[Congressional Record Volume 146, Number 5 (Monday, January 31, 2000)]
[House]
[Pages H81-H87]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
A REPUBLIC, IF YOU CAN KEEP IT
The SPEAKER pro tempore (Mr. Green of Wisconsin). Under the Speaker's
announced policy of January 6, 1999, the gentleman from Texas (Mr.
Paul) is recognized for 60 minutes.
Mr. PAUL. Mr. Speaker, I have taken this special order this evening
to discuss the importance of the American Republic and why it should be
preserved.
Mr. Speaker, the dawn of a new century and millennium is upon us and
prompts many of us to reflect on our past and prepare for the future.
Our Nation, divinely blessed, has much to be thankful for. The
blessings of liberty resulting from the Republic our forefathers
designed have far surpassed the wildest dreams of all previous
generations.
The form of government secured by the Declaration of Independence,
the American Revolution and the Constitution is unique in history and
reflects the strongly held beliefs of the American revolutionaries. At
the close of the Constitutional Convention in Philadelphia on September
18, 1787, a Mrs. Powel anxiously awaited the results and as Benjamin
Franklin emerged from the long task now finished asked him directly,
``Well, Doctor, what have we got? A republic or a monarchy?'' ``A
republic, if you can keep it,'' responded Franklin.
The term ``republic'' had a significant meaning for both of them and
all early Americans. It meant a lot more than just representative
government and was a form of government in stark contrast to pure
democracy where the majority dictated laws and rights. And getting rid
of the English monarchy was what the revolution was all about, so a
monarchy was out of the question.
The American Republic required strict limitation of government power.
Those powers permitted would be precisely defined and delegated by the
people with all public officials being bound by their oath of office to
uphold the Constitution. The democratic process would be limited to the
election of our leaders and not used for granting special privileges to
any group or individual nor for defining rights.
Federalism, the binding together loosely of the several States, would
serve to prevent the concentration of power in a central government and
was a crucial element in the new republic. The authors of the
Constitution wrote strict limits on the national government and strove
to protect the rights and powers of the State and the people.
Dividing and keeping separate the legislative, executive, and the
judiciary branches provided the checks and balances thought needed to
preserve the Republic the Constitution created and the best way to
preserve individual liberty.
The American Revolutionaries clearly chose liberty over security for
their economic security and their very lives were threatened by
undertaking the job of forming a new and limited government. Most would
have been a lot richer and safer by sticking with the King. Economic
needs or desires were not the driving force behind the early American
patriotic effort.
The Revolution and subsequent Constitution settled the question as to
which authority should rule man's action, the individual or the state.
The authors of the Constitution clearly understood that man has free
will to make personal choices and be responsible for the consequences
of his own actions. Man, they knew, was not simply to be a cog in a
wheel or a single cell of an organism or a branch of a tree but an
individual with free will and responsibility for his eternal soul as
well as his life on earth. If God could permit spiritual freedom,
government certainly ought to permit the political freedom that allows
one to pursue life's dreams and assume one's responsibilities.
If man can achieve spiritual redemption through grace which allows
him to use the released spiritual energy to pursue man's highest and
noblest goals, so should man's mind, body, and property be freed from
the burdens of unchecked government authority. The founders were
confident that this would release the creative human energy required to
produce the goods and services that would improve the living standards
of all mankind.
Minimizing government authority over the people was critical to this
endeavor. Just as the individual was key to salvation, individual
effort was the key to worldly endeavors. Little doubt existed that
material abundance and sustenance came from work and effort, family,
friends, church, and voluntary community action, as long as government
did not obstruct.
No doubts were cast as to where rights came from. They came from the
Creator. And if government could not grant rights to individuals, it
certainly should not be able to take them away. If government could
provide rights or privileges, it was reasoned, it could only occur at
the expense of someone else or with the loss of personal liberty in
general.
Our constitutional Republic, according to our founders, should above
all else protect the rights of the minority against the abuses of an
authoritarian majority. They feared democracy as much as monarchy and
demanded a weak executive, a restrained court, and a handicapped
legislature.
It was clearly recognized that equal justice and protection of the
minority was not egalitarianism. Socialism and welfarism were never
considered. The colonists wanted to be free of the King's oppressive
high taxes and burdensome regulations. It annoyed them that even their
trees on their own property could not be cut without the King's
permission. The King kept the best trees for himself and his
shipbuilding industry. This violation of property ownership prompted
the colonists to use the pine tree on an early revolutionary flag to
symbolize the freedom they sought.
The Constitution made it clear that the government was not to
interfere with productive, nonviolent human energy. This is the key
element that has permitted America's great achievements. It was a great
plan. We should all be thankful for the bravery and wisdom of those who
established this Nation and secured the Constitution for us. We have
been the political and economic envy of the world. We have truly been
blessed.
The founders often spoke of divine providence and that God willed us
this great Nation. It has been a grand experiment, but it is important
that the fundamental moral premises that underpin this Nation are
understood and maintained. We, as Members of Congress, have that
responsibility.
This is a good year to address this subject, the beginning of a new
century and millennium provides a wonderful opportunity for all of us
to dedicate ourselves to studying and preserving these important
principles of liberty.
One would have to conclude from history as well as current conditions
that the American Republic has been extremely successful. It certainly
has allowed the creation of great wealth with a large middle-class and
many very wealthy corporations and individuals. Although the poor are
still among us, compared to other parts of the world, even the poor in
this country have done quite well.
[[Page H82]]
We still can freely move about from town to town, State to State, and
job to job. Free education is available to everyone, even for those who
do not want it or care about it. But the capable and the incapable are
offered a government education. We can attend the church of our choice,
start a newspaper, use the Internet and meet in private when we choose.
Food is plentiful throughout the country and oftentimes even wasted.
Medical technology has dramatically advanced and increased life
expectancy for both men and women.
Government statistics are continuously reaffirming our great
prosperity with evidence of high and rising wages, no inflation, and
high consumer confidence and spending. The U.S. Government still enjoys
good credit and a strong currency in relationship to most other
currencies of the world. We have no trouble financing our public nor
private debt. Housing markets are booming and interest rates remain
reasonable by modern day standards. Unemployment is low.
Recreational spending and time spent at leisure are at historic
highs. Stock market profits are benefiting more families than ever in
our history. Income, payroll, and capital gains taxes have been a
windfall for politicians who lack no creative skills in figuring out
how to keep the tax-and-spend policies in full gear. The American
people accept the status quo and hold no grudges against our President.
The nature of a republic and the current status of our own are of
little concern to the American people in general. Yet there is a small
minority ignored by political, academic, and media personnel who do
spend time thinking about the importance of what the proper role for
government should be. The comparison of today's government to the one
established by our Constitution is the subject of deep discussion for
those who concern themselves with the future and look beyond the fall
election.
The benefits we enjoy are a result of the Constitution our founding
fathers had the wisdom to write. However, understanding the principles
that were used to establish our Nation is crucial to its preservation
and something we cannot neglect.
Unbelievable changes have occurred in the 20th century. We went from
the horse and buggy age to the space age. Computer technology and the
Internet have dramatically changed the way we live. All kinds of
information and opinions on any subject are now available by clicking a
few buttons. Technology offers an opportunity for everyone who seeks to
the truth to find it, yet at the same time it enhances the ability of
government to monitor our every physical, communicative, and financial
move.
Mr. Speaker, let there be no doubt. For the true believers in big
government, they see this technology as a great advantage for their
cause. We are currently witnessing an ongoing effort by our government
to develop a national ID card, a medical data bank, a work data bank,
``Know Your Customer'' regulations on banking activity, a national
security agent all-pervasive telephone snooping system called Echelon,
and many other programs. There are good reasons to understand the many
ramifications of the many technological advancements we have seen over
the century to make sure that the good technology is not used by the
government to do bad things.
{time} 2045
The 20th century has truly been a century of unbelievable
technological advancement. We should be cognizant of what this
technology has done to the size and nature of our own Government. It
could easily be argued that, with greater technological advances, the
need for government ought to decline and private alternatives be
enhanced. But there is not much evidence for that argument.
In 1902, the cost of Government activities at all levels came to 7.7
percent of GDP. Today it is more than 50 percent.
Government officials oversee everything we do, from regulating the
amount of water in our commodes to placing airbags in our cars, safety
locks on our guns, and using our own land. Almost every daily activity
we engage in is monitored or regulated by some Government agency. If
one attempts to just avoid Government harassment, one finds himself in
deep trouble with the law.
Yes, we can be grateful that the technological developments in the
marketplace over the last 100 years have made our lives more prosperous
and enjoyable. But any observant person must be annoyed by the ever-
present Big Brother that watches and records our every move.
The idea that we are responsible for our own actions has been
seriously undermined. And it would be grossly misleading to argue that
the huge growth in the size of government has been helpful and
necessary in raising the standard of living of so many Americans.
Since government cannot create anything, it can only resort to using
force to redistribute the goods that energetic citizens produce. The
old-fashioned term for this is ``theft.''
It is clear that our great prosperity has come in spite of the
obstacles that big government places in our way and not because of it.
And besides, our current prosperity may well not be as permanent as
many believe.
Quite a few major changes in public policy have occurred in this
century. These changes in policy reflect our current attitude toward
the American Republic and the Constitution and help us to understand
what to expect in the future. Economic prosperity seems to have
prevailed. But the appropriate question asked by too few Americans is,
have our personal liberties be undermined?
Taxes: Taxes are certainly higher. A federal income tax of 35 to 40
percent is something many middle-class Americans must pay, while, on
average, they work for the Government more than half the year. In
passing on our estates from one generation to the next, our partner,
the U.S. Government, decides on its share before the next generation
can take over.
The estate tax certainly verifies the saying about the inevitability
of death and taxes. At the turn of the century, we had neither. And in
spite of a continuous outcry against both, there is no sign that either
will soon be eliminated.
Accepting the principle behind both the income and the estate tax
concedes the statist notion that the Government owns the fruits of our
labor as well as our savings and we are permitted by the politicians'
generosity to keep a certain percentage.
Every tax cut proposal in Washington now is considered a cost to
Government, not the return of something rightfully belonging to a
productive citizen. This principle is true whether it is a 1 percent or
70 percent income tax. Concern for this principle has been rarely
expressed in a serious manner over the past 50 years. The withholding
process has permitted many to believe that a tax rebate at the end of
the year comes as a gift from Government.
Because of this, the real cost of Government to the taxpayer is
obscured. The income tax has grown to such an extent and the Government
is so dependent on it that any talk of eliminating the income tax is
just that, talk. A casual acceptance of the principle behind high
taxation with an income tax and an inheritance tax is incompatible with
the principle belief in a true republic. It is impossible to maintain a
high tax system without the sacrifice of liberty and an undermining of
property ownership. If kept in place, such a system will undermine
prosperity regardless of how well off we may presently be.
In truth, the amount of taxes we now pay compared to 100 years ago is
shocking. There is little philosophic condemnation by the intellectual
community, the political leaders, or the media of this immoral system.
This should be a warning sign to all of us that even in less prosperous
times we can expect high taxes and that our productive economic system
will come under attack.
Not only have we seen little resistance to the current high tax
system, it has become an acceptable notion that this system is moral
and is a justified requirement to finance the welfare/warfare state.
Propaganda polls are continuously cited claiming that the American
people do not want tax reductions. High taxes, except for only short
periods of time, are incompatible with liberty and prosperity. We will,
I am sure, be
[[Page H83]]
given the opportunity in the early part of the next century to make a
choice between the two. I am certain of my preference.
Welfare: There was no welfare state in 1900. In the year 2000, we
have a huge welfare state which continues to grow each year. Not that
special interest legislation did not exist in the 19th century. But for
the most part, it was limited and directed toward the monied interest,
the most egregious example being the railroads.
The modern-day welfare state has steadily grown since the Great
Depression of the 1930s. The Federal Government is now involved in
providing healthcare, houses, unemployment benefits, education, food
stamps to millions, plus all kinds of subsidies to every conceivable
special interest group. Welfare is now a part of our culture, costing
hundreds of billions of dollars every year. It is now thought to be a
right, something one is entitled to. Calling it an entitlement makes it
sound proper and respectable and not based on theft.
Anyone who has a need, desire, or demand and can get the politicians'
attention will get what he wants even though it may be at the expense
of someone else.
Today, it is considered morally right and politically correct to
promote the welfare state. Any suggestion otherwise is considered
political suicide.
The acceptance of the welfare ethic and rejection of the work ethic
as the process for improving one's economic condition are now ingrained
in our political institutions. This process was started in earnest in
the 1930s, received a big boost in the 1960s, and has continued a
steady growth even through the 1990s despite some rhetoric in
opposition.
This public acceptance has occurred in spite of the fact that there
is no evidence that welfare is a true help in assisting the needy. Its
abject failure around the world where welfarism took the next step into
socialism has even a worse record.
The transition in the past hundred years from essentially no welfare
to an all encompassing welfare state represents a major change in
attitude in the United States. Along with the acceptance, the promoters
have dramatically reinterpreted the Constitution in the way it had been
for our first 150 years.
Where the General Welfare clause once had a clear general meaning,
which was intended to prohibit special interest welfare and was
something they detested and revolted against under King George, it is
now used to justify any demand of any group as long as a majority in
the Congress votes for it.
But the history is clear and the words in the Constitution are
precise. Madison and Jefferson, in explaining the General Welfare
clause, left no doubt as to its meaning.
Madison said, ``With respect to the words `general welfare,' I have
always regarded them as qualified by the detail of power connected with
them. To take them in a literal and unlimited sense would be a
metamorphosis of the Constitution and to a character which there is a
host of proof not contemplated by its creators.''
Madison argued that there would be no purpose whatsoever for the
enumeration of the particular powers if the General Welfare clause was
to be broadly interpreted.
The Constitution granted authority to the Federal Government to do
only 20 things, each to be carried out for the benefits of the general
welfare of all the people.
This understanding of the Constitution, as described by the Father of
the Constitution, has been lost in this century. Jefferson was just as
clear, writing in 1798 when he said, ``Congress has not unlimited
powers to provide for the general welfare but only those specifically
enumerated.''
With the modern-day interpretation of the General Welfare clause, the
principle of individual liberty in the Doctrine of Enumerated Powers
have been made meaningless.
The goal of strictly limiting the power of our national Government as
was intended by the Constitution is impossible to achieve as long as it
is acceptable for Congress to redistribute wealth in an egalitarian
welfare state.
There is no way that personal liberty will not suffer with every
effort to expand or make the welfare state efficient. And the sad part
is that the sincere effort to help people do better economically
through welfare programs always fails. Dependency replaces self-
reliance, while the sense of self-worth of the recipient suffers,
making for an angry, unhappy and dissatisfied society. The cost in
dollar terms is high, but the cost in terms of liberty is even greater
but generally ignored; and, in the long run, there is nothing to show
for this sacrifice.
Today there is no serious effort to challenge welfare as a way of
life, and its uncontrolled growth in the next economic downturn is to
be expected. Too many citizens now believe they are entitled to the
monetary assistance from the Government anytime they need it and they
expect it. Even in times of plenty, the direction has been to continue
expanding education, welfare, and retirement benefits.
No one asked where the Government gets the money to finance the
welfare state. Is it morally right to do so? Is it authorized in the
Constitution? Does it help anyone in the long run? Who suffers from the
policy? Until these questions are seriously asked and correctly
answered, we cannot expect the march toward a pervasive welfare state
to stop and we can expect our liberties to be continuously compromised.
The concept of the Doctrine of Enumerated Powers was picked away at
in the latter part of the 19th century over strong objection by many
constitutionalists. But it was not until the drumbeat of fear coming
from the Roosevelt administration during the Great Depression that the
courts virtually rewrote the Constitution by reinterpretation of the
General Welfare clause.
In 1936, the New Deal Supreme Court told Congress and the American
people that the Constitution is irrelevant when it comes to limits
being placed on congressional spending. In a ruling justifying the
Agricultural Adjustment Act, the Court pronounced, ``The power of
Congress to authorize appropriations of public money for public
purposes is not limited by the grants of legislative power found in the
Constitution.''
With the stroke of a pen, the courts amended the Constitution in such
a sweeping manner that it literally legalized the entire welfare state,
which, not surprisingly, has grown by leaps and bounds ever since.
Since this ruling, we have rarely heard the true explanation of the
General Welfare clause as being a restriction of government power, not
a grant of unlimited power.
We cannot ignore corporate welfare, which is part of the problem.
Most people think the welfare state involves only giving something to
the unfortunate poor. This is generally true. But once the principle
established that special benefits are legitimate, the monied interests
see the advantages and influences the legislative process.
Our system, which pays lip service to free enterprise and private
property ownership, is drifting towards a form of fascism or
corporatism rather than conventional socialism. And where the poor
never seem to benefit under welfare, corporations become richer. But it
should have been expected that once the principle of favoritism was
established, the contest would be over who has the greatest clout in
Washington.
No wonder lobbyists are willing to spend $125 million per month
influencing Congress; it is a good investment. No amount of campaign
finance reform or regulation of lobbyists can deal with this problem.
The problem lies in the now accepted role for our Government.
Government has too much control over people and the market, making the
temptation and incentive to influence government irresistible and, to a
degree, necessary.
Curtailing how people spend their own money or their right to
petition their government will do nothing to this influence peddling.
Treating the symptoms and not the disease only further undermines the
principles of freedom and property ownership.
Any serious reforms or effort to break away from the welfare state
must be directed as much at corporate welfare as routine welfare. Since
there is no serious effort to reject welfare on principle, the real
conflict over how to divide what Government plunders will continue.
Once it is clear that it is not nearly as wealthy as it appears, this
will become a serious problem and it will get the attention it
deserves, even here in the Congress.
[[Page H84]]
Preserving liberty and restoring constitutional precepts are
impossible as long as the welfare mentality prevails, and that will not
likely change until we have run out of money. But it will become clear
as we move into the next century that perpetual wealth and the so-
called balanced budget, along with an expanding welfare state, cannot
continue indefinitely. Any effort to perpetuate it will only occur with
the further erosion of liberty.
{time} 2100
The role of the U.S. Government in public education has changed
dramatically over the past 100 years. Most of the major changes have
occurred in the second half of this century. In the 19th century, the
closest the Federal Government got to public education was the land
grant college program. In the last 40 years, the Federal Government has
essentially taken charge of the entire system. It is involved in
education at every level through loans, grants, court directives,
regulations and curriculum manipulation. In 1900, it was of no concern
to the Federal Government how local schools were run at any level.
After hundreds of billions of dollars, we have yet to see a shred of
evidence that the drift toward central control over education has
helped. By all measurements, the quality of education is down. There
are more drugs and violence in the public schools than ever before.
Discipline is impossible out of fear of lawsuits or charges of civil
rights violations. Controlled curricula have downplayed the importance
of our constitutional heritage while indoctrinating our children, even
in kindergarten, with environmental mythology, internationalism and
sexual liberation. Neighborhood schools in the early part of the 20th
century did not experience this kind of propaganda.
The one good result coming from our failed educational system has
been the limited, but important, revival of the notion that parents are
responsible for their children's education, not the state. We have seen
literally millions of children taken from the public school system and
taught at home or in private institutions in spite of the additional
expense. This has helped many students and has also served to pressure
the government schools into doing a better job. And the statistics show
that middle-income and low-income families are the most eager to seek
an alternative to the public school system.
There is no doubt that the way schools are run, how the teachers
teach and how the bills are paid is dramatically different from 100
years ago. And even though some that go through public schools do
exceptionally well, there is clear evidence that the average high
school graduate today is far less educated than his counterpart was in
the early part of this century.
Due to the poor preparation of our high school graduates, college
expects very little from their students since nearly everyone gets to
go to college who wants to. Public school is compulsory and college is
available to almost everyone, regardless of qualifications. In 1914,
English composition was required in 98 percent of our colleges. Today,
it is about one-third. Only 12 percent of today's colleges require
mathematics be taught where in 1914, 82 percent did. No college now
requires literature courses, but rest assured plenty of social babble
courses are required as we continue to dumb down our Nation.
Federal funding for education grows every year, hitting $38 billion
this year, $1 billion more than requested by the administration and 7
percent more than last year. Great congressional debates occur over the
size of the classroom, student and teacher testing, bilingual
education, teacher salaries, school violence and drug usage. And it is
politically incorrect to point out that all these problems are not
present in the private schools. Every year, there is less effort at the
Federal level to return education to the people, the parents and the
local school officials.
For 20 years at least, some of our presidential candidates advocated
the abolishing of the Department of Education and for the Federal
Government to get completely out of public education. This year, we
will hear no more of that. The President got more money for education
than he asked for and it is considered not only bad manners but also
political suicide to argue the case for stopping all Federal Government
education programs.
Talk of returning some control of Federal programs to the States is
not the same as keeping the Federal Government out of education as
directed by the Constitution. Of the 20 congressionally authorized
functions granted by the Constitution, education is not one of them.
That should be enough of a reason not to be involved. There is no
evidence of any benefit and statistics show that great harm has
resulted. It has cost us hundreds of billions of dollars, yet we
continue the inexorable march toward total domination of our
educational system by Washington bureaucrats and politicians. It makes
no sense. It is argued that if the Federal funding for education did
not continue, education would suffer even more. Yet we see poor and
middle-class families educating their children at home or at private
school at a fraction of the cost of a government school education, with
results fantastically better, and all done in the absence of violence
and drugs.
A case can be made that there would be more money available for
education if we just left the money in the States to begin with and
never brought it to Washington for the bureaucrats and the politicians
to waste. But it looks like Congress will not soon learn this lesson,
so the process will continue and the results will get worse. The best
thing we could do now is pass a bill to give parents a $3,000 tax
credit for each child they educate. This would encourage competition
and allow a lot more choice for parents struggling to help their
children get a decent education.
The practice of medicine is now a government managed care system and
very few Americans are happy with it. Not only is there little effort
to extricate the Federal Government from the medical care business but
the process of expanding the government's role continues unabated. At
the turn of the 19th century, it was not even considered a possibility
that medical care was the responsibility of the Federal Government.
Since Lyndon Johnson's Great Society programs of the 1960s, the role of
the Federal Government in delivering medical care has grown
exponentially. Today the Federal Government pays more than 60 percent
of all the medical bills and regulates all of it. The demands continue
for more free care at the same time complaints about the shortcomings
of managed care multiply. Yet it is natural to assume that government
planning and financing will sacrifice quality care. It is now accepted
that people who need care are entitled to it as a right. This is a
serious error in judgment.
There is no indication that the trend toward government medicine will
be reversed. Our problems are related to the direct takeover of medical
care in programs like Medicare and Medicaid. But it has also been the
interference in the free market through ERISA mandates related to HMOs
and other managed care organizations, as well as our tax code, that
have undermined the private insurance aspect of paying for medical
care. True medical insurance is not available. The government dictates
all the terms.
In the early stages, patients, doctors and hospitals welcomed these
programs. Generous care was available with more than adequate
reimbursement. It led to what one would expect, abuse, overcharges and
overuse. When costs rose, it was necessary through government
rulemaking and bureaucratic management to cut reimbursement and limit
the procedures available and personal choice of physicians. We do not
have socialized medicine but we do have bureaucratic medicine,
mismanaged by the government and select corporations who usurp the
decision-making power from the physician. The way medical care is
delivered today in the United States is a perfect example of the evils
of corporatism and an artificial system that only politicians,
responding to the special interests, could create. There is no reason
to believe the market cannot deliver medical care in an efficient
manner as it does computers, automobiles and televisions. But the
confidence is gone and everyone assumes, just as in education, that
only a Federal bureaucracy is capable of solving the problems of
maximizing the number of people, including the poor, who receive the
best medical care available. In an effort to help the poor,
[[Page H85]]
the quality of care has gone down for everyone else and the costs have
skyrocketed.
Making generous medical savings accounts available is about the only
program talked about today that offers an alternative to government
mismanaged care. If something of this sort is not soon implemented, we
can expect more pervasive government involvement in the practice of
medicine. With a continual deterioration of its quality, the private
practice of medicine will soon be gone.
Government housing programs are no more successful than the Federal
Government's medical and education programs. In the early part of this
century, government housing was virtually unheard of. Now the HUD
budget commands over $30 billion each year and increases every year.
Finances of mortgages through the Federal Home Loan Bank, the largest
Federal Government borrower, is the key financial institution pumping
in hundreds of billions of dollars of credit into the housing market,
making things worse. The Federal Reserve has now started to use home
mortgage securities for monetizing debt. Public housing has a
reputation for being a refuge for drugs, crimes and filth, with the
projects being torn down as routinely as they are built. There is every
indication that this entitlement will continue to expand in size
regardless of its failures. Token local control over these expenditures
will do nothing to solve the problem.
Recently, the Secretary of HUD, using public funds to sue gun
manufacturers, claimed this is necessary to solve the problems of crime
which government housing perpetuates. If a government agency, which was
never meant to exist in the first place under the Constitution, can
expand their role into the legislative and legal matters without the
consent of the Congress, we indeed have a serious problem on our hands.
The programs are bad enough in themselves but the abuse of the rule of
law and ignoring the separation of powers makes these expanding
programs that much more dangerous to our entire political system and is
a direct attack on personal liberty. If one cares about providing the
maximum best housing for the maximum number of people, one must
consider a free market approach in association with a sound,
nondepreciating currency. We have been operating a public housing
program directly opposite to this and along with steady inflation and
government promotion of housing since the 1960s, the housing market has
been grossly distorted. We can soon expect a major downward correction
in the housing industry prompted by rising interest rates.
Our attitude toward foreign policy has dramatically changed since the
beginning of the century. From George Washington through Grover
Cleveland, the accepted policy was to avoid entangling alliances.
Although we spread our wings westward and southward as part of our
manifest destiny in the 19th century, we accepted the Monroe Doctrine
notion that European and Asians should stay out of our affairs in this
hemisphere and we theirs. McKinley, Teddy Roosevelt, and the Spanish
American war changed all that. Our intellectual and political leaders
at the turn of the last century brought into vogue the interventionist
doctrine setting the stage for the past 100 years of global military
activism. From a country that once minded its own business, we now find
ourselves with military personnel in more than 130 different countries
protecting our modern day American empire. Not only do we have troops
spread to the four corners of the Earth, we find Coast Guard cutters in
the Mediterranean and around the world, our FBI in any country we
choose, and the CIA in places Congress does not even know about. It is
a truism that the state grows and freedom is diminished in times of
war. Almost perpetual war in the 20th century has significantly
contributed to steadily undermining our liberties while glorifying the
state.
In addition to the military wars, liberty has also suffered from the
domestic wars on poverty, literacy, drugs, homelessness privacy and
many others. We have in the last 100 years gone from the accepted and
cherished notion of a sovereign Nation to one of a globalist new world
order. As we once had three separate branches of our government, the
United Nations proudly uses its three branches, the World Bank, the IMF
and the World Trade Organization to work their will in this new era of
globalism. Because the U.S. is by far the strongest military industrial
power, it can dictate the terms of these international institutions,
protecting what we see as our various interests such as oil, along with
satisfying our military industrial complex. Our commercial interests
and foreign policy are no longer separate. This allows for subsidized
profits while the taxpayers are forced to protect huge corporations
against any losses from overseas investments. The argument that we go
about the world out of humanitarian concerns for those suffering, which
was the excuse for bombing Serbia, is a farce. As bad as it is that
average Americans are forced to subsidize such a system, we
additionally are placed in greater danger because of our arrogant
policy of bombing nations that do not submit to our wishes. This
generates the hatred directed toward America, even if at times it seems
suppressed, and exposes us to a greater threat of terrorism since this
is the only vehicle our victims can use to retaliate against a powerful
military state.
But even with the apparent success of our foreign policy and the
military might we still have, the actual truth is that we have spread
ourselves too thinly and may well have difficulty defending ourselves
if we are ever threatened by any significant force around the world. At
the close of this century, we find our military preparedness and morale
at an all-time low. It will become more obvious as we move into the
21st century that the cost of maintaining this worldwide presence is
too high and cutbacks will be necessary. The costs in terms of liberty
lost and the unnecessary exposure to terrorism are difficult to
determine but in time it will become apparent to all of us that foreign
interventionism is of no benefit to American citizens but instead is a
threat to our liberties.
Throughout our early history and up to World War I, our wars were
fought with volunteers. There was no military draft except for a failed
attempt by Lincoln in the Civil War which ended with justified riots
and rebellion against it. The attitudes toward the draft definitely
changed over the past century. Draftees were said to be necessary to
fight in World War I and World War II, Korea and Vietnam. This change
in attitude has definitely satisfied those who believe that we have an
obligation to police the world. The idiocy of Vietnam served as a
catalyst for an antidraft attitude which is still alive today.
Fortunately we have not had a draft for over 25 years, but Congress
refuses to address this matter in a principled fashion by abolishing
once and for all the useless selective service system. Too many
authoritarians in Congress still believe that in times of need, an army
of teenage draftees will be needed to defend our commercial interests
throughout the world. A return to the spirit of the republic would mean
that a draft would never be used and all able-bodied persons would be
willing to volunteer in defense of their liberty. Without the
willingness to do so, liberty cannot be saved. A conscripted army can
never substitute for the willingness of freedom-loving Americans to
defend their country out of their love for liberty.
{time} 2115
The U.S. monetary system. The U.S. monetary system during the 20th
Century has dramatically changed from the one authorized by the
Constitution. Only silver and gold were to be used in payment of debt,
and no paper money was to be issued. In one of the few restrictions on
the states, the Constitution prohibited them from issuing their own
money, and they were to use only gold and silver in payment of debt. No
Central Bank was authorized.
The authors of the Constitution were well aware of the dangers of
inflation, having seen the harm associated with the destruction of the
Continental currency. They never wanted to see another system that
ended with the slogan, ``it's not worth a Continental.'' They much
preferred sound as a dollar, or as good as gold, as a description of
our currency.
Unfortunately, their concerns as they were reflected in the
Constitution have been ignored and as this century closes we do not
have a sound dollar as
[[Page H86]]
good as gold. The changes to our monetary system are by far the most
significant economic events of the 20th Century. The gold dollar of
1900 is now nothing more than a Federal Reserve note with a promise by
untrustworthy politicians and the central bankers to pay nothing for
it.
No longer is there silver or gold available to protect the value of a
steadily depreciating currency. This is a fraud of the worst kind and
the type of a crime that would put a private citizen behind bars. But
there have been too many special interests benefitting by our fiat
currency, too much ignorance and too much apathy regarding the nature
of money.
We will surely pay the price for this negligence. The relative
soundness of our currency that we enjoy as we move into the 21st
Century will not persist. The instability in world currency market
because of the dollar's acceptance for so many years as the world's
currency, will cause devastating adjustments that Congress will
eventually be forced to address.
A transition from sound money to paper money did not occur
instantaneously. It occurred over a 58 year period between 1913 and
1971, and the mischief continues today.
Our Central Bank, the Federal Reserve System, established in 1913
after two failed efforts in the 19th Century, has been the driving
force behind the development of our current fiat system. Since the turn
of the century, we have seen our dollar lose 95 percent of its
purchasing power, and it continues to depreciate. This is nothing less
than theft, and those responsible should be held accountable.
The record of the Federal Reserve is abysmal, yet at the close of the
20th Century, its chairman is held in extremely high esteem, with
almost zero calls for study of sound money with the intent to once
again have the dollar linked to gold.
Ironically, the government and politicians are held in very low
esteem, yet the significant trust in them to maintain the value of the
currency is not questioned. But it should be.
The reasons for rejecting gold and promoting paper are not
mysterious, since quite a few special interests benefit. Deficit
financing is much more difficult when there is no Central Bank
available to monetize government debt. This gives license to
politicians to spend lavishly on the projects that are most likely to
get them reelected. War is more difficult to pursue if government has
to borrow or tax the people for its financing. The Federal Reserve's
ability to create credit out of thin air to pay the bills run up by
Congress establishes a symbiosis that is easy for the politician to
love.
It is also advantageous for the politicians to ignore the negative
effects from such a monetary arrangement, since they tend to be hidden
and disseminated. A paper money system attracts support from various
economic groups. Bankers benefit from the float that they get with the
fractional reserve banking that accompanies a fiat monetary system.
Giant corporations who get to borrow large funds at below market
interest rates enjoy the system and consistently call for more
inflation and artificially low interest rates. Even the general public
seems to benefit from the artificial booms brought about by credit
creation, with lower interest rates allowing major purchases like homes
and cars.
The naive and uninformed fully endorse the current system because the
benefits are readily available, while the disadvantages are hidden,
delayed or not understood. The politicians, central bankers, commercial
banks, big business borrowers, all believe their needs justify such a
system.
But the costs are many and the dangers are real. Because of easy
credit throughout this century we have found out that financing war was
easier than if taxes had to be raised. The many wars we have fought and
the continuous military confrontations in smaller wars since Vietnam
have made the 20th Century a bloody century. It is most likely that we
would have pursued a less militaristic foreign policy if financing it
had been more difficult.
Likewise, financing the welfare state would have progressed much
slower if our deficits could not have been financed by an accommodative
Central Bank willing to inflate the money supply at will.
There are other real costs as well that few are willing to believe
are a direct consequence of Federal Reserve Board policy. Rampant
inflation after World War I as well as the 1921 depression were a
consequence of monetary policy during and following the war. The stock
market speculation of the 1920s, the stock market collapse of 1929 and
the depression of the 1930s causing millions to be unemployed, all
resulted from Federal Reserve Board monetary mischief.
Price inflation of the early 1950s was a consequence of monetary
inflation required to fight the Korean War. Wage and price controls
used then totally failed, yet the same canard was used during the
Vietnam war in the early 1970s to again impose wage and price controls,
with even worse results.
All the price inflation, all the distortions, all the recessions and
unemployment should be laid at the doorstep of the Federal Reserve. The
Fed is an accomplice in promoting all unnecessary war, as well as the
useless and harmful welfare programs, with its willingness to cover
Congress' profligate spending habits.
Even though the Fed did great harm before 1971 after the total
elimination of the gold-dollar linkage, the problems of deficit
spending, welfare expansion and military-industrial complex influence
have gotten much worse.
Although many claim the 1990s have been great economic years, Federal
Reserve Board action of the past decade has caused problems yet to
manifest itself. The inevitable correction will come as the new century
begins, and it is likely to be quite serious.
The stage has been set. Rampant monetary growth has led to historic
high asset inflation, massive speculation, overcapacity, malinvestment,
excessive debt, a negative savings rate and a current account deficit
of huge proportions. These conditions dictate a painful adjustment,
something that would have never occurred under a gold standard.
The special benefits of foreigners taking our inflated dollars for
low priced goods and then loaning them back to us will eventually end.
The dollar must fall, interest rates must rise, price inflation will
accelerate, the financial asset bubble will burst, and a dangerous
downturn in the economy will follow.
There are many reasons to believe the economic slowdown will be
worldwide, since the dollar is the reserve currency of the world. An
illusion about our dollar's value has allowed us to prop up Europe and
Japan in this pass decade during a period of weak growth for them, but
when reality sets in, economic conditions will deteriorate. Greater
computer speed, which has helped to stimulate the boom of the 1990s,
will work in the opposite direction as all of the speculative positions
unwind, and that includes the tens of trillions of dollars in
derivatives.
There was a good reason the Federal Reserve rushed to rescue long-
term capital management with a multibillion dollar bailout: It was
unadulterated fear that the big correction was about to begin. Up until
now, feeding the credit bubble with even more credit has worked, and is
the only tool they have to fight the business cycle, but eventually
control will be lost.
A paper money system is dangerous economically and not
constitutionally authorized. It is also immoral for government to
counterfeit money, which dilutes the value of the currency and steals
values from those who hold the currency and those who do not necessary
benefit from its early circulation.
Not everyone benefits from the largesse of government spending
programs or systematic debasement of the currency. The middle class,
those not on welfare and not in the military industrial complex suffer
the most from rising prices and job losses in the correction phase of
the business cycle.
Congress must someday restore sound money to America. It is mandated
in the Constitution, it is economically sound to do so, and it is
morally right to guarantee a standard of value for the money. Our oath
of office obligates all Members of Congress to pay attention to this
and participate in this needed reform.
Police state. A police state is incompatible with liberty. One
hundred years ago the Federal Government was responsible for enforcing
very few laws.
[[Page H87]]
This has dramatically changed. There are now over 3,000 Federal laws
and 10,000 regulations, employing hundreds of thousands of bureaucrats
diligently enforcing them, with over 80,000 of the bureaucrats carrying
guns.
We now have an armed national police state, just as Jefferson
complained of King George in the Declaration of Independence. ``He has
send hither swarms of officers to harass our people and eat out their
substance.''
A lot of political and police power has shifted from the state and
local communities to the Federal Government over the past 100 years. If
a constitutional republic is desired and individual liberty is
cherished, this concentration of power cannot be tolerated.
Congress has been derelict in creating the agencies in the first
place and ceding to the Executive the power to write regulations and
even tax without Congressional approval. These agencies enforce their
own laws and supervise their own administrative court system where
citizens are considered guilty until proven innocent. The Constitution
has been thrown out the window for all practical purposes, and although
more Americans every day complain loudly, Congress does nothing to stop
it.
The promoters of the bureaucratic legislation claim to have good
intentions, but they fail to acknowledge the cost, inefficiency or the
undermining of individual rights. Worker safety, environmental
concerns, drug usage, gun control, welfarism, banking regulations,
government insurance, health insurance, insurance against economic and
natural disaster, and the regulation of fish and wildlife. Are just a
few of the issues that prompts the unlimited use of Federal regulatory
and legislative power to deal with perceived problems.
But, inevitably, for every attempt to solve one problem, government
creates two new ones. National politicians are not likely to volunteer
a market or local government solution to a problem, or they will find
out how unnecessary they really are.
Congress' careless attitude about the Federal bureaucracy and its
penchant for incessant legislation have prompted serious abuse of every
American citizen. Last year alone there were more than 42,000 civil
forfeitures of property occurring without due process of law or
conviction of a crime, and oftentimes the owners were not even charged
with a crime.
Return of illegally ceased property is difficult, and the owner is
forced to prove his innocence in order to retrieve it. Even though many
innocent Americans have suffered, these laws have done nothing to stop
drug usage or change people's attitude toward the IRS.
Seizure and forfeitures only make the problems they are trying to
solve that much worse. The idea that a police department under Federal
law can seize property and receive direct benefit from it is an
outrage. The proceeds can be distributed to the various police agencies
without going through the budgetary process. This dangerous incentive
must end.
The national police state mentality has essentially taken over crime
investigation throughout the country. Our local sheriffs are
intimidated and frequently overruled by the national police. Anything
worse than writing traffic tickets prompts swarms of Federal agents to
the scene. We frequently see the FBI, the DEA, the CIA, the BATF, Fish
and Wildlife, the IRS, Federal marshals and even the Army involved in
local law enforcement. They do not come to assist, but to take over.
The two most notorious examples of federal abuse of police powers
were seen at Ruby Ridge and Waco, where non-aggressive citizens were
needlessly provoked and killed by government agents. At Waco, even Army
tanks were used to deal with a situation that the local sheriff could
have easily handled.
These two incidents are well-known, but thousands of other similar
abuses routinely occur with little publicity. The Federal police state
seen in the action the Ruby Ridge and Waco hopefully is not a sign of
things to come, but it could be, if we are not careful.
If the steady growth of the Federal police power continues, the
American republic cannot survive. The Congresses of the 20th Century
have steadily undermined the principle that the government closest to
home must deal with law and order, and not the Federal Government.
The Federal courts also have significantly contributed to this trend.
Hopefully in the new century our support for a national police state
will be diminished. We have in this past century not only seen the
undermining of the Federalism that the Constitution desperately tried
to preserve, but the principles of separation of powers among the three
branches of government has been severely compromised as well.
The Supreme Court no longer just rules on Constitutionality, but
frequently rewrites the laws with attempts at comprehensive social
engineering. The most blatant example was the Roe v. Wade ruling. The
Federal court should be hearing a lot fewer cases, deferring as often
as possible to the states courts.
Throughout the 20th Century, with Congress' obsession for writing
laws for everything, the Federal courts were quite willing to support
the idea of a huge interventionist Federal Government. The fact that
the police officers in the Rodney King case were tried twice for the
same crime, ignoring the constitutional prohibition against double
jeopardy, was astoundingly condoned by the courts, rather than
condemned. It is not an encouraging sign that the concept of equal
protection under the law will prevail.
{time} 2130
Mr. Speaker, I will yield back the few minutes I have left because I
plan to complete my special order on this subject on Wednesday evening.
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