When the Government’s ‘Cure’ Aids the Disease

When the Government’s ‘Cure’ Aids the Disease

Remember all of the government bailouts and stimulus in response to the 2008 financial crisis? Conservatives threw a fit. The Tea Party movement grew out of worry about the impact of all of the stimulus, money-printing, and the taxes they knew were coming down the pike.

My, how things have changed in 12 short years—and with a Republican sitting in the Oval Office.

Today, pretty much everybody supports the stimulus and bailouts gushing out of Washington D.C. even though they dwarf anything imagined during the Obama administration.

“This is different!” so we’re told. Government policy set up the 2008 financial crisis and a lot of “bad actors” got bailed out. The Obama stimulus undermined the free market!

But now we’re being told that you can’t pin this economic meltdown on the government. You can’t blame anybody for coronavirus. This crisis really is too big for the free market to handle. Government needs to step in.

But the truth is big government set the stage for this economic meltdown just like it set the stage for the 2008 financial crisis. This is a prime example of the government breaking your legs and then giving you a wheelchair.

Don’t let the irony get lost on you. Government intervention in the economy set things up for a crisis like this. Now virtually everybody thinks we need the government because the free market can’t handle a crisis like this. Even people who claim to favor free markets are pushing for the bailouts.

A healthy economy could weather the coronavirus. In a truly free market, businesses and consumers would have savings. These government shutdowns would stress a healthy economy, but they wouldn’t kill it.

But we don’t have a free market.

We have a central bank that manipulates interest rates and a bloated government that taxes, borrows and spends us into oblivion. As a result, the United States went into the coronavirus pandemic with a bubble economy built on a mountain of debt.

By holding interest rates at artificially low levels for more than a decade after the 2008 financial crisis, the Federal Reserve incentivized borrowing. As a result, consumer debtcorporate debt and the national debt were all at record levels before COVID-19 reared its ugly head.

Meanwhile, the federal government was already spending trillions of dollars to prop up the economy. The Trump administration was on track to run a $1 trillion budget deficit in 2020 before the pandemic. This is the kind of budget deficit one would expect to see during a major economic downturn. The federal government has only run deficits over $1 trillion in four fiscal years, all during the Great Recession. The current Congress and the Trump administration were approaching that number before the pandemic, despite having what Trump kept calling “the greatest economy in the history of America.”

The Fed facilitates this deficit spending by monetizing the debt—buying U.S. Treasury bonds on the open market with money created out of thin air. Without the Fed backstopping the financial system and effectively printing money, the U.S. government wouldn’t have the ability to borrow and spend as it does.

Meanwhile, the tax burden necessary to sustain big-government spending policies stresses family and corporate budgets to the breaking point. When people have to hand a big percentage of their income to the taxman, it becomes that much more difficult to save for a rainy day—or a government shutdown of the economy.

And why save when you can borrow? Artificially low interest rates make it easy to borrow and pointless to save. You get no return on your savings. Might as well borrow and spend now.

This is all well-and-good until the economy hits a bump in the road like the coronavirus pandemic. Suddenly you have no income, no savings and a massive pile of debt. It doesn’t take long to go from a hiccup to a full-blown crisis.

This is where the United States finds itself today. After a decade of easy-money and borrowing, coupled with out of control spending in Washington D.C., the coronavirus shutdowns popped the economic bubble that the government helped create. Now the air is coming out and everybody is turning to the government to bail them out.

That’s not to say the coronavirus shutdowns would have been a walk in the park if the economy wasn’t already broken. But a healthy economy could have weathered the storm. If the Fed hadn’t intervened in the economy, people wouldn’t have been able to bury themselves in debt. If the government wasn’t levying high taxes on corporate earnings, companies would have had more money saved to push through a crisis. If people didn’t rely on government programs like Social Security for their savings, they could have saved money on their own and they would have had it to tap into during this crisis.

This is the exact same set of policies that set up the 2008 financial crisis. The government and the central bank doubled-down after ’08 with some political backlash from the right. This time, the government is quadrupling down with pretty much everybody on board. Peter Schiff summed up the situation perfectly in a recent podcast.

“It’s the government that crippled the economy in the first place. The solution – the answer to that –  is not to have a bigger government crutch so we can hobble around. How about getting rid of all of that government? Liberating the economy from the dead weight of government.”

This article was originally featured at the Tenth Amendment Center and is republished with permission.

Supreme Court Rules Against Fourth Amendment

Supreme Court Rules Against Fourth Amendment

The Supreme Court handed down another opinion eroding the Fourth Amendment in a case that should have never gone to the federal court.

Kansas v. Glover revolves around a traffic stop by Douglas County Sheriff’s Deputy Mark Mehrer. He pulled Charles Glover over after running his license plate and finding that Glover had a suspended driver’s license. Glover entered a motion to suppresses evidence gathered during the stop, arguing there was no reasonable suspicion of an actual crime. The deputy stopped the car based on the assumption that the registered owner was probably driving.

The district court granted the motion. An appellate court overturned the lower court. The Kansas Supreme Court reversed again, holding that the stop violated the Fourth Amendment. According to the Kansas Supreme Court, Mehrer did not have reasonable suspicion to pull the vehicle over because his inference that Glover was behind the wheel amounted to “only a hunch.” The court further held the deputy’s “hunch” involved “applying and stacking unstated assumptions that are unreasonable without further factual basis.”

Kansas prosecutors appealed to the Supreme Court and it overturned the Kansas Supreme Court in an 8-1 decision. Writing for the majority, Justice Clarence Thomas said Mehrer “drew the commonsense inference that Glover was likely the driver of the vehicle, which provided more than reasonable suspicion to initiate the stop … The fact that the registered owner of a vehicle is not always the driver of the vehicle does not negate the reasonableness of [the officer’s] inferences.”

In her dissent, Justice Sonia Sotomayor wrote that the majority opinion “destroys Fourth Amendment jurisprudence that requires individualized suspicion.”

Reason lamented the decision by highlighting Sotomayor’s dissent.

Sotomayor was not wrong.

But this case was not a federal case. It should have never gone to the Supreme Court. And it wouldn’t have except for the bastardization of the 14th Amendment known as the “incorporation doctrine.”

The Supreme Court invented the incorporation doctrine out of thin air 57 years after the ratification of the 14th Amendment to apply the federal Bill of Rights to state governments.

A lot of civil libertarians like the incorporation doctrine because they believe the federal courts will protect our liberty from overreaching, onerous state and local governments. In theory, the incorporation doctrine empowers federal courts to police the states in order to stop state governments from violating individual rights. In practice, it centralizes power at the federal level and allows the Supreme Court to apply liberty-destroying decisions to the entire United States.

The theory falls apart because federal courts rarely hand down decisions that expand liberty. They almost always increase government power and place limitations on individual rights.

Kansas v. Glover provides an example of the tendency in the extreme. The state court handed down a decision that protected liberty and restrained government, only to be overruled by the central authority.

Sadly, the Kansas Supreme Court opened the door to federal intervention by basing its decision on the Fourth Amendment of the federal Bill of Rights. It should have rested its case on the Kansas state constitution. The state bill of rights § 15 reads as follows:

“Search and seizure. The right of the people to be secure in their persons and property against unreasonable searches and seizures, shall be inviolate; and no warrant shall issue but on probable cause, supported by oath or affirmation, particularly describing the place to be searched and the persons or property to be seized.”

There was no need to invoke the Fourth Amendment. But the Fourth Amendment got invoked because thanks to the incorporation doctrine, everything now qualifies as a federal case.

So, why do so many liberty-minded people possess this impulse to centralize power? What drives their fixation on monopolizing decision-making at the highest level?

In a nutshell – power. They operate on the misguided notion that they can someday gain control of the levers of power and impose liberty top-down.

The problem is it never happens. Centralized government is antithetical to individual liberty. It will never care about you.

And you will never control it.

“But, what if the state courts get it wrong?”  they plead. “State and local governments can be just as tyrannical as the federal government,” they insist. “Are you saying we just have to put up with state or local tyranny?”

Fair questions. State courts often do get it wrong. The judicial branches of both state and federal governments typically side with the government when it comes to the extent of the government’s powers. But a bad outcome at the state level only applies to that state. A bad outcome at the Supreme Court ends up as a judicial precedent that applies all across the entire United States.

Kansas v. Glover illustrates the worst-case scenario. In this instance, the state court got it right. It was a win for liberty for Kansans. But thanks to the incorporation doctrine and the Supreme Court, we now have a judicial precedent that diminishes the Fourth Amendment and applies sets the precedent every single police department in the US will now follow.

We just centralized our way to another loss of liberty.

Centralizing government in the name of liberty will always fail. You might get a few crumbs from the table now and then. The Supreme Court will occasionally issue an opinion that protects liberty. But most of the time, it will hand down garbage that empowers government at the expense of your rights.

This article was originally featured at the Tenth Amendment Center and is republished with permission.

Joint Law Enforcement Task Forces are Creating a National Police State

Joint Law Enforcement Task Forces are Creating a National Police State

Through the proliferation of joint law enforcement task forces, the federal government is creating a national police force that operates in a legal twilight zone with little or no oversight.

Law enforcement officers from various state, local and federal law enforcement agencies make up these joint task forces. The concept evolved out of the unconstitutional “War on Drugs” launched by President Richard Nixon. The first multi-jurisdictional task forces were put together in the 1970s.

Dan Baum chronicled the evolution of these multi-jurisdictional police forces in his book, Smoke and Mirrors: The War on Drugs and the Politics of Failure. Radley Balko summarized Baum’s description of the origins of these task forces in a Washington Post article writing, “Nixon wanted ‘strike forces’ that could kick down doors and put the fear of God into drug offenders without burdensome hurdles like the Fourth Amendment or the separation of powers.”

Initially, many local law enforcement agencies weren’t interested in getting in bed with federal cops and were wary of the aggressive tactics employed by the joint task forces. But the feds used federal grants and asset forfeiture money to bribe reticent departments and incentivize participation. The number of joint task forces grew exponentially in the 1980s and 1990s. The deployment of these task forces also expended beyond the “war on drugs.”

Today, you will find hundreds of joint state-federal task forces across the U.S. Just consider this list of task forces in the Pittsburgh area alone.

  • Anti-Terrorism Advisory Council (ATAC)
  • Crimes Against Children Task Force
  • FBI Opioid Task Force
  • Greater Pittsburgh Safe Streets Task Force
  • J-CODE (Joint Criminal Opioid DarkNet Enforcement Team)
  • Opioid Fraud and Abuse Detection Unit
  • Pittsburgh Financial Crimes and Electronics Task Force
  • Western Pennsylvania Fugitive Task Force
  • Western Pennsylvania Violent Crimes Task Force

As of 2016, the DEA oversaw or participated in 271 anti-drug task forces across the U.S. Through a program called Project Safe Neighborhood, the Department of Justice ran another 86 taskforces as of 2018. The FBI administers 160 violent gang task forces.

The U.S. Marshalls run 60 Fugitive Task Forces. The ATF oversees the National Explosives Task Force and forms task forces for specific investigations. According to Balko, the U.S. Attorney General runs 18 task forces through the Organized Crime Drug Enforcement Task Force program. And then there are the countless temporary joint task forces created every year for special investigations and law enforcement initiatives.

Due to their nature, joint task forces operate in a legal twilight zone that gives them wide latitude. As Balko explained, they often go about their business with little or no oversight. Often, it’s impossible to identify any local officials overseeing their work. And even when somebody is technically in charge of the task force, they often give it free rein.

With little oversight, they have a record of overstepping and misdeeds, from excessive force to shootings, to mistaken raids, to straight-up corruption.”

This jurisdictional neverland also allows members of these task forces to escape accountability or punishment when they use excessive force, destroy property, or simply engage in sloppy police work. Balko’s article chronicles the story of a man who was beaten senseless after undercover members of a joint task force mistook him for a wanted individual. The state and federal law enforcement officers both dodged prosecution by playing ping-pong with state and federal jurisdictions. As Balko illustrates, In practice, joint task forces can “pick whichever laws — state or federal — afforded them the most power and the least accountability.”

Ironically, the Obama administration couldn’t even conduct a cost-benefit study on joint police task forces because records were almost nonexistent. According to those conducting the study, “Not only were data insufficient to estimate what task forces accomplished, data were inadequate to even tell what the task forces did as routine work.”

There are other pernicious consequences resulting from the rise of joint police task forces.

Local police can circumvent strict state asset forfeiture laws by claiming cases are federal in nature due to the participation in a joint task force. Under these arrangements, state officials simply hand cases over to a federal agency, participate in the case, and then receive up to 80 percent of the proceeds.

And the money and power that comes when local cops partner up with the feds incentives local police to focus on “national” priorities such as the war on drugs, federal gun control and “anti-terrorism” efforts instead of prioritizing more routine local policing such as murder, rape and property crime.

We also see the influence of these task forces in the state legislative process. Police lobbyists often oppose warrant requirements, limits on state and local cooperation with federal surveillance, prohibitions on the state enforcement of unconstitutional federal gun control, asset forfeiture reform, and other laws blocking state enforcement of unconstitutional federal laws because they don’t want to jeopardize “our federal partnerships.” In other words, their relationships with their “federal partners” trumps the Constitution.

The federal government was never intended to exercise “police powers” in the first place. The Constitution only defines four federal crimes – treason, piracies and felonies committed on the high Seas, counterfeiting, and crimes against the law of nations. The federal government also has criminal jurisdiction within Washington D.C. and its other enclaves.

The creation of every other federal crime violates the Constitution.

In other words, virtually the entire federal law enforcement apparatus is unconstitutional.

Nevertheless, the federal government is developing a national police force that operates outside of any jurisdictional, legal or constitutional boundaries. Joint task forces are a threat to liberty. States should simply withdraw.

Reprinted with permission from the Tenth Amendment Center.

That Didn’t Take Long: U.S. National Debt Exceeds $24 Trillion

That Didn’t Take Long: U.S. National Debt Exceeds $24 Trillion

The U.S. national debt pushed above $24 trillion on Tuesday.

The U.S. government was already running massive budget deficits long before the coronavirus pandemic and the debt was piling up at a dizzying pace. Response to the outbreak has put spending and debt in hyperdrive.

The Trump administration has added $1 trillion to the national debt in just six months.

It’s easy to just brush off the spending spree. Virtually everybody agrees the stimulus is necessary to deal with the economic impacts of coronavirus. But the Trump administration was stimulating long before this emergency. Uncle Sam was already on pace for a trillion-dollar shortfall long before the pandemic. That’s the kind of budget deficit one would expect to see during a major economic downturn.

The federal government has only run deficits over $1 trillion in four fiscal years, all during the Great Recession. The fifth trillion-dollar deficit was coming down the pike in fiscal 2020, despite what Trump kept calling “the greatest economy in the history of America.”

To put the growth of the national debt into perspective, the debt was at $19.95 trillion when President Trump took office in January 2017. It topped $22 trillion in February 2019.  That represented a $2.06 trillion increase in the debt in just over two years. By November 2019, the debt had eclipsed $23 trillion. Now, less than six months later, we’re at $24 trillion, with much of the coronavirus stimulus still in the pipeline. That’s a $4 trillion increase in the debt since Trump took office.

As Peter Schiff pointed out in a tweet, the president will add more debt in four years than President George W. Bush did in eight. If re-elected, he will add more debt in eight years than Bush and Obama did in 16.

Instead of draining the swamp, he is draining the nation.”

Ironically, there is bipartisan support for the massive coronavirus spending-spree and virtually no concern about the increasing debt. I say ironically because Republicans had a much different response when Obama pushed his stimulus plan through in response to the 2008 financial crisis. The GOP grassroots pitched a fit and the Tea Party was born. Today, many of the people who marched in those Tea Party rallies against the Obama spending are eagerly planning how to spend their MAGA-Bucks.

Trump supporters often claim the debt isn’t the president’s fault and the blame should fall on Congress. The legislative branch does bear its share of responsibility, but the White House has significant input into the budgeting process and the president has never once submitted a budget that cut overall spending.

In reality, the borrow and spend policies today are every bit as problematic as they were in the Tea Party days. In effect, we have the world’s biggest debtor trying to guarantee everybody else’s debt.

The massive debt raises a number of questions few people seem to be asking. For instance, how will all of this government borrowing impact the bond market?

Investors poured into U.S. Treasuries as a safe-haven as the coronavirus crisis grew. Interest rates plunged, with the yield on the 10-year Treasury dipping to record lows below 0.5 percent. At some point, the demand for bonds will ebb, but the supply certainly won’t. The  U.S. Treasury Department is going to have to sell a massive amount of bonds to fund all of this deficit spending.

The Federal Reserve has stepped in to backstop the borrowing. The central bank is set up and primed to monetize all of this debt through QE Infinity.

Through quantitative easing programs, the Fed buys U.S. Treasury bonds on the open market with money it creates out of thin air. Ostensibly, by creating artificial demand for Treasuries, the Fed can soak up excess supply and hold interest rates down. It has no choice but to intervene in the market because rising interest rates would be the death knell for this debt-riddled, overleveraged economy.

But the central bank will create trillions of dollars out of thin air and inject it into the economy in order to run this debt monetization scheme. That raises the specter of inflation. This is one reason Schiff recently said hyperinflation has gone from the worst-case scenario to the most likely scenario.

The Fed got away with this once. We didn’t see the type of price inflation one would expect with the three rounds of QE in the wake of the 2008 financial crisis. The inflation went into the stock market and other asset bubbles. That could conceivably happen again. But the last time around, then-Federal Reserve Chairman Ben Bernanke swore the QE wasn’t debt monetization. He promised it was a temporary expansion of the balance sheet. He insisted there was an exit strategy.

There was no exit.

And today, nobody is even talking about an exit strategy. Will investors actually believe this is going to be temporary? It seems unlikely.

I also see little concern about how all of this government debt will impact economic growth.

The CBO warned before the coronavirus pandemic that the growing “debt would dampen economic output over time.” In fact, studies have shown that GDP growth decreases by an average of about 30 percent when government debt exceeds 90 percent of an economy. U.S. debt already stood at around 106.9 percent of GDP before coronavirus. Ever since the U.S. national debt exceeded 90 percent of GDP in 2010, inflation-adjusted average GDP growth has been 33 percent below the average from 1960–2009, a period that included eight recessions.

Europe’s spending binge serves as a prime example of the impact of debt on economic growth.

Most people seem to believe the president will snap his fingers in the near future and the economy will snap back to normal. But the economy was broken before coronavirus. Now the government and the central banks are doubling down on the policies that broke it to begin with. There aren’t a lot of scenarios where this ends well.

Reprinted from The Tenth Amendment Center.

Why Do We Trust Politicians to Run Our Lives?

Why Do We Trust Politicians to Run Our Lives?

I became a journalist because I love to write.

In fact, most people tend to pursue career paths related to things that interest them if they have any choice in the matter. A person who likes to bake might become a baker. A person who likes numbers might become an accountant. A person who loves animals and biology might become a veterinarian.

So, what does a person who likes to control other people do?

Become a politician. (more…)

Stimulus Bill Lets Fed Operate in Complete Secrecy

Stimulus Bill Lets Fed Operate in Complete Secrecy

I guess we’re just supposed to have faith that Jerome Powell will do the right thing. I don’t know about you, but I don’t have that kind of faith in anybody when it comes to passing out billions of dollars in cash or creating government policy.

-Mike Maharrey, TAC

Last week, Congress passed a $2 trillion stimulus bill in an effort to offset the economic impacts of the coronavirus. Most people have focused on the $1,200 checks to Americans and bailouts for industries hard-hit by the economic shutdown.

But the 883-page bill does a lot more than that, including empowering the central bankers at the Federal Reserve to hand out billions of dollars to their Wall Street buddies in complete secrecy.

The stimulus bill authorizes the Fed to create $454 billion out of thin air and loan it out. The provision gives the central bankers complete autonomy when it comes to deciding who gets the money.

Not more than the sum of $454,000,000,000…shall be available to make loans and loan guarantees to, and other investments in, programs or facilities established by the Board of Governors of the Federal Reserve System for the purpose of providing liquidity to the financial system….”

The money will allow the Federal Reserve to create what are known as special purpose vehicles (SPVs). An article in CounterPunch explains that an SPV was the same device used by Enron to hide its toxic debt off its balance sheet before it went belly up.

With the taxpayers’ money taking a 10 percent stake in the various Wall Street bailout programs offered by the Fed, structured as SPVs, the Fed can keep these dark pools off its balance sheet while levering them up 10-fold.”

During the 2008 financial crisis, the Fed used SPVs to buy toxic debt from Bear Stearns to facilitate its takeover by JPMorgan Chase and to prop up AIG.

In other words, they are a vehicle for federally-backed corporate bailouts.

The Federal Reserve has already established an SPV in response to the coronavirus meltdown. On March 17, the Fed announced the creation of a Commercial Paper Funding Facility (CPFF) “to support the flow of credit to households and businesses.”

The Treasury will provide $10 billion of credit protection to the Federal Reserve in connection with the CPFF from the Treasury’s Exchange Stabilization Fund (ESF). The Federal Reserve will then provide financing to the SPV under the CPFF. Its loans will be secured by all of the assets of the SPV.”

One could argue that the Fed needs the power to create establish these programs in the midst of a major financial crisis. But does it need to do so in complete secrecy?

A provision of the stimulus bill throws a big shroud over the activities of the central bank. The bill repeals the sunshine law as it relates to Federal Reserve board of governors’ meetings until the end of 2020 or when the president determines the coronavirus crisis has passed, whichever comes first.

SEC. 4009. TEMPORARY GOVERNMENT IN THE SUNSHINE ACT RELIEF. (a) IN GENERAL.—Except as provided in subsection 8 (b), notwithstanding any other provision of law, if the Chairman of the Board of Governors of the Federal Reserve System determines, in writing, that unusual and exigent circumstances exist, the Board may conduct meetings without regard to the requirements of section 552b of title 5, United States Code, during the period beginning on the date of enactment of this Act and ending on the earlier of— (1) the date on which the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 20 U.S.C. 1601 et seq.) terminates; or (2) December 31, 2020.”

In other words, Jerome Powell doesn’t have to let you know what the Fed is doing. All he has to do is assert “exigent circumstances” and a veil of secrecy descends over the central bank.

Practically speaking, the new law effectively empowers the Fed to hand out money to whomever it pleases and nobody will ever be able to find out the whos, hows and whys.

I guess we’re just supposed to have faith that Jerome Powell will do the right thing.

I don’t know about you, but I don’t have that kind of faith in anybody when it comes to passing out billions of dollars in cash or creating government policy.

This looks like a recipe for cronyism and corruption on a massive scale. Even is you accept the veracity of central bank bailouts of Wall Street, it’s difficult to understand the benefit of doing so in secret.

Whenever civil libertarians complain about government surveillance, the response is always, “If you have nothing to hide, you have nothing to fear.” So, what is the Fed hiding? And what does it fear?

No! ‘We’ Are Not the Government

No! ‘We’ Are Not the Government

During a speech in Asheville, North Carolina, in 1902, Theodore Roosevelt proclaimed, “The government is us; we are the government, you and I.” 

Most people believe this.

And it’s a bald-faced lie.

Fernandina Beach, Florida, shut down all of its public beaches this evening in response to the coronavirus pandemic. Anybody caught on the beach is subject to trespassing charges.

So, let’s boil down what’s going on into simplest terms.

Government officials closed “public” beaches. If we go on our “public” beach that “we” ostensibly own as members of “the public” we are subject to trespassing charges enforced by armed government agents.

This should end once and for all the asinine assertion that “we” are the government.

I’m not arguing about whether or not “social distancing” enforced at gunpoint is a necessary policy in light of the pandemic. In fact, I think it’s a good idea to stay at home to minimize the spread of the virus, or at least slow it down. I’m simply pointing out a fallacy that most people unthinkingly embrace. Here’s the truth: “we” are not the government. And furthermore, there is no such thing as “public property.”

These notions are nothing but collectivist claptrap that government officials throw around to justify their sociopathic behavior.

While we’re waxing poetic about democracy and the “will of the people,” government operates as an institution separate and distinct from the people it controls. I can demonstrate the absurdity of this “we are the government” mantra with a personal experience.

When I was living in Lexington, Kentucky, the city sued me over an open records request I made. I simply asked for some documents relating to police surveillance programs. In order to keep those records secret, the government sued me. If “I” am the government, why would I hide documents from myself? And why would I spend my own money to sue myself to stop me from getting documents that are rightfully mine?

Clearly, the government is acting independently and against my interests. If “we” are the government, then “we” should really stop treating “us” this way.

Charging residents with a trespassing crime if they walk onto the public beach further exposes the lie. What we call “public property” is actually government property. The government institution owns and controls it. Most of the time, the government maintains the illusion of “public ownership” by letting you access the property. Of course, even then, you must abide by the government rules. And when the poop hits the proverbial fan, the illusion of public ownership dissipates altogether. The government can ban you from its property and ultimately shoot you if you trespass.

In real life, owners cannot be charged with trespassing on property they own. They certainly can’t be shot for being there. Ownership implies the ability to control and use your property as you see fit. When it comes to public property, the hard truth is you don’t own crap. The government owns it. The government controls it. It’s not “yours” in any sense of the word.

Here’s the red pill. Take it if you dare.

The entire structure of society you’ve embraced your entire life is based on a big, fat lie.

It’s the lie of “the will of the people.”

A group can’t possess a will. Only individuals have a will. Those who assert the “will of the people” really mean the opinion of the majority of individuals within whatever arbitrarily contrived grouping they cobble together to suit their purposes. In reality, this concept of “the people” is nothing more than a political construct. Those in power, and those vying for power, use the “will of the people” to wrap their actions in moral legitimacy. But does the existence of a majority consensus within an artificially constructed group really provide any kind of moral authority?

When I was a kid, I often appealed to such popular will to justify my actions.

“But mom! Everybody’s doing it!”

Without fail, she would reply, “If everybody was jumping off a cliff, would you do it too?”

Those immersed in the political process seem to have forgotten the lesson my mother sought to teach.  The existence of a majority opinion doesn’t make it morally or ethically right. It merely makes it popular.

When push comes to shove, it doesn’t matter anyway. Will of the people or not, when the government decides to do something, it gets done, whether the majority approves or not. Eighty percent of the people in Nassau County could oppose closing the beaches. It wouldn’t matter. The beaches will be closed.

And do you know why the beaches will be closed?

Because government agents have guns and they’re willing to use them.

Think Deficits Are Bad Now? You Ain’t Seen Nothin’ Yet

Think Deficits Are Bad Now? You Ain’t Seen Nothin’ Yet

The Trump administration has been operating with a crisis-like fiscal policy for nearly four years. Now it looks like America’s hurtling toward a genuine economic crisis. What’s next?

The U.S. appears to be heading for economic lockdown as the impact of the coronavirus grows. Ever the Keynesian, President Trump has promised fiscal stimulus to offset the economic impacts. The actual plan remains unclear, but the Trump administration has floated a reduction in payroll taxes, along with bailouts and loan guarantees for struggling industries. While the details are murky, one thing is certain — it will cost billions of dollars.

Meanwhile, the US government is already living far above its means. The Trump administration recorded another massive budget deficit of $235 billion in February, according to the latest Treasury Department report.

The February deficit was up about $1 billion year-on-year. That may not seem significant, but it follows on the heels of a $32.6 billion deficit in January. The U.S. government ran a surplus in January 2018.

February’s shortfall brings the FY2020 budget deficit to $625 billion. That compares with $544 billion at this point in FY2019.

The deficit trajectory was clearly upward, even before adding billions in spending for coronavirus relief.

Spending continues to be the culprit. Government revenues were up 12 percent year-on-year last month, but spending also rose 5 percent compared to February 2019 and was up a whopping 22 percent in January. So far in this fiscal year, the federal government has spent just a hair under $2 trillion.

Trillion – with a “T”.

The U.S. government was on track for a $1 trillion deficit this fiscal year, even before coronavirus. That’s the kind of budget deficits one would expect to see during a major economic downturn. The federal government has only run deficits over $1 trillion in four fiscal years, all during the Great Recession. The U.S. was on that path before the recent coronavirus economic upheaval even while Trump called “the greatest economy in the history of America.”

And now it looks like the U.S. is on the cusp of a legitimate economic crisis.

That raises a question with only ugly answers: if deficits are this bad now, what is it going to look like when coronavirus spending starts to come through the pipeline? As Peter Schiff said in a recent podcast, “They’re talking about loan guarantees for everybody. How is the government that’s the world’s biggest debtor going to guarantee anybody else’s debt?”

This raises another question: how will the growing deficits impact the bond markets?

There are only two ways to get the money for all this spending – tax it or borrow it. Trump is talking tax cuts, so that leaves borrowing. That means the Treasury Department will need to sell billions of dollars in bonds.

But there are already cracks int he bond market.

Investors poured into U.S Treasuries as a safe-haven as the coronavirus crisis grew. Interest rates plunged, with the yield on the 10-year Treasury dipping to record lows below 0.5 percent. At some point, the demand for bonds will ebb, but the supply certainly won’t. In fact, the supply will increase as the Treasury issues new bonds to pay for the new spending.

Then what?

In fact, the bond bubble may have already popped with Trump’s promise of government stimulus. This could foreshadow rising interest rates – a nightmare for a government trying to run on borrowed money.

The existence of a crisis doesn’t change fundamental economics. The national debt is still a problem. It still has to be paid back. And government debt still retards economic growth.

And by the way, all of the proposed sending and bailouts to deal with the ‘crisis’ are still unconstitutional – just like they were when Obama did it.

Reprinted from The Tenth Amendment Center.

Dr Jekyll and Mr Hyde: Which Hamilton Are You Talking About?

Dr Jekyll and Mr Hyde: Which Hamilton Are You Talking About?

We often hear people referred to as “Hamiltonians.” But that term always makes me wonder, which Hamilton do you mean?

I recently had the opportunity to speak to a class at the West Virginia University School of Law. The subject was the constitutionality of federal marijuana prohibition.

As I told the class, this is an open and shut case. It’s clearly unconstitutional. If you doubt me, ask yourself why alcohol prohibition required a constitutional amendment.

The simple fact is there is no delegated power for the feds to regulate marijuana within the borders of a state.

But over the years, federal courts have reinterpreted various clauses in the Constitution to “authorize” the federal government to do all kinds of things it was never intended to do. As Justice Clarence Thomas said in his dissent in the Raich medical marijuana case, if the federal government can regulate six plants in a woman’s back yard, the federal government has “no meaningful limits.”

And that’s where we are today  – at least according to federal judges and politicians.

As the professor of the class I spoke to put it, this is the Hamiltonian legacy.

During the class, she divided the students up between “Hamiltonians and Madisonians” for a debate. I couldn’t help but interject and ask, “Which Hamilton are you talking about?”

During the ratifying debates, Hamilton was every bit as Madisonian and Madison. He sold the Constitution as a document that gave the federal government only a few limited powers just like all the other supporters of the document. In fact, I use quite a few Hamilton quotes in my book Constitution – Owner’s Manual to explain the limited scope of various constitutional clauses.

But once the Constitution was ratified, he did a complete 180. He became an apologist for a national, centralized government with sweeping federal power – a vision of government that the ratifying conventions would have resoundingly rejected. This is precisely why Hamilton had to make limited government arguments during ratification. It was the only way the Constitution would have ever been adopted.

Consider the general welfare clause. Opponents of the Constitution worried that this phrase would open the door for the federal government to wield almost unlimited power. But in Federalist #83, Hamilton argued that their worry was misplaced because the general welfare clause was strictly limited to the enumerated powers that followed and was not a grant of general authority.

“This specification of particulars [the 18 enumerated powers of Article I, Section 8] evidently excludes all pretension to a general legislative authority, because an affirmative grant of special powers would be absurd as well as useless if a general authority was intended.”

But just seven years after the Constitution was ratified, Hamilton reversed course and argued for an expansive reading of the clause in his Report on Manufactures.

The National Legislature has express authority “To lay and Collect taxes, duties, imposts and excises, to pay the debts and provide for the Common defence and general welfare” with no other qualifications than that “all duties, imposts and excises, shall be uniform throughout the United states, that no capitation or other direct tax shall be laid unless in proportion to numbers ascertained by a census or enumeration taken on the principles prescribed in the Constitution, and that “no tax or duty shall be laid on articles exported from any state.” These three qualifications excepted, the power to raise money is plenary, and indefinite; and the objects to which it may be appropriated are no less comprehensive, than the payment of the public debts and the providing for the common defence and “general Welfare.” The terms “general Welfare” were doubtless intended to signify more than was expressed or imported in those which Preceded; otherwise numerous exigencies incident to the affairs of a Nation would have been left without a provision. The phrase is as comprehensive as any that could have been used; because it was not fit that the constitutional authority of the Union, to appropriate its revenues shou’d have been restricted within narrower limits than the “General Welfare” and because this necessarily embraces a vast variety of particulars, which are susceptible neither of specification nor of definition.

It is therefore of necessity left to the discretion of the National Legislature, to pronounce, upon the objects, which concern the general Welfare, and for which under that description, an appropriation of money is requisite and proper.

According to post-ratification Hamilton, the term “general welfare” did imply a “general authority” after the pre-ratification Hamilton emphatically rejected this reading.

Hamilton made a similar flip-flop on the necessary and proper clause. In Federalist 33, He asserted that the necessary and proper clause (along with the supremacy clause) merely stated a truism and gave no additional power to the federal government.

It may be affirmed with perfect confidence that the constitutional operation of the intended government would be precisely the same, if these clauses were entirely obliterated, as if they were repeated in every article. They are only declaratory of a truth which would have resulted by necessary and unavoidable implication from the very act of constituting a federal government, and vesting it with certain specified powers. [Emphasis added]

Hamilton went on to explain that the act of delegating a power logically implies the authority to “pass all laws NECESSARY and PROPER for the execution of that power,” but it doesn’t authorize the exercise of any additional powers. Hamilton wrote, “If there is any thing exceptionable, it must be sought for in the specific powers upon which this general declaration is predicated. The declaration itself, though it may be chargeable with tautology or redundancy, is at least perfectly harmless.” [Emphasis added]

But again, Hamiton changed his tune just a few years later and claimed the necessary and proper clause gave Congress the authority to charter a national bank, a power nowhere delegated to Congress by the Constitution.

In fact, during the Philadelphia Convention, James Madison proposed a provision “to grant charters of incorporation where the interest of the U. S. might require & the legislative provisions of individual States may be incompetent.” It was voted down 8-3.

Without an explicit constitutional authorization to charter corporations, Hamilton turned to the “perfectly harmless” necessary and proper clause to justify his bank. He rested his argument on the existence of “implied powers,” writing, “It is not denied that there are implied well as express powers, and that the former are as effectually delegated as the latter.”

Of course, this very notion contradicts his ratification-era argument that Congress was limited to its enumerated powers. He went on to argue that Congress is authorized to create a corporation because this implied power is necessary and proper.

“It is conceded that implied powers are to be considered as delegated equally with express ones. Then it follows, that as a power of erecting a corporation may as well be implied as any other thing, it may as well be employed as an instrument or mean of carrying into execution any of the specified powers, as any other instrument or mean whatever. The only question must be in this, as in every other case, whether the mean to be employed or in this instance, the corporation to be erected, has a natural relation to any of the acknowledged objects or lawful ends of the government.”

Hamilton drove his point home insisting the word necessary doesn’t literally mean “necessary,” but can simply mean needful, requisite, or even just incidental, useful, or conducive.

By Hamilton’s definition, the word necessary becomes so expansive as to include virtually anything the government wants to do. This was precisely the construction the anti-federalists objected to during the ratification debates leading Hamilton to accuse them of “exaggerated colors of misrepresentation as the pernicious engines by which their local governments were to be destroyed and their liberties exterminated.”

These two examples demonstrate how Hamilton drastically shifted from the limited federal power perspective taken by all of the supporters of the Constitution during the ratification process to a nationalist pushing for virtually unlimited federal authority. He did a classic bait-and-switch. Hamilton was a duplicitous bastard (literally a bastard.) And we should give his post-ratification pontification about the Constitution no credence.

What he said during ratification – now that matters. Because it was on that basis that the people agreed to approve the Constitution. As Thomas Jefferson said, “On every question of construction let us carry ourselves back to the time when the Constitution was adopted, recollect the spirit manifested in the debates, and instead of trying what meaning may be squeezed out of the text, or intended against it, conform to the probable one in which it was passed.”

Reprinted from the Tenth Amendment Center.

Libertarians Have to Cope With the Real World

Libertarians Have to Cope With the Real World

Imagine you’re starving to death in a desert and you happened across a man who has a loaf of bread. He takes pity on you and offers you a slice. But you refuse it and go on your way because he won’t give you the whole loaf.

That would be pretty dumb, wouldn’t it?

But this is exactly how a lot of libertarians approach political activism. They reject small steps forward that would make us a little bit freer because it’s not complete liberty.

I’ll give you an example.

Last week, the Kentucky House passed a bill that would legalize medical marijuana. Activists have been pushing toward this for years. But a big chunk of the Facebook comments I saw were libertarians crapping on the bill. Here’s just one of dozens of comments I read.

“So can I grow it? Can I smoke it? Do I need the state to grant me permission, on any level, to use it? Smells like more garbage legislation with built in victimless crime laws. Oh wait, the entire thing is victimless crime. Y’all see this as a win?”

Yes. Yes I do.

As somebody who used to live in Kentucky, used CBD capsules containing a small amount of THC, and worried about going to jail, I would definitely see legalized medical marijuana as a win . Even with the restrictions on growing and smoking. Even with the taxes. Even with the government regulation.

Why? Because I could have my little marijuana-derived CBD pills (that have zero psychotropic effect) without having to worry about armed government thugs locking me in a cage or taking my car.

I get it. Legalized marijuana in Kentucky would not be “liberty.” There would stlll be government control. Of course, it would be a lot better if the government stopped regulating marijuana completely. But call me crazy, I still view a change in the law that means fewer people getting locked in cages because of a plant “a win.”

Far too many libertarians let ideological purity get in the way of their common sense. As Murray Rothbard wrote:

“Libertarians must come to realize that parroting ultimate principles is not enough for coping with the real world.”

We live in a real world with real governments. Posting on Facebook isn’t going to change that. Your memes aren’t going to make you any more free. And turning down a slice of bread because you want a whole loaf will just leave you hungry.

As much as I wish it would happen, government isn’t going to disappear from the face of the earth any time soon. So, shouldn’t we push forward any measure will mitigate some of the intrusion of government in our lives?

William Lloyd Garrison was a prominent abolitionist when abolishing slavery was still a radical and unpopular position, even in the North. He believed slavery should end immediately, and he constantly said so. Garrison wasn’t concerned about winning a popularity contest or convincing people he was properly mainstream. He unapologetically wore a badge of radicalism. He unwaveringly pursued the ideal.

But Garrison was also a political pragmatist. He didn’t reject steps toward emancipation just because they didn’t bring about complete and immediate emancipation. Read carefully what he wrote.

“Urge immediate abolition as earnestly as we may, it will, alas! be gradual abolition in the end. We have never said that slavery would be overthrown by a single blow; that it ought to be, we shall always contend.”

I’m not suggesting we should jettison our radical philosophy of liberty. But I am suggesting that we should take a slice of bread when we can get one. And then another. And then another.

Eventually, we’ll have the whole loaf.

I’ve watched this play out in over 10 years of cannabis activism. Do you realize that every state that has legalized adult-use marijuana started with legalizing medical? And crappy medical program always expend over time. Just last year, five states loosened up restrictions on their existing medical marijuana programs. And several states with legal recreational marijuana passed laws that will encourage the cannabis market to expand in the future.

In other words, if Kentucky can get a medical marijuana program established – however limited – it will almost certainly expand over time.

So, you have a couple of choices. You can sit on the sidelines and throw rocks at the people actually doing the work. Or you can get out from behind your keyboard and do something that will bring about just a little more liberty.

Debilitating Pessimism

Why do so many libertarians spend so much time complaining and running down every effort to advance liberty? I think it oftentimes stems from a sense of hopelessness. I think a lot of people in the so-called liberty movement suffer from what Rothbard called “debilitating pessimism.”

That’s quite an indictment. But you know what? It’s true.

Pessimism is debilitating. It motivates us to do — well — nothing. It even leads some people to tear down the efforts of others. Here’s the thing; no matter how small the odds are of winning are even if you do something, I can guarantee you this — if you do nothing, you’ll get nothing.

My point is that if you believe in something – if you are convinced something is right and true – you have to fight for it. Even if the odds seem insurmountable. Even when you’re tired. Even when the crowd tells you you’re wasting your time. Because you never know when something is going to tip that scale and kick off an avalanche of change.

Rothbard was right. We have to cast off the needless pessimism and keep up the good fight for liberty.

Rothbard offers us some sage advice.

“For the libertarian, the main task of the present epoch is to cast off his needless and debilitating pessimism, to set his sights on long-run victory and to set about the road to its attainment.”

Another Massive Budget Deficit to Start 2020

Another Massive Budget Deficit to Start 2020

The Trump administration posted another massive budget deficit to start out calendar-year 2020.

According to the latest data released by the U.S. Treasury Department, Uncle Sam spent $32.6 billion more than it took in last month. That compares with an $8.7 billion surplus in January 2019. Analysts had projected an $11.5 billion shortfall in January.

That brings the total deficit in FY2020 to $389.2 billion. So far, the deficit in fiscal 2020 is about $79 billion bigger than it was at this point in FY2019, a 25 percent gain.

According to the Congressional Budget Office, the federal budget shortfall will hit $1.02 trillion in FY 2020 and rise into the foreseeable future.  The CBO warns that the ballooning national debt poses a “significant risk” to the economy and financial system.

Overspending continues to drive the ever-widening deficits. The federal government took in $372 billion in January. That was a 10 percent increase in revenue compared with January 2019. But spending was up $405 billion. That represents a 22 percent increase year-on-year.

Through just the first four months of FY2020, Trump and company have already spent nearly $1.5 trillion.

These are the kind of budget deficits one would expect to see during a major economic downturn. The federal government has only run deficits over $1 trillion in four fiscal years, all during the Great Recession. We’re approaching that number today, despite having what Trump keeps calling “the greatest economy in the history of America.”

Generally, during economic expansions, government spending on social programs shrinks and tax revenues climb with increased economic activity. Revenues have increased over the last year, even with the Republican tax cuts, but they haven’t kept pace with the increase in government spending.

President Trump didn’t even mention the growing national debt during his State of the Union address. As Peter Schiff noted in a tweet, “During his 90-minute #SOTU address President Trump did not urge Congress to cut one dime of government spending, or eliminate one government agency or department, even as the national debt is soaring by record amounts during an economy he claims is booming.”

Much has been made in cuts to social programs in Trump’s proposed 2021 budget. But there are spending increases in other areas and the overall spending plan comes in at $4.8 trillion compared to $4.4 trillion in actual outlays during FY2019.

Republicans argue that economic growth will ultimately fix the national debt. The Trump plan claims to balance the budget in 15 years. But this scenario depends on 3 percent GDP growth every year and no recession. Last year, GDP growth was 2.3 percent.

The CBO warns that the growing “debt would dampen economic output over time.”

In fact, studies have shown that GDP growth decreases by an average of about 30 percent when government debt exceeds 90% of an economy. Total U.S. debt already stands at around 106.9 percent of GDP. Ever since the US national debt exceeded 90 percent of GDP in 2010, inflation-adjusted average GDP growth has been 33 percent below the average from 1960–2009, a period that included eight recessions.

Europe’s spending binge serves as a prime example of the impact of debt on economic growth.

The reality is America’s fiscal condition is circling the drain. The bottom line is that the spending trajectory is unsustainable. If the U.S. government is running $1 trillion deficits now, what will the country’s financial situation look like when the next recession hits?

Reprinted from the Tenth Amendment Center.


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