Thursday, July 16, 2009

There Once Was A Country

There once was a country that went to war for 7 years. In the course of that war, they borrowed heavily and doubled the national debt in 7 years. To remedy this situation, they decided the solution for this was to raise taxes. They did this by taxing imports and by raising sales taxes. In the accommodation of all these tax increases, bureaucracy required the number of government workers to nearly double as well to enforce the new policies. To empower this new bureaucracy, a flurry of new laws and administrative powers and controls were enacted. The subjects of this country chafed at the new tighter controls and stifling national debt. This represented a change in how revenue had been raised and policy had been enforced for over 100 years. Taxation became a central point of contention to the subjects of this country because it threatened the prosperity and autonomy of its subjects.

It is interesting to note that during this time of war the trade balance shifted so that consumers were consuming more imports than they were exporting and that to accommodate this demand credit began to be extended to the consumers very commonly.

An era of peace after the war removed the stimulus of a war economy and brought about a recession in the country. People with debt in all areas of life experienced a credit crunch. The balance of trade still was favoring imports and was rendering the country’s economy more and more dependent on foreign commercial ties and foreign financial policy. That country had tried printing more paper money to finance the large debt but this increased inflation and depreciated the value of the currency. Soon foreign governments did not want the cash anymore. Even as the country’s standard of living rose, citizens in debt grew increasingly suspicious of government motives and interests. In one instance, legal cases were moved from lower courts with juries to federal courts with singular judges to decide their fate because local juries were too sympathetic . Many laws were then interpreted by federal magistrates rather than by local law. Taxes became increasingly dictated from the federal government and slowly the local governments lost their authority to tax and regulate.

After a particularly large abrogation of commonly accepted liberty and addition of a heavier tax, the subjects of this country began to unite against this intrusion into their local economies and started to protest. They petitioned government to repeal the new taxes and restore local authority for their taxation. Groups around the country formed many local protests.

Urban areas were hit the hardest with the taxes. Lots of small businesses were already economically dislocated from the recession and the large supply of cheap imports. The addition of these taxes and regulatory burdens started to undermine the loyalty of the middleclass and businessmen to the government.

In continuing efforts to increase revenue the government fiddled with various taxes including granting national monopolies to certain companies through trade policies and import taxes. The various local governments started protesting these taxes and were refusing to enforce them. The national government stepped up its enforcement and neutered local authority by getting rid of it in certain instances and consolidating power in federal hands and forcing the local governments to comply or be taken over.

When the subjects of this country could not take the intrusion of federal power and intrusion in their lives they finally banded together and threw off the yokes of that Federal government.
Can you guess which country this was and when it occurred? Does it sound familiar? I hope so but for the sake of those from public school I will just say that country mentioned above represents Colonial America from 1756 through 1776.

  • As you contemplate a government that in one year will have more than tripled last year’s deficit. ($485 B in 2008, 1.85 TRILLION in 2009)

  • As you contemplate a government that has taken over banks and car companies

  • As you contemplate a government that is taking over Health Care (tax penalties if you do not provide it, penalties if you do not buy it, taxes to the middleclass and businessmen to subsidize it, rate setting that will destroy private insurance)

  • As you contemplate a government that sacrifices its economy with Cap and Trade to solve a “world problem” that doesn’t exist while the rest of the world laughs and says “we just gained a huge competitive advantage. Stupid Americans are handing manufacturing to us on a platter.”

  • As you contemplate a government that prints cash to fund its expenditures and threatens the nations fiscal soundness with rampant inflation, high interest rates, and high unemployment.

  • As you contemplate a government that taxes the “rich” to give to the “poor” and calls it progressive.

  • As you contemplate a government that grows increasingly unresponsive to the will of the people.

  • As you contemplate a government that decides policies in federal courts rather than in its local governments.

  • As you consider a government conceived in a Christian morality that has abrogated all signs of morality to the point of working against any moral code.

As you consider all these modern travesties consider that the very foundation of this country was formed to protest against them. The hymn title “We all like sheep have gone astray” is a good description of our fall from Liberty. Almost daily I hear another liberty being taken away or proposed to be taken away. I fear Americans will only know that their liberty is gone after it is gone. It literally brings tears to my eyes to think of the liberty we have surrendered away in the name of “social justice”. In reality we are surrendering our liberty in the name of economic equality. This is not what liberty is all about. That’s more what socialism is about. This is the time to stop this liberty decay. Right now I truly hope that history will repeat itself.


Anonymous said...

You do understand that any and all references to colonial American limp because America operated on the Gold standard at that time.

Economics is entirely different now--Apples to Oranges.

Tim Niedfeldt said...

Except for the fact that the colonies did indeed print their own currency in the 1760's until the resulting inflation and worthlessness of it forced England to abolish paper money in the colonies with the Currency Act of 1764. This was a response from the British merchants and bankers who were being paid with money that just became more worthless and depreciated because Virginia was deficit spending to pay their share of war costs. Virginia was the worst offender. A microcosm yes but nonetheless similar. However base economics was hardly my intended focus in the blog.

I understand that monetary policy has changed since colonial America however the economics has not. They same principles play out time and time again. The more important focus is responsibly dealing with fiscal policy. There just happens to be a lot of similarity in how Britain handled its fiscal policy with the colonies and how our current government is operating.

I think its interesting that quite honestly the colonies started a revolution over much less of issues as are being crammed down our throat today and much less liberties being taken away as are now. Yet today we sit and take it. Its just a bit sad to see each day how America is ceasing to be the America it was meant to be.


LutherRocks said...

I am but a stranger here...


Tim Niedfeldt said...

Excellent reminder, Beavis. Thanks!!