Debt, Entitlements, and the Consent of the Governed
By Michael Bargo, Jr.

Everyone is familiar with the traditional connections of money to government. These include granting contracts to persons who make substantial campaign donations, funding entitlements to voter identity groups, and many other abuses.

But the Democratic Party and President Obama developed this connection between money and government farther than anyone else in US history. In order to understand what they did, it’s necessary to review the nature and financial usefulness of our monetary system. Briefly stated, the monetary system creates the value of paper money and its electronic equaivalient as a means of the federal government purchasing products and servicing debt through a government controlled central bank, the Federal Reserve, purchasing the debt issued by the Fedral Government. Unlike barter or gold backed currency, this monetary system introduces the element of time.

That the monetary system introduces time into financing can be easily understood by looking at the terms of a mortgage. A mortgage allows a person to put a down payment, for example twenty percent, on a mortgage loan, then agree to make monthly payments for twenty years or so. The advantage of the mortgage payment plan to the homeowner is that the twenty year value of the homeowner’s income can be borrowed today to purchase a home, giving the homeowner the advantages of home ownership.

But this is not the whole story. This alone doesn’t explain the connection of national debt to the ballot box. President Obama expanded, more than any other president, another, far deeper and more dangerous layer of connection between the monetary system and the control of national government.

Obama’s method was not to seize control of the ballot box but to seize control of the results of the ballot box: the choice of what legislation is funded in the future. Voters are supposed to be able to completely control the funding of policies of national government, but Obama, more than any president before him, took most of that control away by comitting taxpayers to repaying debt incurred to fund current spending. Just as a consumer can personally choose how future income is used today through borrowing, Obama seized control of the will of tomorrow’s electorate by expanding his party’s practice of using time to control legislation.

This concept is so abstract it has largely escaped detection, yet here is the proof: no matter what voters do in the future they are forced to service the debt created by Obama’s party’s choices; and since those choices have already been made and the debt must be serviced in the future, future voters have no opportunity to give their consent. This is not just an abstract theory it is the most real fact of financial and legislative life for Americans. These programs exist, the debt exists, and the debt cannot be wiped away with a vote. If it were, the US would lose its credit rating and ability to borrow. So for now, this setup prevents the voters from reducing the debt. The debt can only be eliminated by being paid down by the taxes of the people.

At first glance it may seem that the concept of debt service over time does not violate voters’ rights. But Scotus has ruled that the value of a person’s vote cannot be diluted, diminished, or impaired. The central issue of the analysis, then, is whether future voters have lost their right to consent to how their taxes are spent when they are forced to support debt incurred to pay for earlier programs.

The Constitution mandates that the legislation passed by Congress must be authorized by the consent of the governed expressed through the ballot box. To guarantee that power comes from the people, the Framers of the Constitution wanted House members to face voters every two years, and Senators every six years; with one-third of the Senate up for reelection every two years. The reason Congress must defer to the “consent of the governed” every two years was explained by James Madison in Federalist No. 37:

“The genius of republican liberty, seems to demand on one side, not only that all power should be derived from the people; but, that those intrusted with it should be kept in dependence on the people, by a short duration of their appointments; and that, even during this short period, the trust should be placed not in a few, but in a number of hands…. A frequent change of men will result from a frequent return of electors; and a frequent change of measures, from a frequent change of men.”

The opportunity to vote for a “frequent change of measures” is denied to voters through their commitment to repay the debt. National debt denies future voters their right to influence legislation in two ways. First, the taxes they pay are wasted to service interest costs for appropriations made years before. Secondly, taxes that go to service debt aren’t available to finance the new policies voters may wish their legislators to enact. Their votes are then diminished, diluted and impaired; and this practice, the Supreme Court has frequently ruled, violates the Constitution.

The national debt indentures tomorrow’s voters to repay money borrowed to finance programs today; so the consent of the governed is also stolen in a similar proportion: if one-tenth of the budget is debt service, that one-tenth of the present legislative power of voters was usurped by a previous Congress. The nation’s republican form of government is nullified by degree as the portion of expenditures devoted to the debt increases.

The Framers were primarily concerned with the distribution of power over the three branches of government. But the Democratic Party found a shrewd way to bypass both the consent of the governed and the checks and balances of the original three branches. Since the will of the people can only be realized through legislative appropriations, past Congresses have usurped the realization of today’s voters’ will by pre-appropriating the funds needed to realize any new legislative policies. Since Democrats are the party of entitlement spending, financing of public sector unions and the bureaucracy, they have intentionally developed and financed this strategy to keep themselves in power. The Framers never envisioned massive entitlements or debt not limited by a limiting quantity of gold.

It would take a revolution in legal thinking for the Supreme Court to apply this thinking and rule unconstitutional the funding of current expenditures by the national debt. But legal thinking does change over time, and the best way to encourage this idea is to discuss it.

http://www.americanthinker.com...of_the_governed.html

This message has been edited. Last edited by: chellim1,

I've discussed the premise of this article with my children.
I told them that the day would come when their generation is so overwhelmed by the debt created by the politicians and votes of their grandparent's and parent's generations that they will simply have to repudiate the debt and say it is immoral and not their responsibility...
The system will collapse when they figure out that they don't have to be slaves to the spending of previous generations of politicians.

The Constitution provides authority to borrow on the credit of the United States. How would a court apply the logic that borrowing is unconstitutional because of the creation of future obligation, when borrowing is explicitly granted to the federal government?

I'm no lawyer, but this argument doesn't hold water to me.

Debt used to be a sin, or akin to sin, a source of shame, to be shunned at all costs and repaid at the very earliest possible time.

Our culture has revised its attitude on both very substantially.

quote:

The Constitution provides authority to borrow on the credit of the United States.

You raise a good point. Of course, borrowing IS Constitutional, but to what extent has been debated almost from the beginning:

The Congress shall have Power To...borrow Money on the credit of the United States....
Article I, Section 8, Clause 2

The power to borrow money is essential to the existence and survival of a national government. In the Founding era, political leaders expected that in peacetime the Congress would craft the federal government's budget so that revenues equaled or surpassed expenditures. Indeed, the Treasury Department strictly complied with a policy of earmarking all revenues for particular government programs. Nonetheless, the nation could not successfully defend itself militarily without the power to borrow quickly and extensively when the need arose. The Framers therefore drafted the Borrowing Clause without an express limitation.

The Borrowing Clause, however, has a practical corollary. The terms upon which a nation could borrow money depended upon its credit standing. George Washington's Farewell Address captures the general sentiment of the times:

As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible: avoiding occasions of expense by cultivating peace, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it; avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertions in time of peace to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear.

Although Federalists and Republicans agreed on the need to maintain the public credit, they diverged considerably on how the borrowing power should be implemented. Indeed, the core differences in the visions of the Federalists and Republicans in the Founding era relate to contrasting views of this power. Alexander Hamilton sought to assure a strong central government by interpreting the Borrowing Clause as authorizing Congress to charter the First Bank of the United States (established in 1791), which maintained federal control over the federal reserves and issued debt instruments that circulated like money. Hamilton viewed large federal issues of debt instruments as an essential stimulant to commerce, providing a source of capital to a capital-poor society, and equally important for revenue collection purposes. The Constitution, however, did not expressly authorize Congress to charter corporations, and the constitutionality of the bank was widely debated.

Thomas Jefferson dismantled much of Hamilton's program. To the Jeffersonian Republicans, a balanced budget reflected a popular desire to limit the size and power of the federal government and to protect states' rights. Jefferson repealed Hamilton's internal taxes (which provided security for the federal debt) and appointed Albert Gallatin as Secretary of the Treasury with a mandate to pay down the federal debt. With a few exceptions, subsequent administrations also prioritized balancing the federal budget, and Andrew Jackson successfully paid down the federal debt in 1834.

Wartime exigencies and economic crises led the country toward the modern interpretation of the Borrowing Clause. A financial emergency that threatened national security during the War of 1812 led to the bipartisan acceptance of the need for federal government control of its reserves through the Bank of the United States, which was held constitutional in Justice John Marshall's expansively written McCulloch v. Maryland (1819). With respect to a federal currency, the Report of the Committee of Detail (debated at the Constitutional Convention) gave Congress the power to "borrow money, and emit bills on the credit of the United States." The delegates voted to strike the power to "emit bills," which strongly suggests that Congress was not authorized to borrow by means of a paper money, although it is clear that interest-bearing debt instruments were permissible. The Union's financial crisis during the Civil War, however, led to the attempt by the federal government to issue and make legal tender a paper-money currency, which was held constitutional in the Legal Tender Cases (1871). Financial problems during the Great Depression led Congress to define what constitutes legal tender. In 1933, a congressional joint resolution prohibited the enforcement of gold clauses in both contracts between the government and individuals and in private contracts, thereby making Federal Reserve notes the exclusive legal tender. The Supreme Court held the resolution constitutional in The Gold Clause Cases (1935).

Legal disputes dealing with the Borrowing Clause today involve two issues. The most litigated issue involves the principle of intergovernmental-taxation immunity. The Supreme Court has held that the Supremacy Clause (Article VI, Clause 2) prohibits state and municipal governments from directly or indirectly taxing the interest income on federal government debt and thereby interfering with the federal government's power under the Borrowing Clause. See State ex rel. Missouri Insurance Co. v. Gehner (1930).

The clause also implicitly requires Congress to maintain the public credit. The Supreme Court has invoked the clause in treating the government like a private party in its contractual dealings and in vesting Congress with the power to contract against subsequent repudiation or impairment of its obligations by future Congresses even in the exercise of independent substantive powers authorized under the Constitution. In Perry v. United States (1935), the Court cautioned that the power to borrow money is

a power vital to the government, upon which in an extremity its very life may depend. The binding quality of the promise of the United States is of the essence of the credit which is so pledged. Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter or destroy those obligations.

In United States v. Winstar Corp. (1996), the Court held, among other things, that contractual obligations of the government would be enforced unless doing so blocked the exercise of one of the government's essential sovereign powers.

Because the Constitution imposes no express limits on the borrowing power, the political branches must decide the issue. As in the Founding era, the question of the extent to which the government should run deficits and maintain a large federal debt are at the essence of contrasting views about the proper scope of the federal government.

http://www.heritage.org/consti.../36/borrowing-clause

I would like to see the court declare progressive taxation to be a violation of the Equal Protection clause.

Unrelated I know. But as long as we're dreaming.

quote:

Originally posted by Fenris:
I would like to see the court declare progressive taxation to be a violation of the Equal Protection clause.

It's a valid argument.
Why should someone pay not just more in total taxation but also at a higher rate simply because they are wealthy?

However, it won't happen.
It's a political question. Just ask John Roberts.

quote:

Originally posted by chellim1:

quote:

Originally posted by Fenris:
I would like to see the court declare progressive taxation to be a violation of the Equal Protection clause.

It's a valid argument.
Why should someone pay not just more in total taxation but also at a higher rate simply because they are wealthy?

However, it won't happen.
It's a political question. Just ask John Roberts.

Perhaps. But it was not that many years ago that everyone would have laughed at a Constitutional mandate to permit same sex marriage. So times can change. And to the best of my knowledge there is no precedent on point.

quote:

Originally posted by JALLEN:
Debt used to be a sin, or akin to sin, a source of shame, to be shunned at all costs and repaid at the very earliest possible time.

Our culture has revised its attitude on both very substantially.

Its not really debt that is the problem, its society's attitude toward it. As you noted, my parents swore off most all consumer debt, and worked relentlessly to pay off the mortgage on the family homestead. They felt it was an obligation to minimize their debt, and to also pay it off as rapidly as possible. Today, society doesn't even view the debt it racks up as a personal obligation anymore, as hiring one of these debt relief lawyers can many times eliminate most if not all of their consumer debt.

The country as a whole has become addicted to living off other people's money, and there no longer exists any real moral or ethical responsibility to live within one's means and/or to repay one's debt. After all, we all deserve the same things, regardless of income, right?

quote:

Originally posted by chellim1:
I've discussed the premise of this article with my children.
I told them that the day would come when their generation is so overwhelmed by the debt created by the politicians and votes of their grandparent's and parent's generations that they will simply have to repudiate the debt and say it is immoral and not their responsibility...
The system will collapse when they figure out that they don't have to be slaves to the spending of previous generations of politicians .

Think of how nice it would be if we learned we don't have to let dead men oppress us.

quote:

Originally posted by darthfuster:

quote:

Originally posted by chellim1:
I've discussed the premise of this article with my children.
I told them that the day would come when their generation is so overwhelmed by the debt created by the politicians and votes of their grandparent's and parent's generations that they will simply have to repudiate the debt and say it is immoral and not their responsibility...
The system will collapse when they figure out that they don't have to be slaves to the spending of previous generations of politicians .

Think of how nice it would be if we learned we don't have to let dead men oppress us.

Particularly, those bastards who tried to guarantee my freedom to speak and worship as I please, carry a gun, and live my life unmolested. They're truly oppressive.

quote:

Originally posted by Fenris:

quote:

Originally posted by chellim1:

quote:

Originally posted by Fenris:
I would like to see the court declare progressive taxation to be a violation of the Equal Protection clause.

It's a valid argument.
Why should someone pay not just more in total taxation but also at a higher rate simply because they are wealthy?

However, it won't happen.
It's a political question. Just ask John Roberts.

Perhaps. But it was not that many years ago that everyone would have laughed at a Constitutional mandate to permit same sex marriage. So times can change. And to the best of my knowledge there is no precedent on point.

The gov't affords you the same opportunity as everyone else to reduce your taxes. You're just not rich enough to do so...

quote:

Originally posted by Fenris:

quote:

Originally posted by darthfuster:

quote:

Originally posted by chellim1:
I've discussed the premise of this article with my children.
I told them that the day would come when their generation is so overwhelmed by the debt created by the politicians and votes of their grandparent's and parent's generations that they will simply have to repudiate the debt and say it is immoral and not their responsibility...
The system will collapse when they figure out that they don't have to be slaves to the spending of previous generations of politicians .

Think of how nice it would be if we learned we don't have to let dead men oppress us.

Particularly, those bastards who tried to guarantee my freedom to speak and worship as I please, carry a gun, and live my life unmolested. They're truly oppressive.

I was referring to FDR, LBJ, Reagan (Hughes amendment) etc. I don't know why you think I meant the founders.

quote:

I was referring to FDR, LBJ,...

Government expands.
Until it collapses of its' own weight.

"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible."
- Justice Janice Rogers Brown

quote:

Originally posted by bigdeal:

quote:

Originally posted by JALLEN:
Debt used to be a sin, or akin to sin, a source of shame, to be shunned at all costs and repaid at the very earliest possible time.

Our culture has revised its attitude on both very substantially.

Its not really debt that is the problem, its society's attitude toward it. As you noted, my parents swore off most all consumer debt, and worked relentlessly to pay off the mortgage on the family homestead. They felt it was an obligation to minimize their debt, and to also pay it off as rapidly as possible. Today, society doesn't even view the debt it racks up as a personal obligation anymore, as hiring one of these debt relief lawyers can many times eliminate most if not all of their consumer debt.

The country as a whole has become addicted to living off other people's money, and there no longer exists any real moral or ethical responsibility to live within one's means and/or to repay one's debt. After all, we all deserve the same things, regardless of income, right?

That's ny point. Attitude has changed dramatically.

The Founders, and most of their succesors through the Greatest Generation, would be horrified to hear on their radio that "You have the right to settle your credit card debt for less than you owe."

quote:

Originally posted by JALLEN:

That's ny point. Attitude has changed dramatically.

The Founders, and most of their succesors through the Greatest Generation, would be horrified to hear on their radio that "You have the right to settle your credit card debt for less than you owe."

Which is what I'm trying to instill into my own children: No matter how many times you hear "you deserve", you probably don't, and the interest will haunt you.

quote:

Originally posted by chellim1:

quote:

I was referring to FDR, LBJ,...

Government expands. Until it collapses of its' own weight. "Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible."
- Justice Janice Rogers Brown

Justice J.R. Brown's assessment is insightful and prophetic. It looks to me like the bolded portion is not far off. I'll wait patiently for my liberation.