The U.S. Constitution: Tool of Centralization and Debt, 1788-Today

Monday, April 4, 2011
By Paul Martin

by Gary North

On a conservative site last week, the editor wrote this:

While the Constitution has been largely ignored over the last 80 years, the document is very real, and its purpose is clear: to limit greatly the powers of the federal government.

Having said this, he went on to a conclusion:

If Congress proves unwilling to force indiscriminate cost reductions on government then it should apply constitutional principles to the budget whereby government functions not enumerated in the Constitution are abolished, privatized, or passed to the states.

When we begin with a myth, we have a tendency to expect miracles. Let me explain.

The Constitution was established in order to strengthen the powers of the Federal government. It strengthened them vastly beyond what the British had attempted to impose on the colonies in the early 1770s.

Before the American Revolution, the British level of taxation was in the range of 1%. There were sales taxes on imported goods, but most people, then as now, bought domestically produced goods. There were taxes on paper after 1765. This affected mainly lawyers and newspaper publishers. By alienating these two influential groups, the Parliament stirred up a hornets’ nest. When professional talkers and writers get squeezed by the government, the public gets an earful. “The end of liberty is nigh!” On the contrary, the end of a debt-free colonial governments was drawing nigh.

Revolutions must be financed. They are always financed with debt and fiat money. Creditors buy the IOUs with good money, then weaker money, and then – at the end of the revolt – worthless money. Then they have a supreme political goal: to get the new government to pay off the worthless IOUs at face value in gold or silver. In the 1780s, it was silver.

The Constitution was deliberately designed to centralize power vastly beyond what the legitimate constitution – the Articles of Confederation – allowed. The Federal government in 1787 was weak. In 1788, it was vastly stronger.

The Rest…HERE

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