No Budget, No Freedom

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Jonathan Mayhew, via wikimedia commons.

There are rallying cries from the American revolutionary period which are still axiomatic in American Society.  One was apparently coined by Jonathan Mayhew in a 1750 sermon, “Discourse Concerning Unlimited Submission and Non-resistance to the Higher Powers“.  It is, “No taxation without representation.”  Similarly, James Otis is often credited with the phrase, “Taxation without representation is tyranny.”  It is claimed that Otis used this phrase in his legal argument against the Writs of Assistance.

These phrases are unquestionably correct in a free society, but what is it that makes them true?  What are the characteristics of taxation without representation  that make it tyrannical — and how do these principles apply to today’s American society?

Before proceeding, it is important to understand a basic fact.  It is tempting to reverse the statement, “taxation without representation is tyranny” and conclude that “taxation with representation is not tyranny”.  Wrong.   The truth is that we can have taxation and representation and tyranny, all at once.  A representative government, by itself, is no guaranty of freedom.

To understand what makes taxation without representation tyrannical and oppressive, we must look deeper.  I think there are two primary aspects that make taxation without representation objectionable.  The first reason, rather obviously, is that if we have no representative, then we have no voice in determining the size of our taxes.  What is to prevent a tyrant from even setting our taxes at one hundred percent – from taking everything?  The second facet is related, but subtly different.  It has been said that today’s government spending is tomorrow’s taxation.  If we have no representation, then we have no voice in how our money gets spent.  We have no voice in today’s priorities or in the size of tomorrow’s taxation.

In this essay, I argue that there are three aspects of American society which conclusively demonstrate that in a fundamental way, our society has left the realm of financial freedom behind and is traveling steadily in the direction of fiscal tyranny.  These factors are the long-standing absence of a federal budget, out of control federal debt, and inflationary federal reserve monetary policy.  We will look at each of these factors in light of the underlying reasons: our voice in determining the size of our tax, and our voice in determining how our money will be spent.

The Federal Budget

When the representatives of the people can’t be troubled to pass a budget, do we have voice in how our money is being spent?

The last time a full federal budget was signed into law was in 1997, during the Clinton administration.  Since then, we’ve had nearly four years of Clinton, eight years of Bush, and nearly four years of Obama.  Sixteen years without a full budget.  The last time that even an Omnibus spending bill was signed was in 2009.

In the time since 1997, my fifth grade son has been born, learned how to walk, to talk, to ride a bike, to read, write, add & subtract, multiply and divide.  And he has learned about the Constitution and the Declaration of Independence, and even the phrase “no taxation without representation”.  In all that time, the supposed representatives of the people have not implemented one single budget.

Between 1997 and 2009, through the use of the omnibus spending bills, the congress had already ceded part of the people’s spending authority over to the president.  After 2009, the congress has almost completely silenced us.  Through the use of rubber-stamped continuing resolutions and debt ceiling increases, government funding is now procured on “autopilot”.  The people’s voices are held hostage to the threat of chaotic government shutdowns.

In my opinion, depriving the people of their voice over how their money gets spent by refusing to create a budget is every bit as tyrannical as doing so through taxation without representation.

Out of Control Deficit Spending

Which brings us to debt spending.  In the Declaration of Independence, Jefferson wrote that, ” Governments are instituted among Men, deriving their just powers from the consent of the governed”.  We are Sixteen trillion dollars in debt – 51 thousand dollars for every citizen, including those under eighteen – 141 thousand dollars for every tax payer.  Today’s debt determines tomorrow’s taxation.  During the next year, today’s seventeen year-olds will become responsible for repaying that debt .  What consent have they given to be taxed to pay for their parents expenditures?  In fact, this is precisely the sort of taxation without representation that our ancestors resisted.  Our society has turned our children into indentured servants.

In Common Sense, Thomas Paine wrote: “‘If there is to be trouble, let it be in my day, so that my child may have peace.”  In contrast, through continued and immoral deficit spending, our society is saying “If there is to be trouble, let it be in my child’s day, so that I may remain comfortable.”

And now comes news that Treasury Secretary Geithner thinks we should completely eliminate the federal debt limit.  It’s not enough that our children are deprived of their voice in determining their own level taxation, but the ruling class thinks that our citizenry should be further deprived of our last remaining control over how our money is spent.

Like the absence of a budget, our government’s deficit spending is just as oppressive towards our children as the stamp act and tea tax were to our ancestors.

The Federal Reserve

“The Congress shall have Power … To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;”, US Constitution, Article I, Section 8

It is a principle of fiduciary trust that a power, once delegated, cannot be redelegated by the trustee.  The people delegated the power to coin money and regulate its value to the congress.  Without a Constitutional amendment, the congress cannot delegate this power to a private/public quasi-governmental central bank.

King Charles I, from the National Portrait Gallery, via Wikimedia Commons

But what has this got to do with taxation?  Federal reserve inflation is actually a creative variant on a very old tyrannical ruse.  It is said that in England, during the first half of the 1600s, the parliament denied a tax increase request which was made by King Charles I.  Charles’ response was to reduce the size of a “jack”, which was a measure of whiskey.  His idea was that people would still drink the same amount of whiskey, so if the jack became smaller, then more jacks of whiskey would be sold.  Since whiskey was taxed by the jack, this would result in higher revenues for the king with no change to the existing tax law.  Charles was ultimately beheaded as a tyrant.

When the federal reserve prints money, it is playing a similar shell game.  All else being equal, existing dollars in circulation are devalued by an equivalent value to the dollars printed.  That value is captured by the central bank, then doled out to politically connected bankers.  By running this scam during the last century, the federal reserve has captured and redistributed more than 95% of the value of the 1913 dollar.

When the value of our money is taken from us under force of law without any vote or other action by our elected representatives, what can this be if not taxation without representation?  Apparently, today’s American citizenry isn’t quite as smart as the English peasants were in the 1600s.

Conclusion

All of these abuses are not actually new.  The federal reserve was launched in 1913.  The people’s loss of control over deficit spending begins in a World War I measure which created the debt ceiling so that a new authorization was not needed for every specific expenditure.  As is so often the case, the emergency grant of power was not revoked when the emergency ended.  The abdication of the responsibility to create a budget is only the latest in a long, slow, continuous erosion of freedom.

As they say, though, the first step is to recognize the problem.  The recent election demonstrates clearly that American society at large has not even made this step.  We remain in denial.  If our children are to be saved from servitude, then an intervention is necessary.

The absence of a budget, by itself, isn’t necessarily a Constitutional issue.  But when it is coupled with deficit spending on unconstitutional programs, it becomes a tool of the anti-constitutional tyrant.  In contrast, the federal reserve is a direct affront to the authority of the people to coin money and regulate its value through their representatives in the congress.

Once we recognize the problem, the solution is simple — but not easy.  The solution is to follow the Constitution.  If spending were limited to Constitutional purposes, there would be no deficit and creating a budget would not be so controversial and challenging.  It must be recognized that maybe the progressives are right and there are parts of the Constitution that need to be updated for modern times, but if so, that’s what the amendment process is for.  We’ll never know if we continue to allow the ruling class to ignore the Constitution and stretch its meanings in absurd and limitless ways.  To end the financial tyranny, we must restore the rule of Constitutional law.

Steve Palmer is the State Chapter Coordinator for the Pennsylvania Tenth Amendment Center.

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