12/24/2015 -
Judge Andrew Napolitano
As if to promise a Christmas present, Congress has just finished
approving the finances of the federal government for the next few months. Santa
Claus would have done a better job. During early 2016, Congress will pay the
government's bills by borrowing money from individual and institutional
lenders. Those folks will lend the feds all the money the feds need because the
law requires the feds to pay them back.
The "pay them back" ideology is a very curious one. It
is true that the full faith and credit of the federal government guarantees the
payment of the government's debts. Without that lawfully binding guarantee, who
would lend money to an institution that carries a debt of $18.8 trillion? So
the investors who have lent money to the feds know that their debts will be
repaid in a timely manner.
Because the federal government spends $1.5 trillion more annually
than it collects in taxes and other revenue and because its payments of
interest alone on the money it has borrowed will soon be about $1 trillion a year,
it can only repay its debts by borrowing more money.
Since 1911, the federal government has not repaid a debt from tax
revenue. It has always borrowed more money to pay its lenders. This is known to
economists as rolling over the debt.
President Woodrow Wilson -- who gave us a racially segregated
military and federal civilian workforce, brought us into the horrific and
useless World War I, arrested Americans for singing German beer hall songs in
public, campaigned for the federal income tax by promising it would never
exceed 3 percent of income, helped to create the cash-printing Federal Reserve,
laid the groundwork for Prohibition, and kept Jim Crow going -- borrowed $30
billion to pay for World War I. That money was borrowed from investors and from
the Federal Reserve, which in those days literally printed the cash that it
lent.
The $30 billion that Wilson borrowed was repaid by the feds with
borrowed dollars. And the folks who lent the feds those dollars were in turn
repaid with borrowed dollars. That inflationary cycle has been repeated
countless times since all this borrowing from Peter to pay Paul became the
financing method of choice for the feds.
As a result of this, the federal government still owes the $30
billion that Wilson borrowed, but it owes it -- obviously -- to different
lenders from those who originally financed the Great War. It has paid more than
$15 billion in interest payments on that $30 billion.
Who could run a household or a business the way the feds have run
the government in the past 100 years?
As we approach a presidential election year, the federal
financing-by-borrowing scheme is seen as a standard operating procedure by all
the Democratic candidates and by all the Republicans, as well, except for Sen.
Rand Paul. He and he alone among the major candidates would have the feds live
within their means and stop the vicious circle that Wilson began.
He understands that government has limits. Those limits are
written down in the Constitution. He recognizes, as his competitors do not,
that the government simply cannot morally or constitutionally right any wrong,
regulate any behavior, borrow any amount, or tax any event as long as it can
politically get away with it. When it does, we end up with war and debt.
Whenever you hear a presidential candidate proclaiming that the
first job of the president is to keep America safe, challenge that absurdity.
Invite that candidate to read the Constitution, which lays out the jobs of the
president -- the principal of which is to keep us free and safe. If a president
keeps us safe but unfree, he is simply not doing his job. Only Sen. Paul has
made that argument.
The world today is a sad place, and those who love freedom
sometimes feel we are shoveling against the tide. But for just a moment, at
this time of year, we should pause and remember an event that occurred about
2,000 years ago in the Middle East.
The world then was a far worse place, yet a light seared through
the darkness. A baby was born in a cave. The Word was made flesh and dwelt
among us. The baby came into the world so that we might have life and live it
abundantly. The baby came into the world so that we would be set free from our
own sins, free from the temptations of the world and free from the governments
that seek to control us.
The baby was the Son of God and the Prince of Peace and the savior
of the world. This week we celebrate His birthday.
Merry Christmas.
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