Wednesday, April 5, 2017

Debt, Entitlements, and the Consent of the Governed - By Michael Bargo, Jr.

Everyone is familiar with the traditional connections of money to government. These include granting contracts to persons who make substantial campaign donations, funding entitlements to voter identity groups, and many other abuses. 
But the Democratic Party and President Obama developed this connection between money and government farther than anyone else in US history.  In order to understand what they did, it’s necessary to review the nature and financial usefulness of our monetary system.  Briefly stated, the monetary system creates the value of paper money and its electronic equaivalient as a means of the federal government purchasing products and servicing debt through a government controlled central bank, the Federal Reserve, purchasing the debt issued by the Fedral Government. Unlike barter or gold backed currency, this monetary system introduces the element of time.
That the monetary system introduces time into financing can be easily understood by looking at the terms of a mortgage.  A mortgage allows a person to put a down payment, for example twenty percent, on a mortgage loan, then agree to make monthly payments for twenty years or so.  The advantage of the mortgage  payment plan to the homeowner is that the twenty year value of the homeowner’s income can be borrowed today to purchase a home, giving the homeowner the advantages of home ownership.
But this is not the whole story. This alone doesn’t explain the connection of national debt to the ballot box.  President Obama expanded, more than any other president, another, far deeper and more dangerous layer of connection between the monetary system and the control of national government.
Obama’s method was not to seize control of the ballot box but to seize control of the results of  the ballot box: the choice of what legislation is funded in the future.  Voters are supposed to be able to completely control the funding of policies of national government, but Obama, more than any president before him, took most of that control away by comitting taxpayers to repaying debt incurred to fund current spending.  Just as a consumer can personally choose how future income is used today through borrowing, Obama seized control of the will of tomorrow’s electorate by expanding his party’s practice of using time to control legislation.
This concept is so abstract it has largely escaped detection, yet here is the proof: no matter what voters do in the future they are forced to service the debt created by Obama’s party’s choices; and since those choices have already been made and the debt must be serviced in the future, future voters have no opportunity to give their consent.  This is not just an abstract theory it is the most real fact of financial and legislative life for Americans.  These programs exist, the debt exists, and the debt cannot be wiped away with a vote.  If it were, the US would lose its credit rating and ability to borrow.  So for now, this setup prevents the voters from reducing the debt.  The debt can only be eliminated by being paid down by the taxes of the people.
At first glance it may seem that the concept of debt service over time does not violate voters’ rights.  But Scotus has ruled that the value of a person’s vote cannot be diluted, diminished, or impaired.  The central issue of the analysis, then, is whether future voters have lost their right to consent to how their taxes are spent when they are forced to support debt incurred to pay for earlier programs.
The Constitution mandates that the legislation passed by Congress must be authorized by the consent of the governed expressed through the ballot box. To guarantee that power comes from the people, the Framers of the Constitution wanted House members to face voters every two years, and Senators every six years; with one-third of the Senate up for reelection every two years.  The reason Congress must defer to the “consent of the governed” every two years was explained by James Madison in Federalist No. 37:
“The genius of republican liberty, seems to demand on one side, not only that all power should be derived from the people; but, that those intrusted with it should be kept in dependence on the people, by a short duration of their appointments; and that, even during this short period, the trust should be placed not in a few, but in a number of hands….  A frequent change of men will result from a frequent return of electors; and a frequent change of measures, from a frequent change of men.”
The opportunity to vote for a “frequent change of measures” is denied to voters through their commitment to repay the debt.  National debt denies future voters their right to influence legislation in two ways.  First, the taxes they pay are wasted to service interest costs for appropriations made years before.   Secondly, taxes that go to service debt aren’t available to finance the new policies voters may wish their legislators to enact.  Their votes are then diminished, diluted and impaired; and this practice, the Supreme Court has frequently ruled, violates the Constitution. 
The national debt indentures tomorrow’s voters to repay money borrowed to finance programs today; so the consent of the governed is also stolen in a similar proportion: if one-tenth of the budget is debt service, that one-tenth of the present legislative power of voters was usurped by a previous Congress. The nation’s republican form of government is nullified by degree as the portion of expenditures devoted to the debt increases.
The Framers were primarily concerned with the distribution of power over the three branches of government.  But the Democratic Party found a shrewd way to bypass both the consent of the governed and the checks and balances of the original three branches.  Since the will of the people can only be realized through legislative appropriations, past Congresses have usurped the realization of today’s voters’ will by pre-appropriating the funds needed to realize any newlegislative policies.  Since Democrats are the party of entitlement spending, financing of public sector unions and the bureaucracy, they have intentionally developed and financed this strategy to keep themselves in power. The Framers never envisioned massive entitlements or debt not limited by a limiting quantity of gold.
It would take a revolution in legal thinking for the Supreme Court to apply this thinking and rule unconstitutional the funding of current expenditures by the national debt. But legal thinking does change over time, and the best way to encourage this idea is to discuss it.