Up until recently I had never given much thought to the subject of economics. I never took an economics class in school and my understanding of the subject could be best explained by, “Don’t spend more than you earn.” However, the more I’ve learned about our system of government, and the men who created it, the more I’ve realized that I’ll never understand the extent of what they did unless I gain some insight into money; how it is created, how it is controlled, and how people profit from its exchange.
If I were to ask you to find a single word to describe government, what would that word be? For the longest time if someone had asked me that I’d have said something like tyrannical, or oppressive. Now that I’ve undertaken an effort to learn more about economics I’m inclined to change my opinion; replacing tyrannical with parasitical – our government is a parasite that sucks both the liberty and wealth from those it governs.
Unlike a business that manufactures an item that can be sold to consumers, our government produces nothing; whatever funds it needs to manage its affairs it must take from us in the form of taxes; and when those taxes are insufficient it has to resort to other means to raise revenue.
Taxes come in many forms; some of them apparent and some not so obvious. The tax upon your income is one of the more obvious ones, as you can see the withholdings every time you get your paycheck. Sales tax is another that you can see if you were to look at your grocery receipt every week. There are also taxes you don’t see; such as those levied against imports and exports. There are capital gains taxes; taxes that are levied against the profit you make when selling something, such as your home, stocks, or other securities. Then there are, what I like to call, use of services taxes. These type taxes are typically small, but still there and you can find them on your phone and cable bills; taxing you for the use of the airwaves. Finally there is the most odious of all the taxes, (at least in my opinion), the property tax you pay upon your home.
There are other forms of taxation that I haven’t mentioned, but I think by now you’ve gotten the picture when it comes to how extensively you are taxed. I’ve said it before, and I’ll say it again, if people were allowed to keep all their money until the end of the year, whereupon the government was to send them a bill for all the taxes they owed for the past year, people would revolt. If they didn’t revolt they would at least be asking why government needed to borrow so much money to fund its operations.
The process by which government borrows money is the one area I’m still sketchy on, but I think I have a somewhat rudimentary understanding of how it happens. Government does not just walk into a bank, like you or I do, and say, “Hey, I need to borrow a couple billion dollars to help us get through some tough times, or fund this or that program.” What government does is it sells securities; bonds and treasury notes; which are in effect loans whereby the purchaser gives government X amount of dollars, and is the purchaser is promised that they will either be given dividends, or paid off in Y amount of dollars once those securities mature.
When I was in the military they used to push US savings bonds on us; urging us to purchase them as an investment tool, and out of some sense of patriotic duty. The way a savings bond works is that, say you want a $100 savings bond, you pay $50 for it, and then wait a specified amount of time whereupon you get $100 in return once it matures; giving you $50 in profit. So basically you loan the government $50 and they pay you back $100; similar to how you pay interest rates to a bank for loaning you money for a new house or car. The question is, since government produces nothing it can make a profit from, where does it get the money it pays to those who purchase these bonds and other securities?
If the government spends less than it takes in from taxes then we have what is known as a budget surplus; which can be applied towards paying off those who purchased these bonds and securities; effectively paying down the national debt. If, however, the government spends more than it gets from taxes, then it has to borrow more to pay off those who seek to cash in their bonds and securities; making the whole scheme similar to a Ponzi scheme in which new investors are needed to pay for the returns owed previous investors. Which is also the way Social Security now works; those working today are not saving for their retirement, they are paying for the retirement of those who have left the work force.
Now we get to the point where things get interesting; and a bit scary at the same time. When you go to the bank to take out a loan they take into consideration what collateral you have to offer; either through your property or your income. Banks aren’t going to lend money to those it can’t recoup that money from. Well the same goes for those who loan our government money, they expect something in return for it, and there is always collateral attached to it.
One of the ways in which those who loan money to the government are assured of repayment is through the promise of taxation upon the laboring class; meaning you and I. People believe that after the Civil War they ratified the 14th Amendment to grant citizenship status to the former slaves. That’s one thing the 14th Amendment did, but there is more than one section to that amendment. Section 4 of the 14th Amendment states, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
If you’ll notice, they did not say ‘government debt‘, they said ‘PUBLIC debt‘ – meaning it is debt that we are responsible for paying through taxation. Right now our national debt sits at $26 Trillion and change. Not every person living in this country is a taxpayer; there are kids who are still too young to work, and those who don’t work at all; meaning the number of people responsible for paying that debt is smaller than the total population of this country. Right now, if every taxpaying citizen was told that they must write a check for the portion of the debt they are responsible for, the checks would be written out to the tune of $214,845. Before I retired I was making somewhere around $30,000 per year; meaning that my portion of the debt would amount to over 6 years of my labor. If that isn’t slavery, then I don’t know what is.
There’s another thing about this debt that you may not know; such as who it is owed to. When you’re talking about trillions of dollars worth of debt, a few measly $100 savings bonds just aren’t gonna make that much of a difference. There are many types of bonds and other securities the government sells to raise money; some are short term and some have longer terms before they mature to face value. For instance, a Treasury Bill might mature in as short a time as 6 months, T-Notes may take as long as 10 years to mature; paying a dividend every so often prior to their maturation date.
In any case, a boatload of these bonds and securities need to be sold to finance our government and keep its doors open for service; doing the many things people expect it to do for them. The question is, what does the government put up as collateral when it sells those bonds and securities? Well I’ve already mentioned the future labor of the taxpayers, but there is something else you may not have considered; the country itself. Land, or real property, is the only true measure of wealth. The value of money fluctuates, but those who own property are the true owners of any country.
I want you to think about something the former head of the Bank of England, Sir Josiah Stamp, once said, “Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with a flick of the pen they will create enough to buy it back.” So who owns this massive debt this country has accumulated?
Did you know that foreign investors hold up to 1/3 of our national debt? Six years ago China owned $1.3 trillion of that debt; Japan owned $1.2 trillion, Brazil owned $262 billion, and other countries such as Iran, Iraq, Kuwait, Ecuador, and Nigeria owned chunks of it too. So if the U.S. were to default on that debt, be unable to make even the interest payments upon it, those countries could conceivably claim title to this country, and the future labor of its inhabitants.
That should scare the bejeezus out of you; especially considering the fact that the Congressional Budget Office has issued a statement saying that by the end of this year our national debt will amount to 98% of the entire Gross Domestic Product of the US of A. That means that the money our government has borrowed will equal the entire amount of goods and services provided by the laboring class in America. That’s a staggering amount of money, and the amount government borrows shows no signs of slowing down.
There is something else people do not understand well; that being inflation. If you mention inflation people believe it to be the natural increase in prices of consumer goods and services. While the cost of doing business, paying wages and other benefits may account for some of that increase, the real reason things cost more is because the value of the money we use continues to diminish. One of the definitions for inflation is, ‘a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency.’
Now if you put on your thinking caps, isn’t that exactly what is happening; more money is being pumped into our system; making the money we are allowed to keep less valuable. Maybe an analogy will explain that better. Let’s say you have a government that needs to borrow a million dollars for something. There are X amount of dollars in circulation in the economy, and government proposes to sell enough bonds valued at $1000 each to raise that money. Now if you recall, the sale value and face value of bonds are not the same; they are sold for less than what they are worth upon maturation. So they may have to sell 1500-2000 of these bonds to get the million dollars they needed.
Now, when these bonds mature, how does government pay those who hold them? Remember, government produces nothing it makes a profit from, so it either has to raise your taxes to pay the interest on those bonds, or borrow more money to pay it; which creates a vicious cycle of borrowing just to sustain a system based upon debt. While that cycle continues the amount of money in circulation continues to increase; making the money in your purses and wallets less valuable – inflation; the hidden tax.
This scam occurs at all levels of government, not just the federal government. Election time is just around the corner and if you were to look at your voters guide I’m certain you’ll find at least one bond measure on the ballot; probably more than one. Each of these measures are the government asking for permission to sell bonds to fund this or that function; such as school improvements or services to the needy.
People don’t look at, or understand the consequences of passing these bond measures; they only see the function they are to serve and vote according to their feelings on that issue. Yet if you are a homeowner you should look closely at your property tax bill; you’ll find that there is a list annexed to the value of your property which outlines other fees you are assessed with for paying the interest accrued by the bonds you voted in favor of at any given election cycle. You might think the cause is good, but every time you vote yes for a proposed bond measure you are voting to raise your property taxes.
I’ll bet you didn’t know that before the constitution was amended to grant voting rights to everyone except felons, above a certain age, that you had to be a property owner to vote. One of the reasons that was the case is because the property owners would be the ones to shoulder much of the financial burden of paying for government; therefore they alone were given the vote.
Nowadays, particularly from those on the left side of the political spectrum, you hear the cry of make the rich pay their fair share. Why; because they have more money they should be required to pay more in taxes? What about those who don’t, or can’t work, and whose very existence depends upon government subsidies and benefits; should they get a free ride, not be required to pay their fair share? Do the rich get any more in government services; more bang for their buck?
The whole idea of a graduated income tax which taxes people at a higher rate based upon how much they earn, is pure socialism; it is plundering of one class of society for the benefit of another. It is also why there was a great deal of wisdom of giving the vote only to those who would pay the taxes that funded government; after all it is very easy to vote for government programs when you don’t have to pay for funding those programs out of your income.
The problem is, the rich are often only interested in creating more wealth for themselves. Can you, especially in this Covid depressed economy, afford to buy Treasury Notes and T-Bills worth thousands and hundreds of thousands of dollars? I can’t. But the rich can; particularly those whose jobs lies in the financial markets and banking sectors. To them these bonds are investments, a way to spend X amount of dollars and get Y amount of return on their investment. Inevitably that kind of system breeds both greed and corruption. Here, let me give you an example.
During the Civil War Abraham Lincoln issued greenbacks as a form of currency for the North. Just as the dollar fluctuates in value on the world markets today, those greenbacks fluctuated in value depending upon a multitude of factors; including the North’s wins or losses in key battles.
At the time there were two types of money people could use; specie or fiat. Specie is something such as gold or silver; something tangible with real intrinsic value. Fiat currency, on the other hand, is paper money that derives its purchasing power because the government declares that is has value. The money in your wallet, and the money the ATM gives you when you make a withdrawal, is fiat money; it is only accepted in payment for goods or services because the government has declared it to be lawful currency; it has no real value.
During the war Lincoln needed to raise money to fund his army; so he sold bonds. Now this is where the graft and corruption comes in. Since the greenbacks fluctuated in value, they often traded for less than actual specie money; meaning if you had, say $50 in gold, you could possibly buy up to $100-$200 in greenbacks due to the exchange rate between the two forms of currency.
You could then take that $200 in greenbacks and buy $200 worth of war bonds; which was twice the face value of the gold you had traded for those greenbacks. These bonds accrued interest and often paid dividends along the way; often payable in specie, or gold. Then along came these investors and speculators, and they demanded that upon maturity the government pay off all their bonds in gold. What they had done was manipulate the market and use government to double their investments; along with earning as much as 7% interest while their bonds matured.
Of course, as I’ve already shown, the end result of any government bonds is that the taxpayers end up shouldering the burden of paying for it. With the wealth they accumulate they buy influence in government through lobbyists, campaign contributions, and funding for the two political parties. They own the government and we pay for it through higher taxes and the hidden tax of inflation; yet people think their votes matter.
Our constitution, the one you all say is so gosh darned great, was written by men who sought to establish a system in which they could use its power of taxation and debt to amass vast amounts of wealth; let alone the subjugation of those it called the people.
Take for instance Robert Morris; who is known as the Financier of the American Revolution. At the time of the Revolution the Colonies did not have a Secretary of the Treasury; that came after the constitution when Washington appointed Alexander Hamilton to that position. Morris was responsible for raising, and managing the money which funded the Revolution.
During the Revolution Morris obtained a rather sizeable loan from France to help finance the war; a loan which Morris had deposited into his bank and from which he then loaned the money to the Continental Congress – at interest of course. Morris was such a scoundrel that he wrote to his partner Silas Deane, “It seems to me the opportunities of improving our Fortunes ought not to be lost, especially as the very means of doing it will contribute to the service of our country at the same time.”
Morris was a member of the convention that produced our constitution, along with like minded individuals such as Hamilton, and Gouverneur Morris; no relation. Their goal was not to establish a system which preserved the rights of the governed; rather it was to establish a system that gave government unlimited taxing power, and the ability to create debt; which as I already have shown you increases the wealth of those who own that debt.
Morris was so despised by some that the anti-federalist Samuel Bryan, writing under the pseudonym of Centinel, said this about him, “When we consider the immense sums of public money taken up by Mr. Morris, as commercial agent, to import military supplies, and even to trade on behalf of the United States, at a time when the risk was so great that individuals would not venture their property; that all these transactions were conducted under the private firm of Willing and Morris, which afforded unrestrained scope to peculation and embezzlement of the public property, by enabling Mr. Morris to throw the loss of all captures by the enemy at that hazardous period on the public, and converting most of the safe arrivals, (which were consequently very valuable) into his private property; and when we add to these considerations, the principles of the man, his bankrupt situation at the commencement of the war, and the immense wealth he has dazzled the world with since, can it be thought unreasonable to conclude that the principal source of his wealth was the commercial agency of the United States during the war?“
I hate to be the bearer of bad news, but your government does not care about you; it only cares about maintaining a working class of people that can keep the economy functioning so that they can tax the workers and benefit their crony friends. That is one of the primary reasons we had the Civil War; not because of slavery; although slavery did play into the picture. The primary cause of the Civil War was due to the fact that the Southern States were being hit with the financial burden of paying for the operation of government – up to 80% of it – while most of that money was being spent in the North for the improvement of the Northern States and enriching Northern business interests.
We are but serfs to this system of government; tax slaves who exist to benefit the moneyed interests. You think the FDA, (Food and Drug Administration), exists to serve you? It exists to benefit Big Pharma and all the other conglomerations which produce our food supply. The Department of Defense exists to serve the military industrial complex by maintaining a perpetual state of war; which requires an endless stream of enemies we must ‘defend’ ourselves against.
As any television crime drama will tell you, follow the money. Where the profits are being made in any system; be it political or economical, that is where the power exists; and in our country that power does not reside with you and I; were are mere sheep to be fleeced; thrown table scraps and thanking government for its benevolence. Only a slave thanks government for returning money it stole from them in the first place; and seeing as how many appreciated government handing out their $1200 checks during the Covid crisis, I’d say there are a lot of slaves who bow down and worship those who enslave them.
Well not me; I know who my enemies are, and they are threefold. First there is the government itself which passes the laws that violate my rights, restricts my liberty, and taxes me for whatever purposes it declares are for the ‘general welfare.’ Next there are those who enforce these laws upon us; both at the federal and local levels; and yes I’m talking about law enforcement. If they were defending our rights they would not be harassing and arresting us, they’d be doing it to government officials. Finally, my enemy is an ignorant and apathetic voting public who seeks to gain control of the very system that enslaves them to it. They believe that by voting they can impose their will upon those they disagree with; which is by its very nature, contradictory to equal rights and equal liberty to all.
Lysander Spooner spoke of this fatal belief that government serves the governed when he said, “In truth, in the case of individuals, their actual voting is not to be taken as proof of consent, even for the time being. On the contrary, it is to be considered that, without his consent having even been asked a man finds himself environed by a government that he cannot resist; a government that forces him to pay money, render service, and forego the exercise of many of his natural rights, under peril of weighty punishments. He sees, too, that other men practise this tyranny over him by the use of the ballot. He sees further, that, if he will but use the ballot himself, he has some chance of relieving himself from this tyranny of others, by subjecting them to his own. In short, he finds himself, without his consent, so situated that, if he use the ballot, he may become a master; if he does not use it, he must become a slave.”
Tell me that’s not true when so many of you don’t vote for a candidate because you truly believe they will support and defend your rights; rather you vote for them because you hate the other candidate even more. Choosing the lesser of two evils is still choosing evil; and I refuse to cast my vote, or lend my consent to a system that was designed in such a manner as to allow evil men to hold the reins of power. As Patrick Henry so aptly stated, “Where is the responsibility — that leading principle in the British government? In that government a punishment, certain and inevitable, is provided: But in this, there is no real actual punishment for the grossest maladministration. They may go without punishment, though they commit the most outrageous violation on our immunities. That paper may tell me they will be punished. I ask, by what law? They must make the law — for there is no existing law to do it. What — will they make a law to punish themselves? This, Sir, is my great objection to the Constitution, that there is no true responsibility — and that the preservation of our liberty depends on the single chance of men being virtuous enough to make laws to punish themselves.”
So go ahead, cast your votes come November; just know this, no matter who you vote for, the system wins; and we’ll never see freedom again in this country until that system is abolished. For as long as any system exists that has both unlimited taxing and legislative powers; which can be used by a simple majority of the people to the detriment of the lives, liberty and property of the minority, freedom is tenuous at best, and non-existent at worst.
I simply choose to see the truth staring me in the face; while you choose to ignore and hide from it. I may not be free of its power, but I recognize it for what it is; a system designed from the get go to enslave the people to it; and I choose not to participate in playing the game of selecting from among candidates to decide who will be my master. That’s what separates people like me from the rest of you; we know we’re slaves and you don’t.
In closing I’d like to leave you with the immortal words of Patrick Henry, from his 1775 speech to the Virginia House of Burgesses, “For my own part, I consider it as nothing less than a question of freedom or slavery; and in proportion to the magnitude of the subject ought to be the freedom of the debate. It is only in this way that we can hope to arrive at truth, and fulfill the great responsibility which we hold to God and our country. Should I keep back my opinions at such a time, through fear of giving offense, I should consider myself as guilty of treason towards my country, and of an act of disloyalty toward the Majesty of Heaven, which I revere above all earthly kings.
Mr. President, it is natural to man to indulge in the illusions of hope. We are apt to shut our eyes against a painful truth, and listen to the song of that siren till she transforms us into beasts. Is this the part of wise men, engaged in a great and arduous struggle for liberty? Are we disposed to be of the number of those who, having eyes, see not, and, having ears, hear not, the things which so nearly concern their temporal salvation? For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth; to know the worst, and to provide for it.”
September 27, 2020
~ The Author ~
Neal Ross, Student of history, politics, patriot and staunch supporter of the 2nd Amendment. Send all comments to: firstname.lastname@example.org.
If you liked Neal’s latest column, maybe you’ll like his latest booklet: The Civil War: (The Truth You Have Not Been Told). Life continues to expand for this prolific writer and guardian of TRUE American history.