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L. Neil Smith's
584, August 22, 2010

"The United States of America are in trouble"

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The Plan
by L. Neil Smith

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Attribute to The Libertarian Enterprise

The United States of America are in trouble. To some, it is a horrible surprise. Many others have helplessly watched it coming for years.

At the most fundamental levels, with regard to its continued national and cultural existence, in both economic and philosophical terms, this country is in vastly worse danger at this moment, than it was during the so-called Great Depression or the War Between the States.

No fewer than fifteen decades of federal government usurpation and mismanagement—culminating in the most openly rapacious and criminal administrations in its history—have brought the nation to this point. Of the ruling parties, the Democrats are arguably the worst offenders in this regard, relentlessly expanding the power and scope of government, invariably at the expense of the personal freedom and individual enterprise this country was supposed to have been all about.

The War Century was largely a Democratic century.

While Republicans rightly criticize the many shortcomings of the Democrats, they systematically and hypocritically overlook or ignore their own part in the destruction of a civilization that once stood as the brightest hope for all Mankind. Both have conspired together to block any third party that might have set America on a different course, one more consistent with the dreams and aspirations of its Founders.

In any event, this essay is about what needs to be done, without regard to who might actually do it, Democrat, Republican, or anybody else, with the warning and understanding that if it doesn't get done, America is doomed, the rest of the world will inexorably follow, and our species is about to plunge into a long, dark night that may never end.

It may come as an annoyance to individuals who think of themselves as "nuts and bolts" problem-solvers that in the field of practical economics, expectations can be just as important as actualities. To them, I'm sure that sounds indistinguishable from the very cynical observation that in politics, perception is more important than reality.

But the fact is that people in an economic context have to be able to plan, and to do that, they have to make guesses about a future which, at best, is always murky, and which, muddled by halfwitted, hamfisted, off-and-on government interference, becomes impossible to predict.

America is in a Depression, and more loans, to the banks or from the banks, more money-printing—more debt—aren't going to get it out. Make no mistake about who is responsible for what happened. For decades, both parties spent vastly more than the government took in, creating debt—with interest—that had be paid by printing paper money and generating credit where there was no real wealth to back it up.

The mortal blow to America's future came when lending institutions were forced by Congress, first under the Carter Administration, and then again under the Clinton Administration, to make home loans to individuals they knew perfectly would be unable to pay them back. Naturally, as defaults and foreclosures started to pile up, the banks began to fail, which caused a cascade—an avalanche—of other failures.

It didn't help that by then, the country was embroiled in two illegal, expensive, and irrational wars in the middle east, initiated for the most cynical of reasons, using the calamity of 9/11 as an excuse.

In any case, the financial collapse was in no way the fault of capitalism or the market system, as the opportunistic left—which bears the real guilt—and its whorish media presently claim, but of a command-and-control system which, no less than that of the late, unlamented Soviets, was doomed to collapse of its own unbearable weight.

The current administration has done nothing right and everything wrong; increasing numbers of individuals think it isn't any accident. What's actually needed is a stability of expectations, and an end to the lethal drain on the country's resources that government, in fact, represents.

The first, most important thing that anyone in charge should do is declare a universal tax amnesty. All past debts to government at any level will be null and void. That alone would be sufficient to stop the plunge, trigger growth, and start businesses and industry hiring again.

Any government shortfalls caused by this policy should be dealt with, not by more deficit spending, but by serious reductions in government activity, by downsizing personnel, and by liquidation of assets.

And that's just for practice. The next step, to be announced at the same time as the amnesty—aimed at restoring predictability to the market while infusing it with cash (or, rather, allowing it to infuse itself), without government loans or further inflation—must be a total moratorium on every form of taxation, for a period of at least one year, so that the economy can get back on its feet and recover from the damage the last several administrations have done to it.

Once again, when politicians and bureaucrats whimper, demanding to know who will "pay" for such a "program", they will be informed that they will. Government will do less. It holds millions of acres of land and tens of thousands of buildings that can be auctioned off (once the original owners have been made whole), endless parking lots covered with vehicles, hangars full of aircraft, harbors full of boats and ships, vast warehouses stuffed with hardware and supplies that were obtained with stolen money and should be returned to the free market.

If all else fails, there are at least a hundred—or perhaps a thousand—times as many public employees as there ought to be. Some can be let go, as well. The recovering market should absorb them with ease.

During the tax moratorium, the details can be worked out on an innovative new two-tier system—in reality, simply another interim measure—under which no taxes of any kind may be levied against any object or activity protected by the Bill of Rights (establishing long overdue parity with the First Amendment protection afforded to churches and religion) or against any of the five fundamental human requirements in life, food, clothing, shelter, transportation, and self-defense.

Healthcare would be included under self-defense; a separate effort would be called for to establish a formal, Constitutional separation of medicine and state, exactly as there needs to be for science and state.

Another essential change is the permanent and total abolition of taxes on so-called "capital gains". Americans are always criticized, the world over, for not putting enough money in savings. The primary reason is basically Marxoid-inspired legislation against "unearned income".

Likewise, so-called "corporate taxation" is just another cynical shot at sucking the Productive Class dry—mostly with their own idiotic approval. No corporation pays taxes, they pass them on to customers, doubling the price of goods and services. Abolishing corporate taxation would, in and of itself, create an historic economic boom that will change the course of American—and world—history.

So-called "limited liability must ended, as well, along with the pernicious legal fiction that the corporation is a person, pulling a long overdue emergency brake on the size, wealth, influence, and power of corporations, and forcing their owners—the stockholders who used to be in control—to take full responsibility for whatever companies do.

The ultimate goal, of course, must be the total elimination of all taxation. Abolitionists who struggled for three hundred fifty years to put an end to chattel slavery faced no more daunting a task. One of the problems this supposedly revolutionary country has always suffered is that its government—no different from the stagnant European satrapies it should have differentiated itself from in this regard—is financed by extortion and theft, the pervasive threat to beat non-compliers up, kidnap, or kill them. At the most charitable, it's a rotten example for teaching children proper behavior. It makes one wonder whether facing the slings and arrows of no government at all might be a better choice than paying government to protect us from itself.

Along with freeing America from taxation, the nation must be free of government-issued fiat money, as well, allowing the market system to create, all by itself, many kinds of money from commodities with an intrinsic value, and imposing no coercive standard on anyone of any kind.

Money is, above and beyond everything, a medium of communication, conveying the vital datum known as "price"—how much of a thing should be made, what should it be sold for—the lack of which killed the Soviet Union and spells ultimate death for any command-and-control economy. A government monopoly on money is censorship. And inflation—printing too much paper money or generating "air credit"—is a lie.

At the same time, as taxes are being cut and abolished, something must be done about the mind-boggling, back-breaking burden of laws and regulations at all levels of government, federal, state, county, and municipal. Speed is of the essence if decades of damage inflicted by Democrats and Republicans is to be repaired—yet, some estimate that there are in excess of fifteen million regulations at just the federal level.

Individuals must be free—they must be encouraged, in fact—to make what would amount to criminal charges against regulations and regulators on Constitutional, as well as other grounds. Government must be compelled to defend itself—and each and every item of regulation—in purely Constitutional terms, or to abandon the given regulation altogether. In the end, a thorough sweep of regulations must be made, employing Article 1, Section 8—which explicitly enumerates the very few acceptable functions of government—as a broom.

This plan would not be complete without mentioning certain items of "housekeeping" that must be done before this nation can begin to heal.

Foremost among those items is to bring a halt to the criminal mischief committed by the last two administrations under the guise of economic "stimulus". This "policy" must be brought to a halt now, and any unspent money returned to the general fund. Political cronies who were the actual beneficiaries of this giveaway scheme must be stripped of all their embezzled fortunes while the politicians responsible are removed from office and prosecuted for having violated their oath of office.

Other measures are called for if we are to get this recovery right and prevent our grandchildren from having to do it all over again. No lawyers, for example, should ever be permitted in the legislature or in any other lawmaking body. Their self-serving presence there today represents a massive conflict of interest that must be swiftly resolved.

The Founding Fathers' worst, most calamitous mistake must be corrected by giving the Bill of Rights a penalty clause with real teeth.

The medieval doctrine of Sovereign Immunity—the vile notion that the King can do no wrong—must be dispensed with, once and for all.

Consistent with that, this nation can never heal fully until the criminals actually responsible for atrocities like the Philadelphia MOVE bombing, Ruby Ridge, Waco, and perhaps even the Oklahoma City bombing (to mention only four of many) are hunted down and brought to justice.

And at the end of the reform period, a greater Moratorium, against all further legislation of any kind for 100 years, must be appended to the Constitution. A notable single exception would be made for bills of repeal.

No discussion of economic reform and recovery can be considered complete without finally addressing two clusters of issues that have always impinged directly on this nation's economic health and wellbeing.

The first, international trade, is relatively easy to dispose of. In a country that is truly free—not one that merely says it is, or pretends to be—any decision about what to trade, or with whom, or for how much, does not rest with government, which can have nothing legitimate whatever to say with regard to "acts of capitalism between consenting adults", but with individual consumers, businessmen, and entrepreneurs.

Tariffs, a form of taxation that has been with us since America's beginning, have distorted markets, drained resources, made ill-gotten fortunes for the politically connected, and caused the War Between the States. There are many who argue that tariffs also cause international wars.

Businesses that try to use tariffs against foreign competitors are picking our pockets by denying us the benefits of free trade. They don't deserve to be protected by the law. And any "agreement" longer than half a page is not about free trade, no matter what it calls itself.

Finally, there is the matter of foreign policy and war.

Throughout America's history, its government has managed to supply at least one war for each generation of old men to send young men off to fight for them, just as they were sent off in their youth to fight for their generation of old men. The cycle is insane and must be stopped.

Elsewhere, I have listed America's major conflicts and examined each to see if it could be called a "just war". The vast majority fail to pass the examination. Only the Revolution, the Mexican War, and the War Between the States pass muster, All the rest were irrational, fought to enrich some group or enhance their power, and could have been avoided altogether, along with the death and destruction they caused.

"Why those three wars in particular?" I pretend to hear you ask.

Well, pretty obviously, if there hadn't been a Revolution, there wouldn't be any United States of America. I have friends—mostly British—who think our War of Independence was unnecessary, but I doubt we'd have made the centuries-spanning leap, technologically, economically, and especially in terms of the philosophy of individual liberty, that we made had we remained a part of the mercantilist empire.

America had no choice about the Mexican War, which was declared by Mexico against the United States because it had annexed Texas—the independence of which politicians in Mexico insanely refused to recognize despite their defeat by Sam Houston at the Battle of San Jacinto and the utter humiliation of General Antonio Lopez de Santa Anna. Mexico deserved what she got, her whimperings to the contrary, notwithstanding.

Finally, there is the matter of the War Between the States, commonly, but incorrectly, known as the Civil War. From a Northern point of view, it was as unnecessary as any other war the United States has involved itself in. (Contrary to Lincolnian propaganda and popular, public school belief, it had nothing whatever to do with black chattel slavery—if it had, then why do we have photographs of the Capitol dome being rebuilt throughout the war—by slaves?) But for the South, there was no alternative. While Southerners represented only a quarter of the U.S. population, through tariffs imposed by the North, they were already paying 80 percent of the taxes. Lincoln and his orcs promised to triple the tariff, reducing all Southerners to serfdom.

And yes, I include the so-called "good war" as unnecessary. In fact it was an observation of my father—a gallant Air Corps veteran, former prisoner of war, and 30-year career Air Force officer —about the strange coincidence of a war for each generation, that made me think about all the other wars Americans have fought for no good purpose.

It is impossible to estimate the degree to which all these wars, especially in the 20th century, distorted our history and retarded its progress. The trillions spent prosecuting them, the resulting waste of resources consumed and destroyed, the loss of human potential would be paralyzing, if we were not numbed to it by close historical acquaintance.

Just a single sobering thought: the genius who might have cured cancer died, instead, as a nineteen-year-old private or seaman in World War I, World War II, Korea, Vietnam, Iraq, the Balkans, or in Afghanistan.

And for what? The government and its useful idiots say it was for freedom. But not single American's freedom was ever endangered by any of these enemies. And not one of these wars prevented what happened on 9/11/2001.

No, for once I have not digressed. If America is ever to recover from this economic crisis, its leaders will have to give up their addiction to war, even though it is, indeed, "the health of the state".

Two solutions come to mind. The first is what I call the "You Go First Amendment" under which (1) the War Powers Act is repealed so that no President can ever start a war again without a Congressional declaration of war, and (2) all those voting for such a declaration will immediately join the (now former) President who requested it, in uniform, on the prospective battlefield, ahead of anybody else in the military.

Finally, because taxation is the fuel of war, military spending, as we have experienced it since World War II, has to stop. If the country needs to be defended, let it be done as the Founding Fathers intended, by a network of well-armed, well trained, and well-supplied volunteer militias—preferably organized and prepared at the county level—among whom the technical means to defend America must be distributed.

Freed of being the "cops of the world" we will prosper as never before.

As to how we get from here to there, I believe showing people what "there" is like may motivate them to change "here". That was the idea behind my first novel, The Probability Broach, the only shortcoming of which is that so far it hasn't reached a sufficiently wide audience yet.

Of course it may, if things continue to get worse.

[Editor's Note: Mr Smith notes in an email the following:

As to how we get from here to there, I believe showing people what "there" is like may motivate them to work to change "here". That was the idea behind The Probability Broach, the only shortcoming of which is that it hasn't reached a sufficiently wide audience yet. It may,if things continue to get worse.

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Four-time Prometheus Award-winner L. Neil Smith has been called one of the world's foremost authorities on the ethics of self-defense. He is the author of more than 25 books, including The American Zone, Forge of the Elders, Pallas, The Probability Broach, Hope (with Aaron Zelman), and his collected articles and speeches, Lever Action, all of which may be purchased through his website "The Webley Page" at

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