The Constitution gives the U.S. too much Power

(Fortunately, the people ultimately have all the power.)

Silver Stock Report

by Jason Hommel, March 12th, 2009


I risk making myself very unpopular writing this essay, but please bear with me.

The truth is self evident to every rational thinker.   The truth is polarizing.  The truth often makes people angry, especially people whose lives and livelihood are set up in ways contrary to the truth.

I hope my presentation is easy enough to digest that it avoids misunderstandings that lead to unnecessary anger and false accusations.  Please read this article in full, before emailing me your discontent. 

The main theme of each Constitutional problem that I will point out is that the Constitution gives the United States too much power.  Also, in each case, a "Constitutional" government need not exercise the powers granted to it by the Constitution, thus there is no need to overhaul the Constitution at all.  What is needed, is to spread these ideas widely.

Sometimes, people think that we who advocate precious metals want to go "back to the Constitution".  Not me.  If the Constitution represents the handcuffs for the government, I'd rather put the government into a straight jacket, and set its feet into concrete blocks!

Understanding the following Constitutional flaws can help us understand how we got into the bad economic situation that our nation is in, and it can also help us to understand how to fix it.    Perhaps in the future, a people or generation may rise up to fix things, and they should at least be headed in the right direction.

DEBT

The greatest flaw, in my opinion, is that the Constitution allows the government to go into debt.  This a problem, because, "the borrower is the servant to the lender", and thus, when the government goes into debt, it is no longer the servant of the people, but it becomes the servant of the moneylenders, and thus, the entire government is instantly overthrown and serves a new master the moment it begins to go into debt. 

Therefore, people who lend money to the government, are actually, in fact, guilty of treason.  While no judge would convict today, the future is another issue.  When things go bad, people tend to rise up and turn against moneylenders in a violent way, from time to time.

Interestingly, the reason the Constitution was created in the first place, is that the new revolutionary government was in debt, and the moneylenders wanted a way to get re-paid, and their lack of re-payment was unjust, just as it was not right for the government to make promises it could not keep in the first place.  It was unfair, and evil was already taking place.  The Constitution was thus born in inequity, or shall I say, iniquity.

Since the lenders wanted to get paid, they wanted a Federal Government that could take money from the people, which is why the government from that point on, started to grow out of control. 

The interesting part was that the men who framed the Constitution were mostly Godly men who knew that the government must be restrained, which is why the constitution is a document of the limits of the power on government.  But limits written on paper don't mean much when the government has an "emergency" and is in debt.

It is important to note, that we are not parties to the contract of the Constitution.  It was a contract between the State Governments.  You and I never signed it, we never agreed to its terms, and was not intended to bind or restrict us; it restricts the Federal Government.

It's been said that the Constitution merely delegates powers.  OK, but certain powers cannot be delegated.  I can't hire a person to steal money from other people for me; that's not a legitimate power or job.

I sincerely believe that a government in debt creates a horrendous kind of evil monster.  People who attempt to extract unpayable usury debts from the government really just force the government to rape the people with taxes more and more.  If the government has to pay back a debt so large that it is unpayable plus 5%, the government will just take 50% from everyone, so there is no possible way to gain.

Lending to the government, in my opinion, is as foolish as trying to extort Superman, you are not going to win.

The government already has another "free pass" to avoid payment, it can merely inflate the currency, which, of course, it is doing, but that also spreads the misery throughout the whole society that the government is supposed to protect.  (Unless, of course, people protect themselves by buying silver and gold.)

Due to the national debt, congress has become a bunch of whinny, incompetent, irrelevant, ninnies, who will argue about $1-2 million pork barrel projects for their home districts, while the Federal Reserve can disperse $2 trillion to their banker buddies, a million times as much, with no discussion, no oversight, no transparency, and no accountability.

I could go on and on about how government debt is bad for society and overturns the government's accountability, but then I would never get to explain why the Constitutional powers to grant patents, levy tariffs, restrict immigration, and engage in price fixing are excessive, arbitrary and economically harmful.

PATENTS - MONOPOLY GRANTS

Article 1:8
"To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;"

Patents are a government granted monopoly.  Our society seemed to think by 1890 that monopolies were bad with the passage of the Sherman Anti-trust Act.  But that act neglected to disband government granted monopolies!  Also, it wrongly attacked successful businesses.

One of the worst abuses of the patent power can be seen with the company Monsanto, which is attacking innocent farmers for using patented plants that may have naturally mixed with the patented crops, as that is nature's way.  I've read that Monsanto is even attacking the right of all farmers to process their own seeds!  This is a great threat to the nation's food supply and is granting Monsanto a dictatorship over the food supply, all due to unjust patent law. 

It is said that innovators need this "patent protection" to be motivated to make money.  On the contrary.  The highly competitive free market is the best motivator of innovation, and patents stand in the way of the free market.

If I am granted a patent over making a certain kind of mouse trap out of wood and springs, how in the world did everyone else lose their property rights to use their wood and springs as they see fit?  Nobody else ever agreed to such a thing, as common sense reveals. 

Patent law never really helps the little guy anyway, since the company with the most money to spend on lawyers or who can tie it up in court the longest will win. 

Furthermore, patents are entirely arbitrary, entirely at the whim of the government patent office and then at the whim of judges, and laws should never be arbitrary and whimsical.

One of the best arguments against patents comes from people in the software industry.  Many sections of code do rather standard things which are already patented.  It's like the wheel itself it patented, but you can't make a car without wheels, just like you can't make certain kinds of software without the code needed to create a button on a web page.  Software patents are mostly just ridiculous, and thankfully, are not often enforced.  But large software companies are forced to get patents, just to protect themselves from being sued frivolously.

Note the running theme here.  A constitutional government does not need to exercise this power to grant patents.  There is nothing "unconstitutional" if the government were to simply stop issuing patents, and let the rest all expire, or stop ruling in favor of all patent holders. 

Note another running theme.  My suggestion does not require the use of force.  Patents, on the other hand, requires using government brutality on people who are totally innocent, such as farmers who "let" bees cross pollinate their fields with patented genetic plants from the next field over! 

The concept of "no patents" is not an attack on the "property rights of patent holders".  Real property rights are being destroyed by patents, and would be protected and enhanced if patents were never granted.

Those who argue the point with me usually come back and say that patents are good for the patent holder.  Of course!  That's exactly the point!  I agree with that.  But that's no counter-argument!  Patents are not good for everyone else! 

Sometimes, they argue that without patents, a certain product would not exist.  But that is a hypothetical guess.  A more brave capitalist might produce them, or even something better.  As it is, only the patent holder can produce the product.  Without patents, anyone can produce the product, which means the product is more likely to be produced, because there are more potential producers.

Sometimes, a person will argue that without a patented medicine, someone they know, might have died!  Yes, but how many more people are now dying, because many other products that we don't even know about, cannot be produced at all, because patent law gets in the way!

Patent Grants stamp out people's freedom to be productive and make whatever they want.

TARIFFS & DUTIES - IMPORT TAXES

Article 1:8

"The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States; "

"To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;"

The power to tax is the power to destroy.  What you tax, you get less of.  If you tax it, you tend to kill it. 

Imported goods already face several uphill battles.  First, the foreign producer has extra transportation costs.  Second, the foreign producer has higher marketing costs, and a steeper learning curve to learn how to market products to a foreign nation.  Third, the foreign producer has currency exchange delays and exchange costs.  Fourth, the foreign producer usually has to deal with a language barrier as well.

I don't like to sell and ship silver outside of the United States for several reasons.  First, it costs more to ship, and thus, product pricing gets too complex.  Second, it wastes time filling out customs forms, and figuring out all the various rules of each foreign nation into which we may want to ship.  Third, wire transfers from foreign nations take too long, up to 3 days, which is an unacceptable delay in my business, and also, if there is a currency exchange required, the customer cannot wire the exact amount.  Fourth, there is a VAT tax on silver in many European nations of up to 17%, which tends to discourage purchases anyway.  Fifth, we've experienced customs officials shipping product back to us.  Sixth, U.S. Post Office insurance often does not cover shipments overseas.  Seventh, if there is a lost shipment, or problem with a customer, what nation has jurisdiction over the dispute? 

The point of my rant is that there are enough difficulties to deal with in international trade.  There don't need to be any artificial barriers to trade, such as import taxes to try to "protect American jobs".  That's a very shortsighted view.  For example, if another nation produces cheaper tires than we can produce here in America, yes, there might be lost jobs in the tire industry.  But the rest of the nation benefits by having cheaper tires.  Cheaper tires mean cheaper transportation.  Cheaper transportation means increased profits for every other business that exists!  Cheaper transportation means that people can live further away from their jobs, in potentially cheaper housing.  The savings and efficiencies just compound enormously. 

But there is a key moral argument.  Property rights.  I own my money.  If it's my money, I have a right to spend it where ever I want.  I never agreed to let the government tell me that I can't spend my money on products made from overseas!

There is another huge benefit if there were no import taxes.  There would be absolutely no need for any sort of trade agreements.  If the U.S. opened the borders to all sorts of goods from everywhere, prices would be lowered for nearly everything.  Furthermore, other nations could also import, if they chose, anything they wanted, so exports from the U.S. would also explode.  Some nations that refused to trade with each other, might end up trading with each other through the U.S.  We would become the world's broker for goods, and end up earning a portion on all that increased business.

All arguments in favor of import taxes are wrong and shortsighted and use false assumptions somewhere in the argument.  Imports do not rely on force.  Nobody is forced to buy any import.  We do not become "dependant" on imports, we are enabled by imports.  Imports do not "destroy jobs", they create and promote them.

Tariffs are the exact opposite of free trade. 

Again, note the running theme.  A constitutional government that has the power to levy tariffs does not need to exercise that power.  My idea is fully 100% constitutional.  A constitutional tariff could just as easily be anything, from a 10% tax to a .001% tax, or even a 0% tax.  Which brings up another point.  Tariffs, by nature, are purely arbitrary, and thus immoral, and unfair.  What makes a 10% tariff fair, and a 9.9% tariff unfair?  The arguments are endless over such things, and totally ridiculous.  Only a 0% tariff is fair, and any other amount also requires force, and the theft of property rights, and impoverishes the entire nation.

One key reason why the U.S. prospered as a nation is that states were unable to levy tariffs on goods from other states, so trade increased.  What then gives us the notion that we should levy tariffs on goods from other nations?

Tariffs stamp out people's freedom to spend their money where ever they want.

IMMIGRATION

If goods should be free to move impeded across borders, how much more so, should people be free to move across national borders?

Article 1:8
"To establish a uniform rule of naturalization"

Nearly all arguments I've ever seen against immigrants are, in reality, arguments against the welfare state.  It is said that immigrants come over and that's bad because they often go on welfare!  That's not an argument against immigration!  It's an argument against welfare!  Welfare is the bad policy!  Allowing immigrants in is not a bad policy!

We are all immigrants!  We all came from the Garden of Eden, and later, we all came from the Mountains of Ararat!  Even "native Americans" came from somewhere else!

Immigrants are generally risk takers; they are more adventurous, more willing to take on the long hours and risks of owning their own business.

Immigrants encourage trade with their home nation; they are more likely to know the languages and customs of both nations, and can more easily spot the trade opportunities that exist between nations.

Whether they do low paying work or high paying work, are good for America, as few here want to do the menial labor, and every worker who does a high paying job creates up to 10 support jobs in surrounding businesses.

People are a blessing, and one of life's greatest gifts.  More people mean more trade, more specialization and a higher division of labor, leading to increased productivity for all of society and higher standards of living for all.

Again, note the running theme.  A constitutional government need not enforce immigration laws.  Immigration laws restricting the numbers of immigrants are completely arbitrary and whimsical, immoral, and unknowable.  Why should 200,000 people be allowed in, but 200,001 not be allowed in?  Such a distinction is totally meaningless, and the debates on such things can be endless, and are foolish.  Furthermore, immigration restriction requires the use of government brutality, to enforce such foolish and arbitrary "people-limits".
 
Even the term we use is hypocritical.  "Illegal immigrant"?    People cannot be illegal.  Only actions can be illegal.  It should be illegal to restrict the movement of people!

Restricting the movement of people is clearly against all notions of freedom, and is clearly incompatible with free market principles.

Deporting people creates a loss of freedom among our national people, as we all need "papers" to prove that we are not illegal immigrants, which is contrary to our legal right to be "innocent until proven guilty".  We are all assumed being guilty of being an illegal immigrant unless we present papers to the contrary when we go to get a job!  Thus, the law is wrong, not us! 

Immigration restrictions stamp out people's freedom to move where ever they want, and make instant criminals out of everyone, until you can prove where you were born, (unless you are the President, of course).

PRICE FIXING

Nearly everyone who has studied any portion of free market economics knows that government price fixing is wrong, and incompatible with elementary free market theory.  But the Constitution has granted the government the power to fix the price of gold and silver, by regulating the value thereof. 

Article 1:8
"To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;'

Clearly, a constitutional government need not exercise that draconian price fixing power to regulate the value of gold and silver coinage.  This article gives the government the power to set and fix the ratio of the value between silver and gold, and such prices were fixed for most of the early history of our nation at 15:1, so that 15 ounces of silver were worth 1 ounce of gold.  This was similar to what other nations did at the time, having similar ratios, so it should not be surprising that the men of that era simply granted to our government these typical governmental powers. 

But such price fixing always leads to trouble, and it seemed nobody could figure it out.  When the market price for silve was higher than the official ratio, people held the silver and dumped gold.  So the treasury would fill with gold.  And when the market price for gold was higher than the official ratio, then people would hold gold and dump silver, and the government treasury would fill with silver, all according to Gresham's law.

Funny thing is that Gresham lived 200 years prior to our Constitution, but still, it seems the men who made our constitution just could not figure out the solution to that monetary problem.

The solution is actually rather easy.  The government should act according to Gresham's law, until neither their own gold or silver is overvalued, and should attempt to maintain an equal value in both gold and silver.  Thus, if the government has 50 ounces of silver for every 1 oz. of gold, but the value in the marketplace is 70:1, then the government should attempt to acquire silver until it has about 70 ounces of silver for every one of gold.  Doing this would, of course, drive up silver prices, and thus reduce the ratio in the process, so that maybe a balance would take place at the 60:1 ratio, at which point the government would stop buying silver, until the ratio changed again.  In such ways, the government would always be dumping the overvalued metal, and acquiring the undervalued one, and this buying and selling would also act to keep the market prices between the two much more stable, yet still freely changing, which would be good for everybody, and would be completely non-manipulative.

Again, note the running themes.  A government with the power to regulate the value of gold and silver coinage, need not engage in foolishly destructive price fixing.  Again, price fixing requires force, and steals property rights of people who dare to trade at prices that are outside that of government decree.  Government thugs would be forced to use government brutality against people to traded on the "black market" at unregulated prices.

Again, a price fix is totally arbitrary, and thus pointless.  People could argue endlessly over whether a 15:1 ratio is best, or a 14.99:1 ratio is best, and the entire argument is totally pointless, and impossible to determine!  The only honest method is to avoid price fixing completely.

Price fixing removes people's freedom to trade.

Note another running theme.  All of these bad powers granted by the Constitution to the Government are in Article 1, Section 8.  Funny they are grouped together so closely.

Unfortunately, I can't conclude this article by saying that you should go out and vote for politicians that understand these issues.  The unfortunate thing is that in our era of big oppressive government and government schools, almost nobody alive today understands all these things, and very few politicians.

I supported Ron Paul for President, but even he has differing opinions on immigration.  Another powerful leader in the freedom movement is Devy Kidd, and she differs on import taxes.  Ayn Rand wrote in support of patents.

It may take a generation before these things are more widely understood and accepted as self-evident truths, and they might never be applied in my lifetime, and I hope to live another 50 years. 

And perhaps these ideas won't be implemented by the U.S., but perhaps some other nation.

Or, perhaps our own government will collapse and be radically be changed as it continues to destroy the currency through Trillion dollar bailouts.

But the power of these ideas is not necessarily about trying to implement them nationally. 
The power is in living them personally.  For example if you know that the government is going to restrict free trade in one of the ways above, you know in advance that it's not going to work, and thus, you will be better able to predict the national economic future, and thus adapt on a pesonal level.  And if you can see the trends of truth increasing, and the power of government force failing, then you might want to leave industries that rely upon failing government monopolies for success. 

In my own life, I try to avoid debt.  I have avoided going into a business that would require any patents or copyrights.  I have created my business processes to work when prices are changing.

For example, I understand that some other bullion dealers are dishonest, having long wait times.  It's probably best that I just deliver silver faster, and let the chips fall where they may.  Those who are failing will probably fail, and those who can successfully deliver will find increasing success.

Let me simply conclude with something simple and memorable.

The government's job is to punish evil; not create evil, or be evil.

Our responsibility is the same.  And if the government is evil, well, then we have quite a responsibility.

But the best way to punish evil is not through force, but to outcompete it in the market!

Silver and Gold are outcompeting Government paper money, and as government paper fails in the market, government evil will have a chance to be greatly curtailed.

People with real money can create freedom for themselves and others.  Today's silver investors will be tomorrow's power bearers.  Hopefully, we can use that power wisely to help create more freedom and prosperity in the world, as silver becomes money again.



Sincerely,

    Jason Hommel