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Declaration of Independence 2.0

July 9, 2010 3 comments

A patriotic and prescient reader, Doug W forwarded me the below timely piece that he wrote as a student at 22 (the same age as me) in 1985, and recently revised:

Declaration of Independence – 2.0

Monday, June 14th, 2010


When in the Course of Human Events, it becomes necessary for Individuals to Reorganize the Political Bonds which have connected them with their national government and to assume among the Powers of the Earth, the separate and Superior Station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the Revitalization.

We hold these Truths to be Self-Evident, that All People are created equal, that they are endowed by their Creator with certain Unalienable Rights, that among these are Life, Liberty of the Spirit & Mind, Ownership of One’s Own Productive Efforts, Freedom from Intrusive governments, Economic Freedom of Choice, and the Pursuit of Happiness. That to secure these Rights, governments are instituted among Individuals, deriving their Just Powers from the True & Informed Consent of the Governed, that whenever ANY form of government becomes DESTRUCTIVE to these Ends, it is the Right of the People to Alter or to Abolish it, and to institute New Government, laying its Foundations on such Principles, and organizing its Powers in such form, as to them shall seem MOST likely to effect their Individual Liberty, Economic Freedom & Security, Physical Safety and Spiritual Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for Light and Transient causes; and accordingly all Experience has shown, that Mankind are more disposed to suffer, While Evils (like government encroachment into the private affairs of individuals & businesses and embarrassingly poor government administrative, operational and financial performance) are sufferable, than to Right themselves by Abolishing the forms of government to which they are accustomed. But when a long train of Government Abuses of Power, Usurpations of Individual FREEDOMS, Increasing Financial Extractions, Regulatory Suffocation, and Bureaucratic Ineffectiveness, pursuing invariably the same Object, evinces a Design to reduce them under Absolute Economic, Social, and thus Political DESPOTISM, It is their RIGHT, it is their DUTY to thoughtfully identify select and install truly Honorable Classically Liberal  guards for Their Future Economic, Individual (and thus Societal) Security, and Ecosystem Preservation.

Such has been the patient Sufferance of the People of the United States; and such is now the necessity which constrains us to Restore Our Former Systems of Government. The History of Congresses & Presidents – 1933 to the Present – is a History of repeated Federal Government Expansions, Excesses and Ineptitudes, all having in Direct Result the establishment of Oppressive Economic Control over the People of the United States. To Prove this, let FACTS be submitted to a candid WORLD.

MEMBERS of CONGRESS and PRESIDENTS (1933 to the Present):

-Have, with the best of intentions (and sometimes without), continually tried to Artificially manipulate the Economy of the United States. This manipulation – designed for the purposes of bringing about improved living standards, greater societal cohesiveness, and Domestic Tranquility – Resulted in: an unjustifiably High Level of Taxation, a Schizophrenically Paradoxical and Complicated Tax Code, Astronomically High Levels of Bankruptcy Threatening Government Debt, Increased Risk of Government Debt Monetization Induced INFLATION, Increasing Levels of Government Intrusion into the Lives of Our Citizens, Greater Amounts of Suspicion, Antagonism and resentment between members of different Socio-Economic Groups, and – MOST IMPORTANTLY – a Stagnation of Our Natural Socio-Economic Interaction. All this has been done by Federal Officials who have no stated or inferred CONSTITUTIONAL Authority to operate the Federal Government in such a fashion and who lack sufficient understanding of THE ECONOMIC LAWS OF THE UNIVERSE. These Financial & Economic WEAKNESSES have left Our Union exposed to all the Dangers of Hollow Propagandistic Slogans and Economic, Psychological and Societal Convulsions.

-They have created a situation which has subjected Us to a form of government alien to: the Ideals, Intentions, and Goals that formed Our DECLARATION OF INDEPENDENCE; fueled the Fires of Our AMERICAN REVOLUTION, and are the very Essence of Our Nation’s Birth;

-They have diluted the strength & meaning of Our CONSTITUTION by passing thousands of obscure and complicated pieces of legislation; thus effectively abolishing Our Most Valuable LAWS, and altering fundamentally the form of Our Government from the WISE Designs of the Original Architects of the Government of the United States;

-They have unjustly declared themselves invested with the Power to legislate for Us in All cases whatsoever. Congress with its Inglorious Plethora of committees and sub-committees AND the Executive Branch with its unchecked executive orders, innumerable departments, agencies, commissions, councils, services and offices, work together to actively “HELP” the People of the United States Live THEIR LIVES; the result of this Ungodly collaboration has been an unprecedented proliferation of laws, regulations, and taxes, which have combined to make it Mathematically Certain that even the most Honest Individuals, businesses and local governments amongst Us will break a good number of Federal Dictates;

-They have created a Multitude of new government agencies, commissions and departments and sent hither swarms of faceless distant bureaucrats to Harass Us and TAX OUT OUR SUBSTANCE.  Our alleged representatives have told Us that We must make do with Less Money because they WANT – without genuinely attempting to adapt the government to less revenue – MORE OF OUR MONEY; We are expected to accept – in a Slave-like Fashion – the unspoken fact that WE THE PEOPLE of the United States serve one purpose relative to the Federal Government – TO PAY, Unquestioningly and Involuntarily, for the Services Provide to, the Aggravation Inflicted on, and the Economic Instability Forced upon Us by the Federal Government;

-They have – by using Socio-Economically Divisive Rhetoric, Simplistic and Vague Campaign Slogans and Speeches, Confusing & Equally Meaningless Statistics and by placing party politics and political gamesmanship ABOVE Our Nation’s True Current and Future Needs – incited the development of Factional Divisiveness with Our Society;

-They have created Oceans of DEBT which threaten to Drown the Happiness of Future Generations of Americans and with this DEBT, they have backed themselves into a Financial and Political corner – from which the only logical long-term escape -given their past Taxing, Financial, & Operational Performance Record- will be Higher Tax Extractions & Inflationary Debt Monetization. This monetization will bring forth a Tidal Wave of Inflation; and this Inflation will result in an Unrestrained Destruction of our Wealth and paralyzing distortions of economic activity. Paper Money will – as it has in Our PAST – “Pollute the Equity of Our Laws, Turn them into Engines of Oppression, Corrupt the JUSTICE of Our Public Administration, Destroy the Fortunes of the Millions who have Confidence in it, Enervate the Trade, Husbandry, and Manufacturers of Our Country, and Will Go Far to DESTROY the MORALITY of OUR PEOPLE;”

-And they have – in general – behaved in a manner totally Unworthy of Solemnly Sworn Stewards of a GREAT & FREE ECONOMIC POWER.

This Documentable pattern of Knowingly & Wantonly Shattering the American Dreams of Individual Economic Self Determination and National Prosperity, for reasons of personal political ambition, financial greed, foolishness, and/or weakness of will power, CANNOT BE JUSTIFIED. And for their parts in this Historically Criminal Act, Members of Congress and Presidents – whether active participants or passive acquiescers – WILL NOT BE FORGIVEN by the People of the United States or by the Posterity of the World.

In every stage of these increasing Economic & Regulatory Oppressions, we have PETITIONED FOR REDRESS in the most humble terms; Our repeated petitions have been answered only by repeated Injury and Restrictions. A Federal Government, whose Character is thus marked by every act which may define a Tyrant, is Unfit to Protect and Govern a FREE PEOPLE.

We, the Citizens of the United States of America, Appealing to the Supreme Judge of the World for the Rectitude of Our Intentions, wish to peacefully restore the Limited, Focused and Just scope of the federal government and reestablish national solvency. We further request our state and local representatives to assist us with  the realignment the Federal Government of the UNITED STATES in accordance with the Precepts contained within Our Original DECLARATION OF INDEPENDENCE, Preamble Objectives & Laws contained within Our Original CONSTITUTION, and Principles of Sound FINANCIAL and OPERATIONS MANAGEMENT.  Thus  Establishing Financial, Economic, and Environmental Conditions conducive to allowing our Citizens to Achieve the Lives they dream of based on their own inspiration, abilities, and determination.  And for the support of this declaration, with a firm Reliance on the Protection of Devine Providence, We mutually pledge to each other Out Time, Abilities, Full Effort, and Our Sacred Honor.

This is a revised version of part of a college economics paper on the socially disruptive dangers of a central Government-Gone-Wild in a distant potential future (which seems to be Our Present) America. I wrote this on the night of September 16th, 1985 as a way of venting my frustration with the fact that the U.S. Senate was raising the Federal Debt Limit to $2 TRILLION ($2,000,000,000,000.00). At the ripe old age of 22, I thought this event was a disaster (joke was on me). I haven’t read this in almost 20 years. Given our current economic and political situation, I think its content holds up pretty well. I hope you enjoyed it.  By the way, the Federal Debt Limit is being RAISED to $14.3 TRILLION ($14,300,000,000,000.00); That’s $47666.67 for Each American, all 300,000,000 of us. Plus we as a Nation have a ZERO PERCENT SAVINGS RATE and We (America) are borrowing 1.5 TRILLION a Year ($1,500,000,000,000.00 Per Year or $4,109,589,000.00 per day or $171,232,000.000 Per Hour or $2,853,881.30 Per Minute) From CHINA, O.P.E.C. Countries, RUSSIA, and everyone else we can hit up to finance our spending binge. PLUS, the U.S. Government has “OFF-BUDGET / IMPLICIT LIABILITIES of $54.3 TRILLION ($54,300,000,000,000.00) see GAO-08-241CG – that’s another $174,450.98 Per Person. NOW, Add that to your credit cards, car loans and mortgages and do you really think we’ll ever see a Social Security check that’s actually worth anything?

This document is (was) designed to be a late-20th Century reflection of the precepts contained within the original UNITED STATES DECLARATION OF INDEPENDENCE. It is intended to provoke constructive thought among members of the general population, the academic community, the business community, the U.S. Congress, the Judicial Branch and the Executive Branch. It IS NOT meant to be considered a policy statement of ANY individual or group(s) of individuals.

All I might add to Doug’s piece are that the tensions spoken to are as old as the Republic itself, starting with the debate between Jefferson and Hamilton on the size, scope and purpose of government.  Moreover, it touches on the age-old battle between the state and sovereign man.  The first major expansion of US governmental power in my view was not in 1933 but during Lincoln’s Presidency.

In addition, blame must be laid at the feet of the citizenry as well.  We have condoned government tyranny for any number of reasons.  We have elected these representatives, and most importantly allowed socialist ideas to defeat capitalist, individualist and moral ones.  The politicians reflect the people, and while I would not want to besmirch our people, we are all at fault for where we stand today.  True, man is flawed, and ultimately his institutions will reflect this fact, but the loss of a once great nation largely over the last century was no fait accompli.

Faber: Nations Will Print Money, Go Bust, Go to War…We Are Doomed

May 22, 2010 2 comments

Today the leading Austrian economic think tank, the Ludwig von Mises Institute held a conference at the University Club in Manhattan in which Marc Faber, famed contrarian investor and publisher of the “Gloom, Boom and Doom Report” gave his perspective on the financial crisis and his outlook for the future.  Below are his main points and entertaining quotes:

  • Central banks will never tighten monetary policy again, merely print, print, print
  • Bubbles used to be concentrated in 1 sector or region in the 19th century, but off of the gold standard this concentration has ended
  • “The lifetime achievement of Greenspan and Bernanke is really that they created a bubble in everything…everywhere.”
  • “Central banks love to see asset prices go up,” and their policy reflects their desperation to perpetuate this
  • US housing bubble that Greenspan could not spot (even though he has recently spotted bubbles in Asia) stands in stark contrast to that of Hong Kong in 1997, where prices fell by 70%, yet none of the major developers went bankrupt; this was a result of a system not built on excessive debt like that of the US
  • “You have to ask what they were smoking at the Federal Reserve,” during the housing bubble, as prices were increasing by 18% annually when interest rates started to steadily rise in 2004
  • Over the last couple of years, when the gross increase in public debt has exceeded the gross decrease in private debt, markets have risen, whereas when private debt growth has outpaced public debt growth, markets have tanked
  • The next 3-5 years will be highly volatile
  • Americans must re-think what constitutes a safe asset; in a “traditional” period, one would generally rank from most to least safe assets: cash, Treasuries, corporate bonds, equities, commodities
  • However, last year Economist Gregory Mankiw articulated the position which according to Faber essentially echoes that of Fed #2 Janet Yellen and pervades much of the Fed generally, that “The problem is that people are saving money instead of spending, and we have to get the bastards spending to keep the economy going,” so the key is to inflate the money supply at something like 6% per annum
  • Thus, Faber says “As far as I’m concerned, the Federal Reserve will keep interest rates at 0, precisely 0…in real terms”
  • As such, cash and longterm bonds will be a bad place to hold one’s money; equities are an avenue to preserve wealth (but this is a risky proposition, given the effects of rampant currency depreciation); precious metals are a sound place for wealth preservation
  • As for the US being the most important economy for the world, there is a sea change going on right now; recently car sales in emerging economies (such as Brazil, China) are outpacing those of the US, Europe and Japan; oil consumption in emerging markets is increasing, while in the developed world it is contracting; the whole world does not depend on American consumption anymore – 60% of total exports are now going to the emerging world when one includes E. Europe; the US is still a large economy but it is not growing, while the growth in the emerging world is and will continue to be strong
  • “People still think of emerging market economies as poor cousins, but because 80% of the world’s people are here, in aggregate the consumption is huge.”; these are not saturated markets and they are growing rapidly
  • “Everybody should have 50% of their money in the emerging world, outside the West.”; people should also keep the custody of their assets overseas
  • Contrary to what the talking heads are saying, markets are not out of control, central banks are out of control printing money
  • The drivers of growth in the emerging world will be the urbanization of India and China; stocks won’t necessarily rise in the short term, but there will be significant growth in Asia in the long run
  • The shift in economic power from West to East has been remarkable in speed, largely due to the rapid industrialization of the emerging world and the speed at which information travels today
  • There will be a massive increase in resource-intensive industries and new export markets, met with increased volatility and tension around the world
  • The supply/demand characteristics of oil are great due to the need for oil in China, India, rest of Asia
  • Oil is the top priority for China, as they are now a net importer
  • US has a huge strategic advantage over China given that we have access to our own oil, and that of Mexico, Canada, the Middle East and off the western Coast of Africa, in addition to the ability to travel on the Atlantic or Pacific Ocean; meanwhile, China sources 95% of their oil from the Middle East, and while they are building pipelines throughout Eastern Europe for example, their oil supply points in terms of ports for example are limited, and the US has defense bases surrounding these areas; Chinese subs could sink our boats however; the Russians are also not happy about our forces being in the region, and tensions will grow as the need for natural resources in these nations grows
  • Eventually, there will be war and one will want physical commodities “not paper from UBS or JP Morgan”
  • In war, cities will not offer safety because one can get bombed, water may be poisoned, electricity shut off; instead, one should buy a house in the middle of nowhere/on the countryside
  • The tremendous economic Sophism of the day is that a nation can print its way into prosperity; “If debt and money printing equaled prosperity then Zimbabwe would be the richest country.”
  • “Mugabe is the economic mentor of Ben Bernanke.”
  • Our fiscal situation is much more horrendous than it is made out to be; total debt (public and private) as a percentage of GDP counting unfunded liabilities is an astounding 800% of GDP, more than double that during 1929
  • Sovereign credits in the Western world are all bankrupt, but before bankruptcy governments will print money; US government leaders will try to postpone the hour of truth, pushing the problems off till succeeding Presidents and Congressmen
  • If deficits didn’t matter as many like Economist James Galbraith argue today, why should citizens even pay taxes?  It would make everyone happier if they didn’t
  • Faber is sure that the economists in academia are intelligent and they study the textbooks hard, but they study the wrong textbooks and are totally inconsistent in their philosophy
  • In an environment of money-printing and high volatility that exists in the US and that will be created by future policy, physical gold is the best thing to own
  • Once currency depreciation does take place, stocks may become very cheap, as happened when the Mexican peso depreciated by 95% in the early 80s, as the fund managers invested in Mexican equities completely undervalued them after currency collapse
  • In a nutshell Faber says he is essentially bearish on everything, though he favors commodities (especially physical precious metals and agriculture), owning a house in the countryside, equities in emerging markets tied to resources (especially necessities like water and oil) and healthcare, and most of Asia including especially Japanese stocks
  • There is no means of avoiding a total collapse in the West; at the first train station in 2008, the financial system went bust but didn’t die, at the next station nations will go bust (though this could take 5-10 years or less), but first they will print money as this is the most politically tenable option, and ultimately the world will go to war
  • All of us will be doomed

Bear in mind that Faber of the “Gloom, Boom and Doom Report,” said all of this quite matter-of-factly.

Even if you disagree with his points on the trajectory of the West, it cannot hurt to understand and prepare for the worst case scenario while still hoping for the best.

Modern Day Mutually Assured Destruction

March 17, 2010 Leave a comment

Check out the latest over at Big Government: