What Went Wrong Home
The North should have never compromised with the South over slavery at the Constitutional Convention in 1787. This compromise led to slaves being considered as three-fifths of a citizen when tallying up population for representation purposes for their white masters. If the North could have overcome their insecurities concerning military threats from foreign powers and formed their own country allowing the South to do the same slavery could have eventually been abolished without a secession war as it was in England and just about everywhere else on the planet. The resort to national violence in 1860 led to a great concentration of power in the federal government, the creation of an unconstitutional national fiat currency (Greenback) based on debts that if ever paid back would extinguish the currency setting the precedent for a future fiat currency that would make it impossible for the federal government to ever get out of debt again, and a general trashing of the Constitution.
The next big mistake was the creation of the Federal Reserve System in 1913 and the passage of the 16th amendment to the Constitution supposedly authorizing the income tax. This was done in anticipation of the future funding needs of supporting Britain and later the US should it enter WWI. It would allow the devaluing of the US Dollar without the knowledge of 99.99% of the people. It allowed the US to fund 70% of the war effort through an increase in the money supply or the theft of the purchasing power of the American people. It also became useful to lower the real cost of labor to counteract the power of the unions. Since 1913 the US Dollar has been devalued by 97%. The gold formerly in Fort Knox is now under the Federal Reserve Bank in Manhattan held as collateral in case we default on the interest we owe them. Abolishing the Fed should be our number one priority in returning to a Constitutional Republic.
The income tax was necessary to ensure the interest would be paid to the central bankers and also helped keep the money supply from rising too fast which could lead to domestic unrest. Even today the non-corporate income tax collected is completely used up to pay the interest on the U.S. debt. No public services are funded by it. The 16th amendment was never legally ratified. Despite this it is the supposed legal justification for the income tax although the Supreme Court ruled several times that the 16th amendment does not authorize any new taxing power which means that the court's 1894 ruling finding the income tax unconstitutional still stands. Which is why the tax is voluntary and there is no law requiring any American to pay taxes on his labor or wages – only on corporate profits. Americans are bullied into paying it by lower court judges ignoring Supreme Court decisions. Hopefully juries will soon wise up and start freeing all income tax protesters until the court produces the law requiring income taxes to be paid, which they have not been able to do because it doesn't exist.
The next big mistake was our entry into WWI which in 1919 President Wilson admitted was his biggest mistake along with supporting the Federal Reserve Act. We should have listened to Joe Kennedy, Charlie Chaplin, Charles Lindberg, Andrew Carnegie, and Henry Ford who were all opposed to our entry into the war. Mark Twain, had he lived that long would have been opposed.. Our entry caused the Russian Czar to re-enter the war which eventually led to the Bolsheviks taking over instead of more moderate forces. It led directly to the 'Dust Bowl' of the 30s by encouraging over farming of the Midwest. Without our entry into the war it is likely there would have been a stalemate in Europe with no clear winner. Instead our participation allowed England and France to impose the onerous terms of the Versailles Treaty onto Germany sowing the seeds of bitterness and economic despair that led to the rise of Hitler and WWII. Anyone who has read Hitler's biography realizes that his entire motivation for entering politics was his reaction to the terms of the Versailles Treaty which would have not been possible without our participation in WWI. Without our meddling he would have been just another anti-Jewish Austrian architect.
We entered WWI to protect JP Morgan's loans to England, but JP Morgan was partially a front for the Rothchilds and the Bank of England. So we really entered the war as a backer of England's debt. England went bankrupt fighting the war so her debts had to be inflated away in the 20s which required us to inflate our currency to provide loans to Germany (never repaid) so she wouldn't default on her loans to England and France and to prevent the British Pound from falling vs the Dollar so gold would not be drained from England. These actions led to the stock market bubble of the 20s which had to be popped in 29 leading to the beginning of the Great Depression. When England finally acknowledged her bankruptcy and went off the gold standard in 31 we had to follow and we went off the domestic gold standard in 33. Hoover and FDR turned what could have been as swift a correction as the one that followed the 1921 depression (Harding had the good sense to drastically cut Federal spending – Also Truman prevented a post WWII recession in 1946 by cutting the budget 60% and firing 10 million Federal employees) into a 12 yr depression by not taking Andrew Mellon's advice and letting the overvalued assets adjust to the new reality. The same mistake is being made again today by Bernanke and the Fed. Imagine how hard it is for a crackhead to get off crack and then think how hard it would be if every crackhead had a vote about whether to continue going into debt to fund their habit and you get an idea of how hard it is politically to allow these financial bubbles created by the Fed to deflate.
After further trashing the dollar during WWII the US exited as the winner of the war with the new reserve currency of the world. Because of the large dollar demand internationally after the war the U.S. could enjoy the benefits of inflation of the money supply without paying the penalty of rising prices domestically. However success can breed its own destruction and the overreaching of the Vietnam war and the 'Great Society' led to the U.S. abandonment of the international Dollar gold standard in 71 and the beginning of world wide fiat currencies.
After WWII in the US the belief in violence as a means of solving political disputes had attained a new respect. Politics now totally embraced the motto 'The Ends Justifies the Means.” Since everyone believes their end is the solution any means is justified. The methods used in winning the war were integrated into the military intelligence agencies and the newly formed CIA. This led directly to the decision to assassinate a sitting US President. It wasn't the first time a war preceded the assassination of a U.S. President. Civil War – Lincoln; Spanish-American War – McKinley, and it's not clear that Harding's death after WWI was by natural causes either. Also can we be sure that FDR wasn't helped along on his journey to the afterlife? I would certainly think that the right wing of this country had to be concerned about FDR giving Stalin eastern Europe as the war came to an end and with the anti-communist VP Truman waiting in the wings it had to be obvious how convenient it would be for FDR to have a stroke just as it would later be convenient to have LBJ waiting in the wings behind JFK. Every assassination attempt on U.S. Presidents has been pinned on a lone nut, but of course they were all coup d'etat attempts by those who expected to benefit from a change of political power.
The huge debt of WWII re-inflated the economy but it also made us dependent in the future on larger and larger debts to keep from falling back into deflation. We are addicted to debt and inflation as bad as any crackhead can be to crack. When the Treasury borrows from the Fed the Treasury gives the Fed an IOU and the Fed creates a computer entry giving the Treasury credit at a commercial bank which eventually increases the counterfeit money substitute supply by approximately ten times the amount of the original computer entry. If the Treasury were to buy back the IOU from the Fed then ten times as many counterfeit money substitutes as the original nominal value of that IOU would disappear back into the nothingness they came from. One can see that if the Treasury were to buy back all their IOUs and retire the complete 13 trillion public debt there would be no currency left in circulation.
However before that ever becomes a problem the second reason would present itself. That is the deflation caused by the decreasing money supply would cause domestic unrest as we can see how unpopular the latest bursting housing and stock market bubble was. So we are destined to continue until we either default on our public debt or try to inflate it away like Zimbabwe. In either case get ready for years of decreasing living standards and a possible dissolution of the Union as we pay for our many years of living beyond our means.
Federal control of education has been very useful in covering up all of the above. Instead it has been used to indoctrinate our youth to believe that the very villains who have taken our freedoms and made serfs out of us are heroes.
The combination of the War between the States, the Federal Reserve Act, the income tax, federal control of education, endless wars, corporate and everyman welfare, ignoring Constitutional restraints on Federal power, and going off the gold standard has dealt a fatal blow to our Republic whose results are just beginning to become apparent.
The reason governments trash gold backed currencies as “barbarous relics” is because the honest currency requires governments to live within their means. Looting the middle class to fight wars and subsidize special interests, and buy off lower and middle class voters is not possible with an honest currency. History has shown the fiat currencies to be the barbarous relics that always eventually go to zero value which is why the founders had the good sense to establish a silver backed currency in the Constitution.
All governments can do is take money and resources from the lootees and give to the looters. The looters then become the biggest supporters of a larger government. Can anyone come up with an example of a government that ever decreased in size? (The Swiss seem to have done the best job of limiting the size of their Federal government because of their strong commitment to local authority.) Generally government's expansion always increases until the lootees stop producing and the bloated Frankenstein collapses. When Rome collapsed it was because the lootees welcomed the Barbarians as relief from their Roman looters.
There is an inverse relationship between the prosperity of this country and the size of government. In the early 1800s the entire Federal government fit in one building. The beginning of the end came with our entry into WWI, the creation of the Federal Reserve, and the abandonment of a gold standard leading to the eventual implementation of worldwide fiat currencies.
Should we ever get another chance to start over we need to recognize that human nature is susceptible to the temptations that government power places in the hands of the political class. They will always succumb to the temptation to spend other people's money whom they don't know to help those that they do know until they bankrupt the country. If the 10th amendment wasn't a strong enough prohibition on Federal power to prevent the Frankenstein we have today then we need a stronger prohibition. The only way I see to prevent this from happening again is to make all taxation voluntary. If the people aren't willing to voluntarily fund government then it shall not exist. Borrowing would be prohibited and all government spending would have to come from prior tax collections. This is the only way I see to put the people back in charge again and prevent unbridled government growth.