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George Washington Quote

To preserve the liberty of our country ought to be our only emulation, and he will be the best soldier, and the best patriot, who contributes most to this glorious work, whatever his station, or from whatever part of the continent, he may come.

ideas > Who is the real problem?

Who is the real problem?
I think that most people would agree that monopolistic power or centralized powers of any kind are dangerous to individual freedom. Look at the reaction people have when gasoline prices rise, because of the concentration of power in the hands of several oil companies. Even though these companies are not monopolies, the venom directed towards them over the past few years is rather obvious. That is why I am amazed at the lack of venom directed at the largest concentration of power that Americans face today, their strong federal government. In many respects, the federal government acts like a monopoly, dictating to whole industries their pricing structure. From farm subsidies, to taxes on excessive profits for oil companies, to protections for unions and labor, to controlling much of education via the public schools, even controlling the financial system of America via the Federal Reserve Bank, to a million other coercive practices that affect Americans in the wallet, the federal government is clearly the largest, coercive, monopolistic force in this nation. Yet, there is no outrage comparable to that spent on oil companies. I am baffled by this reaction. It would seem that if Americans are so anti-monopoly and against centralized power, they should be outraged at the size of and the power wielded by the federal government. Clearly the government has a much greater economic effect on the American public than the oil company could ever. From the large amount of taxes taken from your paycheck everyday to the regulations that all businesses must bear to the billions of dollars spent on pork barrel projects to endless wars created by the federal governmentís inability to protect our borders, when will the American people realize that the problem isnít the oil company, or health insurance companies, or take your pick of from any industry that your current Congressman is targeting. The real problem is the federal government. The government does so many things it shouldnít, that it canít do what it should well. I challenge you to name one thing the government does well. It is near impossible. The government does many things average to poor, but nothing is done well. And why is that, because it acts like a monopoly in most things that it wields its power in. If we can all agree that monopolies or centralized power is bad, then why do we continue to support this federal government and its wasteful ways?

People are afraid of change. Things have been this way for several decades now and to change them would leave many people uncertain about their future. The current economy is driven to a large percentage by direct and indirect government spending. Millions of Americans work directly for the government, non-profits tied to the government, or industry supported by the government. But fear should not cause us to ignore one simple fact. Government spending and private sector spending are not equal. One is better than the other and to show you this, letís me use an example. Letís say a business has one million dollars to invest in whatever it would like. What would the business generally invest in? It would look to invest its money in a productive capacity, or in producing something that people want. In the end, there would be more goods that people would want and the more goods for people to have, the higher the standard of living. Letís say that the government has one million dollars to spend. Typically, how does the government spend this money? It spends it by giving it to people, sometimes for free and sometimes with strings attached in the form of a grant. But the main motivation of the government is not to invest the money in the most productive way, but to invest it in such a way that will lead to the election of those who are in power. This type of investment will not lead to more goods that people want, which will not improve the standard of living of everyone. Now over time, the people will become restless because they want a higher standard of living, so they will naturally turn to the government and the government will extract more and more money from the people as they promise them a higher standard of living, but the exact opposite will happen. The government will take the money that businesses and people would normally invest in productive ventures and spend it on unproductive, vote getting projects. This will lead to fewer goods that people want produced, which will lead to a lower standard of living. The cycle will continue until either the people wise up or the government is overthrown by an angry citizenry. I think that history will bear out that usually the latter happens. The point of this example is that fear should not make you afraid of change away from government largesse and spending. Either you change it now while you can and vote for leaders who will shrink government, or you watch your standard of living decline and wonder where the good times went. The one thing that is certain is that government spending is not the same as private spending. They are not equal. I, myself, vote for change before it is too late. No country has ever survived the disaster of large government spending and centralized planning that it entails.

It is clear to me that we have a problem with the federal government and it has largely come about for two reasons. First, America was changed at the beginning of the 20th century. Americans, at that time, bought the siren songs that politicians sang to them that large government spending and interference in the economy would solve their problems. Second, the government and its elected leaders have ignored the Constitution for many years.

Letís deal with the changing of the role of the American government in the early 20th century. Three very important events happened to America between 1909 and 1913. First, the Federal Reserve Bank was created. This private bank would now be charge of the printing of money and therefore would control the lifeblood of the American economy, money. Instead of a democracy of the economy, we now had a monopoly over the American financial system. Second, with the 16th amendment, taxation on personal income at any percentage was allowed. Before the 16th amendment, Congress had to tax peopleís income essentially equally, which was very difficult. With the 16th amendment, came the progressive income tax structure, which basically allowed Congress to tax you up to 100 percent of your income. If that isnít scary, I donít know what is. At one point in recent American history, the highest marginal income tax rate on Americans was over 90 percent. Allowing the federal government to tax income directly and progressively essentially gave the federal government the power to control people through economic means. Third, senators were now directly elected by the people. It used to be that senators were elected by the state legislators, giving the States power to influence the federal government. Now the states would be exposed to an ever expanding federal government, as there only way to directly affect it was now taken away. Together, these three acts made it possible for the federal government to become the monster that it is now. There is not one aspect of our lives that isnít touched by the federal government and they want more even as we speak.

Letís talk about the ignoring of the Constitution next. The founding fathers recognized that the greatest threat to individual freedom was centralize political power. The founding fathers were men who studied history and understood this simple principle, that man cannot be trusted with power. So they set out to construct a system of government that would decentralize the power enough to counter manís natural tendency to abuse power and spread tyranny over those subjected to this power. If you need a modern day example of this, look to Venezuela. President Chavez has recently proposed that the Constitution be amended to make him president for life and that people should worry. He stated that democracy is not in danger. Scary, isnít it? So the founding fathers created a federal government split into 3 branches. Each branch had to work together to get things done and each branch held some sort of check over the other branches power. To ensure that the federal government never became too big, the founding fathers did two things. They spelt out directly the things the federal government could do and then gave all other powers to the states to execute. Then they gave the federal government the power to tax people, but all people had to be taxed equally. In essence, it was a flat tax. The beauty of a flat tax is that the federal government cannot tax people too high because the poor and middle class bear most of the burden of this kind of tax. So it naturally limits the size of the federal government. As you can see, these two protections have been either ignored or amended in the Constitution. The federal government pretty much does what it wants to do. The states are not coequals, but are constantly looking to the federal government for money like a drug addict looks to their drug dealer for drugs. Hawaii is notorious for this. In fact, many people that I speak with often say that Senator Inouye is such a great senator because he brings the federal money back to Hawaii. I am disgusted by it, because I realize that the states are weak and no longer coequals. The states need to assert their greatness in Washington. Why be subservient? Why not stand up for your rights under the Constitution? Be proud once again.

So as we can see the federal government has become something it was never intended to be. The American people have been duped by the sweet songs of politicians and they are being duped today with promises of universal health care, social security, consumer protection, mass transit, and on and on and on. It is a sad state of any nation to watch so many people passively watch their freedom slip away as they demand or watch as the federal government does more and more of their living for them.

For me, the question becomes what then is the proper role of government? I can best explain by using an example. Letís pretend that life is like a basketball game. We, the people, are the players in this game. The referee is the government. The players are the ones that normally make the rules (the Constitution) of the game. After all, the game is for the players, not the referees. The minute it is for the referees is the minute that most players would just walk away and find another game. The referees, then, are to officiate the game according to the rules set forth by the players. So this game is going along just fine as the referees officiate the game according to the rules set forth by the players. Then one referee gets an idea, that player over there is too short or too slow or doesnít quite fit in, so letís ignore the rules and call the game to favor these underprivileged players. How do you think most of the players would react? They would be upset, incensed, and tired of the favoritism show them. Once the referees start showing favoritism to one particular player or group of players, then the game will lose its energy and its fun. The rule book hasnít changed, but the way the game is called has changed, all in the name of making up for some perceived disadvantage. The game has been ruled for most of the people and even the minority as they have become beholden to the refs for special treatment. They no longer have to work harder or smarter to get their shot off. They will just rely on the refs. The point of this story is to illustrate that the proper role of the government is to call the game by the rules, which are set forth by the people. It is not to call the game however they want or by whatever rules they feel the game should be called by. The governmentís job is to referee the game fairly, meaning that everyone receives the same treatment. Itís that simple. If the government chooses to call the game any other way, the majority of the players or people will be disenfranchised, angry, and upset and the game will be destroyed for all involved, except for the referees who get the enjoyment of controlling the game and the people involved.

I began this article with a simple fact, that most people are incensed about monopoly in business, but are calm to mildly upset about the monopoly of government and the truly strong federal government that we have today. The federal government does more to ruin your economic life than an oil company or Wal-Mart could ever dream of. So my challenge to all Americans is to wake up and look at the world as it really is, not as you hope or wish it was. It really is a country run by the federal government. Think about who controls most of your paycheck. Who requires you to have car insurance, house insurance, mortgage insurance, health insurance, register your car, your business, and million other little things? And then honestly think about what you get out of this. If the government take 20-40 percent of your income, donít you think that there should be little crime? Donít you think the borders should be secure? Donít you think that roads should be smooth all the time? Donít you think that our infrastructure would a little nicer? If you answered yes to any or all of these questions, then you really should be calling your elected officials now and demanding answers to where your money is going and you really should start looking at the government not as the solution, but as the problem, which it really is. With the rise of government spending and government power, has your life become easier economically to live? If you answered no, then why do you think that is?
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