Fake money and borrowed time: A political system incapable of living within its means

OPINION:

“Freedom is always just one generation away from extinction.” — Ronald Reagan (1911-2004)

In December 1776, just five months after the Declaration of Independence had been signed and a year and a half into the Revolutionary War, Thomas Paine sensed desperation throughout the colonies. It prompted him to write a candid and iconic essay titled “The American Crisis,” which began with the famous line “These are the times that try men’s souls.” He made an argument similar to one that Ronald Reagan would make 188 years later.

The essence of that argument is that our personal liberty is fragile. Since government is essentially the negation of liberty, government is liberty’s greatest threat. So, we must exercise our freedoms with prudence and courage. We must also be skeptical of what the government says and does.

Paine and Reagan, and those who risked all to sign the Declaration and fight against England, recognized that our freedoms are natural to us.

Freedom is the right to make personal choices — about religion, speech, association, self-defense, travel, privacy, money and property — without a government permission slip or anyone’s approval. A right is an indefeasible claim against the whole world that all humans possess. Our rights can be extinguished or denied only when a jury has convicted us of violating someone else’s rights.

That is, at least, the theory of the Declaration, the theory upon which the colonies seceded from England and the theory upon which the states created the American republic.

Today, our rights can be extinguished or denied, and politicians and bureaucrats can take our liberty and property without a jury trial.

These are the times that try our souls because, at home, we have a government that spends $2 trillion a year more than it takes in, while abroad, it taunts the Russian dictator by paying for a war in Ukraine that the Ukrainians simply cannot win.

At home, both political parties in Congress over the past 100 years have spent $31 trillion more than the feds have collected, have written any law, regulated any behavior, taxed any event, spent any sum, and intruded upon any property or process that they believed would advance themselves politically.

Last month, the American private industry added 517,000 new jobs to its payrolls. That brought the unemployment rate down to its lowest in 58 years. And when the traders who move the equity markets learned this, the markets went down!

Down? It’s because the traders fear that their masters at the Federal Reserve will respond to good economic news by raising interest rates. Why? Because the Fed has so flooded the market with fake money — more dollars chasing the same amount of goods and services — that inflation is rampant.

So, to correct its own mistakes, the Fed is making it more expensive to borrow money by raising its base interest rate, thus inducing the large banks that are dependent upon it for artificial cash to raise their interest rates. Higher interest rates will induce less or deferred borrowing and thus— this modern monetary theory goes — a reduction in economic activity and a lessening of inflation.

But interest on borrowing is the rent we pay to use other people’s money. Why should government planners regulate that rent? It shouldn’t. It should be regulated as all rents are (except real estate in New York City, where World War II-era rent controls still abide): by the law of supply and demand. Is it constitutional for the Fed to regulate interest rates? The Supreme Court, in 100 years of fake money, has never ruled on this.

But the federal government is one of limited powers, all of which are derived exclusively from the Constitution — and there is no grant or even hint of a grant in the Constitution of power to the feds or their offspring to regulate interest rates.

The Constitution expressly prohibits the government from taking property without just compensation. When the government spends more than it collects in revenue, it borrows — often Fed-created money — in order to pay its bills, and that causes more inflation. It pushes the obligation to repay the borrowing with interest onto generations of Americans as yet unborn.

Stated differently, without raising taxes, the government takes your money.

So today, we have a federal government existing on fake money and borrowed time.

What is the goal of spending $100 million in Ukraine? Is it the expulsion of Russian troops and citizens from Crimea and eastern Ukraine, or is it the expulsion of Russian President Vladimir Putin from office? Does either circumstance remotely affect or threaten U.S. national security? No.

Has Mr. Putin threatened the United States? No. The United States has threatened him. Just ask Sen. Lindsey Graham, South Carolina Republican, who publicly requested the president to assassinate Mr. Putin. We have arms at the Russian border. They have none at ours.

Do we know who in Ukraine received American military equipment and cash? No. Has Congress declared war on Russia? No. Can Congress fund a war without declaring it? No, but Congress does what it thinks is politically popular, the Constitution be damned.

Then why are we funding a war against Russia? We are doing so because the government here is out of control and the president is unpopular, and when that happens, the government chooses war. Presidents kill because they can.

So our property is being devalued at home by a political system incapable of living within its means and abiding by the Constitution and by saber rattling abroad in the face of a country that poses no threat to America.

Freedom is one generation, maybe one nightmare event, from extinction because the people in whose hands we have reposed the Constitution for safekeeping hate it. And in the process, these constitutionally unfaithful stewards have given away our liberty and property.

• Andrew P. Napolitano is a former professor of law and judge of the Superior Court of New Jersey who has published nine books on the U.S. Constitution.