Monthly Archives: January 2013

Signs, Signs, Everywhere a Sign

Our lives are full of signs; little signs and big signs, signs telling us how we should or should not behave or act.  Signs are supposedly for our benefit.  Some signs are meant to replace common sense.  Signs warn us the road may freeze or the coffee may be hot.  Some signs are meant to warn us to behave a certain way or a fine, penalty, or other unpleasant thing may be coming our way.  Yet other signs are warnings of impending danger.

Consider a light comes on in your vehicle and a beeping sound ensues that indicates your oil is low.  The sign is useful in one sense and meaningless in another.  It’s useful because the warning sign provides you information.  The warning is meaningless if you choose to ignore it.  You choose how to act given the warning provided to you and you live with the consequences of your decision.  Most people have the common sense to take action to add oil to avoid consequences such as the vehicle breaking down or damaging the engine.  Ayn Rand said, “you can ignore reality, but you can’t ignore the consequences of ignoring reality”.

Moreover, there aren’t politicians, government bureaucrats, or the media to interpret the warning sign when your oil light comes on, trying to persuade you how to act , and promoting a narrative to fit an agenda.  At least not yet!  However, if these people were involved and the narrative was; it is an environmental hazard to refill your oil, or that oil and gas companies are collaborating with automobile manufacturers to produce faulty warning signs.  Instead, many people would conform to the politically acceptable narrative promoted by the ruling class and their abettors in the media.

People succumb to and are mesmerized by narratives peddled by the media and the ruling class as though it represents truth and fact.  History is replete with examples of despots and tyrants using narratives to exploit people for their own gain.  Children are exploited for political, personal, or economic gain.  To what depths must the ruling class sink when they cannot compete in the arena of rational thought and ideas and resort to immoral and ignoble exploitation children?

The point is the ruling class and the media use narratives to propagandize, program, and persuade people to act and behave contrary to the warning signs all around them.  Individual judgment and discernment is replaced by group think and normalcy bias.

The warning signs regarding the economy and the government are all around us.  The signs are visible.  The lights are flashing.  The buzzers are buzzing.   I’ve written in detail about many of these subjects but here are some highlights of the warning signs people seem to ignore:

Economy

  • Debt is 16,432,000,000,000 dollars.
  • Unfunded liabilities are estimated on the low end at 60,000,000,000,000 dollars and 200,000,000,000,000 dollars on the high end.
  • From January 19, 2009 through January 18, 2013 the debt increased from $10.625 trillion to $16.432 trillion.  On average, the annual fiscal deficit for the past four years is $1.452 trillion dollars.
  • Using the U.S. Government’s most recent budget prepared by the Executive branch the outstanding debt will increase by $7 trillion dollars bringing the total debt to $23.432 trillion.  Note, this has been underestimated by $600 to $800 billion per year for the past four years and the future budgets assume growths rates between 4% and 6% per year.  It is more likely the debt will increase by $13 trillion in the next ten years bringing the total debt to $29.432 trillion.
  • Today, each person’s equal share of the debt is $52,165.  If we include another $70 trillion for unfunded liabilities each person’s equal share increases to $273,412.
  • Interest payments on the debt are roughly 10% ($250 billion) of federal revenues.  This is based on the Federal Reserve’s zero interest rate policy (ZIRP).  If interest rates returned to their 30 year average of 5.5% interest payments would increase to $925 billion or 37% of federal revenues.  By 2022, the projected interest payments on the debt (at current interest rates) are expected to be $915 billion annually.
  • The currency is being debased/devalued by an increase in the money supply.  The money supply (m0) was $800 billion at the end of 2008.  The money supply today is nearly $3 trillion.
  • From 1800 to 1913 (year the Federal Reserve started) a dollar increased in purchasing power.  What cost $1 in 1800 cost only 65 cents in 1913.
  • From 1913 to 2013 a dollar has decreased in purchasing power.  What cost $1 in 1913 costs $25 in 2013.  The purchasing power of a single dollar has decreased by 96%.
  • Real inflation rates are substantially greater than the figures reported by the U.S. government.  The inflation calculation method has been modified over the past 20-22 years to exclude certain items and weight the basket of goods differently.  Using the same inflation rate calculation that was used in 1980, the real inflation rate from 2000 to 2012 has been bounded at 5% on the low end and 12% on the high-end.
  • Real unemployment rates are substantially greater than the figures reported by the U.S. government.  The real unemployment rate is near 16%.  That government reported unemployment rate of 7.9% reflects a 2.1% drop in the labor participation rate from 65.7% to 63.6%.  In other words several million people are out of the labor force and not counted as unemployed.
  • Exorbitant privilege is given to the government to control a country’s money supply.  This privilege allows a cabal of people to destroy wealth through monetary inflation (which decreases the purchasing power of the currency).  Savers (net producers) are punished by this while borrowers (net consumers) are rewarded.
  • The same cabal controls interest rates (cost of money).  These rates are set to benefit government and manipulate economic behavior to drive consumerism and increase the total credit market debt.
  • Total credit market debt outstanding was $4.3 trillion in 1980.  As of July 2012 the total credit market debt outstanding is $55.3 trillion.  That is an 1100% increase.
  • Likewise, GDP was $2.8 trillion in 1980 and is $15.1 trillion as of November 2011.  That is a 440% increase.
  • Most GDP growth has been manufactured through increased credit market debt (i.e. people buying things on credit and taking on more debt) and through currency debasement (devaluation of the dollar).
  • The total outstanding claims on base money is $70 trillion.  That includes outstanding credit + money supply (m2).  The money supply is levered at a ratio of 25:1.
  • The Federal Reserve’s ZIRP impacts people on fixed income, those savings through traditional savings accounts, certificates of deposit or money market accounts.  The real interest rate is calculated as follows (nominal interest rate less the real rate of inflation).  So, the real interest rate is actually negative for savers.  In other words, due to real inflation/currency debasement every dollar saved loses purchasing power.
  • Under a monetary regime with fiat currency debts are never truly extinguished.  When you pay a debt with a $50 check or $50 federal reserve note the debt is not extinguished it is merely transferred to your bank.  The bank transfers the FRN to the federal reserve bank that issued the note.  It is the U.S. Treasury that is ultimately responsible for all the liabilities of the Federal Reserve.
  • The entire global monetary system is a debt-based system.
  • The total debt of all the countries on earth is $220 trillion and the GDP is $62 trillion.  That is a debt to GDP ratio of 355%.
  • All major currencies around the globe are being debased in a race to the bottom.
  • The use of paper money is unconstitutional.  Moreover, people are forced to use government issued paper money under legal tender laws.
  • Too Big To Fail policy that eliminates moral hazard.  Government bails out financial institutions due to poor decisions and takes the debts onto the Federal Reserve’s balance sheet to be paid by the people.  In other words profits are privatized but risks are socialized.
  • The total outstanding notational derivatives market, as report by the Bank of International Settlements, is over $700 trillion.
  • The Federal Reserve bank now owns over 90% of the long-term bonds (10 year and beyond).
  • Government determines which industries succeed and which fail.  Government takes tax revenues or borrowed money and redirects it to industries, businesses, and groups according to government centric preferences.

Government

  • Government mandated health insurance.  Government forces you to buy insurance or be fined.
  • Governmental regulations over every minute detail of the economy and your life.
  • War on drugs.  Nearly 25% of the prison population is due to some drug related offense.
  • Illegal wars overseas.  There has not been a constitutionally declared war since WWII.
  • Government providing guns to Mexican drug gangs that resulted in the deaths of hundreds of people include a U.S. border agent.  The U.S. Attorney General is complicit in this and in the cover-up.
  • Drones over the U.S.
  • Indefinite detention of U.S. citizens without due process.  The government decides who gets due process and who does not.
  • Warrantless searches under the Patriot Act.
  • Assassinations of U.S. citizens can be ordered by one person – the President.
  • Secret evidence and secret courts are used to detain and prosecute people.  Government uses these courts so it doesn’t have to reveal evidence and hides behind national security claims.
  • Extraordinary renditions
  • Asset Forfeiture Laws
  • Government school systems
  • Laws forbidding assembly near elected officials.
  • Control over the internet.
  • Outright disobedience of the Constitution.
  • Outright disobedience of the Bill of Rights.  For instance, the 2nd amendment FORBIDS the government from doing anything that interferes with your unalienable right to self-defense by bearing and keeping arms.
  • Government collusion with private companies, the media, Unions, and other groups.

This was not an exhaustive list, nor did it take long to compile it.  There are hundreds and thousands more that can be added to the list.  These are the warnings signs of a despotic and tyrannical government.  The lights are flashing and the buzzers are buzzing.  The signs are everywhere.  These are danger signs warning you of impending peril.

Why are people ignoring the signs?

Mostly people can’t discern truth and facts from narrative used to distort and obfuscate and further an agenda.  The narrative is peddled like a drug dealer pushing heroin.  Those complicit in the peddling are looking for more innocent customers that will buy into the narrative just as the junkie buys heroin.  People can’t contemplate government is not trustworthy and doesn’t have the peoples’ interest in mind.  People can’t break free of the chains that bind them to the false left-right paradigm and think critically and rationally on their own.  People buy into the incessant narrative propagated by elected officials, government bureaucrats, and the media.  People don’t know nor do they care about constitutional government or unalienable rights.

People are paying attention to the narrative and ignoring the signs.  This must be reversed.  People must pay attention to the signs and ignore the narrative.

As society, our liberty, and our life styles continue to deteriorate will you recognize the signs or will you believe the narrative?  At what point does it become too late to adjust your thinking and take action?  Precisely how far and how bad does it need to get for people to simply say “enough is enough” and take action?

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What is government?

I’ve had many conversations with folks about what is the role or purpose of government.  My answer is, to better secure our unalienable rights.  If we pause for a moment and consider the question:  What is Government?  We know why governments are instituted but, really, have you stopped to contemplate the question..

What is Government?

If we agree that people were on this earth before government then we can readily agree that people without government are truly in a state of Nature.  In a Hobbesian and Lockean sense.  Every person has certain unalienable rights endowed upon them by their Creator.  We often hear of life, liberty, and property.  But there are other unalienable rights such as the right to self-defense, the right to barter/trade, the right to contract, the right to association, etc.

It is the last one I listed that I want to discuss — The Right of Association.  If people are free to associate with whomever they please they may choose many associations.  Some may be related for religious reasons, others may be for work related reasons.  In a modern sense we are free to associate with people in many ways like a chess club, a fantasy football league, a particular religious denomination, etc.  We have many associations in life.  And, all associations directly flow from our unalienable right of association.

There is one particular, one very specific type of association that deserves further discussion.  That is when people freely choose to form a political society.  In context of our history, the people chose to form a political society called a State.  The people of Virginia formed the Commonwealth of Virginia.  The people of Massachusetts formed that State.  The people of Delaware formed that State.  The people in those States chose to form a political society called a State government.

The free and voluntary acts by the people of one State did not and cannot obligate the people of other States.  For instance, the people of Virginia could not obligate the people of Maryland to join Virginia or to force the people of Maryland to abide by what Virginians chose to do.  The people of each State acted independent of every other State.

We find this in our founding documents.  The Declaration of Independence says in the last paragraph, “and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do.”

So, back the question, what is government?   Government is simply the free and voluntary act of people choosing to associate themselves with other people to form a political society.  Government is simply a political society.  Its formation is a direct result of our unalienable right to associate.  This is precisely what the Declaration means when it says “Governments are instituted among Men, deriving their just powers from the consent of the governed”.  To rephrase, our political societies are created by people exercising their unalienable right of association.  Thus the political society’s just powers come from the consent of the people.

In our history there have been three secessions.  The first secession happened when the colonies declared independence from Great Britain.  The second secession happened when the ninth State ratified the Constitution.  At the time the 9th State ratified the other four States remained under the Articles of Confederation and Perpetual Union.  The third secession happened when the Southern States withdrew from the Union.

The historical record has dozens of documents that prove demonstrably that the Articles of Confederation and the Constitution where both referred to as a federal constitution.  Moreover, documents from the ratification of the Articles of Confederation, from the States authorizing representatives to the federal convention in Philadelphia, from State ratifying conventions, and the State ratification documents provide overwhelming evidence that both Articles of Union were a compact amongst the States.  The contemporaneous understanding during the founding generation was the federal constitutions were social compacts.  Future assertions made by people like John Marshall, Joseph Story, Daniel Webster, Abraham Lincoln, and others in the 20th century that the government is national and was a creature of the whole of the people are simply unfounded and without demonstrable evidence to support their assertions.

As both federal constitutions were made in compact amongst the States which means that each State – political society – acceded to the compact.  If we review the definitions of certain critical words as they were defined in the 1780s it provides insight into the understanding at that time.  The following definitions can be found in Samuel Johnson’s 1785 dictionary:

Accede:  to be added to, to come to, generally used in political accounts; as another power has acceded to the treaty; that is, has become a party.

Society:  1) Union of many in general interest.  2) Partnership; union on equal terms.

Compact:  1) A contract; an accord; an agreement; a mutual and settled appointment between two or more, to do or to forbear something.  2) to league with  3) to join together; to bring into a system.

Confederation:  League; compact of mutual support; alliance.

Constitution:  1) Established form of government; system of laws and customs.  2) Particular law; established usage; establishment; institution.

Federal:  relating to a league or contract.

With these definitions in mind as well as the documented records of the time it doesn’t require mental gymnastics or semantic manipulation to understand each State was a political society formed by the citizens of said State, and each State was free, independent, and sovereign.  The acts of the States – the political societies – was to create a federal constitution which each State assessed, evaluated, and debated its merits before deciding whether to accede – to join – the Union.  The federal constitutions were compacts amongst the States.  The Sates reached agreement on which powers would be delegated to the federal government and which powers would be reserved by the States or the people.  That agreement was the federal constitution, which was acceded to through a ratification process.  In both cases the creators of the federal constitution were the States – the political societies acting independently and in their own capacity as a free State without obligating any other State – political societies – in any way shape or form.    The creation of both Articles of Union was the federal government.

If the States accede to join the Union the states therefore can Secede and leave the Union.  The right to Secede from the Union was exercised when States seceded from the Articles of Confederation and Perpetual Union.  The right was certainly not denied at that time as each State, one by one, seceded from the Articles of Confederation.  If the Union were perpetual as some posit, then the States could not have seceded in 1787 and 1788.  In fact, once secession was established, in act rather than in principle, the right to secede was valid and established or the new Constitution has no effect.

The contrary view is the new Constitution was ratified by the people.  In this context I mean the people of all thirteen states acting as one aggregate, cohesive body.  Two of the better known proponents of the national view of ratification are Supreme Court Justice Joseph Story and Congressman Daniel Webster.  Some of you may have heard of or even read Story’s Commentaries on the Constitution.  Both Story and Webster posit that the people as a whole ratified the constitution and as a result created a national government.  This was Lincoln’s view as well.  And, a view that has gained traction in the 20th century by big government theorists like Teddy Roosevelt, Woodrow Wilson, Franklin Roosevelt and many more.

However, both Story and Webster concede that if the constitution was indeed a compact amongst the States and not ratified by the whole of the people then States absolutely had a right to secede.  Justice Story said, “The obvious deductions which may be, and, indeed, have been drawn from considering the Constitution a compact between States, are that it operates as a mere treaty or convention between them, and has an obligatory force no longer than suits its pleasure or its consent continues.”  Webster concedes the same point as Story does.

Let’s assume for a moment the Constitution was indeed ratified by the whole of the people.  If true, then the system and form of government established prohibited the people from ever amending the Constitution in the future, as there are no provisions for the people to directly amend the Constitution.  Only the States can amend the Constitution.  Why would the whole of the people create a new form of government yet prohibit themselves from every changing, modifying, or amending the very creature they created?  Moreover, consider, can the Congress pass a law today that obligates a Congress twenty years in the future?  For instance, imagine if a law were passed that said, all Congresses are, by law, obligated to pass in the affirmative any debt ceiling increases requested by the President at that time.  Or, that a law is passed that would never allow for the repeal of some current law.  The current Congress cannot obligate a future Congress.  So, can the whole of the people obligate future generations to the Constitution?  No, they cannot.  If the whole of the people ratified it, then the Constitution would require ratification by future generations.  How could someone 200, 500, 2000 years ago obligate me to a government or set of rules of which I was not a party too.  It’s not possible in any legal or moral sense.

One may ask, how can the people of the state – a political society – do the same thing under a compact?  The answer is they cannot.  The people of each State can independently determine for themselves whether the State remains in the Union or whether the State secedes from the Union.  Any suggestions otherwise are pure folly.

Under the compact when one party – the federal government – becomes abusive of its powers those that created the federal government may either rescind or amend the powers delegated, or if the aggrieved party feels the injustice is so severe as to defeat the purpose, reason, and benefits of remaining in the Union they can leave the Union. The right and duty of the people of each political society — each State — to alter or abolish government is up to them.  Of course, alteration has a proscribed process and requires the agreement from other states to reach the threshold for an amendment to be ratified.  But secession is a form of abolishing government by virtue of simply seceding from the Union, from the compact.  The question of secession is particular to each State.  One State cannot obligate another State to accede to or secede from the Union.

Consequently, secession is merely a political question.  It is not a legal question whatsoever.  It is because political societies are formed as an extension of our unalienable rights and that self-governance and self-determination as well as the consent of the governed are inherent in any legitimate form of government.   If we understand the answer to the question what is government we can proceed to put to rest questions of secession as we’ve resolved them in unambiguous and unequivocal terms.

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