Hi,
I am a recent convert to the Austrian economic view and I still have a relatively large reading deficit on the standard library, so forgive me if this idea has already been floated.
Anyway, I was thinking about how money is created in our system. The majority of the increase in the money supply requires the Fed to purchase government debt to create the new money (this money will be multiplied out many times, but without this so-called "high-powered" money, the money creation process is significantly slowed). If we could control the Federal debt ceiling, then we could strangle most of the air supply to the inflationary beast.
In Oregon, we have the ability to create ballot measures that overturn the legislative tax increases and Oregonians have a reputation for using this power. The legislature has become much more polite about how they spend our money, even though they still spend money like a spoiled hotel heiress.
So, why not start a PAC (or whatever, I don't know how it works) to get Congress and the states to pass an amendment requiring Congress to receive majority approval from the state legislatures (who would be expected to put it to popular vote, ala the Presidential election) to raise the Federal debt ceiling. We could initially set it at $11T, which would give them about two or three years to figure out how they're going to stop the budgetary hemorrhaging.
Here's two benefits of this idea:
a) We don't even have to worry about lowering the debt ceiling because the inflationary system will be strangled simply by being unable to raise the debt ceiling. The only other option to keep inflation rolling is to either print money outright (blatant inflation) or to tax now. Either way, they can't hide what they're doing.
b) It would be very politically difficult to oppose the legislation. If we could get someone like Ron Paul to introduce it and get it onto the floor, and work through the more libertarian politicians in state legislatures throughout the US, opposing the amendment would almost be political suicide since Americans almost unanimously hold that the Federal debt is bad, very bad.
In the end, I don't think this changes anything, but maybe it can prevent the inevitable collapse of the fiat monetary system from being as destructive to human life and welfare as it otherwise is going to be.
Thoughts?
Clayton
I don't want to be a wet blanket here, but people don't know and don't care about how the monetary system works. It is in fact very boring, even to me. I don't think you could possibly get the number of states to ratify the thing. (I'm assuming amendments are made by getting citizens to vote, right?) I think it would be politically unfeasable to do it, no politician would give up god-like power.
I read something like this in (Milton) Friedman's Free to Choose where he advocates a similar constitutional amendment. Here it is:
SECTION 1 [Balanced Budget]. The Congress shall adopt for each year a budget, which shall set forth the total receipts and expenditures of the United States. No budget in which expenditures exceed receipts shall be adopted, unless three-fifths of each House of Congress approve such budget by a rollcall-vote directed solely to that subject. No appropriation bill shall be passed Which would cause the total expenditures for any year to exceed the expenditures in the budget for such year. SECTION 2 [No Automatic Tax Increases]. The receipts collected in any year shall not exceed, as a proportion of the national income, that collected in the prior year, unless a specific increase in such proportion has been approved by each House of Congress by a rollcall vote directed solely to that subject. SECTION 3 (Waiver During Wartime]. The Congress may waive the provisions of Section 1 with respect to any single year in which a declaration of war is in effect. SECTION 4 [Definitions]. Terms used in this article shall be construed in accordance with their meanings on the date on which this article was submitted to the States for ratification. SECTION 5 [Effective Date]. This article shall take effect on the first day of January of the second calendar year beginning after its ratification.
SECTION 1 [Balanced Budget]. The Congress shall adopt for each year a budget, which shall set forth the total receipts and expenditures of the United States. No budget in which expenditures exceed receipts shall be adopted, unless three-fifths of each House of Congress approve such budget by a rollcall-vote directed solely to that subject. No appropriation bill shall be passed Which would cause the total expenditures for any year to exceed the expenditures in the budget for such year.
SECTION 2 [No Automatic Tax Increases]. The receipts collected in any year shall not exceed, as a proportion of the national income, that collected in the prior year, unless a specific increase in such proportion has been approved by each House of Congress by a rollcall vote directed solely to that subject.
SECTION 3 (Waiver During Wartime]. The Congress may waive the provisions of Section 1 with respect to any single year in which a declaration of war is in effect. SECTION 4 [Definitions]. Terms used in this article shall be construed in accordance with their meanings on the date on which this article was submitted to the States for ratification. SECTION 5 [Effective Date]. This article shall take effect on the first day of January of the second calendar year beginning after its ratification.
SECTION 3 (Waiver During Wartime]. The Congress may waive the provisions of Section 1 with respect to any single year in which a declaration of war is in effect.
SECTION 4 [Definitions]. Terms used in this article shall be construed in accordance with their meanings on the date on which this article was submitted to the States for ratification.
SECTION 5 [Effective Date]. This article shall take effect on the first day of January of the second calendar year beginning after its ratification.
More of it here. 10 bonus points if you can spot the moral hazard in the amendment.
If this idea wasn't successful I don't think any new ones will be. If only your founding fathers could have predicted fiat currencies...
Irish Liberty Forum
MatthewWilliam:More of it here. 10 bonus points if you can spot the moral hazard in the amendment.
Is it being able to waive the first section in time of war? As if the president doesn't already have enough reasons to keep the country in perpetual warfare....
Stolz2525: MatthewWilliam:More of it here. 10 bonus points if you can spot the moral hazard in the amendment. Is it being able to waive the first section in time of war? As if the president doesn't already have enough reasons to keep the country in perpetual warfare....
Ding ding ding ding ding!! We have a winner!
ClaytonB: Constitutional Amendment Proposal
Constitutional Amendment Proposal
You're thinking in the wrong frame. It's wrong to say "How can we amend the Constitution to keep the bad guys in line." The correct answer is "Why is the Constitution a valid contract? I never specifically consented to it. Why do people who died 200 years ago have the right to impose a contract on me?"
Once you realize "Taxation is theft!" and "A Constitution isn't a valid contract unless everyone unanimously conents.", then it's impossible to justify any form of government at all.
I have my own blog at FSK's Guide to Reality. Let me know if you like it.
Technically speaking you're right. But then again, it just might be an incentive to actually declare war, not wage undeclared wars like we are in Iraq, Afghanistan, and like we did in Vietnam and Korea.
Political Atheists Blog
I agree that taxation is robbery and a unilateral monopoly of decision-making cannot be just. That said, we're stuck with this system for the foreseeable future and the nature of its inevitable breakdown will determine how dire the consequences are. I think it is only humanitarian to desire that the breakdown of our system be as "gentle" as possible, although that goal may be unattainable.
That's pretty close, but I was thinking of controlling the debt ceiling itself, which is logically equivalent to requiring a balanced budget (once the debt ceiling is reached). The advantage of this approach is that it is much more difficult, politically, to argue against restricting the Federal debt than it is to argue against a balanced budget. The budget being "out of balance" for a year or two sounds like no big deal, something which can always be remedied. Debt, on the other hand, always has a negative connotation.
I think you're right, however, that not enough people care and the super-majority required to pass any such amendment just couldn't be attained.
Clayton -
ClaytonB: I agree that taxation is robbery and a unilateral monopoly of decision-making cannot be just. That said, we're stuck with this system for the foreseeable future and the nature of its inevitable breakdown will determine how dire the consequences are. I think it is only humanitarian to desire that the breakdown of our system be as "gentle" as possible, although that goal may be unattainable. I think you're right, however, that not enough people care and the super-majority required to pass any such amendment just couldn't be attained.
This gets back to the agorism debate. Agorism is a strategy for surviving the economic collapse and minimizing the damage.
If you read the Constitution, there is *NO* provision for direct ratification amendments by the people. Amendments are ratified by Congress and the indvidual state legistlatures. You can have an "Article V convention", but there is no guarantee that such a convention would be recognized as legitimate, nor that an Article V convention wouldn't be hijacked by other interests.
MatthewWilliam: SECTION 1 [Balanced Budget]. The Congress shall adopt for each year a budget, which shall set forth the total receipts and expenditures of the United States. No budget in which expenditures exceed receipts shall be adopted, unless three-fifths of each House of Congress approve such budget by a rollcall-vote directed solely to that subject. No appropriation bill shall be passed Which would cause the total expenditures for any year to exceed the expenditures in the budget for such year. SECTION 2 [No Automatic Tax Increases]. The receipts collected in any year shall not exceed, as a proportion of the national income, that collected in the prior year, unless a specific increase in such proportion has been approved by each House of Congress by a rollcall vote directed solely to that subject. SECTION 3 (Waiver During Wartime]. The Congress may waive the provisions of Section 1 with respect to any single year in which a declaration of war is in effect. SECTION 4 [Definitions]. Terms used in this article shall be construed in accordance with their meanings on the date on which this article was submitted to the States for ratification. SECTION 5 [Effective Date]. This article shall take effect on the first day of January of the second calendar year beginning after its ratification.
Well, the problem is that it gives an incentive to go to war.
Also, couldn't Congress distort what the national income is to further its interests?
So, it is hard to increase taxes. But what about other ways of cheating the balanced budget, like:1. Contracts where the workers are paied later
2. Not giving acurate figures on the budget
And so on...
I propose the following ammendment to the constitution (I need to work on the wording):
People do not need to obey the government, and can establish alternatives.
Schools are labour camps.