Tuesday, February 24, 2009

A Time for “Fairness”

Here’s the latest from the congress we all just re-elected. The house and the senate are getting ready to push through a little bit of legislation designed to give the District of Columbia’s non-voting congressional representative full voting rights in the US House of Representatives. To “appease” conservatives, they are also proposing adding one more congressional seat to Utah, which, for some reason, reminds me of all the compromises of the 1850’s that led up to the Civil War.

The logic is that there are 600,000 poor, neglected people in Washington, DC, that are denied the right to representation in congress. There are cries of “taxation without representation,” but before we cry too much, we need to note that DC will get more “bailout” money than seven legitimate states. Seems like a lack of representation has not hurt them too much so far.

The desire for DC representation shows such a horrifying lack of familiarity with the Constitution that I wonder how many of our elected officials, the same ones who have sworn to “honor and defend the Constitution of the United States of America,” have ever actually read it.

Some news outlets have picked this story up, noting that “finally” DC residents are going to get their “right” to vote. I know this sounds harsh and confusing, but there is NO constitutionally guaranteed “right” to vote. There are amendments that have done away with the poll tax and guaranteed the equality of blacks and women for suffrage, but there is nothing in the Constitution that guarantees an individual’s right to vote on national issues. Was that an oversight by the framers of the document? No, it is in perfect step with their own conception of our Republic.

The Constitution was a carefully written document that allowed for a voluntary cooperation of sovereign states, composed of free people, and allowed for a federal government to handle issues that involved the cooperation of states. The president was not to be elected by individual citizens, but by states. Congress was not to be composed of representatives of private individuals, but of states. The Senate was not to be composed of people elected by individuals, but by state legislatures.

Not only is the current Senate action under consideration ill-advised; it is illegal. Only states are guaranteed representation in the House or Senate. And the District of Columbia is, by design, NOT A STATE. It has no rights as a state, except for the mutilation of the constitution that gave the district three electoral votes. That alone is wrong: electoral votes were determined by the sum of representatives and senators that each state has, and since DC is not a state, it has none. By design. On purpose!

There is no constitutional provision that allows congress to arbitrarily assign representation to any entity. They might as well be assigning a representative to Guam, to Puerto Rico, or to American Samoa. They have as much authority to give a representative to the Republic of Colombia as they do to the District of Columbia – none.

Yet it appears it will be done, because our elected representatives are facing issues with emotion and arbitrary opinion. One senator said, “We’re the only nation in the world whose capital has no representation in its own government.” First, I doubt the truth of that statement, and second, since when do we want to be like everyone else? Our nation was founded as a unique experiment in self-government, and we have been copied, but never equaled, in our history. Why would we want to be like some European or Asian state? Our forefathers surely didn’t.

If this obscene idea must be pursued, let it at least be done by way of the Constitution – what’s left of it. Let the District of Columbia petition congress for statehood, and let congress and the states debate and decide on statehood. Don’t try to “sneak in” some representation based on an emotional appeal, especially by people whose emotions have more than once elected a convicted cocaine user to their own highest office.

If DC is to be granted statehood, don’t stop there. Texas was admitted with the agreement that it could be split into as many as five states. Let that happen, and add eight new senators to the mix – all from the state that has voted Republican every time since 1980. Don’t stop there. California is way too big. It’s obscene to have over 50 electoral votes, so let’s keep the liberal west and south, but split off a more conservative northern California and a moderate eastern California. Then, let’s give each of the two new Californias two senators, and divvy up the “fair” proportion of congress people to the new states. For too long, the presidential election has been about who gets California. Why not let the conservatives in the state get some representation? If you’re going to vote with your emotions, it’s only “fair.”

But congress needs to be stopped. Is it an impeachable offense for someone who has sworn to “uphold” the Constitution to act directly against it? I know most of our elected officials have never read it, and have no idea what it says, but the Supreme Court needs to intervene. Out of the nine, there are at least five or six who have read the Constitution. Please tell your elected officials to stop defying the law of the land. If DC “deserves” statehood, then start a drive to get it for them, if you dare. But the current action of Congress is a travesty that needs to be dealt with. Let’s nip this in the bud.

ADDENDUM: Two days after the above post, I discovered the following proposed amendment. Obviously, within the last decade, congress still knew it had no constitutional right to do what it is about to do. Therefore, an amendment was drawn up to give the District of Columbia statehood privileges without actually being a state. The amendment died for lack of support, which is probably why they are doing an "end around" this time. For your information, here is the text of the failed amendment:
Joint Resolution Proposing an Amendment to the Constitution To Provide for Representation of the District of Columbia in the Congress
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled (two-thirds of each House concurring therein), That the following article is proposed as an amendment to the Constitution of the United States, which shall be valid to all intents and purposes as part of the Constitution when ratified by the legislatures of three-fourths of the several States within seven years from the date of its submission by the Congress:
"Section 1. For purposes of representation in the Congress, election of the President and Vice President, and article V of this Constitution, the District constituting the seat of government of the United States shall be treated as though it were a State.
"Section. 2. The exercise of the rights and powers conferred under this article shall be by the people of the District constituting the seat of government, and as shall be provided by the Congress.
"Section. 3. The twenty-third article of amendment to the Constitution of the United States is hereby repealed.
"Section. 4. This article shall be inoperative, unless it shall have been ratified as an amendment to the Constitution by the legislatures of three-fourths of the several States within seven years from the date of its submission."

Monday, February 9, 2009

A Short Course in Government Economics

So, how does the government make money? They have to make money, after all -- they spend it, so obviously they make it, too. How do they make money? Most people would say "by taxes." That's what I used to think. It's true that the US government has always made money from tariffs and other market-style taxes, but most people think that the major portion of government money comes in from the annual April 15 billing cycle. It's surprising to realize that, for well over a hundred years, the US government was able to operate and pay expenses without taxing the income of its own citizens. In fact, I believe that the US government still operates independently from the taxation of citizens.

We have believed for at least two generations that we faithfully pay our taxes to the government, and the government then responsibly uses it to pay the bills and housekeeping. The truth, of course, is that taxation has practically nothing to do with raising revenue, and practically everything to do with controlling business, education, religion, commerce, and our private lives. If taxation were just to raise revenue, the process would not be nearly as complicated as it is. Most average Americans can take their tax data to three different, licensed tax preparers and they will get three different statements, three different amounts, three different sets of figures. There is nothing simple about paying American taxes.

In a nation where officially no one has the right to force us to be accountants, much less even to be able to read and write, we are expected every year to set up bookkeeping, calculate our finances, and using a book of charts provided by a para-government agency, determine what we "owe" our nation and then send it in. It is probably the hardest, least objective, most confusing thing any American is called on to do. Most of us are forced to spend even more money to hire someone who can prepare a vaguely readable return and get it to an agency that will then cash our checks and hopefully not bother us again for a year.

Why not just have a straight percentage? Some think that a varying scale is "fair" for the "poor," but if it's just a percentage, wouldn't it still be that the poor pay less and the rich pay more? Most people understand this; unfortunately, there's something in the Washington water or air that causes them to forget it. However unfair it might be to some people, even a "graduated" scale would be fairly simple to figure out. First you would find out how much you made; then, using the scale, you could figure out if you owed ten percent, fifteen percent, eight percent, thirty percent, or "no" percent. But it's not that easy, either. If it were, you wouldn't get those mythical three figures mentioned above.

So why is it so complicated? Because it's all about control. By giving tax advantages for some things and tax penalties for others, government is able to "modify" behavior of both corporations and individuals. When a school, a business, a church, or a family has "been bad," according to government standards, they suffer a tax problem. They are penalized and it perhaps puts them on the straight and narrow for the next year.

The "Internal Revenue Service" is the oxymoron of all oxymorons: it is neither internal (it is a private agency contracted by the government), nor a "service," in the strictest sense of the word. Who depends on them to help anyone? And it does not raise "revenue." It is the enforcement arm of a federal government grown big and overblown like Jabba the Hutt. The IRS goes way beyond raising money. In the 30's the feds could not find enough proof of an actual crime to jail the mobster Al Capone. Everyone knew he was bootlegging, killing, and extorting, but for some reason, that was not enough. Enter the IRS, and the crook was locked up for life. A church in middle America has admittedly strange ideas about something or other. Unfortunately, there's that pesky first amendment, as well as the fourth and others. Fortunately, there's the IRS, entering where angels fear to tread, and there's a padlock on that church door. When the IRS finally comes in and breaks the ice, the ATF, FBI and NSA can meekly follow and sweep up the mess.

Where does the government get money, then, if not from income taxes and the IRS? Well, when you are the government, you can print more. How do you get 700 billion dollars, then get 800 billion more? Simple! You just get out the plates with George Washington's -- or better yet, Benjamin Franklin's -- picture on them, and you slap some green ink on some treasury paper and -- Viola! -- instant money! In this electronic age, you don't even have to waste all that ink and paper. Our government also prints "virtual" money! It's so easy even a freshman congressman can do it!

How can I make such a claim? Mathematics helps somewhat. The two latest "stimulus" plans -- the adopted one and the proposed one -- total $1.5 trillion dollars. That's one million times one million dollars, and then add half of that again. Let's go wild and say that every man, woman, and child in the US could be a wage earner and tax payer. Split a trillion and a half up into three hundred million payments, and each of them would be responsible for five thousand dollars. That means that the IRS would have to clear -- show a profit of -- five thousand dollars for taxing every man, woman, and child in this country. That's not going to happen, of course. Most Americans' tax bills are not that high.

Then, consider that it's more like only one hundred million households or less that will file a tax return, and that perhaps a fourth of them will not have to pay taxes. That gets us to about $18000 dollars from every tax paying household in this country. Now, realize that this money is not to pay the ongoing operation of congress, the maintenance of roads, the salaries of government agencies, regulatory commission employees, medicaid, or welfare. Oh, yes, we are also fighting two wars overseas, and maintaining the peace in several countries. I think that costs a dollar or two. Then there are things like PBS, the National Endowment for the Arts, and other subsidized agencies. Don't forget our education system, primary, secondary, and post secondary. Highways, airports, and everything related to them -- all of this is paid for by government.

Do you see that there is no possible way that what is collected by the IRS even starts to pay for most of this? Oh, I'm sure there are some "token" amounts that go to government programs. But the idea that the two "stimulus" packages are being paid for with tax dollars is impossible to anyone that does the math. That money will be printed, electronically transferred, or borrowed from our great-great-great grandchildren, since we've already borrowed from all the generations leading up to that.

It doesn't matter if you are a Democrat or a Republican, a conservative or a liberal. The fact is, we have elected some people who are spending money that they don't have, money that doesn't exist. Several years ago, the Peruvian government had a unit of currency called a "Sol," roughly equivalent to a dollar. When that money was devalued severely, they developed a new unit called an "Inti," that was the equivalent of a million "Soles," and roughly the equivalent of -- a dollar. Later, Peru developed the "Nuevo Sol," worth a million "Intis," and worth about -- a dollar. That was fifteen years ago, more or less, and I didn't even want to research what the "new" Soles are worth now. However, I know they are worth a trillion of the old ones. That's called "printing your own revenue," and it makes your currency worth approximately what Monopoly money is worth. The only thing that has preserved our dollar so far has been an American economy that can swim upstream in an adverse, spending-gone-wild climate.

Please don't think your tax dollars will go to the "stimulus" package. Your tax dollars are a drop in the bucket. They just make you behave yourself. No, this money will be manufactured. No gold to back it up, no securities to make it worth anything. You could print paper that was worth as much. But we continue to believe that it is real money, and as long as congress continues to spend it, we will continue to stretch it thin. A day is coming when the stretching will stop, and the "snap" will affect all of us.

It's not about taxpayers anymore. It's about devaluation, and it will cost us in the future. The world once coveted our green paper. The time is coming when we won't be able to give it away.