budget (OMB). It is from the budget document published in 2009.

Except for periods of war (when spending for defense increased sharply), depressions or other economic downturns (when receipts fell precipitously), the Federal budget was generally in surplus throughout most of the Nation's first 200 years. For our first 60 years as a Nation (through 1849), cumulative budget surpluses and deficits yielded a net surplus of $70 million. The Civil War, along with the Spanish-American War and the depression of the 1890s, resulted in a cumulative deficit totaling just under $1 billion during the 1850–1900 period. Between 1901and 1916, the budget hovered very close to balance every year. World War I brought large deficits that totaled $23 billion over the 1917–1919 period. The budget was then in surplus throughout the 1920s. However, the combination of the Great Depression followed by World War II resulted in a long, unbroken string of deficits that were historically unprecedented in magnitude. As a result, Federal debt held by the public mushroomed from less than $3 million in 1917 to $16 billion in 1930 and then to $242 billion by 1946. In relation to the size of the economy, debt held by the public grew from 16% of GDP in 1930 to 109% in 1946.

During much of the postwar period, this same pattern persisted—large deficits were incurred only in time of war (e.g., Korea and Vietnam) or as a result of recessions. Prior to the 1980s, postwar deficits as a percent of GDP reached their highest during the 1975–76 recession at 4.2% in 1976. Debt held by the public had grown to $477 billion by 1976, but, because the economy had grown faster, debt as a percent of GDP had declined throughout the postwar period to a low of 23.9% in 1974, climbing back to 27.5% in 1976. Following five years of deficits averaging 2.5% of GDP between 1977–1981, debt held by the public stood at 25.8% of GDP by 1981, only two percentage points higher than its postwar low. The traditional pattern of running large deficits only in times of war or economic downturns was broken during much of the 1980s. In 1982, partly in response to a recession, large tax cuts were enacted. However, these were accompanied by substantial increases in defense spending. Although reductions were made to nondefense spending, they were not sufficient to offset the impact on the deficit. As a result, deficits averaging $206 billion were incurred between 1983 and 1992. These unprecedented peacetime deficits increased debt held by the public from $789 billion in 1981 to $3.0 trillion (48.1% of GDP) in 1992. After peaking at $290 billion in 1992, deficits declined each year, dropping to a level of $22 billion in 1997. In 1998, the Nation recorded its first budget surplus ($69.3 billion) since 1969. As a percent of GDP, the budget bottom line went from a deficit of 4.7% in 1992 to a surplus of 0.8% in 1998, increasing to a 2.4% surplus in 2000.

An economic slowdown began in 2001 and was exacerbated by the terrorists attacks of September 11, 2001. The deterioration in the performance of the economy together with income tax relief provided to help offset the economic slowdown and additional spending in response to the terrorist attacks produced a drop in the surplus to $128 billion (1.3% of GDP) in 2001 and a return to deficits ($158 billion, 1.5% of GDP) in 2002. These factors also contributed to the increase in the deficit in the following two years, reaching $413 billion (3.6% of GDP) in 2004. Strong economic growth in 2005 and 2006 produced a sharp increase in revenues, helping to reduce the deficit to $248 billion (1.9% of GDP) in 2006 and even further to $162 billion (1.2% of GDP) in 2007. Debt held by the public, which had peaked at 49.4% of GDP in 1993, fell to 33.0% by 2001 and increased thereafter, reaching 37.5% by 2005. The recent declines in the deficit have helped to reduce debt held by the public to 36.8% of GDP in 2007.

United States debt is divided, for purposes of reports such as this, into _publicly-held debt_ and _government-held debt_. Publicly-held debt represents U.S. Treasury securities (national IOUs) that have been purchased by individuals and institutions not part of the U.S. Government. Government-held debt represents U.S. Treasury securities (national IOUs) that have been purchased by the trustees of federally-held trust fund accounts—most notably Social Security. For instance, the above statement about publicly-held debt being 36.8% of GDP in 2007 really should say that publically-held debt was 36.8% and government-held debt was 27.2% for a total public debt of 65%.

The question this should raise is whether the government's money is actually the public's money anyway. Isn't a government of the people, by the people and for the people owned by the people? Aren't 'the people' the same as 'the public'?

U.S. public debt represents obligations made on behalf of the U.S. public. Individuals, institutions and even foreign governments choose to trade a portion of their wealth for this debt. Federally-administered funds are also used towards financing U.S. public debt. The chief difference is that the first type describes individual entities **choosing** to finance the Federal Government while the second type describes federally-confiscated money (i.e. taxes) **automatically** be used to finance the Federal Government.

This artificial distinction between freely-chosen debt purchase and forced debt purchase was used beginning in the 1980s to make the nation's debt problem appear less severe than it was. The gap between net debt and gross debt represented the accumulated surpluses from government trust funds, mainly Social Security. The 2009 OMB report cited earlier describes these trust funds as follows:

The Federal Government accounts holding the largest amount of Federal debt securities are the civil service and military retirement, Social Security, and Medicare trust funds. However, significant amounts are also held by some other Government accounts, such the unemployment and highway trust funds. The budget is divided between two fund groups, Federal funds and trust funds. The Federal funds grouping includes all receipts and outlays not specified by law as being trust funds. All Federal funds are on-budget except for the Postal Service fund, which is shown as off-budget starting with fiscal year 1972. All trust funds are on-budget, except the two Social Security retirement trust funds, which are shown off-budget for all years.

_The term trust fund as used in Federal budget accounting is frequently misunderstood. In the private sector, ''trust'' refers to_ _funds_ _of one party held by a second party (the trustee) in a fiduciary capacity. In the Federal budget, the term ''trust fund'' means only that the law requires the funds be accounted for separately and used only for specified purposes and that the account in which the funds are deposited is designated as a ''trust fund.'' A change in law may change the future receipts and the terms under which the fund's resources are spent. The determining factor as to whether a particular fund is designated as a ''Federal'' fund or ''trust'' fund is the law governing the fund. The largest trust funds are for retirement and social insurance (e.g., civil service and military retirement, Social Security, Medicare, and unemployment benefits). They are financed largely by social insurance taxes and contributions and payments from the general fund (the main component of Federal funds)._

However, there are also major trust funds for transportation (highway and airport and airways) and for other programs financed in whole or in part by beneficiary-based, earmarked taxes.

Attempts have been made to portray Social Security as a trust fund being held in 'a lockbox' for the sole use of future pensions for Americans who paid into 'the fund'. The OMB itself specifies that the definition of 'trust fund' as used in federal budget accounting means no such thing. It's just an accounting concept. Any funds not immediately used for the 'trust fund purpose' (in this case Social Security and Medicare) are directly 'loaned' to the Federal Government for general use.

In short, debt is debt. The gross vs public debt is just a political gimmick to try and make the national debt more palatable—and confusing. All of it is debt against the United States, but somehow we are supposed to feel better about the fact that only some of it is IOUs purchased voluntarily by individuals while the rest represent IOUs purchased in the name of the U.S. 'collective' taxpayer.

The following graphs attempt to show this sleight-of-hand.

In both graphs, the lower of the two lines is the net public debt while the upper is the gross debt. The difference between the two represents U.S. public debt held by the Federal Government—which means U.S. Government IOUs 'bought' by the U.S. Government.

There has since 1917 been an official debt ceiling; a limit beyond which Congress is not supposed to be able to borrow more money in the name of the United States. The ceiling is for public debt, with none of the accounting sleight-of-hand about publicly-held versus government-held.

Though apparently this limit really was adhered to early on, it had to be raised many times during World War II. By the end of the war it stood at $300 billion, but was dropped to $275 billion in 1946 in an attempt at reigning in spending.

Since then, this ceiling has been raised every time Congress comes near to hitting it.

It was raised over 100 times! To be fair, it was actually lowered several times in the years following World War II. Standing at $275 billion in 1946, the ceiling was first raised over $1 trillion in 1981. This represented an almost 4-fold increase over 35 years. It was first raised above $10 trillion in 2008. This represented a 10-fold increase in 27 years.

Apparently this debt ceiling is just another accounting gimmick to make it appear like Congress has some sort of discipline. The only real discipline is that they have to make it official before violating the ceiling.

Over this 60-someodd years since 1946 there have been over 30 elections for Congressman. Obviously if the American public wanted the ceiling to be a real limit the offenders wouldn't have stayed in power.

Actually the idea of a debt ceiling, authorized by Congress, is actually pretty preposterous. The function of Congress is to deliberate and make the laws of the land. Since they set a limit on U.S. debt they must know how much debt is outstanding—so they must have a pretty good idea whether the laws they pass can be paid for without having to incur deficits that would break the limit that they themselves set.

It's bad enough that Congress consistently okays the spending of more funds than it possesses, but then they compound the irresponsibility by consistently setting a debt limit that they know full well is meaningless and will just be raised every time they come close to exceeding it.

Because of the relative fiscal sanity of the United States from its birth until the early 20th-century, that period will be skipped in the following charts. These should clearly show the meltdown in effect, generally since 1920 but most notably since 1980.

The reasons individuals and organizations make a budget are many, but the chief reason is to aid their fiscal discipline. A budget lays out historical and estimated future wealth generation and wealth expenditure. It is used to plan where you're going and analyze what you did—right or wrong—along the way.

One would think the largest budget in the world would be studied closely.

Well ... the following is a breakdown of some of the reasons to keep a budget; along with an analysis of how well the U.S. Government has utilized this financial tool.

**1. Acts** **as** **a roadmap** – Documents where you have been financially, where you are financially and where you want to go financially

**2.** **Locate** **waste** – Used to identify misallocation of resources and correct such mistakes in the future.

**3.** **Aid** **in prioritization** – Makes you think and plan as to priorities.

**4. Control spending** – Since you can better track and project income and expenses it is easier to see the effects of spending too much and avoid doing so.

**5. Increase saving** – By avoiding over-spending in general you can save money for needed future purchases.

While it may seem evidently clear that the United States Government has failed miserably at each of these reasons to maintain a budget, this is only the case if results are measured against achieving the goals and principles associated with a moral society. From even a cursory examination of the history of the United States, it should seem just as evidently clear that the goals and principles of her people have transitioned far from the moral society envisioned at the time of the nation's founding.

As a roadmap, the federal budget has for decades clearly pointed to fiscal disaster and society decadence. But is that bad? Not if American society values socialism, legalized plunder and collective spoils over freedom and individual rights.

'One man's waste is another's treasure'. What is wasteful to a moral individual—concerned with his own pursuit of happiness—can be properly seen as a 'societal investment' to a gang of looters who depend on government to steal for them.

To prioritize is to align one's actions in accordance with one's values. Based on the last few decades one has to come to the realization that America values immediate gratification and 'wealth redistribution' far more than any vague concept of liberty for future generations.

To control spending does not necessarily imply notions of only spending wealth that you yourself possess. As long as others will lend you the money all that is really necessary is to control how to spend all of it.

Increase savings? Future? Again, the assumption is often erroneously made that a society has to care about such things.

Beginning in the 1970s an accounting method was adapted called _baseline budgeting_. In essence any year's budget is judged, as far as spending cuts or increases are concerned, against costs not from the previous year but costs _estimated_ years in the past. This intuitively makes little sense so some examples are in order.

Let us say legislation for a public-works project is passed in 2003 and at that time costs associated with that legislation were estimated to be $200 million in 2004, $220 million in 2005 and $250 million in 2006. In the 2004 budget $200 million is accounted for this _budget item_. If the 2005 budget allows spending $210 million on that program this is classified as a $10 million, or 4.5%, cut to the budget. Then the 2006 budget increased spending on that item to $220 million. To the uninformed it would seem that an INCREASE of 4.75% was allowed for. Not so in the world of U.S. Government accounting! That $220 million actually represents a 12% budget CUT, since it is $30 million LESS than the $250 million ESTIMATE made back in 2004.

In the old-fashioned days, _zero-based budgeting_ was used. In each year's budget the project in question would have to be justified. If it wasn't doing as well as expected, less money would be allocated than in last year's budget. That would define a cut. If the final budget allocated $1 more than last year then that was the definition of an increase.

While there may be some validity to this baseline budgeting model as a planning exercise, the result has been a total disaster as far as budget modifications are concerned. Since most legislation results in a budget item that assumes, based on past estimates, automatic increases every year real cuts are extremely rare. What it does allow is hypocrites—both politicians and too many citizens—to claim they are cutting the federal budget when they are really just allowing smaller increases than would have occurred otherwise

The two major political parties in the United States are always fighting over the best ways to address this fiscal nightmare of a budget.

The Democrats have been adamant that upper tax rates need to be raised to generate more revenue and help pay the nation's bills. They handily ignore the following facts however.

According to Congressional Budget Office records, federal tax revenues from 1946 until 2008 ranged between 17% and 20% of GDP. This despite the fact that top marginal tax rates were above 90% in the years 1946 to 1963, 70% from 1964 to 1981, 50% from 1982 to 1986 and between 30% and 40% from 1986 to 2008. The evidence is clear that no matter how high the upper tax brackets get set the amount of tax revenue generated is fairly consistent. Presumably the reason for this is that those in the upper tax brackets will find ways to avoid taxes if they become too high for them to endure.

Probably the most telling fact is that as upper rates fell the overall tax revenues as percentage of GDP stayed roughly the same. If, as Democrats claim, raising upper rates would generate more revenue would not the converse be true and tax revenues would have fell as top rates fell?

But while tax revenues average approximately 18% of GDP for those years, federal spending averaged approximately 22% of GDP. Raising the top tax rates have done and will do nothing, especially with spending exceeding revenues by at least 20% a year.

A more alarming trend than tax rates has been the steady removal from taxpayer ranks of those who are deemed poor. There is a direct correlation here, though not one that Democrats or Socialists like to see pointed out, with increased federal spending. The percentage of American tax filers who pay NO income tax reached a low of 17% in 1970, bounced around to 19% by 1985 and has steadily climbed to well over 40% going into 2010.

If in that light you examine again the chart regarding U.S. debt history you can't help but see the correlation; the more people paying NO federal taxes closely matches more federal spending and more federal debt. The reason is simple. Those people paying ZERO taxes vote, and they will overwhelmingly vote for increased federal spending on themselves—since they aren't paying the bill.

The Republicans are adamant that all tax rates, but especially upper rates, need to be lowered to stimulate the economy and thus generate more revenues to pay the nation's bills. They handily ignore the following facts however.

This theory only works if federal spending is held to less than the revenues collected. The ONLY years this situation occurred under a Republican Congress were the budgets in the 2nd term of Democratic President Clinton. It is not a hard theory to grasp, to spend less than you take in, but Republicans apparently can't grasp it any more than Democrats.

And the Republicans let non-fiscal issues mar their fiscal sense too often. For instance, in order to appear 'pro-family' they have several times over the years put in place large tax credits that were a main cause of the before-mentioned skyrocketing trend in non-taxpaying Americans. Examples are the Earned Income Tax Credit (enacted under President Ford and vastly expanded under President Reagan) and the various child tax credits (enacted under President Clinton but greatly expanded under President Bush). Both significantly eliminate those having to pay federal income taxes at the lower brackets, along with the increase in spending and debt problems that go along with that.

And as repeatedly been shown, the surest way to have Americans support increased government spending is to eliminate them from the burden of paying the taxes.

There are two possibilities related to the federal budget. The two are not mutually exclusive.

Number One. There is NO discipline at the Federal Government to adhere to a budget. If that is the case, then the fact that such a government exists—and has existed for at least 40 years—in a democratic society means that there is NO desire among the American people to adhere to a budget.

Number Two. It is all a sham and the Federal Government's actual agenda—and thus the American people's actual agenda—is to rob from Peter to pay Paul ... until Peter runs out of money. When that happens we will all ___________.*

* The ingenious '____________' strategy was first described by the philosopher/author Ayn Rand in her 1957 novel ' _Atlas Shrugged'_. It is called 'blank out'. The socialist characters in the story would proclaim all these socialistic-sounding plans and when confronted with the need to specify how to accomplish them the answer would always be to 'blank out'.

## Moral Hazard Examples

Examples abound in the United States, especially in the late-20th and early-21st century of the problems brought about by federal introduction of Moral Hazards. Some have been covered earlier while documenting the historical downfall, but some prime examples are Individual Welfare and Corporate Welfare.

###  Welfare (Individual)

Societal desires, as manifested by federal actions, to 'reduce the burden of poverty' have since the 1960s led to an increase in poverty in the United States. The official government poverty rate has stayed fairly constant at 15% over that period, but that is very misleading.

From 1960 to 1975 the average amount, as a percentage of GDP, transferred from Americans 'not-in-poverty' to Americans 'in-poverty' floated between 2% and 3%. From 1975 to 2008 that figure fluctuated between 3% and 4%.

If the official poverty rate has remained the same after all those trillions of dollars were given to _impoverished_ Americans then it must mean that on their own they are getting worse off rather than better off. The 'best-off' of the impoverished should be leaving the ranks of poverty with all that money being given them—except for the fact that they are told they'll be given less money if they leave poverty. It's probably better financially for them to just stay right at the edge of that poverty definition rather than risk stepping over the poverty line.

Moral hazard! By doing what society as a whole thinks is 'good' and 'compassionate', the Federal Government has provided incentives for people to make very bad choices.

With welfare transfer payments, it often pays better to stay among the ranks of the poor than to try and climb out of those ranks. This helps perpetuate poverty, not fight it. The individual decision is a poor one which society makes more attractive than it should be.

Income-tax credits for children make the decision to have kids easier for families—or individuals—in poverty. The closer one is to a poverty situation the relatively more attractive are those tax credits, but it is precisely those close to poverty who should not be having any children. Poor people having children does more to perpetuate poverty than anything else. The individual decision is a poor one which society makes more attractive than it should be.

Laws and regulations to make the poor not just 'able to survive' but 'more comfortable' remove the main incentive that should exist for escaping poverty—misery. Poverty SHOULD NOT be comfortable or easy or fun and trying to make it more comfortable makes it more acceptable as a lifestyle. The individual decision to escape poverty is not pursued as vigorously as it probably would be if poverty wasn't made relatively comfortable.

Laws and regulations to reduce the social stigma associated with poverty likewise reduce a major incentive for escaping poverty. Receiving all or part of one's living expenses from the public dole—via taxes confiscated from others under threat of force—was at one time considered shameful. In individuals with any moral values that shame would be an incentive to do all they could to escape the situation. However, for decades now society has been telling welfare recipients that they are entitled to the handouts they receive and they shouldn't feel guilty about it.

Wrong! Lack of shame definitely results in a lack of incentive.

###  Welfare (Corporate)

Moral Hazards certainly do not just apply to poor Americans. Even though the United States has always claimed to be a capitalistic free market economy, there is a long history of federal bailouts of troubled corporate entities.

As if the redistribution of tax moneys—confiscated from American taxpayers under threat of force—to failing businesses isn't bad enough there is the fact that aiding a failing business is in effect punishing all non-failing businesses.

The clear message to many in corporate America is that the risk-reward analysis engaged in as part of any decision-making can always be slanted more towards reward possibility than risk avoidance. This is because the Federal Government, representing the American society, will tend to mitigate some of your risk if you

* make a big enough mistake **and**

* are important enough to matter to the Federal Government.

There have been many such corporate bailouts.

In the 1970s and 1980s, the Federal Government spent over $19 billion on several financially-struggling railroads, primarily Penn Central, as part of forming ConRail. The reason given was that railroads were essential to the defense of the United States.

Part of ConRail was a huge money-loser called AmTrak, known for providing heavily subsidized commuter rail between selected American cities. Largely government-owned, ConRail was sold back to private railroad interests in 1987 for less than $2 billion. However, the private companies only wanted the ConRail business units that could be profitable and refused to take AmTrak.

Net loss to the federal taxpayer was over $17 billion in those early years.

Not only did this action greatly aid those failing railroads at the expense of the American taxpayer, it alleviated them from having to make hard decisions during those years on how to recover from their failing business models. Instead, they could just wait for the Federal Government to build up ConRail for them and then swoop in to buy the profitable portions when the time was right.

And AmTrak? The Federal Government still operates it at a yearly loss. It has lost nearly $50 billion since it began operations in the early 1970s. Passengers ride it at a heavily-subsidized fare. In addition to the losses—and the fact that the Federal Government was never meant to run a railroad—there are unknown lost opportunity costs. Those opportunity costs are the various private commuter companies that could have sprung up over the decades but never did because of the impossibility of competing against a railroad that never has to worry about making a profit or worry about the size of losses.

In the 1980s widespread speculative activities by many Savings and Loan institutions were further enabled by increased deposit insurance guarantees by the Federal Government in conjunction with lax regulatory oversight. Many S&L managers took greater risks than they otherwise would have because of the larger deposit guarantees.

When S&Ls began failing in large number in the mid-1980s the government's insuring agency (Federal Savings and Loan Insurance Corporation or FSLIC) required some $25 billion in additional taxpayer funds to stay afloat because it was having to cover S&L losses. By 1989 that agency was totally insolvent and S&L deposit insurance was transferred to the government bank-insuring agency (Federal Deposit Insurance Corporation or FDIC).

By 1996 the final taxpayer amount required to cover all the S&L losses and restructuring was over $200 billion.

The biggest moral hazard so far was the entire federally-manipulated housing situation leading up to the 2008 economic collapse. See _Total Meltdown – Federal Housing_. This house of cards, when it collapsed, ended up costing taxpayers literally trillions of dollars.

In an ironic twist, the year 1999 saw repeal of maybe the most conservative action to come out of the administrations of Democratic President Franklin Roosevelt. A coalition led by a Republican Congress rolled-back the Glass-Steagall Act of 1933. That legislation had mandated the separation of commercial banking and investment banking. Given that the Federal Government guaranteed large amounts of commercial banking deposits and had engaged in numerous precedents of 'bail-outs', allowing commercial banks to raise their risk levels by mixing investment banking activities should not have seemed too conservative of a move.

The result was the enabling of the economic collapse that culminated in 2008. Commercial banking firms were able to experiment with such financially risky entities as mortgage-backed securities and collateralized debt obligations, things that Glass-Steagall largely kept them away from.

The damage in these cases was not primarily the monetary expense borne by taxpayers. It was the precedent—and the message—that failure is not quite so bad ... because _modern_ America will have your back and soften the fall.

Take outrageous risks! Reap outrageous rewards! But outrageous consequences if things go wrong ... now that's going too far.

## Quotes

Alexis de Tocqueville

"A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it."

"All those who seek to destroy the liberties of a democratic nation ought to know that war is the surest and shortest means to accomplish it."

"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."

"All those who seek to destroy the liberties of a democratic nation ought to know that war is the surest and shortest means to accomplish it."

Thomas Jefferson

"Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny."

"Friendship is but another name for an alliance with the follies and the misfortunes of others. Our own share of miseries is sufficient: why enter then as volunteers into those of another?"

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."

"It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world."

Ayn Rand

"Government "help" to business is just as disastrous as government persecution... the only way a government can be of service to national prosperity is by keeping its hands off."

" _Do not ever say that the desire to "do good" by force is a good motive. Neither power-lust nor stupidity are good motives._ "

Dwight Eisenhower

"A people that values its privileges above its principles soon loses both."

Ron Paul

"When the federal government spends more each year than it collects in tax revenues, it has three choices: It can raise taxes, print money, or borrow money. While these actions may benefit politicians, all three options are bad for average Americans."

"Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers."

**********

# Foreign Entanglements – 1940 to present

## Entangling

Though the internal downfall of the United States was clear from its beginning, what was not foreseen prior to World War II was the extent to which America's interaction with the rest of the world would play into both its ascendance and its downfall.

The ascendancy would clearly be the rise of the American Empire, with the United States becoming the undisputed world power in terms of military power and the influence that power brings. The term Empire may be a little stretched here, mostly because of its negative connotation as oppressor and conqueror. No other term, however, seems to convey the literal size and scope of American influence on the world stage.

There is no doubt that the United States after World War II had a responsibility in terms of traditional power politics; political vacuums had to be filled and spheres of influence had to be managed by someone. There is also no doubting the huge benefits this world domination has brought the United States as well as large portions of the globe.

The downfall refers not so much to economic or physical aspects, but the slide away from Founding ideals. Did the Founders wish to see the United States stay out of the world power struggles that have been so prevalent in man's history? That would seem to be the case, based on their writings. But was that wish realistic?

Should we accept that becoming the world's greatest superpower is just a matter of _changing with the times_? If that is true, then what is the response to Progressives who say that socialized medicine is similarly a matter of _changing with the times_?

Whether it is better to be a major player on the global stage or remain on the sidelines is a debate that will not be engaged in here.

In relation to 'The Plan', however, the ascendancy of the United States to lead a global American Empire has to be seen as part of the transformation away from the ideals the nation was founded upon.

The founders of the early Republic were fearful about what they called 'foreign entanglements'. In conflicts among nations there were rarely clear good and bad sides, and forming defense or trade pacts with your neighbors had a nasty habit of dragging multiple nations into such conflicts.

A portion of President George Washington's farewell address (in 1796) was:

"Against the insidious wiles of foreign influence (I conjure you to believe me, fellow-citizens) the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government. But that jealousy to be useful must be impartial; else it becomes the instrument of the very influence to be avoided, instead of a defense against it. Excessive partiality for one foreign nation and excessive dislike of another cause those whom they actuate to see danger only on one side, and serve to veil and even second the arts of influence on the other. Real patriots who may resist the intrigues of the favorite are liable to become suspected and odious, while its tools and dupes usurp the applause and confidence of the people, to surrender their interests."

Of course, the people of any nation have cultural and historic ties to the people in other nations. Such was certainly the case between the Americans and the English and the French people, even though both of those played differing roles in the bloody Revolution from which the United States was begun.

### Pre-Cold War

But for 120 years or so there were few such entanglements entered into.

The 19th century saw very few foreign entanglements of any kind. The 1898 Spanish-American War was the first real example of American foreign expansionism. The causes of that war are shrouded in mystery, not least of which were the mysterious events surrounding the sinking of the U.S. Navy vessel _Maine_ ; which provided an official justification for American involvement.

During World War I (1917-1919) approximately 3 million American military personnel served overseas. After the war, essentially everyone came back home and U.S. forces were drastically cut back. There was no compelling interest in staying engaged on the world stage.

As late as 1938 the United States maintained 14 military bases in 13 countries worldwide, including Hawaii and Alaska which were later to become states. There weren't many troops between all of them.

Then came World War II. During active U.S. involvement in the war (1942-1945) there were over 12 million American military personnel serving overseas. After the war, there were drastic cutbacks but the United States was thrust into a role as the major actor on that world stage.

The discussion of foreign involvement will pick up at this point, describing the situation that was presented by the Cold War.

### Cold War: Pre-Vietnam

The specter of world Communism was the primary force behind American force projection from the end of World War II up until 1990.

There are legitimate arguments to be made that the United States had no real choice other than to take on the role of superpower in the face of this threat. History, ideology and world circumstances forced that role upon America more than any real desire for empire.

And for the most part America was successful in the Machiavellian role it was thrust into.

Four decades of Cold War saw American and Soviet manipulations, to varying degrees, of other countries in a power struggle for strategic and influential dominance of the world stage. Seldom did their militaries directly clash, though they constantly threatened confrontation on scales never seen in human history.

From 1947 to 1957 the Soviets were increasingly belligerent in a Europe pre-occupied with rebuilding from World War II. The countries of Eastern Europe (East Germany, Czechoslovakia, Hungary, Poland, etc) fell within the direct control of the Soviets while America poured aid into the other European countries while building up military forces there. NATO (North Atlantic Treaty Organization) was formed to link the United States and the Western European nations in a military pact to counter the Soviets. Radio Free Europe was begun as a major propaganda tool to keep discontent alive in the Eastern European nations.

In 1949 the Soviets formed close military ties with the other communist giant of the world, The People's Republic of China. In the years preceding that the Korean peninsula divided into North—a client state of China and the Soviets—and South—aided by the United States.

From 1950 till 1953, the United States was directly involved in a major military conflict between North and South Korea. This saw the closest direct confrontation of the Cold War between forces of China and the Soviets on one side, and the United States on the other. A cease-fire was declared in 1953 but the conflict was never fully resolved.

In 1953, the long-time dictator of the Soviet Union died. Joseph Stalin was without a doubt the most brutal and merciless ruler in the history of the world, and his death was hoped to facilitate a thawing of East-West relations. That was not to prove the case, however. Nikita Khrushchev took power and, though seemingly less brutal, was maybe more cunning than Stalin had been.

In 1956 a break between the Soviets and China occurred, strengthening the position of the West—and the U.S.—as it diverted some Soviet attention from Europe.

The late 50s and early 60s saw the development of InterContinental Ballistic Missiles (ICBMs) and space satellites. It also saw Soviet influence spread to the Western hemisphere as Fidel Castro took control in Cuba. In 1961 an American-backed invasion force attempted to start a counter-revolution in Cuba but was ineptly handled by the Kennedy administration and failed miserably.

In the few years since the development of ICBMs the United States had accumulated a huge numerical and technological advantage in these long-distance weapons. It had also moved dozens of medium-range nuclear missiles within close range of Moscow by deploying them at sites in Italy and Turkey.

In the fall of 1962 Soviet Premier Khrushchev, encouraged by the U.S.'s botched Cuban invasion, decided to test America's resolve regarding its long-declared (since 1823) Monroe Doctrine. To counter the American ICBM lead he secretly introduced medium-range nuclear missiles in Cuba. What resulted, the Cuban Missile Crisis, brought the two powers to the brink of nuclear war. In November of that year the crisis was resolved by the Soviets pulling their missiles out of Cuba and the United States promising to pull their missiles out of Italy and Turkey.

Khrushchev was removed from power in 1964. The Soviet ruling circle had been dissatisfied since the Berlin Wall was erected between East and West Berlin in 1961, a public admission that East Germans were fleeing to West Berlin in huge numbers. Khrushchev also oversaw extremely disappointing agricultural and industrial results, and the Cuban Missile Crisis was largely seen as a Soviet embarrassment.

The period 1964 to 1974 saw an uneasy thawing of relations. Militarily, it was accepted that both the Soviets and Americans had enough nuclear weapons deployed that any overt conflict between the two would quickly result in unacceptable devastation to both sides. This 'policy' became known as Mutually Assured Destruction (MAD). The Soviets needed to focus more on their economy, which was proving to be an undeniable failure. It was in America's interests to simply contain the Soviets while the West grew economically stronger.

France did withdraw from NATO in 1966, after years of demanding that they be given as much relative power as the United States and Great Britain within that organization. This proved a slight setback to the West.

### Vietnam

In the early 1950s, American aid and French troops were backing a far-from-perfect—but non-Communist—regime in Vietnam. By 1954 the Soviet and Chinese-aided communist Viet Minh forces had driven the French out of Vietnam. American military aid and 'advisors' helped the non-communist government forces battle the Viet Minh along temporary borders established after the French left. Vietnam split into North and South, with populations migrating to each largely based on religious and political views. Violence escalated and by 1961 the United States was committing larger numbers of 'military advisors'—over 1,000 by that time.

President Kennedy knew that the South Vietnamese government was corrupt and untrustworthy. But the theory at the time was that if South Vietnam fell to Communism, this would rapidly become the fate of Laos, Cambodia, Thailand and other countries in that far-east Asian region. This was the so-called Domino Theory

By 1963 the number of U.S military advisors had surpassed 10,000, but the South Vietnamese government and military were proving very ineffectual. In November American officials signaled to internal opponents in the South Vietnamese regime of Ngo Diem that they were okay with Diem being replaced. Diem was subsequently executed in a coupe that month.

As it happened, President Kennedy was also assassinated that month. President Johnson declared his intentions to greatly enlarge American involvement and bring the conflict to a quick end. He did escalate but the quick resolution proved not to be the case.

In the summer of 1964 several incidents in the Gulf of Tonkin, off the North Vietnamese coast, were reported. U.S. naval vessels, collecting intelligence data near the North Vietnamese capitol of Hanoi, reported being fired on by much-smaller North Vietnamese torpedo boats. While the facts of this 'attack' can never be known for sure, this fortuitous maritime event allowed President Johnson to ask Congress for, and receive, permission to commit U.S. military forces in the Vietnamese theater of operations without a formal Declaration of War. This was known as the Gulf of Tonkin Resolution.

In 1965, U.S. troop levels reached 180,000. A massive bombing campaign called Rolling Thunder commenced. In 1969, troop levels reached 500,000. By that time the air campaign had rained close to 1,000,000 tons of missiles and bombs on North Vietnam.

Even against such enormous numbers and vastly superior firepower, guerilla warfare and adaptive tactics made the North Vietnamese and Viet Cong—South Vietnamese insurgents—a fearsome opponent. They learned to fight in close to lessen the advantage provided by American weapons superiority. They kept in dispersed groups to keep the Americans from being able to take advantage of all their concentrated firepower, especially air power.

Even so, casualties among the communists were horrific. But years of casualties among the Americans also weakened their resolve for a war that seemed unlikely to ever be won, though it was unclear what winning meant.

In 1969, newly-elected President Nixon declared his intention to begin disengaging the United States from the conflict. Over the next four years U.S. troop levels steadily receded while the South Vietnamese military ramped up to take control of their own destiny.

During peace negotiations in 1972, following heavy bombing campaigns by the United States, agreement was reached for a treaty between North and South. When the North Vietnamese government realized that they had in effect won in their attempt to rid Vietnam of the Americans, they began demanding more concessions. President Nixon, to show his resolve, began another massive bombing campaign during December of 1972 which lasted nearly two weeks.

The North agreed to return to the original treaty and the Paris Peace Accords were signed on January 27, 1973. In short order U.S. POWs were released and all but a token American force was withdrawn from the country.

The North Vietnamese, however, had struggled for many decades to chase out Western interference and lost little time in taking full advantage of the American departure. Preparations were secretly made for a massive invasion of South Vietnam.

In the world turmoil of the 1973 Arab-Israeli War and the resulting oil shortages, the Viet Cong stepped up operations in South Vietnam. In early 1974 the South Vietnamese president declared the Paris Peace Accords to no longer be in effect, probably hoping to have the Americans return. This did not occur and Congress continued cutting military aid to Vietnam.

In December of 1974 the North Vietnamese attacked the South in force. Though vastly outnumbered in men and weapons, communist forces enjoyed rapid successes. U.S. President Ford asked Congress for renewed aid to South Vietnam in January of 1975 but Congress refused further involvement.

South Vietnam, after more than a decade of economic and military dependency on the United States, fell into deep panic. The North seemingly could not be stopped and by early April was surrounding the South Vietnamese capital of Saigon.

On April 30, 1975 Saigon fell.

The conflict in Vietnam, while of course a setback to Cold War posturing, proved to be a much more serious blow to the American national psyche.

In nearly two decades of fighting almost 2 million combatants on both sides had been either killed or wounded. U.S. casualties alone were over 58,000 dead and 300,000 wounded.

Military tactics designed for conventional European-style warfare were found extremely lacking in the jungles of Vietnam. Air and naval forces, normally a huge advantage for the American military, proved of very limited effectiveness. The greatest military power on the planet was in effect defeated by a relatively small but dedicated insurgency.

It had been apparent throughout the conflict that Americans did not really understand their enemy nor indeed their allies in the South Vietnamese government. Corruption was rampant and many people profited from the war, both Vietnamese and American.

Ultimately, there was no clear reason for the United States to have been involved in Vietnam. There was no clear national interest and little solid reason to believe that the conflict would enhance American global influence vis-à-vis the Soviet Union.

The so-called Domino Theory that was used to justify initial U.S. involvement never materialized. Cambodia and Laos did fall to internal communist forces in 1975, but the spread to Thailand, Malaysia and Indonesia never happened. Vietnam invaded Cambodia in late 1978, after repeated border incursions by Cambodian forces, and quickly ousted the communist Khmer Rouge while establishing a Vietnamese-controlled government and renaming the country Kampuchea. China responded by invading Vietnam but after little more than a month of fighting withdrew back to China.

Cambodia reverted to a more democratic form of government in the late 1980s. Vietnamese troops withdrew and Cambodia now enjoys good relations with China.

China's view of Vietnam after 1975 seems to have been that of a potential military rival. Thus in some ways the fear of Vietnam as vehicle for the spread of communism throughout South East Asia may have instead had a dampening effect on Communist Chinese designs for the region.

### Cold War: Post-Vietnam

The American experience in Vietnam seemed to have shown the United States that indirect confrontation with the Soviet Union was much more effective than getting overly involved in small military skirmishes. Vietnam had proven a thorn in the side of the Americans, but it was never more than a bit player in the Cold War itself.

The United States began to gain greater influence in the Middle East after it became Israel's major benefactor in the late 1960s. The 1970s saw plenty of Soviet and American posturing for influence in political and military conflicts throughout Africa, the Middle East and Central America.

President Nixon formalized relations with Communist China in 1972. Presidents Ford and Carter signed several nuclear arms control treaties during the 1970s with the Soviet Union.

By 1979, however, Soviet-American relations had deteriorated once more. In 1981, newly-elected leaders U.S. President Ronald Reagan and British Prime Minister Margaret Thatcher appeared committed to bringing down the Soviet Union. When deciding whether to run for President, Ronald Reagan confided to his future National Security Advisor his plans on how to deal with the Soviets; " _We win and they lose_ ".

Beginning in Poland in 1981, with the indirect aid of Pope John Paul II, pressure was put on the Soviet regime to loosen control over the people under its control. In a 1983 speech, President Reagan explicitly called the Soviet Union an " _evil empire_ ".

Throughout the 1980s the Soviets ramped up their conventional and nuclear military forces tremendously, regularly consuming more than 20% of their gross national product (GNP). Their civilian economy was in steep decline from its already poor conditions. In comparison, U.S. military spending averaged 5% of GNP. America was deploying nuclear weapons close to Soviet territory and essentially doing all it could to keep the Soviets in the massive military build-up mode.

President Reagan had apparently—and correctly—decided that the chief strength possessed by the West was economic. Thus the best way to finally win the Cold War was to spend the Soviets into bankruptcy. As seen earlier (see American Conservatism: Later Conflicts/Problems) the United States road to financial ruin escalated rapidly during this period. However, President Reagan understood that the Soviets would go broke long before the United States.

At the same time, the Soviets became embroiled in their own version of the quagmire America found itself in with Vietnam. Between 1979 and 1989 the Soviets committed over 100,000 troops into Afghanistan. They were forced to withdraw in defeat, much as the Americans had in Vietnam, but while Vietnam had been a thorn in the side of the United States Afghanistan proved much more fatal for the Soviets. The United States never felt a severe financial strain because of Vietnam. The Soviet Union was going broke fast and could ill afford the expenditure of treasure and prestige in trying (unsuccessfully) to pacify an insurgent force even less well organized than the Viet Cong had been.

The United States, sensing the end was near for the Soviets, allowed relations to thaw beginning in 1985 with the new Soviet General Secretary Mikhail Gorbachev. Gorbachev really seemed to be trying to stave off Soviet economic collapse and proved very cooperative with the West.

Secretary Gorbachev and President George H Bush announced in December of 1989 that the Cold War should be considered over. At the same time mostly-peaceful revolutions throughout Eastern Europe were replacing pro-Soviet puppet governments with more democratic ones.

In the summer of 1990 the United States led a coalition of countries in a large-scale military action against Iraqi forces in Kuwait. But, for the first time since the 1920s, the Soviet Union did not have to be seriously taken into account in world affairs. The 1990 Iraqi affair was significant not because of the outcome—that was never in doubt—but because the United States showed the world decisively that it was the sole superpower in the world.

In December of 1991 the Soviet Union itself dissolved into several separate republics, the most important of which was Russia.

### Interests vs Friends; Pragmatism vs Emotions

The concept that, for the most part, guided U.S. foreign policy during the Cold War was that America had foreign interests as opposed to foreign friends. The main interest, stopping the spread of Soviet influence, was predicated on the facts that

* The United States and the Soviet Union were the two largest world superpowers and

* Their two political systems could not by definition co-exist peacefully. One or the other was going to come out the winner no matter what.

Seen through the prism of foreign interests, aid and alliances shifted over time. The main reason for such shifts in American policy would be determined by what would best counter Soviet policy.

The trouble usually came about when guiding precepts of foreign policy became based on friendship or emotions rather than on pragmatic interests.

Though the major U.S. foreign policy goal since World War II was to halt Soviet expansion a secondary goal was to prevent any regional power from becoming so powerful as to threaten American foreign interests. To this end some American foreign policy during that time has seemed rather cold-blooded.

In general this is a good thing. The only legitimate justification for the American Empire that developed after World War II was national defense. It was determined then that the best way to defend the United States was to use foreign influence to counter the influence of rival, or potentially rival, nations. This is a more legitimate reason to expend American treasure—and sometimes blood—than to do so for the sake of other nations just because they were thought of as friends at the time. If it is wrong for a moral society to confiscate money from its citizens to give that money to others of its own citizens then it is certainly wrong to give that confiscated money to citizens of other societies. If, however, the prime reason for American aid is to better defend America herself then the fact that foreign citizens benefit is secondary.

American military policy in this era is largely synonymous with foreign aid, since a very significant portion of military spending involves forces operating outside the borders of the United States. The extent of this foreign involvement, and why the term American Empire seems appropriate, will be discussed shortly.

In hindsight it seems U.S. involvement in Vietnam was primarily one of national pride. That the most powerful military force in the world could in effect be stood up to by a third-rate poor country seemed unimaginable. Would such a precedent embolden similar 'bush wars' around the world and increase the spread of Communism? That did not prove to be the case.

Unfortunately, pride and emotion still seems to rule.

Since the mid-1970s strong U.S. support for Israel has appeared to be primarily an emotional response versus a pragmatic one. The influential Jewish constituency in the United States and the fact that Israel is the closest thing to a Western democracy in the Middle East seem to be the driving forces. Continuing support, often unwise support given supposed American virtues, has caused the U.S. considerable trouble in dealings with the rest of the Middle East.

The three largest military powers in the Islamic world after the early-1970s were Pakistan, Iraq and Iran. Pakistan was checked from further expansion by India, and in turn the Pakistanis acted as a check on Indian expansion in South Asia. Therefore, the two biggest Islamic concerns for America were Iraq and Iran.

In Iran, the seat of ancient Persia, the U.S. ousted the elected Prime Minister in 1953 and until 1979 supported the Pahlavi monarchy there. The reason was to maintain greater influence in the region as well as to better protect Western oil interests. In 1979 a long-exiled Iranian cleric named Ayatollah Khomeini returned to Iran, whose citizens were predominately of the Shi'a sect of Islam. The Iranian monarchy was soon dissolved in favor of an Islamic theocracy ruled by religious leaders called Imams. Iranians held the United States chiefly responsible, with plenty of valid reasons, for propping up the despised pre-1979 monarchy. This made Iran a powerful force against U.S. interests in the region.

In neighboring Iraq, the government since the late 1960s was dominated chiefly by members of the Sunni sect of Islam. The majority of the population is Shiite (i.e. Shi'a). In 1979, an ambitious man named Saddam Hussein took control of the Iraqi government. One of his first acts was to take a hard stance against the new Iranian theocracy there.

Iraq invaded Iran in the fall of 1980, though the invasion achieved few tangible results. After 1982, Iraqi forces were mainly on the defensive against Iranian troops. The war lasted for eight years and resulted in approximately 1,000,000 total casualties. Military aid in various forms was provided to both sides by the United States, primarily because American interests in the region would be best served by both nations remaining relatively balanced.

Although weakened by the recently-concluded war with Iran, Hussein used the Iraqi military to invade the small neighboring nation of Kuwait in August 1990. Kuwait had financially supported Iraq during its war with Iran, but refused to forgive some of Iraq's debt after the war. The Iraqis apparently miscalculated U.S. reaction, and in early 1991 American forces along with a coalition of dozens of other nations initiated a massive lightning-quick effort to drive the Iraqis out of Kuwait.

The Iraqis were pushed back into Iraq in February 1991. Technologically, the weaponry of the American and Coalition forces were far superior to those of the Iraqis and the outcome was never in doubt. Overall American/Coalition deaths resulting from this operation were approximately 400 compared to approximately 30,000 Iraqis.

The decision was made to halt military operation far short of destruction of the Iraqi military as a viable military force. The objective of pushing Iraq out of Kuwait had been achieved and it was still in the best interests of the United States to maintain a balance of power between Iraq and Iran.

This balance of power would come into play a dozen years down the road, when the United States once again would err on the side of emotions rather than pragmatism.

Islamic terrorist groups began stepping up attacks on civilian and/or government targets in the 1990s. Operating primarily against Israel, attacks against such relatively soft targets were much more effective than attacks against military targets. More and more, U.S. installations began to be targeted. This was especially true after the Iraqi conflict of 1990 and the increased presence of American military forces in the Middle East.

Such groups, be they called terrorists or guerillas, have as their goal to have their grievances taken seriously by the sheer horrendous nature of their acts. Attacking military targets would do little as most would fail miserably mainly because of the huge disparity in military assets. Attacking such soft targets as civilian population centers tremendously increased the likelihood of success and often made the attackers appear more serious of a threat than they actually were.

It is highly improbable, if not impossible, to imagine any terrorist group even coming close to threatening the existence of a modern nation. It makes little difference what they do—though their potential threat becomes far greater with devastating nuclear and biological weapons. But because the casualties tend to be non-combatant civilians the populace feels especially vulnerable and scared. And, especially in democratic societies, governments have to be very responsive to citizen concerns.

Thus, relatively minor acts of targeted mayhem result in much more importance being assigned to the perpetrating groups than would otherwise be the case. Much money, time and prestige are expended by the nation being sniped at by these so-called terrorist groups.

Vietnam, as a loose example, was an American embarrassment. The reason it became such a huge event was because of the way America responded and NOT what either the North Vietnamese or the Viet Cong were doing, or could do, to America.

When Iraq had invaded Kuwait in 1990, the kingdom of Saudi Arabia refused military assistance from a small Islamic group that would later evolve into something called al-Qaeda. Organized by Saudi-born Osama bin Laden, its members had largely been involved with the struggle against Soviet forces in Afghanistan. The United States had even provided substantial aid to them at the time. But in 1990 Saudi Arabia opted to accept the much stronger protection of the United States and allowed it to deploy forces within Saudi Arabia.

To bin Laden, allowing Americans to have a military presence on Saudi Arabian soil—home of some of the most holy of Islamic sites—was religious blasphemy.

A series of bombings against American targets, most outside the U.S., culminated in the September 11, 2001 attacks that saw commandeered airliners crashed into buildings in New York and Washington. Approximately 3,000 American civilians died in those attacks and the two largest buildings in New York City were completely destroyed.

This was a horrible crime that easily justified the obliteration of al-Qaeda. It was complicated by the fact that the government of Afghanistan allowed al-Qaeda to operate within its borders, though it is not clear whether they could have done anything about the organization's presence in their country even if they had wanted to.

Rather than just concentrating on finding and destroying al-Qaeda, the United States responded to the attacks by declaring its intent to 'go to war' against all large terrorist organizations and any nation that harbored them. On September 20, 2001 President George W Bush pledged " _Our 'war on terror' begins with al Qaeda, but it does not end there. It will not end until every terrorist group of global reach has been found, stopped and defeated._ ".

Thus a small Islamic fundamentalist group centered in one of the poorest countries in the world rose to enough prominence that it became the center of U.S. foreign and military policy for more than a decade afterwards.

In pursuit of this 'war' Afghanistan was invaded in October of 2001. The Islamic ruling organization that was displaced, the Taliban, was still conducting guerilla warfare on U.S. forces a decade later. The group responsible for the September 11 attacks, al-Qaeda, was largely destroyed but over those years attracted many additional regional followers due to its stature as a powerful 'defender' of Islam against the United States.

Iraq, not strongly linked to al-Qaeda, was invaded in March of 2003 and its military essentially destroyed. The rationale for this American invasion was definitive intelligence of Iraqi weapons of mass destruction, or WMDs. The fear was that these WMDs would be supplied to al-Qaeda. Not a single WMD was ever discovered in Iraq, however, and the supposed definitive intelligence was, in hindsight, at best pretty sketchy and at worse fabricated.

Islamic fighters flocked to Iraq and are still conducting guerilla war on U.S. forces eight years later. A large reason the Coalition forces escaped with so few casualties back in 1991 was the decision by the Iraqis not to engage in urban warfare, chiefly within Kuwait City. Close-in city fighting largely negates the huge advantages in weaponry enjoyed by modern forces such as those of the United States. This type warfare is mainly what the guerilla forces in Iraq are engaged in this time around.

Thus, far more casualties were incurred each year in both the Iraq and Afghanistan actions in the years since 2001 than in the lop-sided campaign against the entire Iraq Army in 1991. The expense of maintaining an occupying force in those nations proved massive, and goals to be achieved were far from clear. The governments were largely U.S. puppet impositions and this invoked much resentment from people in the region.

The pragmatism that was exercised in 1991 to keep Iraq intact as a military counter to the chief anti-American interest in the Middle East, Iran, was completely abandoned in the 2003 invasion. Other than the threat of direct invasion by the United States, Iran was left with no credible opposition in the Middle East short of Israel.

A number of factors, most of them unfortunately more emotional than calculated, seemed to have been at work in what appeared to be a knee-jerk reaction by the United States to what amounted to a horrendous act of violence by a group of international gangsters in 2001. A reaction, by the way, which undid much of the balance of power setup by the U.S. over previous decades.

Since 1990, a major force in guiding U.S. foreign policy seems to be something discussed earlier in the section on American Conservatism.

A huge shift in Conservative philosophy was the rise, and some say outright subversion, of the [Conservative] movement by anti-Soviet liberals who promoted the use of U.S. power to bring their version of democracy and human rights to foreign countries. Starting in the 1970s but gaining huge influence after 1980, these Neo-Conservatives saw little problem with the growing welfare state or expanding federal powers as long as it did not interfere with their molding of the world in what they saw as 'the American image'.

Neo-Conservatives were often upfront about their belief that America had a 'divine purpose' to spread freedom and liberty—their versions, of course—to the rest of the world. This 'divine purpose' was more often than not decidedly Christian in nature, and the ancient Biblical lands of the Middle East were often prominent in their plans.

A common phrase used by Neo-Conservatives in describing U.S. foreign policy that ran counter to their desires was that the opposition lacked 'moral clarity'. Obviously their definition of morality differed quite a bit from the individual-liberty definition that more appropriately defines a moral society.

Neo-Conservatives were big proponents of using military power not only to protect U.S. interests but to engage in nation-building, which became another glaring dichotomy of modern Conservatism. The Republican Party, which blasted President Clinton at various times in the 1990s for committing U.S. forces without 'exit strategies', by 2004 was supporting multiple foreign adventures in the Middle East while claiming it was unpatriotic to even dare ask about 'exit strategies'.

This is not to imply that American Liberals had nothing to do with this post-1990 doctrine of military expansionism. Often the groups overlap, though primarily American Liberals seem to be in control of the Democratic political party while American Neo-Conservatives seem to be in control of the Republican political party.

U.S. Liberals hold that a responsibility of the Federal Government is to take an interventionist policy regarding economic and social issues for all Americans. Likewise, Neo-Conservatives hold that a responsibility of the Federal Government is to take an interventionist policy regarding the spreading of American values throughout the world.

U.S. Liberals, and there are distinct differences among American and European Liberals, at least claim the Federal Government needs to intervene on behalf of Americans. In contrast, Neo-Conservatives claim the Federal Government needs to intervene on behalf of non-Americans.

## American Empire

Describing the worldwide American influence as an American Empire is justified on several grounds.

###  Worldwide Presence

The focus of this section is on American installations around the world, but as such installations exist to project American military might let's take a quick look at the massive amounts of those U.S. forces.

The figures below indicate the modern phenomena of American forces being stationed throughout the world. Never in human history, outside of potentially the two World Wars of the 20th century, has any nation maintained a foreign military presence like this.

The actual number of overseas military bases maintained by the U.S. military has never been easy to ascertain. There are of course official bases but the nature of foreign policy and military affairs are such that not all installations are revealed to the public. Then there is the matter of classification. The military classifies some bases as sites or installations, usually depending on mission, number of personnel or cost of maintaining the facilities.

For our purposes a military base is where military personnel are 'stationed. Some common sense is of course required. A temporary firebase erected in 1970s Vietnam or 2005 Afghanistan is not really a 'base' for our discussions, but obviously a large expensive compound or airfield is.

It is widely believed that the number of American bases has fluctuated between 1100 (at the end of World War II) to maybe half that around 1950. Construction picked back up as the strategy for dealing with the Soviet Union seemed to be to ring them in with U.S. military bases. By 1967 the U.S. was back up to over 1000 bases and that number has remained fairly consistent ever since.

And this doesn't count the more than 400 military bases being maintained in the United States itself.

The rationale for maintaining these installations, at fantastic cost, has never been fully explained. It was often argued during the Cold War years (1947 – 1991) that the rationale was to contain the Soviet Union and that these bases were for forward deployed supplies and forces to deter the Soviets.

When relative force structures from that period are examined, it is obvious that manpower and number of conventional weapons were an advantage for the Soviets. Speed of reply and force multipliers (i.e. technological advances) were crucial in the event of Soviet attack. Thus the pre-deployment of forces did seem somewhat justified.

What is questionable, however, is how it was ever justified for the United States to bear the brunt of the costs for defending basically the entire world from the Soviet Union.

For 25 years or so after the end of World War II the argument could be made that everyone **except** the United States had to rebuild their societies and economies from the widespread devastation that had occurred in the war. It was ironic that the projection of force the United States felt the need to engage in was aimed at containing the Soviet Union—the nation that had endured the greatest devastation of that war.

But the Soviet Union officially was dissolved in 1991 and after two decades little changed as far as the global American presence. At first the justification was that the world was undergoing upheavals during this period after the Cold War. Then after September 11, 2001 the United States embarked on an extremely ill-defined concept called a 'Global War on Terrorism'.

On that day, as previously discussed, the Islamic militant group known as al-Qaeda orchestrated coordinated attacks on 'soft' targets in New York City and Washington, D.C. Some 3,000 American citizens were killed, the World Trade Center towers were totally destroyed and the Pentagon damaged.

The chief reason given for these attacks was the continued presence of U.S. military forces in the Middle East, specifically those in Saudi Arabia.

That terrorism is a tactic, as opposed to an opposing enemy force, was what made the 'Global War on Terrorism' such a strange concept. At plenty of times throughout history opposing military forces confronted one another in battles and/or wars. There were some times when the strength of both sides were so unbalanced that the weaker side conducted its actions in ways that avoided direct confrontation with its opponent. Examples have been known as hit-and-run attacks, guerilla wars, acts of sabotage, ambushes and terrorism. The 'perpetrators' have been referred to as irregular forces, guerillas, partisans, raiders and terrorists.

How can a 'War on Terrorism' be won? When it is over? Is it meant to be perpetual?

If basing U.S. military forces on foreign soil, which is why al-Qaeda said they launched the September 11, 2001 attacks in the first place, are part of the solution to winning this 'war' then the issue of such bases is quite a dilemma.

What it does point out is the reason why U.S. Founders warned about foreign entanglements in the first place.

For the most part, maintaining this global force projection means the United States needs to maintain good relations with the relevant governments in power. That implies that the U.S. 'takes sides'—which tends to not set well with opposition groups that may exist or develop in those countries.

Too many times in the past the United States has lent support to dictatorial regimes because of military basing or regional security issues. Then, when violence is directed at the United States from these foreign opposition groups, Americans attribute it to platitudes such as 'jealousy about American freedom' or 'religious intolerance'.

Maybe if America didn't prop up one side the other side wouldn't care what America wanted to call 'freedom'. For a country that boasts of its support for democracy, shouldn't its policy be to allow peoples of other nations the freedom to decide their own futures?

###  Worldwide Protector

Assuming that American military force overseas are to protect other nations from external attack, rather than support unpopular regimes from internal strife, the question becomes one of why this is done.

It is hard to believe that the bulk of U.S. bases have anything substantive to do with defense. It is true that if hostilities were to break out in a region of the world the U.S. may be glad to have bases already in the area. However, we come back to the question of what is being defended?

Historically, what has kept the U.S. secure more than anything else has always been its geographic location. The largest oceans in the world lie to the East and West and isolate America from potential enemies. Its neighbors to the North and South have never posed a threat and are unlikely to ever do so.

Ever since World War II the U.S. Navy had become the undisputed naval force in the world. No other nation comes close. This not only guaranteed the safety of the nation but has allowed unprecedented growth in trade and commerce.

During that time the only competitor in any military arena, as far as strength was concerned, was the Soviet Union. After 1990 that was no longer the case.

Nuclear weapons, which were developed by the U.S. in World War II, distort the picture somewhat. Since it is possible with a relatively tiny number of such weapons to cause massive havoc, defense against them is much more problematic than with conventional forces. Again, however, no other nation comes remotely close to the United States in its nuclear forces.

So any pretense of a defensive reason behind the maintenance of a global system of U.S. military installations must mean defending the rest of the world against itself. Few of these bases have anything to do with defending the United States, which is a pretty clear interpretation—i.e. 'common defense'—of federal mandate under the Constitution of the United States.

Can the term 'common defense' be extended to mean 'common' to the rest of the world? Not in the context of the Constitution, being clearly a compact among the several States.

###  Empire-Like Costs (and Deceptions)

Maintaining this global military presence has become as much a political issue as anything involving security. The economic costs of building, operating and maintaining these installations both make and break politicians in domestic U.S. politics and are significant tools in U.S. foreign policy. The presence of a military base is often a significant economic effect on the local community, whether it is domestic or foreign.

Remembering that all federal spending is by definition wealth redistribution, such communities are actually relying on massive transfers of wealth from the American taxpayer. There is no rational need for hundreds of bases in the United States—it is mainly political pork-barrel spending meant to redistribute public funds to effect the greatest political gain. As for foreign bases, the infusion of billions into the local countries is as much an under-the-table form of foreign aid as anything else.

The Defense Department budget in 2008 was over $600 billion, with the greatest portion of that (approximately $250 billion) going to operations and maintenance. Up until the 1970s much of the cost of infrastructure operating and maintenance was included in the cost of manpower, as duties of military members included caring for the facilities they used. This changed drastically, especially with the elimination of conscription in 1973. Military installations since then have increasing become run more like small American communities, with operations and maintenance costs contracted out to private sector businesses.

The difference this makes is that the bulk of operations and maintenance costs provide hugely-profitable work for those private-sector businesses as well as the communities where the bases are located.

Add to this the approximately $110 billion—again from the 2008 DoD budget—for military procurement and the money flowing to the private-sector becomes massive.

The point is that maintaining a huge U.S. military presence both at home and abroad involves economics and politics as much or more than any security concerns.

Looking at yearly U.S. budgets, however, defense spending has been held remarkable low in comparison to the overwhelming world influence that its military has provided since 1945.

In fact, compared to the largest items in the U.S. budget (that being Social Security, Medicare, Defense and Education) there is little doubt which area is the growing the least.

And also remember that of these four, Defense is the only legitimate responsibility of the United States government, according to the Constitution.

Defense spending numbers began to be severely distorted after this 'War on Terrorism' concept was sold to the American public in 2001. While this may not change the overall defense spending of the United States it certainly raises questions as to the legitimacy of the military conflicts that defined the bulk of this 'war'.

In a departure from previous U.S. budgets, direct military actions overseas were no longer included in the standard budget. Instead, they were submitted and approved as separate off-budget appropriations.

Such supplemental appropriations have been used in the past to fund various emergencies. In the area of military activity, the most significant have been World War II, the initial months of the Korean and large ramp-up in Vietnam in the mid-1960s.

President Roosevelt asked Congress for additional funds, called supplemental appropriations, in 1941 and 1942 in light of U.S. lend-lease programs to help the Allies immediately before and after Pearl Harbor. President Truman, in 1951, asked Congress for additional funds when U.S. forces became embroiled in Korea. President Johnson asked Congress for additional funds in 1966 and 1967 for increased U.S. involvement in Vietnam.

What was common with all three of these U.S. Commander-in-Chiefs—all Democrats by the way—was the treatment of war funding after those initial large requests had to be made. In every case, after the initial round of unexpected costs the future costs would be estimated and included in the next military/defense budget process. The 1990 Gulf War was so short that its costs were handled through a single supplemental appropriation. Although President Clinton submitted a supplemental appropriation to Congress for funding air operations in Bosnia and Kosovo (1997) he then included on-going costs in future defense budgets.

The 'War on Terrorism', in addition to (or maybe because of) its nebulous goals, was handled as one big emergency that President George W Bush's administration could never apparently estimate. Even though the actions in Afghanistan and Iraq lasted more than a decade essentially all those years were funded using emergency supplemental appropriations. Included in those emergency fundings was foreign military aid to governments that in various ways could be tied to this nebulous conflict.

Between 2001 and 2009 some $850 billion was in this manner appropriated to pay for military-related activities in Afghanistan and Iraq. Though estimating costs for ongoing operations should not be too difficult to accomplish, defense budgets for each of those years specify a base amount (without costs for the 'War on Terror') and separate supplemental amounts to cover the 'War on Terror'. The reason is almost certainly subterfuge to hide from the American public the details behind this action.

The deception was not so much that there was an American Empire; that should have obvious to anyone. But the fact that needed hiding was that a fight to neutralize a small group of religious zealots had spun out of control to become the second costliest war in U.S. history. Only World War II, which involved the armed forces of every major nation in the world, surpassed the costs of the Afghanistan and Iraq conflicts between 2001 and 2010.

Maybe the real deception was to hide the fact that the American Empire was no longer effective or needed.

## The Plan: Result

This whole American Empire situation can be debated as to being a strength or weakness for the United States. What is not debatable is that it must be considered a major symptom of 'The Plan'. After all, for better or worse, this global expansion of American influence and power is certainly a transition from the ideals on which the United States was formed.

Does the Constitution preclude the Federal Government from acting as the 'policeman of the World'? This would have been an interesting debate, had it ever taken place in the U.S. Supreme Court.

Several excerpts from the U.S. Constitution seem relevant to this discussion.

The preamble seems to indicate clearly that the purpose of the Constitution is to apply only to the states signing the compact. " _. . insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity . ._ ".

There is no mention or implication of securing Blessings and Liberty to other nations.

The powers granted to the Congress allow them to appropriate money for supporting a military for only a limited time period. " _. . To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;_ ". Of course, it also clearly states that the Congress is the only entity that can declare war on behalf of the United States. A power granted Congress in Article 1 Section 8 is " _To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;_ ".

What constitutes national defense versus fighting a war? Does the Congress have a duty to declare war before being willing to support an armed force in the execution of what would commonly be considered war-like actions?

Finally, the powers granted to the President include the limiting adjective 'actual'. " _. . The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States; . ._ ".

The case would need to be made that defending foreign countries, whether allies or not, falls under the prevue of 'actual Service of the United States'.

There is the precedent of all those implied powers being extrapolated into government control of areas no one would have thought possible back in 1789. Is the American Empire an analogous expansion of National Defense powers in the same ways that General Welfare and Interstate Commerce were expanded upon?

Did war mean the same thing after World War II than it had prior to that event? For some reason the U.S. Congress became unwilling to declare war. Even if global maintenance of forces was considered legitimate national defense there still is the question of why they funded extended direct military operations such as Korea, Vietnam, Iraq and Afghanistan without believing those actions important enough to warrant a declaration of war.

With Korea and Vietnam, war was not declared but Congress knew that military budgets included funding for those actions. They could maybe make the case that the actions being undertaken were considered to fall within the prevue of national defense.

With Afghanistan and Iraq, however, the funding for those actions was deliberately held distinct and apart from the budget for national defense. What was that supposed to mean? It would appear to acknowledge that those two conflicts did NOT have anything to do with national defense. Then why did the Congress continually grant the President funds to prosecute armed conflict in those nations? If the case could have been made that those two conflicts were for national defense then why not include them in the national defense budget?

That U.S. military spending and foreign entanglements are essentially the same cannot be ignored. The entire military system of the U.S. goes far beyond that required for defense of its homeland, which necessarily means that the reason is foreign entanglements. That the picture is further muddied by economic and political posturing does not change that fact.

Engaging in a web of such entanglements has obviously 'benefited' the United States in much the same way as the Federal Government 'benefits' from expanding its own size and power.

Within the U.S., by distributing money to selected groups the Federal Government gains power if for no other reason than the threat of cutting off the money flow guarantees that its wishes be followed.

Outside the U.S., by distributing money to selected nations the Federal Government gains power if for no other reason than the threat of cutting off the money flow guarantees that its wishes be followed.

In both cases the money being distributed, of course, belongs to American taxpayers. The expansion of U.S. military presence correlates directly with the redistribution of U.S. private wealth.

In the case of internal U.S. wealth redistribution, we have seen that the reason this situation exists is primarily due to the combination of democratic voting and non-uniform taxation. That is, every citizen gets to vote on how to distribute money but most do not contribute to the amounts being distributed. Such a combination results in 'the many' dictating what is to be done with the wealth of 'the few'.

In the case of external U.S. wealth redistribution, which is largely the case with military spending and foreign aid, what is the rationale? The American electorate is not choosing to enrich themselves at the expense of the few paying the bills, but rather choosing to enrich other nations.

True, far too many Americans are largely allowing the enrichment of other nations to occur at the expense of _other_ Americans having to shoulder the bulk of the costs. But what do _any_ Americans believe they get out of enriching those other nations in the first place?

The danger to the United States lies primarily not in the monetary costs that it's military and foreign policies impose on the nation.

No, the primary danger is philosophical.

Is it moral, or Constitutional, to require U.S. citizens to pay to protect not only America but other societies as well?

Is it moral, or Constitutional, to send U.S. armed forces into conflicts and keep them there for years without Congress declaring war?

Is it moral, or Constitutional, to maintain U.S. armed forces in a foreign region when the chief reason is not to defend America but to influence events within that other land?

Another danger is physical security.

By engaging in foreign entanglements the risks of being drawn into conflicts and violence—having little or nothing to do with United States security—is vastly enhanced.

By taking sides in foreign disputes the risk is that the side not being supported becomes understandably antagonistic towards the United States.

Whatever the answers, the extent to which foreign entanglements are intertwined with the American experience is far from anything foreseen 100 years ago, much less in 1789.

**********

# The Plan in Perspective

My concept of 'The Plan' has hopefully achieved its intended goal. That goal was not to describe a necessarily real conspiracy but rather to focus, and in a way personify, the very real human frailties that both necessitate governments as well as lead to their demise.

Human beings innately desire to be free and to pursue happiness . . . the Declaration of Independence was not some obscure theory that Thomas Jefferson pulled out of his imagination and foisted upon an uninterested populace.

Governments had been formed and tolerated throughout history mainly as defense against societal outsiders, not because people somehow appreciated being subjugated and ruled over by a relatively-small ruling class. Exceptions of course existed, but these were chiefly in small isolated communities with few enemies and low levels of technological advancement.

Absent focused violence by the ruling governments, more complicated societies should theoretically evolve towards more individual freedoms. Or so we like to imagine!

The magic of the American Experience was that for the first time this theoretical evolution was allowed to be tested in practice. Geography and revolution had combined to allow a situation whereby this group calling themselves Americans could design a government structured towards individual liberty and against the accumulation of power by a ruling elite.

We often tend to think of evolution as a process of bettering an entity, be it a species or a society, toward attainment of some ideal goal or pinnacle. But does that need to be the case?

The hypothesis put forth in this book has been that, while freedom and liberty are innate human desires, thousands of years of history have conditioned us that neither are attainable or even reasonable. Many of us seem not to fully comprehend these desires given our life experiences as well as our historical and cultural backgrounds.

A couple of centuries ago some people in the New World merged their own self-interests with the Enlightenment concepts of freedom and liberty and forged a nation called the United States. Was it in any way reasonable to assume that doing so would have a real effect on the human experience of the previous several millennia?

Right and wrong had always been narrowly defined, with the definitions for each being laid down by the ruling elite—secular as well as religious. Living as one wanted—within those definitions—was considered the meaning of freedom.

But real freedom means that the definitions of right and wrong are relative to the individual and not some ruling elite. Liberty is being free to act for your own sake in ways you deem appropriate. The promise of the United States of America was that it was to nurture those concepts of freedom and liberty to as much an extent as possible while still allowing individuals to live together as a society.

Just as in the past laws were often inappropriately proclaimed by ruling elites, it is often just as inappropriate for laws to be proclaimed by majority rule. The first describes tyranny by ruling elites whereas the second describes tyranny by the masses.

The criteria for an act being deemed lawful must, in a free society, be determined by whether it forces any other individual to act against his will. Obviously, in order for a society to flourish, if one individual would be initiating violence against another then the act is deemed unlawful. But that should be one of the few criteria for the lawful curtailment of individual activities. The criteria certainly should not be determined by popular consensus, such that an activity is outlawed for the sole reason that it offends the sensibilities of the majority.

As has been shown, societies are maintained by surrendering individual freedoms in the name of that society. But as has also been explained, the surrendering of individual freedoms is in itself an evil that must be minimized. This is not some feel-good phrase that has no real meaning but rather an important concept in regards freedom and liberty.

Given the nature of man, we have survived largely by evolving a herd mentality. In the environments we have historically found ourselves in—often inhospitable terrain and weather, stronger and faster predatory animals, competing human enemies, etc—grouping together into societies of tribes and nations was to a great extent inevitable. Such groupings were thus usually formed because of a common fear rather than the ideal reason of wishing to maximize one's own potential.

We can thus view the spectrum of human history as evolving towards a state of greater safety. However, all this safety is not the goal but rather a necessary pre-requisite before scaling the ultimate pinnacle of self-actualization.

In 1943 an American psychology professor named Abraham Maslow postulated a theory that has become famous as Maslow's Hierarchy. It organizes human needs into a prioritized structure with the most basic needs at the bottom supporting the more esoteric internalizing needs at the top. The physiological and safety elements necessary for survival are the most basic needs that must be satisfied, followed by the more 'feel-good' needs of belonging and self-esteem.

The history of mankind has chiefly been focused on these basic human needs, with the self-esteem and esteem of others being a much more recent set of perceived needs. The reason, of course, for the pyramid shape is to depict the relative effort and importance of the stated needs. Love and affection are well and good but only after relatively greater time and effort have been expended on those lower needs necessary for survival.

The goal for the vast majority of humans, at least until the time of this nation's creation, was concerned with _physiological, safety_ and _belonging_ needs. Americans through the 18th and 19th centuries probably were in the minority of the world's population in exploring the realms of _esteem_. In the 20th century Americans and others were spending far less effort in basic survival and more on individual happiness pursuits that in the past were the concerns of the privileged elites.

_Individual happiness_ , _belonging_ , _esteem_ , etc all culminate in self-actualization—being all that you as an individual can become.

Individual freedom and liberty!

Thus, we have a dilemma with Maslow's model. The theory, when looked at in practice with actual people, strongly tends towards the sacrifice of individuality for collectivism in the attainment of its lower levels. However, attainment of its higher levels is dependent on individual freedoms and liberties.

The dilemma, of course, is that the paradigm for successfully scaling the pyramid needs to change radically during the journey. The United States of America came into existence at just the time in human history when this dilemma was being grappled with, and our Founders tried mightily to draft a compact that would take into account the oft-competing tendencies of security and freedom.

The reason 'The Plan' was destined to succeed was because of human nature. After thousands of years where the only experience for most people was that of being directed by a ruling power, most Americans could not handle a shift away from that paradigm. It was certainly true that Americans tended towards self-reliance in their survival needs—but such has been the case for the majority of 'the ruled' in the world forever. Most, however, were ill-prepared for the necessary shift away from society as a vessel of collectivized-security to one as a protector of individual-rights. The concept was too foreign and different from the way the world had always operated, and change from 'how it has always been' is hard to accept.

It had always been the higher-level decisions, at a societal level, that were imposed by the ruling elite. Americans, however, were told that they could have a say in choosing who those ruling elite would be. This is all well and good—but only if such choice was engaged in by a populace who valued liberty, freedom and morality above personal gain, elusive feelings and immorality. Instead, American elites were usually elected because they promised the biggest gifts to the target groups whose votes they could most easily buy.

The fact that the U.S. Constitution had some wording loopholes was something to be taken advantage of, not a reason for failure in and of itself. The thing that guaranteed success of 'The Plan' was that there has always been ambitious men who want power and there always will be. This Democracy concept, which is probably essential in some form for individual liberty, opened a huge gateway for power to such men. They didn't have to be part of any special bloodline or any such rare physical constraints. All they had to do was promise enough benefits to enough people to win an election. If those benefits were ones that individual voters could have purchased themselves then tenure in office was usually short. If, however, the benefits were ones that were paid for fully or partially with other people's money or effort then tenure in office was going to be long-lived.

This phenomenon of wanting to benefit from other people's wealth is not new. Nor is it is necessarily immoral if force is not initiated against the 'other people'. A government is, as we have repeatedly pointed out, the one entity in a society with a legal right to initiate such force. So if individuals have a say in the makeup of a government they also have a say in the legal use of other people's money. An argument could be made, and it is by the recipients, that obtaining such benefits is not even immoral since it is done under government auspices. But no valid argument could be made that such a situation in any way supports individual liberty.

It can thus be said that—primarily because of the individual 'rights' represented by Democracy—America has always been destined to elect leaders who rule in a manner most against individual liberty.

But to blame the American downfall on anyone but the American public makes no sense! We got what we wanted and the only hope to fix any of it is to fix ourselves.

**********

# Author's Notes: Conclusion

I love the United States of America. Specifically, I love the concept she represents.

The country is physically beautiful, but that's not necessarily what I love about her. I was raised a Texan but have now lived most my life in Nebraska. America is vast and as long as the freedom exists to go where I please then that's enough.

The history is grandiose and awe-inspiring, but that's not necessarily what I love about her. I have always been a student of history and am fully aware that this nation has made its share of mistakes.

The people are generous and industrious, but that's not necessarily what I love about her. I have lived long enough to see plenty of the good and the bad. It should be evident from this book that I am not big on Democracy, and I freely admit that I think there are far too many misguided and immoral Americans for my liking.

The government is huge and powerful. I have worked for or with the U.S. Government for most of my life, but that's not necessarily what I love about her. As to the makeup of her government, I've voted equally for Republicans and Democrats—for the most part being sorely let down by both.

The main reason I love the United States of America is for what it was meant to be—the ideals expressed by her Founders. Ideals that were for the most part lost long before I came of age.

Growing up in the 60s and 70s, my life largely revolved around American institutions that nourished that love of country. The Boy Scouts of America and the Army Reserve Officers Training Corp were very important to me and prepared me for later life. After a brief stint in the U.S. Air Force I find myself some 30 years later still involved with that institution.

But over the years it has become more and more evident that the very nation that means so much to me—the very concept that is to me the United States of America—has drastically changed.

That change did not begin in the 80s or 90s, the Bush administration or even under the present Obama administration. The pace of change has ramped up, but the tipping point occurred long before then.

The idea of 'The Plan' has intrigued me for some time. Could the destruction of this nation have been scripted any better than the way history has actually unfolded? Was the downfall an inevitable result of human nature reacting with high ideals?

I had been frustrated ever since becoming politically aware, probably in the mid-70s, with the mass-hypnosis that seemed to take place with the letters R and D by the names of political candidates. Did American voters really even listen to what these guys were saying and then compare their words with what they really did? Did history mean anything to most of them?

To pay attention to what was going on was like watching a debate between a thief and a con man. Both were going to steal your money, but one was going to rob you first and the other was going to make you feel good while stealing from your bank account.

Most of my friends, given my background, were and are Republicans. For decades I've heard speeches about love of country ... while any clear observation showed only the up-sloping side of spending and debt curves while simultaneously the clear downward slide in the ideals expressed in our Constitution.

" _But our guy cut taxes_ " I was told. Newsflash . . . cutting taxes _instead of_ cutting spending doesn't work for personal finances and it isn't ever going to work for national finances either. And most of the time, the idiots—with all due respect—were cutting taxes _while_ increasing spending.

Horrible idea. Realizing that should not be rocket science!

Somewhere along the line I became an engineer. And then the frustration really began. In my profession, in any of its myriad variations and offshoots, there are some constant rules for handling a problem. In general these are:

1. Isolate and identify the underlying cause of the problem, as opposed to the symptoms of the problem.

2. Mitigate the problem as much as possible while working on the solution. This means stop doing the activity causing the problem, or put in place 'band aids' to make the problem as manageable as possible until a fix is found and implemented.

3. Determine if the problem can be 'fixed' by changes to the system—this is usually the case—or if the problem is so systemic that the whole system needs to be radically redesigned.

4. Based on the above, plan a course of action and design a 'fix'. Have experts review the design extensively before implementing it.

5. If at all possible, implement the 'fix' to a test environment. If possible, test and re-implement as necessary until satisfied that the 'fix' will work.

6. Implement the 'fix' in the production (i.e. real-world) environment.

Invariably, in U.S. politics, I see step #1 screwed-up. Then step #2 is performed in a half-assed manner that usually results in a 'band aid' being put on a symptom rather than the cause.

That's it! I cannot recall ever having seen further steps.

And yet the effort of misdiagnosing the problem and then putting a band aid on that misdiagnosis more often than not is reason enough to get a member of Congress, or even a President, re-elected.

I am convinced that no amount of tinkering around the edges can somehow 'fix' the problems that are evident in the modern United States. It is easy to blame the Federal Government and righteously proclaim that 'if only' we had better politicians, or term limits, or more Conservatives, or more Liberals, then the ship of state would right itself.

What is hard, but is the only chance to get things right, is to examine ourselves.

The United States of America was a concept meant for governing a moral society composed of moral individuals.

I contend that for the most part we are no longer a moral society. It is of little use to argue about whether there are many moral individuals around anymore, but if we can't agree that the American society is no longer the moral society envisioned by our Founders then all efforts at any sort of Resurrection will be for naught.

I forgot to mention step #0 in the problem-solution steps above—realizing that there is a problem.

From my observation point most Americans don't even recognize there is a problem. The ones who do realize a problem exists usually focus on a symptom—vs the cause—and spend inordinate effort on trying to fashion a 'band aid' they mistakenly think is some kind of actual 'fix'. More often than not those misguided individuals fall short of even that goal.

Moral societies do not do to their own members what the American society has done to itself for nearly a century now. And all the band aids in the world matter little if the American society is systemically broken. How would such a society determine if it is getting better when most members don't even acknowledge it is broke?

Around 2006 I decided to write a book. It has actually evolved into three books at this point, mainly because along the way I kept deciding that I needed another book to set the stage for the one I was working on.

So this was kind of a work in reverse.

The one you are reading now I felt was needed to explain the reason why I chose the topics I did in the others.

For those who feel I am off-base regarding the underlying philosophy behind the origination of the United States, this must have been a frustrating read. For me, everything builds on that philosophy—especially the fall from grace brought about by our societal abandonment of those ideals.

As strange as it sounds, my greatest desire for this book is that it prove uncomfortable for the reader. Having to face the reality that we, as well as our ancestors, have screwed this nation up entirely on our own **should** be uncomfortable. Having to face the reality that there is no turning back from the devastation we have wrought this nation **should** be uncomfortable. Having to face the reality that there is no fix for this nation, only a **rebirth** —or Resurrection—of it, **should** be very uncomfortable.

Book One, that you just read, is meant to lay out the fact that the modern United States is really not even the same nation that was formed first in 1781 and then reformed in 1789. It is not just that the Federal Government has changed. That is only a symptom. We as a people have changed—for the worse.

The reason this realization is so important is that it is totally meaningless to change the Federal Government without profoundly changing the American society that we have allowed ourselves to become. We have to decide if we really want to change our society or just put a new face on the one we have morphed into.

Books Two and Three were started several years ago and will need to undergo significant rewriting in light of events unfolding since that time. However, the idea currently is as follows.

Book Two will lay out my vision of how to effect this societal change. I harbor no spiritual or psychoanalytic illusions about transforming hearts and minds—American society succumbed to its current state because of discreet enabling events that at the time were largely seen as incremental, benign steps. By focusing on a few core, but primary, political and economic enablers of our downfall we may possibly have a chance to reset the American experiment.

Book Three will expand on Book Two and be much more specific as to current manifestations of our national plight—focusing on the core problems rather than various related symptoms.

Thanks for your time. And God Bless the United States of America.

Gary W Brown - Oct 2011

"In a revolution, as in a novel, the most difficult part to invent is the end. "

The Recollections of Alexis de Tocqueville \- 1896

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# Acknowledgements and References

I agonized over references in this book.

The intent has always been to document how I perceive things and events—history and philosophy especially. I obviously refer to actual historical events but the interpretation of those events in relation to the current state of this country is what prevents me from claiming this as a work of history.

Do I believe my interpretations are correct? Absolutely!

Do I believe I have my historical facts correct? Yes, I do.

The list of people who have had a hand in molding the views expressed in this work are many. At the risk of feeling foolish afterwards for forgetting someone, let me try to list the most important.
***** **Ayn Rand**

** Never has any book left such an impression on me than 'Atlas Shrugged'. I first read it in 2007. The fact that it was published the year of my birth, in 1957, is a great coincidence. I can always say I was born in the year of 'Atlas Shrugged', Sputnik and the Frisbee. Ms. Rand's work had the most effect by far.

** I heartedly recommend anything by Ms. Rand. I've read all her novels and every book on Objectivism I can get hold of.

** 'The Voice of Reason', 'Capitalism: The Unknown Ideal', 'The Virtue of Selfishness' and 'Ayn Rand Answers' (all compiled works published after her death) are favorite references.

* Representative Ron Paul

** My biggest disappointment in politics is that I'll probably never see a President Ron Paul. There is his son, Rand, though.

** Neither party—Republicans or Democrats—have the slightest idea how to deal with a real Libertarian statesman.

* Jason Lewis

** My favorite radio talk show host by far. Jason is the real-deal, the quintessential Libertarian. He claims he is a Republican but his listeners know better.

** He is especially great at explaining economic issues. And sticking to his principles.

** If you have not found him yet, he has a nationally syndicated show that broadcasts out of Minneapolis. Go to http://www.jasonlewisshow.com for a treat!

* Judge Andrew Napolitano

** Another great Libertarian mind, especially in the field of Constitutional Law.

Specific resources I use and highly recommend.

* Google

** What can I say? It is THE search engine.

* Wikipedia

** I thought the idea sounded strange when I first heard of this several years ago, but was I wrong! It is hard to imagine the Internet being anything near what it is without Google and Wikipedia.

** My normal way to gather facts, dates, figures, etc is to use both. Google usually gives Wikipedia as the #1 source, so you start there. Open up several related sources and start reading. Find the specifics you need and take some notes and use those to support your point.

** If you use Wikipedia, and who doesn't, then please contribute in talent or money. The whole Wikimedia concept is fantastic.

* Mr. Christopher Chantrill

** Chris runs a website that compiles data and charts regarding various levels of government spending and debt. If you want to check it out do so at http://www.usgovernmentspending.com
Some specific sources are listed here.

Total Meltdown: ADA

1. AMERICANS WITH DISABILITIES ACT OF 1990, AS AMENDED. U.S. Department of Justice.

2. The Unintended Consequences of the Americans with Disabilities Act by Thomas DeLeire. Cato Institute.

Total Meltdown: Public Education

1. Mission statement from U.S. Department of Education web site: http://www2.ed.gov/about/landing.jhtml

Total Meltdown: Public Transortation

1. Mission statement from U.S. Department of Transportation web site: http://www.dot.gov/about.html

Total Meltdown: Federal Housing

1. Mission statement from Federal Housing Authority web site: http://www.fhaloancorp.com

Total Meltdown: Growth of Government Unions

1. The Trouble with Public Sector Unions by Daniel Disalvo, Free Republic, Fall 2010

2. Public Sector Unions and the Rising Costs of Employee Compensation by Chris Edwards, Cato Institute, 2010

3. The Trillion Dollar Gap, Pew Center on the States, February 2010

Total Meltdown: Economy

1. Historical Tables, Budget of the United States Government, Executive Office of the President of the United States, Office of Management and Budget, 2009

2. 11 Ways Budgeting Can Improve Your Life by Jeremy Vohwinkle, About.com Financial Planning

Total Meltdown: The Patriot Act

1 The Constitution in Exile by Judge Andrew Napolitano, 2006

Foreign Entanglements

1. Global U.S. Troop Deployment, 1950-2003 by Tim Kane, Ph.D., Heritage Foundation

2. U.S. Military Bases and Empire, Monthly Review, March 2002

3. The Trillion Dollar War by Veronique de Rugy, Reason Magazine, May 2008

4. Military Operations: Precedents for Funding Contingency Operations in Regular or in Supplemental Appropriations Bills by Stephen Daggett, Congressional Research Service, June 2006

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### About the author

Gary W Brown is a transplanted Nebraskan from Texas, a father of 3 grown children, a long-time student of American history and politics, as well as an outspoken Libertarian and FairTax proponent.

A database engineer by profession, this is his first book

For further information, please visit FairTaxWarrior.com

.

This book also available in print at <https://www.createspace.com/3668203>

