August 8, 2010
1913 Was a Very Bad Year
Prior to 1913, there was no federal income tax. The states had rights and representation in Washington, D.C., there was no Federal Reserve Bank, and the federal government lived under the enumerated powers afforded within the U.S. Constitution. What a difference one year can make...
Almost a hundred years later, it's clear that the policies established in 1913 must be revoked in order to restore power to the people and the states. But can the American people stuff the genie back in to the bottle?
The history of the U.S. tax system can be summed up in one paragraph...
Prior to the enactment of the income tax, most citizens were able to pursue their private economic affairs without the direct knowledge of the government. Individuals earned their wages, businesses earned their profits, and wealth was accumulated and dispensed with little or no interaction with government entities.
Passage of the 16th Amendment to the Constitution would forever change life in America, and not for the better.
The 16th: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.
It's hard to imagine how the aforementioned amendment could have been written any broader, or why 36 states would agree to such an open-ended federal power to strip citizens of their rightful earnings via taxation without representation and with literally no boundaries or limits to how far the federal government could ultimately go in their effort to buy the votes of some with the assets of others.
Since 1913, the federal tax code has been used as a primary tool of leftist social engineering, in which the people have been forced to fund a government they no longer recognize and no longer support. The U.S. Congress has a mere 11% approval rating today, and the executive branch is supported only by the 28% of citizens who benefit personally from the robbing of fellow citizens.
The states are now fiscal dependents of the federal government, and the federal government is a twenty-trillion-pound ape trampling through the rose garden of American life. Nobody seems to have any clue how to rein it all in.
Further, thanks to the 17th Amendment, also passed in 1913, the states no longer have representation in Washington, D.C. Once again, what seemed like a simple sentence and a good idea to some at the time has since been used by the federal government to eliminate states' sovereignty and rights.
The 17th: The Senate of the United States shall be composed of two Senators from each state, elected by the people thereof, for six years[.]
The year 1913 gave birth to today's interpretation of the abused "supremacy clause" -- a wholly anti-American notion that the federal government has unlimited, "supreme" power over the states and the people. Without states' representation in D.C. due to the 17th Amendment, the Fed is free to run wild...and running wild it is.
Prior to the passage of the 17th, the U.S. Senate was the legislative body that represented the interests of the states, namely state sovereignty and states' rights. The 17th eliminated both by eliminating state's representation and reducing the Senate to just an extension of the people's House of Representatives.
The Senate was elected by each state legislature and obligated to serve each state's interest as a result. Unlike the House of Representatives -- in which local representatives known by local voters are elected by their neighbors to represent the will of constituents in their home districts -- members of the Senate, who are not known or accessible to most voters in the state, also represent the will of constituents they don't know and with whom they are no longer in touch. The distance leaves the state itself unrepresented.
As a result, the federal government is now engaged in running roughshod over state sovereignty and rights as a daily event. The recent situation in Arizona, where the Feds sued the state for attempting to enforce existing immigration laws that the Feds refuse to enforce, is but one glaring example of federal tyranny made possible by the 17th Amendment.
The Federal Reserve
On the heels of the banking Panic of 1907, Democrats were elected into full control of both congressional chambers. With full control over the legislative process, they wasted no time shifting the focus of the federal government from the "enumerated powers" to federal power and social engineering.
Financial panics and bank runs were all too common during the 19th and early 20th centuries. Some were more severe than others, but most followed the same general pattern. The misfortunes of a prominent speculator would undermine public confidence in the financial system. Panic-stricken investors would then scramble to cut their losses. And because it wasn't uncommon for speculators to double as bank officials, worried depositors would rush to withdraw their money from any bank associated with a troubled speculator.
The Federal Reserve System was established to provide a stabilizing factor to occasional extreme volatility in the financial markets, usually caused by overreaching speculative trading by only a handful of eager investors.
The new system emerged from a private-sector investment by then 70-year-old J.P. Morgan, which stalled the growing run on banks caused by the financial trouble of the New York Knickerbocker Trust. J.D. Rockefeller stepped in to help out, along with a few other well-heeled financiers.
Just as Obama and Democrats are doing today, Democrats tried to saddle Republican President Teddy Roosevelt with the blame for the banking panic.
One person who didn't seek advantage in the crisis was William Jennings Bryan, the Democrats' perennial presidential candidate. In an impromptu speech to the assembled crowd at the Binghamton, New York train station, he came to the defense of President Theodore Roosevelt, a Republican. "I notice," said Bryan, "that one of the officers of the bank that just closed its doors yesterday attributed it to President Roosevelt. That is not the reason. Don't blame the Sheriff, but the horse thief."
It wasn't the federal government that stopped the run on banks; it was private investors. But the formation of the Federal Reserve System that followed would once again give the federal government power it could not be trusted to hold.
From that moment forward, it would not be private investors who bailed out failing banks, but American taxpayers. Even worse, there would be no end to the printing of money and accumulation of public debt once the federal government via the Federal Reserve had what would be treated as a bottomless well from which to draw cash.
Beginning in 2001, the Bush administration tried for seven years to convince Congressional Democrats, including Barney Frank and Christopher Dodd, that there was impending trouble with Fannie Mae and Freddie Mac, but to no avail.
It was the Federal Reserve and American taxpayers who would be held accountable for the misdeeds of Democratic incompetency and a refusal to address the growing mortgage problem until there were no good options left.
In the end, the Obama administration would drive the nation from $10 trillion in debt to $14 trillion in just their first two years in office, with trillions more in unfunded social spending aimed at propping up the failing labor unions that will keep them in political power.
The year 1913 was one of the worst years in American history, as the people thereafter became fiscally responsible for the unethical actions of a few in banking and government. The states lost their representation in the Senate, state sovereignty, and rights, while the Fed grabbed "supreme powers" and the Federal Reserve became the arm of government that would sink the nation in a mountain of debt.
In 2010, Democrats now control both Houses of Congress, the White House, the press, and the courts. What happened in 1913 is nothing compared to what Democrats have in store for America now.
Before the people and the states can control this nation again, they will have to undo all the damage done in 1913 which allowed further damage to be done during FDR's Raw Socialism Deal.
The 1st, 2nd, and 10th Amendment initiatives underway in the states today are necessary due to the events of 1913. Reverse 1913 and most of the problem is easily solved.