Monday, March 23, 2009

UPDATE: Jefferson on Government Spending in Relation to Modern Problems

Thomas Jefferson and Inter-generational Theft

For those who appreciated the wisdom of Jefferson as presented in a previous post, consider his equally sound thoughts about inter-generational theft. Jefferson used the unjustness of a man giving away his son's labor for his son's lifetime as the obvious reason why it was unjust for all men to give away all of their sons' labor during all of their sons' lifetimes. The latter of course referred to actions taken by government officials as government policy supposedly under government authority. Today there are some major economic problems. Jefferson's clear thinking on economic issues relating to public policy might indicate what the hidden problem is and lead to recognition of a completely different and better solution than letting things go from very bad to much worse in the hands of those largely responsible for the situation.

The Modern Problem
The current economic situation is largely the result of two separate problems. The first is government policy that has forced lending institutions to loan money for homes to those who cannot actually repay the loans. Due to the government's policy requiring unsound loans for housing, many people have purchased homes much more expensive than they would otherwise have bought. Others have purchased more than a home, they have engaged in extensive speculation in the housing market, buying up houses, especially in a few parts of the country, to make extensive profits. The second problem involves some of the largest financial institutions that have engaged in what amounts to gambling or blatant speculation through the medium of credit default swaps, betting on the likelihood of various large businesses failing. Because of the failure of Freddie and Fanny due to unsound loans caused by equally unsound public policy, the failure of various major financial institutions has become likely, and as a result of a possible string of failures, literally trillions of dollars may be owed to those speculating in credit default swaps.

Modern Inter-generational Theft
The government has responded by assuring those who have speculated will be made whole by Americans through their federal taxes, even if it requires the labor of all men's sons for all of their lives to pay for it. Think about the amount of money that a newborn American owes in future taxes to pay for the gambling debts of those, many of whom have apparently given profusely to federal politicians' campaigns. Don't forget to add in all the other programs funded by debt and the extensive and increasing list of planned federal entitlements imposed. One of the tea party protest children somewhere in the country recently held a sign indicating he was only eight but already owed more than $36,000.

That Americans ever gave any level of government authority to require the repayment out of Americans' taxes of gambling debts and losses due to open speculation is obviously not the case, regardless of whether a contract was involved in the gambling or not. So, exactly where did federal legislators and administration officials get this authority? Apparently it is simply the result of politicians ignoring the power actually given them in the U.S. Constitution and doing whatever they please whenever they want. That many of the financial institutions that are receiving astronomical amounts of money from our government to cover their gambling losses also gave very sizable sums of money to the legislators in charge of overseeing the financial sector smacks of corruption.

The scale of this activity combined with the lack of clarity about exactly what Americans are paying for and WHY is rather disturbing. Some bonuses for AIG employees recently publicized have resulted in a dog and pony show that will probably result in the real problem and the really huge amounts of money, thousands and probably hundreds of thousands times more than the bonuses involved, being hidden from view. These bonuses, how they were handled, and WHY they should be paid are the tiny tip of a massive iceberg of money flow that needs to be recognized and properly dealt with to help prevent running future generations into debt as a political "favor" to those who spend big bucks on political campaigns.

The Audacity of Criminal Enterprises
The terms that come to mind relative to blatant political contributions by gamblers and bailing out gamblers by politicians using tax dollars are these - audacious criminal enterprise. For those who think this terminology too harsh, has there been the slightest attempt yet to alter the policies that require banks to make unsound home loans or to prevent those with the money from buying powerful politicians?

Exactly where in the U.S. Constitution does it say that the government has power to tax Americans, even entire future generations by borrowing, for the purpose of reimbursing the gambling losses of certain wealthy individuals and companies that contribute large amounts of money to powerful politicians' campaigns? In addition to audacious criminal enterprise, the term that comes to mind is - unconstitutional.

1 comment:

  1. Absolutely on point. So much so, I cite you on my own post on the insanity we're facing today.