Ron Paul Introduces the Private Option Health Care Act

Statement of Congressman Ron Paul
United States House of Representatives

Statement Introducing the Private Option Health Care Act

May 27, 2010
Madam Speaker, I rise to introduce the Private Option Health Care Act. This bill places individuals back in control of health care by replacing the recently passed tax-spend-and-regulate health care law with reforms designed to restore a free market health care system.

The major problems with American health care are rooted in government policies that encourage excessive reliance on third-party payers. The excessive reliance on third-party payers removes incentives for individual patients to concern themselves with health care costs. Laws and policies promoting Health Maintenance Organizations (HMOs) resulted from a desperate attempt to control spiraling costs. However, instead of promoting an efficient health care system, HMOs further took control over health care away from patients and physicians. Furthermore, the third-party payer system creates a two-tier health care system where people whose employers can afford to offer “Cadillac” plans have access to top quality health care, while people unable to obtain health insurance from their employers face obstacles in obtaining quality health care.

The Private Option Health Care Act gives control of health care back into the hands of individuals through tax credits and tax deductions, improving Health Savings Accounts and Flexible Savings Accounts. Specifically, the bill:
A. Provides all Americans with a tax credit for 100% of health care expenses. The tax credit is fully refundable against both income and payroll taxes;
B. Allows individuals to roll over unused amounts in cafeteria plans and Flexible Savings Accounts (FSA);
C. Provides a tax credit for premiums for high-deductible insurance policies connected with a Health Savings Accounts (HSAs) and allows seniors to use funds in HSAs to pay for medigap policies;
D. Repeals the 7.5% threshold for the deduction of medical expenses, thus making all medical expenses tax deductible.

This bill also creates a competitive market in heath insurance. It achieves this goal by exercising Congress’s authority under the Commerce Clause to allow individuals to purchase health insurance across state lines. The near-monopoly position many health insurers have in many states and the high prices and inefficiencies that result, is a direct result of state laws limiting people’s ability to buy health insurance that meets their needs, instead of a health insurance plan that meets what state legislators, special interests, and health insurance lobbyists think they should have. Ending this ban will create a truly competitive marketplace in health insurance and give insurance companies more incentive to offer quality insurance at affordable prices.

The Private Option Health Care Act also provides an effective means of ensuring that people harmed during medical treatment receive fair compensation while reducing the burden of costly malpractice litigation on the health care system. The bill achieves this goal by providing a tax credit for negative outcomes insurance purchased before medical treatment. The insurance will provide compensation for any negative outcomes of the medical treatment. Patients can receive this insurance without having to go through lengthy litigation and without having to give away a large portion of their awards to trial lawyers.

Finally, the Private Option Health Care Act also lowers the prices of prescription drugs by reducing barriers to the importation of Food and Drug Administration (FDA)-approved pharmaceuticals. Under my bill, anyone wishing to import a drug simply submits an application to the FDA, which then must approve the drug unless the FDA finds the drug is either not approved for use in the United States or is adulterated or misbranded. This process will make safe and available imported medicines affordable to millions of Americans. Letting the free market work is the best means of lowering the cost of prescription drugs.

Madam Speaker, the Private Option Health Care Act allows Congress to correct the mistake it made last month by replacing the new health care law with health care measures that give control to health care to individuals, instead of the federal government and politically-influential corporations. I urge my colleagues to support this bill.

Ron Paul: Mental Health Month

SPEECH OF
HON. RON PAUL
OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
MONDAY, MAY 24, 2010
Madam Speaker, I voted against H. Res. 1258 designating the month of May as National Mental Health Month to draw attention to the threat to liberty posed by proposals to perform mandatory mental evaluations of all schoolchildren without parental consent.

The New Freedom Commission on Mental Health has recommended that the federal and state governments work toward the implementation of a comprehensive system of mental-health screening for all Americans. The commission recommends that universal or mandatory mental-health screening first be implemented in public schools as a prelude to expanding it to the general public. However, neither the commission's report nor any related mental-health screening proposal requires parental consent before a child is subjected to mental-health screening. Federally-funded universal or mandatory mental-health screening in schools without parental consent could lead to labeling more children as "ADD" or "hyperactive" and thus force more children to take psychotropic drugs, such as Ritalin, against their parents' wishes.

Too many children are suffering from being prescribed psychotropic drugs for nothing more than children's typical rambunctious behavior. According to Medco Health Solutions, more than 2.2 million children are receiving more than one psychotropic drug at one time. In fact, according to Medico Trends, in 2003, total spending on psychiatric drugs for children exceeded spending on antibiotics or asthma medication

Many children have suffered harmful side effects from using psychotropic drugs. Some of the possible side effects include mania, violence, dependence, and weight gain. Yet, parents are already being threatened with child abuse charges if they resist efforts to drug their children. Imagine how much easier it will be to drug children against their parents' wishes if a federally-funded mental-health screener makes the recommendation.

Universal or mandatory mental-health screening could also provide a justification for stigmatizing children from families that support traditional values. Even the authors of mental-health diagnosis manuals admit that mental-health diagnoses are subjective and based on social constructions. Therefore, it is all too easy for a psychiatrist to label a person's disagreement with the psychiatrist's political beliefs a mental disorder. For example, a federally-funded school violence prevention program lists "intolerance" as a mental problem that may lead to school violence. Because "intolerance" is often a code word for believing in traditional values, children who share their parents' values could be labeled as having mental problems and a risk of causing violence. If the mandatory mental-health screening program applies to adults, everyone who believes in traditional values could have his or her beliefs stigmatized as a sign of a mental disorder. Taxpayer dollars should not support programs that may label those who adhere to traditional values as having a "mental disorder."

In order to protect our nation's children from mandatory mental health screening, I have introduced the Parental Consent Act, H.R. 2218. This bill forbids federal funds from being used for any universal or mandatory mental-health screening of students without the express, written, voluntary, informed consent of their parents or legal guardians. This bill protects the fundamental right of parents to direct and control the upbringing and education of their children. I hope all my colleagues will co-sponsor H.R. 2218.

Ron Paul: Permanently Extending the First-Time Homebuyer Credit

SPEECH OF
HON. RON PAUL
OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
TUESDAY, MAY 25, 2010
Madam Speaker, today I introduce legislation to permanently extend the first-time homebuyer tax credit and to make the credit available to people whose homes have been destroyed by a natural disaster, such as a hurricane. The legislation also makes a number of changes to existing tax credits in order to enhance their usefulness to victims of natural disasters. Specifically, this bill makes the casualty loss deductions available to taxpayers who do not itemize and it makes the casualty loss provision available for five years after the disaster. This legislation also helps people who have lost their jobs because of a natural disaster by making unemployment payments provided under the Disaster Relief and Emergency Assistance Act tax free.

Renewing the first-time home buyer's credit will help Americans purchase a first home with their own money, instead of having to rely on government-funded or backed programs. The other sections of this legislation were inspired by conversations my staff and I had with constituents who had to purchase new homes because Hurricane Ike destroyed their prior homes. The first-time homebuyer's tax credit could be of tremendous value to these people, yet the law denies them the credit because they are replacing destroyed homes. My bill not only reinstates that first-time homebuyer's credit, it also corrects that oversight.

It is hard to think of a more beneficial or compassionate expansion of the first-time homebuyer tax credit than to make the credit available to those whose homes have been destroyed or damaged by natural disasters. In addition, the changes to the casualty loss provision will help more taxpayers affected by natural disasters. Repealing the taxes on unemployment benefits provided to people affected by natural disasters will ensure those forced onto the unemployment rolls because of a natural disaster are not further burdened by having to pay taxes on their unemployment benefits. Providing tax relief to first-time homebuyers and to those affected by natural disasters should be one of Congress' top priorities. I therefore urge my colleagues to join me in supporting this legislation.

UPDATE: Also see the press release issued by Dr. Paul's office:

For Immediate Release
May 25, 2010

Paul Introduces Homeowner Tax Credit Extension and Expansion Act
Washington, D.C. - Congressman Ron Paul (TX-14) today introduced legislation to permanently extend the first-time homebuyer tax credit and to make the credit available to people whose homes have been destroyed by a natural disaster, such as a hurricane.

The legislation also makes a number of changes to existing tax credits in order to enhance their usefulness to victims of natural disasters. Specifically, this bill makes casualty loss deductions available to taxpayers who do not itemize, and makes it available to them for five years after the disaster. This legislation also helps people who have lost their jobs because of a natural disaster by making unemployment payments provided under the Disaster Relief and Emergency Assistance Act tax free.

Renewing the first-time home buyer’s credit will help Americans purchase a first home with their own money, instead of having to rely on government-funded or backed programs.

The other sections of this legislation were inspired by conversations Congressman Paul and his staff had with constituents who had to purchase new homes because Hurricane Ike destroyed their prior homes. The first-time homebuyer’s tax credit could be of tremendous value to these people, yet the law denies them the credit because they are replacing destroyed homes.

“It is hard to think of a more beneficial or compassionate expansion of the first-time homebuyer tax credit than to make the credit available to those whose homes have been destroyed or damaged by natural disasters,” stated Congressman Paul. “In addition, the changes to the casualty loss provision will help more taxpayers affected by natural disasters. Providing tax relief to first-time homebuyers and to those affected by natural disasters should be one of Congress’ top priorities.”

Ron Paul: Expressing Sympathy to Families of South Korean Seaman Killed by North Korea

SPEECH OF
HON. RON PAUL
OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
MONDAY, MAY 24, 2010
Mr. Speaker I rise in opposition to this legislation not because I do not wish to express sympathy to those killed in the recent sinking of a South Korean naval vessel near the border with North Korea, but rather because I object strongly to the threatening and militaristic language in this resolution. I do not believe Congressional expressions of sympathy for those who have lost their lives should include language that further escalates an already volatile situation on the Korean peninsula. At a time when the United States maintains nearly 30,000 troops in South Korea, serving as a tripwire for an American response should hostilities break out between North and South, this resolution should, if anything, counsel caution and diplomacy rather than urge the U.S. government "to take other appropriate actions in response to the sinking of the ROKS Cheonan and other hostile acts of North Korea." Further, in reaffirming the United States' "enduring commitment to the ..... security of the Republic of Korea," this resolution signals a U.S. willingness to commit military force should the current escalation in tensions continue between North and South.

It is difficult to imagine a more dangerous or inappropriate time for such statements. I believe this unfortunate incident should instead serve as a wake-up call for the United States to re-assess its military presence in South Korea in particular and Asia in general. Maintaining the U.S. global empire is costing us one trillion dollars per year and is undermining rather than contributing to peace and stability. The North and South Koreans have all the incentive to reach a peaceful solution to their long-standing conflict and have made strides recently in that direction. The U.S. military presence in South Korea some 50 years after the Korean War is an impediment to that progress and should be ended immediately.

Twelve Parallels in Political Economy (Bob Higgs)

The always clever Robert Higgs uses parallels to describe the destructive nature of the political economy:

The federal budget is to a tolerable government

as the Palace of Versailles is to a two-car garage.

***

The Code of Federal Regulations is to the rule of law

as a trainload of cyanide is to a nutritious diet.

***

A member of Congress is to the preservation of our liberties

as a member of the Mafia is to the propagation of Christianity.

Read the rest

Ron Paul: More Blank Checks to the Military Industrial Complex

Dr. Paul's latest Texas Straight Talk:



Congress, with its insatiable appetite for spending, is set to pass yet another “supplemental” appropriations bill in the next two weeks. So-called supplemental bills allow Congress to spend beyond even the 13 annual appropriations bills that fund the federal government. These are akin to a family that consistently outspends its budget, and therefore needs to use a credit card to make it through the end of the month.

If the American people want Congress to spend less, putting an end to supplemental appropriations bills would be a start. The 13 “regular” appropriations bills fund every branch, department, agency, and program of the federal government. Congress should place every dollar in plain view among those 13 bills. Instead, supplemental spending bills serve as a sneaky way for Congress to spend extra money that was not projected in budget forecasts. Once rare, they have become commonplace vehicles for deficit spending.

The latest supplemental bill is touted as an “emergency” war spending bill, needed to fund our ongoing conflicts in the Middle East. The emergencies never seem to end, however, and Congress passes one military supplemental bill after another as the wars in Iraq and Afghanistan drag on.

Many of my colleagues argue that Congress cannot put a price on our sacred national security, and I agree that the strong, unequivocal defense of our country is a top priority. There comes a time, however, when we must take stock of what our blank checks to the military industrial complex accomplish for us, and where the true threats to American citizens lie.

The smokescreen debate over earmarks demonstrates how we have lost perspective when it comes to military spending. Earmarks constitute about $11 billion of the latest budget. This sounds like a lot of money, and it is, but it is a drop in the bucket compared to the $708 billion spent by the Pentagon this year to expand our worldwide military presence. The total expenditures to maintain our world empire is approximately $1 trillion annually, which is roughly what the entire federal budget was in 1990!

We spend more on defense than the rest of the world combined, and far more than we spent during the Cold War. These expenditures in many cases foment resentment that does not make us safer, but instead makes us a target. We referee and arm conflicts the world over, and have troops in some 140 countries with over 700 military bases.

With this enormous amount of money and energy spent on efforts that have nothing to do with the security of the United States, when the time comes to defend American soil, we will be too involved in other adventures to do so.

There is nothing conservative about spending money we don’t have simply because that spending is for defense. No enemy can harm us in the way we are harming ourselves, namely bankrupting the nation and destroying our own currency. The former Soviet Union did not implode because it was attacked; it imploded because it was broke. We cannot improve our economy if we refuse to examine all major outlays, including so-called defense spending.

Working as Designed (Jim Fedako)

Jim Fedako makes an interesting observation about America's system of government:

Working as Designed
by Jim Fedako | LewRockwell.com

Those who support our system of government and complain about the passage of Obamacare need to keep this in mind: The fact that Obamacare passed in spite of the wishes of a majority of Americans is proof that the system works as designed.

Be forewarned: I am not writing to defend the system. I am writing to condemn a system that provides no protection for either person or property – simply, a system that cannot be defended.

Types of Democracy

In a direct democracy, the voters decide, by majority vote, the issues of the day. The problem with this type of system is voters do not have the necessary time and expertise to understand all of the nuisances of proposed laws – the strategically placed comma, etc.

And they do not have the necessary time and expertise to understand all the near- and long-term impacts of those laws. Because of this lack of understanding, those seeking a political advantage can easily manipulate voters. So voters end up voting from positions of ignorance – voting against their own interests.

The solution is for voters to elect a representative, someone who has both the time and expertise to understand the issues. Someone the voters can trust to look out for their (the voters’) own interests.

Our System

We live under a representative democracy. As such, we elect our representatives to vote in our collective best interest, on all issues. They are not to simply vote according to the majority opinion – that would be a direct democracy by proxy. No, they are to vote in the interest of their collective constituents, as they – the politicians – think best.

Here is something to consider: The only time we know our political system works is when the elected representatives go against the majority of voters. If our elected officials vote with the majority of voters on every issue, our representative democracy would be no better than a direct democracy.

The same holds for your local representative. He must vote, at least occasionally, against the majority opinion of his constituents in order for you to know that our system is functioning properly.

That means my congressman was actually acting in accordance with the ideal of our political system when he voted for TARP and the bailout in spite of opposition from an overwhelming majority of his constituents (based on calls to his office before the vote, as reported in the local paper).

There is no reason for anyone in his district to get angry (assuming they support our current political system); his votes proved our system works.

Furthermore, there is no reason for anyone to get angry over Obamacare and the likely passage of other evils in spite of the desires of a majority of voters. These are all indicators of the health of a representative democracy.

The majority in both the House and Senate serve (and will continue to serve) our country well by voting opposite the majority from time to time. To complain about such a vote is to complain about our current system. And we all agree that our system is best. Don’t we?

The Ideal

Our system of government is based on the ideal – and this is utopian – of representatives going to DC and doing what is right. These folks educate themselves on all issues to the point of omniscience. And they vote, not based on the uniformed, fleeting opinions of their constituents, but on their (the representatives) understanding of the nuances of proposed laws, as well as an understanding of the current and future impacts of those laws.

Of course, this is pure fantasy. But it is the party line – the public school version of our current political system. In reality, we live according to the whims of the majority of elected representatives – which is to say that we live according the whims of the state

Individual Interests

We (you and I) do not share interests. You have an interest in an issue, as do I. But those interests are never the same. Sure, our individual interests may be similar, and we may even use some of the same words and phrases. But you and I never see things exactly the same. Because of that, melding our various and individual interests into a common set of interests that we share is impossible. Furthermore, it follows that it is impossible to aggregate all the various and individual interests across a congressional district (or some other local, state, or national political boundary) into a single set of interests that we all share.

So it is nonsensical to believe that an elected representative can vote in our (yours and mine) individual best interests, just as it is nonsensical to believe that he can vote in our (whether local, state or national) collective best interest. He cannot. And neither will he. He can and will vote in his own interest, only. We should expect nothing else.

A State without Bounds

Some will claim that we have a safeguard – a piece of faded, 200-year old parchment. They claim that we live in a republic, not a democracy. They claim that those words drafted in deceit, behind closed doors, protect their person and property.

While it is true that we have nominal protections, a document has no power, whatsoever. Don’t believe it? Test those assumed rights sometime, in a real, open way. Really challenge the state. You will be gambling your person and property on an interpretation of someone who represents the interests of the state – not your interests, and certainly not the ideals of person and property.

We have no safeguard other than ideas. And when the majority desires the safety of the wolves, our fate is obvious.

Conclusion

Those who desire to live in a representative democracy, a state without bounds, should be proud that their government has passed nonsense over their objections. And they should be proud that liberty is giving way to slavery, since even this is a product of their beloved political system.

For those of you who still hold onto the god of democracy yet see Obamacare as an omen, a harbinger of greater evils to come, may I suggest taking a harder look at the system of government you support. It is working as designed. Always.

May 19, 2010

Jim Fedako [send him mail] is a business analyst and homeschooling father of seven who lives in Lewis Center, OH, and maintains a blog: Anti-Positivist.

Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Ron Paul: The Government as Identity Thieves

Dr. Paul's latest Texas Straight Talk:



The spotlight remains on the Greek sovereign debt crisis as the riots continue. The terms of the Greek bailout from the IMF and Eurozone countries remain contentious with citizens on all sides. Europeans hate having their governments throw public money away as much as Americans do. The Greeks are not happy about having their taxes raised while their pensions and salaries are cut. Meanwhile, it is rumored by the Financial Times, AFP and others that Greece may spend more than it saves from austerity measures on arms deals with Germany, France and the US as a potential condition of receiving bailout funds. If true, it is certainly not unprecedented for the global military industrial complex to benefit from deals made by their friends in the central banking community. After all, war is the health of the state. The last thing big government proponents want is for peace to break out in the world.

This free flow of fiat money from around the globe to Greece will not really save Greece as much as it will grant a temporary reprieve to central bankers from the consequences of their mistakes. Sadly, this will come at the expense of the Greek people and taxpayers in Europe and America. Taxpayers are of no consequence to either European or American central bankers. Even the mere desire for complete information on what they are up to in our name is rebuffed, as we saw last week in the Senate with the failure of Senator Vitter’s amendment containing my language to fully audit the fed. The hubris of powerful and secretive central bankers seems to know no bounds.

If someone incurred debts against you as an individual, without your knowledge or consent, you would call it identity theft. You would call your bank for a full accounting of the debts incurred in your name, and after some verification, those debts would be declared invalid and you would not be held responsible for them. Furthermore, if the culprit was found, they would be prosecuted and sent to jail.

Not so with governments and central banks. Governments that are supposed to be of the people and for the people routinely incur debts against the people. Some governments even borrow money to oppress their citizens, and then expect them to pay for their own oppression with interest. With a fiat monetary system, the sky is the limit for how much debt a government can place on the backs of the people.

We have reached the point in the United States where the debt our government has accumulated against us is mathematically impossible to pay off. Harder times, likely due to a wave of hyperinflation, will eventually find its way to our streets and I am fearful of how Americans will react. My hope is that we will come together peacefully and help each other, and that enough of us will be aware that the blame rests securely on the shoulders of the Federal Reserve and the special interests. They should not be looked to for salvation. They should not be given more power. Rather, they should be stripped of the powers that allowed them to create this mess in the first place.

Resistance to public transparency regarding public debts should be denounced in the strongest of terms, and the central bankers that incurred them should be seen as no better than common identity thieves.

When a Congressman Says X, He Is Thinking Y (Bob Higgs)

Terrific commentary by Bob Higgs:

When a Congressman Says X, He Is Thinking Y

X : I will serve the people of this district to the best of my ability.

Y: I intend to look out for my own interest every step of the way, so unless you’re the highest bidder for my services, you’d better start saying your prayers now.

* * *

X: The people have spoken, and they have chosen me.

Y: The rich guys and well-heeled organizations that backed my candidacy picked me to run, and they coughed up enough dough to buy or steal this election for me. I’d be a damned fool to forget who put me in office.

* * *

X: America needs A, B, and C.

Y: My critical electoral coalition stands to make a shipload of money off of A, B, and C. If I want to keep my sorry ass in office, I’d better do everything in my power to see that the government carries out A, B, and C.

* * *

X: I will always level with you.

Y: Watch my lips. If they’re moving, I’m lying (because I’m not such an idiot that I’d ever own up to the disgraceful way I sell my soul to the devil every day of the week—and that includes Sunday, when I make a show of attending church.

There's lots more, so read the rest!

‘Panic’ in the Streets! (David Kramer)

David Kramer wrote a nice blog post on all the NYC "incidents" of late:

I wonder how long this is going to go on? This is the second “false alarm” in New York City since the original false flag operation thwarted car bomb attack in Times Square a few weeks ago. Between the ongoing scare campaign in NYC (“If you see something, say something.”—actually quoted by one of the original vendors who reported the Times Square suspicious SUV when he was interviewed by the MSM!) to the pointless random bag checks at NYC subway stations by the NYPD, New Yorkers tend to become their usual jaded selves once the “scare” tactic event fades into the distant past. But I’ll say this much—for most Americans still, the cartoon below says it all:

The Myth That Justice Is Blind! (Butler Shaffer)

Some terrific commentary by Butler Shaffer on Elena Kagan, the Supreme Court, and the limitless power inherent in the Constitution:

The Myth That Justice Is Blind!
by Butler Shaffer | LewRockwell.com

With President Obama’s nomination of Elena Kagan to fill a Supreme Court vacancy, the choir has assembled to chant the mantra: "we are not supposed to know anything of her judicial predispositions." Questions designed to elicit indications of how she might rule on given cases are not to be asked. Lawyers, legal scholars, and judges – along with media lickspittles – will croon the liturgy.

I have always regarded this proposition as so absurd on its face as to be unworthy of respect from intelligent, rational men and women. It takes an Ivy League college graduate to vigorously defend the idea. Think of the implications of this doctrine were it to be applied to advice you might seek from others in your daily life. If you were suffering from appendicitis and sought the help of a medical practitioner, would it be any of your concern whether that person engaged in established medical analysis and remedies, astrology, chiropractic techniques, crystal healing, prayer, or New Age methods? Whatever you might think of any of these approaches to health, would you consider it beyond your right to inquire? If your financial advisor regularly consulted tarot cards, dream analysis, Ouija boards, or Ben Bernanke to inform his judgments, would you want to know of this fact prior to his making investment decisions on your behalf?

The general acceptance of this idea requires an underlying belief that there is something called "the law" – with the emphasis on "the" – which wise and well-educated men and women are able to discern through great effort. It is an idea that can be traced back to Plato’s notion of "philosopher kings," persons capable of discovering the objective principles and processes beneficial to a well-ordered society. The premise underlying this belief is that members of the judiciary are capable of listening to all sides in a dispute and rendering a decision consistent with these presumed objective legal standards.

Such thinking has also been influenced by scientific methods of reasoning, i.e., that one can test the validity of a given hypothesis through empirical means. One can set up experiments to determine the freezing point of water at sea level and, if the test is properly conducted, arrive at an answer upon which scientists can agree. (I will omit, for the time being, the discoveries from the study of chaos that call into question the "absolute" nature of the results achieved.) The ability of mathematicians to calculate answers to complex math problems upon which all can agree is another source of the undeserved faith in the judicial process.

But "law" – as with philosophy generally – is a normative proposition, grounded not in some imagined coherence of legal principles with the physical universe, but in subjectively-created values that differ from one person to another, one culture to another, and one time period to another. One can dispute the law of gravity and jump from the roof of a twenty-story building, but he or she cannot avoid the consequences of doing so. On the other hand, laws generated by legislative or judicial bodies can be ignored without adverse effects: have you ever seen someone driving 100 miles per hour without getting caught?

"Law," as something created and enforced by the state, is a product of nothing more than the preferences of those who control the machinery of the state. There is no more objectively-discovered validity to such a body of rules than there was in Ayn Rand’s preference for the music of Rachmaninoff over Stockhausen. What separates the pro-war from anti-war advocates are subjectively-held priorities regarding institutional interests and the value of life. None of this is to say that one person’s opinion is as good as another’s, or that a persuasive case cannot be made for a given normative standard. It is only that, no matter how strongly one holds to a given set of values – legal or otherwise – such preferences can never rise to a higher level than the thinking that produced them.

If some people are to rule others, however, the authority to do so must be seen to rest upon some higher principle than this. Every grade-schooler is aware that the bully’s power derives solely from his capacity to use violence upon others. Children are perceptive enough to understand this basic fact. Adults, on the other hand, insist upon being seduced into a state of subservience. Those who govern must be seen as deriving their powers from some higher source than the exercise of self-serving violence. Monarchs were once able to bamboozle their victims with the proposition that they ruled by "divine right." The Enlightenment – with its emphasis upon earth-centered explanations of reality, and individual liberty – forced the ruling classes to find other rationales for their arbitrary powers. This was found in the so-called "social contract" theory of social practices, with political systems presumed to have been created by an imagined collective will of all, subscribing themselves to a written constitution delineating the authority state officials were to have. That this "social contract" explanation has no more validity to it than "divine right" justifications for the existence of the state, need not concern us at this point. Other-directed men and women are capable – even desirous – of being deceived by any rationale for their subservient roles, provided it be couched in terms familiar to their conditioned mindset.

Thusly do otherwise intelligent men and women cling to the belief that written constitutions can restrain the arbitrary exercise of state power. Conservatives still speak of "returning to the Constitution." I am sorry to inform you that the American political system has never deviated from the Constitution; this document provides the state with all the authority it might ever wish to exercise. I try making the point by tweaking my conservative friends with the notion that "the Constitution is what keeps the government from doing all the terrible things it does!"

If more people bothered to actually read this document – including President Obama, who once taught constitutional law and who, in this year’s state of the union address, erroneously declared that the Constitution provided that "all men are created equal" – they would discover the unlimited powers it provided to government. Beginning with a preamble setting forth the purposes of the Constitution being "to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty," the document proceeds to set forth how such purposes are to be attained.

Article I, Sec. 8 informs us that "Congress shall have Power to lay and collect Taxes, . . . to pay the Debts and provide for the common Defence and general Welfare of the United States. . . ." Later on, we discover that Congress also has the power "To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof." Standing by themselves, these words would provide the most ambitious tyrant with the only grant of authority that would ever be needed to carry out his or her desired purposes. As Lord Macaulay so well expressed it, "Your Constitution is all sail and no anchor."

One of Ms. Kagan’s college professors has stated that "she’s a woman whose . . . deepest dedication is to the constitution of the United States." There is nothing startling in all of this: one can find in this document all the power needed for putting together any political program.

Suppose that I was given the authority to "provide for the general Welfare" and "to make all Laws which shall be necessary and proper" for exercising this power? What could I not do, constitutionally, pursuant to such a grant? Who is to decide what constitutes the "general Welfare," or what laws are "necessary and proper?" By their very nature all words are abstractions, and must be interpreted as to their application in the world. As I ask my students, if a statute regulated the sale of "glasses," would this include drinking glasses? Would it even include "eye-glasses" if such glasses were made of plastic, or if contact lenses were at issue?

For those desirous of understanding the realpolitik – instead of just the rhetoric – of how (and by whom) constitutional powers are to be interpreted, one can begin with the insights of Humpty Dumpty, who advised Alice that "’When I use a word, . . . it means just what I choose it to mean – neither more nor less.’ ‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’ ‘The question is,’ said Humpty Dumpty, ‘which is to be master – that’s all.’"

Who, in our political scheme of things, is to be "master" of defining words, when one "can make words mean so many different things?" This is a power usurped, on behalf of the Supreme Court, by Justice Marshall in his opinion in the classic case of Marbury v. Madison. His convoluted reasoning came down to his finding, in Article III, a power of judicial review of the actions of other branches of the government, even though such authority is nowhere spelled out, or even hinted at, in the Constitution. When the Framers of the Constitution went to such great lengths to define – albeit in very abstract terms – the powers of the other branches, why would such a fundamental authority be omitted from the section on judicial powers?

The answer, of course, is to be found in the inherently arbitrary power associated with government in all its forms: those who are to rule must have a realm of final authority that is not subject to preemption by anyone else. The American political establishment was concerned – and with some justification, given the Reign of Terror that had occurred in France – that such a popular uprising might occur in America, and that the legislative and administrative powers of the state might be employed in ways that were inconsistent with institutional interests. Part of our make-believe democracy consists of the true owners of the state creating restraints on the efforts of the ruled to direct it to their purposes. Through the use of a power of "judicial review" that is nowhere to be found in the Constitution, Justice Marshall made the Supreme Court the "master" of the meaning of words found therein.

In this manner, the Supreme Court became, for all practical purposes, the sovereign political authority. Its pronouncements – not those of the electorate, or of their elected representatives – became the final interpretation of the meaning of words subject, of course, to a later court providing a different interpretation. The Supreme Court – whose members are not subject to being voted in or out of office by the general citizenry – became the seat of arbitrary power that defines every government as an agency enjoying a monopoly on the use of violence within a given territory. Members of the Supreme Court will vote their respective subjective preferences – or, more accurately, the preferences of the political establishment that elevated them to their status – for the ever-changing rules that will govern the rest of us in society.

This is why it is considered so impolitic to inquire of a judicial nominee his or her thinking on specific issues over which they are to promulgate binding definitions and rules of law. We may ask such questions of legislative or presidential/gubernatorial candidates – although experience shows we are unlikely to get either clear responses or promises that will be lived up to – but are not supposed to inquire into the thinking of those who will enjoy the arbitrary powers that define sovereignty. It is the nature of a sovereign not to be bound down, for such a limitation implies that his or her ultimate decision-making authority is subject to the approval or review of other forces who would, by definition, become sovereign.

What about the legality of federal bailouts of major corporations; or of congressional powers to audit the Fed; or of presidential powers to undertake wars without Congress’ declaration; or the constitutionality of torture; or the future of Roe v. Wade? These and other court-prescribed rules or constitutional interpretations are none of your business to ask of your sovereign rulers in advance of their assuming power. When it comes time for them to tell you of the rules to which you will be bound, rest assured that they will do so!

May 12, 2010

Butler Shaffer [send him e-mail] teaches at the Southwestern University School of Law. He is the author of the newly-released In Restraint of Trade: The Business Campaign Against Competition, 1918–1938 and of Calculated Chaos: Institutional Threats to Peace and Human Survival. His latest book is Boundaries of Order.

Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Peter Schiff: Gold to $10,000/oz!

I just wanted to let all six of my readers know that my YouTube account is on the verge of being terminated. I got "Strike 3" today by the copyright police and they've threatened to shut down my account effective May 18. So I've begun a new account called C4Liberty, which can be found here. Here's my first video on the channel, where Peter Schiff reiterates his view that the Dow Jones to gold ratio will be close to 1:1 in the near future, which means gold might hit $10,000 an ounce!

Ron Paul: Fed Audit Under Fire

Dr. Paul's latest Texas Straight Talk:



It doesn’t come as too much of a surprise that the measure to audit the Federal Reserve is coming under continuous fire from the central bank and its cronies. For the first time since the Federal Reserve was created nearly a century ago, they have hired an actual lobbyist to pound the pavement on Capitol Hill. This is a desperate effort to hang on to the privilege of secrecy and lack of accountability they have enjoyed for so long. Last week showed they are getting their money’s worth in the Senate.

At the very last minute on the floor of the Senate, supposed compromise language was agreed to and substituted in the Sanders Amendment to the Financial Reform Bill. This language was acceptable to the administration, committee leadership, and to the Fed. The trouble is, while it is better than no audit at all, it guts the spirit of a truly meaningful audit of the most crucial transactions of the Fed. In fact, rather than still calling the Sanders Amendment an audit, maybe it should instead be called more of a disclosure at this point.

The new language of the Sanders Amendment requires a one-time disclosure from the Fed of 13(3) facilities, foreign currency swaps and mortgage-backed securities. Basically, their sins of the past would be revealed and Americans would know more about who got bailed out by the Fed and under what terms. This would be good, but its not nearly enough.

Taxpayers are sick and tired of bailing out privileged, dysfunctional institutions that should be allowed to fail in order to stop their ability to wreak havoc on our economy. Perpetuating these corporations at taxpayer expense is not just wasteful, it is actively harmful. It would be good to know what went on in the past, but what about accountability in the future? A one-time disclosure now will not do us a lot of good down the road when the cycle repeats itself and friends of the Fed find themselves in trouble again.

More importantly, agreements with foreign central banks are not touched by the new Sanders Amendment language. At a time when Greece, Portugal, Spain and other countries are experiencing dire financial crises and have their hands out to the international community, we need to know if our Federal Reserve is at all involved in bailing them out. As weary as we are of bailing out companies, the American people would not stand for bailing out entire countries. Our government is wasteful enough in its own affairs without contributing to the waste of other countries. Yet the Fed currently has the tools it needs to do just this, and to do it in secret.

If we cannot take away the Fed’s ability to waste trillions of taxpayer dollars on failing companies and failing countries, at the very least, we can take away their ability to do this with no transparency or accountability to the American people. While the Sanders Amendment no longer contains a full audit, Senator David Vitter has introduced an amendment which contains the Audit the Fed language that passed the House last fall. The Senate must pass the Vitter amendment for full disclosure and full accountability going forward.

1789 (Jim Davies)

While I've long agreed with the incomparable Joe Sobran that a return to the Constitution would be a "tolerable compromise," the more I read about its origins, the more convinced I become that it was doomed from the start. Jim Davies wrote this terrific article that gives more evidence that this is the case:

1789 | LewRockwell.com
by Jim Davies

It's often said that America was once a free country, but that its freedom has been heavily damaged by a relentless growth in government. Some (like Aaron Russo in his documentary America: from Freedom to Fascism) date the decline from 1913, when the Federal Reserve was chartered and the Income Tax enacted; but I no longer think it began that late. The "Pristine State" advocates suppose that there was once in our history a kind of Eden from which we have fallen, and so that all we need now is somehow to get back there – to "constitutional rule." There wasn't, and we don't. I think our troubles began no later than 1789.

The drafting was done in 1787, and the needed nine States had ratified it by June 21st, 1788, so the Constitution became supreme law on that day. Then on March 3rd 1789 Congress opened its doors and the following month George Washington presided. It's very interesting to notice what the new Congress did, in its first session, from March through September of that year.

It committed six acts, before going home for the winter in September. See if any of them give you warm, fuzzy feelings; and in a moment I'll focus on the sixth, because of its huge importance.

First came some administration; deciding on how oaths of office were to be taken. Not too much there to bother us.

Second was the "Hamilton Tariff," under which revenue was to be raised. So the second-ever Act of the US Congress was to arrange for the confiscation of property. Sure, it was Constitutional – it was a set of tariffs, imposed on certain imports; some must have recalled that it was a tariff on tea that had sparked the Revolution in the first place, so may have wondered whether anything had changed except the geographic location of the thieves. The import duties favored Northern manufacturers by making foreign goods seem more expensive – it was protectionist – and hurt Southerners by making them pay more. From Day One, a division was being fashioned that led after seventy years to open warfare. So the first substantive thing Congress did was to start to set the scene for internal conflict.

Third came an establishment of "Foreign Affairs" – now the Department of State – by which the new government was to execute "policies" towards other nations. If the intention was to have a perfectly uniform policy towards all, that would not have been needed. By establishing one, it was clear there were to be some nations more favored, others less favored. That's what a "foreign policy" means, and it is ultimately the cause of war and, in our own era, of the unconventional war called "terrorism"; for had there been no foreign policy favoring Israel (recall Biden's call in March for "no space" between the policies of the US and Israel?) there would have been no 9/11, or if there had been one favoring Palestinians there would have been a "9/11" much sooner and much more devastating, executed by Mossad. So the third Act in the history of the new government was to set the scene for all future external conflict.

Fourth was an Act to set up a Department of War – now euphemized as "Defense" – and that was very logical. You play favorites with other nations, eventually you'll need to fight some of them. Better get ready.

Fifth came the Department of the Treasury, to take in and account for the collection and spending of the money confiscated by Act Two. It is to this Department that today's IRS belongs, so I need say no more.

So far, it's not too hard to detect the beginnings of all the most loathsome attributes of any government: tax, distortion, discord and warfare. This is to what our well-meaning "Constitutionalist" friends want to get us back.

The sixth action of that first session bore fruit on September 24th, 1789 and was the "Judiciary Act" – and it's notorious and breathtaking. Here's why.

On its face, its purpose was just to flesh out Article Three, which said there was to be a Judicial Branch in the new government. It had to do with establishing Courts – Supreme, District, Circuit – and government Attorneys, General and less general. But as well as that administrative stuff, the 1789 Judiciary Act declared that the Supreme Court had the power to hear actions for "writs of mandamus" as one of original jurisdiction, and so not to be just a court of appeal. Congress was therefore purporting to grant to its sister Branch a power which Article Three never gave it.

Oops! Right off the bat, in its very first session, Congress therefore tried to do something it was not empowered to do (if you'll allow for the moment that, contrary to Spooner, the Constitution actually empowered anyone to do anything). In so doing, Congress demonstrated its disdain for the fences placed around it by Articles Two and Five. Very clearly, government today acknowledges no limits on its power; the 1789 Judiciary Act made it plain that Congress never did acknowledge such limits, even in its very first session.

Was this arrogation of power deliberate, or inadvertent?

Either is possible if the Act is considered in isolation, but it wasn't isolated. While the Constitution was being drafted, Alexander Hamilton and other Federalists had wanted to specify powers for the Judicial Branch, just as the charter did for the other two Branches, and in particular to grant it the power of "Judicial Review," i.e., to say what is, and is not, valid law. He argued that that is what high courts normally do. However in Article Three no powers were granted to it at all, so as it's fair to presume that it was not to have zero powers (otherwise, why set it up?) consequently Article Three left them wide open – for unlike the wording of Articles I and II there are no limits or prohibitions named, either. It was a blank check, whose detail could be filled in later.

If Hamilton had had his way and the Constitution as drafted had said something like "The Supreme Court shall have power to decide what is law and what is not law" the new government would have been plainly seen as a dictatorship, and in my humble opinion it would have not had a snowball's chance of getting ratified; even as it was, that process was no sure thing. So that's why they left it blank – while the Federalist majority intended all along that such a power should, indeed, be owned by the Judicial Branch so that the new government could (with a little delay, and with its cooperation) do anything it wanted to do, while operating under the pretense of being strictly limited.

So Congress' 1789 attempt to endow the Supreme Court with a new power (to hear certain cases with original jurisdiction) was not accidental, but deliberate; that particular power wasn't very important, but it was to test the waters, establish a precedent. If they could grant it one small power then, they could later grant it bigger ones, and so eventually equip it with absolute, law-determining power. Take an inch at once, so as to take a mile later on.

Success came soon: Jefferson won the 1802 election and in the changeover from Adams' administration a certain judge, William Marbury, was not given his proper paperwork to take up an appointment in D.C. So he took advantage of the Judiciary Act, and filed with the Supreme Court a suit for a "writ of mandamus" – to handle that matter at once – against the new Secretary of State, Madison.

John Marshall's Supreme Court delivered a well-reasoned opinion, which confirmed that Marbury was properly entitled to his new job, but that the Supreme Court was not legally entitled to issue the requested writ. Marshall wrote that the Congress had no power to endow the Court with the right to hear such petitions as one of original jurisdiction, for by so doing it would have amended the Constitution, contrary to Article V. He was right; the 1789 Judiciary Act was unconstitutional. So as to clarify that Congress was not the final arbiter of law he then went on to write the sentence now engraved on the wall of the Supreme Court building:

IT IS EMPHATICALLY THE PROVINCE AND DUTY OF
THE JUDICIAL DEPARTMENT TO SAY WHAT THE LAW IS

Now, here's the awesome trick that was being pulled: in the very act of declaring that Congress was not entitled to amend the Constitution, Marshall's court was itself amending the Constitution! – or purporting to do so. Why? – because in Article Three, the Judicial Branch is not empowered to declare whether or not a law that Congress wrote conforms to the Constitution. That power of final arbitration or "judicial review" is simply not there. Hamilton wanted it there, and argued that it was implicitly there, but in fact it is not. Therefore, in issuing the Marbury opinion, Marshall put it there: he did for his own Branch exactly what the decision itself said was not allowed for another Branch.

Did his court have any alternative? – I don't think so, but to judge from the enthusiasm Marshall used in the quote above, I doubt whether that worried him. The Marbury decision filled in the blank check of Article Three; that was how power was grabbed. Since 1803, what is and is not law has been determined not by "The People" or their alleged representatives in Congress, but by a cabal of government people who decide what's to be done and, if challenged, get the Judicial Branch to declare it legal. The yawning chasm between what courts now routinely enforce regarding income tax, for example, and what USC Title 26 actually says (and indeed what the Supreme Court said about unapportioned direct taxes, between 1896 and 1921) is thereby fully explained: the Judicial Department "says what the law is," really and truly and actually, and so it's been ever since 1803 thanks to the empty text of Article Three and to Marbury v Madison.

Was the Marbury decision itself Constitutional? – that's the nub of the matter. No, of course it wasn't, for the Court exercised a power it had never been given. Yet on the other hand it exercised a power it had never been denied, either, and as Hamilton persuasively argued in the The Federalist #78, Judicial Review is quite customarily a normal function of high courts and so the power was implicit in Article Three even though not explicit. We can note also that even the power to decide simple cases of lawbreaking is not explicitly described there either, along with the prerequisite power to interpret what laws mean; yet those are accepted as normal functions of any judicial branch of government. In any case, who is to decide that key question? Some kind of super-supreme court? Sorry, that's not covered in the Constitution, not even in Article Eight. We have here reached the ultimate, fatal flaw in the pleasant fiction that governments are entities capable of being limited.

Ever since 1803, America's government has pretended to operate a limited, democratic republic but has actually been an oligopoly of lawyers. And since Article Three was crafted (and left blank) with all deliberate intent, I suggest that's the way the founders always planned it. The 1789 Judiciary Act was a kind of delayed-action poison pill, a really cunning plot, planned and executed by those honored even today as the founders of a free society. And this is perfectly logical; the notion that a government (something that governs) can ever be subject to limits (things that prevent governing) is nonsense on its face, an absolute contradiction.

May 8, 2010

Jim Davies [send him mail] is a retired businessman in New Hampshire who led the development of an on-line school of liberty in 2006, who expects to experience a free society in his lifetime, and who in 2008 wrote the books A Vision of Liberty, Transition to Liberty, and, in 2010, Denial of Liberty and To FREEDOM from Fascism, America!

Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Dr. Dobson Changes Mind, Endorses Rand Paul!

Last week, I read that James Dobson decided to endorse Trey Grayson for US Senate in Kentucky. Dr. Dobson has supported Neocons in the past, so I wasn't too surprised, but today I read that he actually did a bit more homework and changed his mind, making an endorsement for Rand Paul! Watch it here or in the embedded video below:



Also see this email from Rand earlier today:

Our defining moment

Dear Friend,

If you would lie to a man who has dedicated his life to God and family, you have no shame. You’re lies clearly can’t be believed. And you don’t deserve to be the next U.S. Senator from Kentucky.

That’s exactly what happened last week. Allies of the Grayson campaign misled Dr. James Dobson in urging his support for my opponent. Friends of ours – and of the truth – approached Dr. Dobson to ask him to look into this matter more fully. His search concluded with a personal interview with me, and today, with his endorsement, which you can read in full here.

While you and I now know about this, I need to let everyone in Kentucky know. TV. Radio. Mail. Email. This is a huge moment for our campaign.

Will you help me do that? You can help by clicking here to donate for our final two weeks.

These types of moments, where your opponent hands you something that can be a defining moment of the campaign, well, they don’t come around often. And our campaign MUST use this to its maximum potential.

Dr. Dobson's endorsement and acknowledgement that he was lied to by "senior GOP leaders" speaks to my opponent’s credibility. That is the message we must pound home, especially as he continues to launch the same lies at us in front of the people of Kentucky.

I know you’ve done a lot. But please, if you possibly can, help us get this message out. Time and money are short, but with your help, we’ll continue on to victory May 18th.

In Liberty,



Rand Paul MD

Ron Paul: Congress Freezes Its Own Pay

Dr. Paul's latest Texas Straight Talk:



Last week Congress did something fiscally responsible. It’s not very often I can say that. Granted, it was small in the grand scheme of things, but I was glad to be an original cosponsor, along with Congressman Harry Mitchell of Arizona, of a bill to block the automatic pay raise that Congress otherwise receives every year. Every Member of Congress gets this raise unless it is expressly voted down. For the second year in a row Congress has voted to freeze its own pay, which, in a time of skyrocketing deficits and high unemployment, is the very least Congress can do.

The country is in a serious recession, bordering on depression. Unemployment is grossly underreported, and not likely to get better anytime soon. American citizens and businesses are overtaxed, yet tax revenues still fall far short of our government’s voracious appetite for spending. This is no time to raise taxes. And since congressional salaries come from tax revenue, allowing ourselves a raise would fly in the face of economic reality.

Of course, Congress ignores economic reality all the time. But if Congress can freeze salaries as a first step towards fiscal sanity, it can freeze- if not drastically cut- a vast array of federal expenditures.

At the very least, Congress could freeze current spending levels, instead of constantly increasing them. We could stop increasing the debt ceiling every few months, as has become our habit. We could freeze regulations that add to the burden on our struggling small businesses. We could freeze intrusive bailouts that upset the balance of the market and cost us billions – billions we could instead use to eliminate the oppressive income tax! We could freeze the money supply and stave off the tsunami of inflation the Fed has been generating for years.

Furthermore, we could address the mismanagement and waste in foreign affairs which adds immensely to our budget. Like entitlements, militarism is expensive. We need to reject sanctions as a precursor to military action, and embrace free trade as the most effective method for spreading liberty. After all, as the great economist Frederic Bastiat said - when goods don’t cross borders, armies will. It is time to bring our troops home, instead of instigating expensive new wars when we’re already hopelessly mired in several conflicts already. We need to rethink the whole idea of pre-emptive war- not only because it’s wrong and counterproductive, but because we literally cannot afford it!

We could do much to restore fiscal sanity to this country simply by stopping the madness and bringing our troops home – from Iraq, Afghanistan, Korea, Japan, Germany, and so many other places. This costly global empire does not serve the interests of the American people and we should end it peacefully and voluntarily now, lest it end in chaos later.

Though it may be wishful thinking on my part, I’m encouraged by the small step taken by Congress last week. Fiscal sanity can begin with a small step, and I want to encourage Congress to move in this direction.