In the oft-told story, The Emperor’s New Clothes, the vain emperor was constantly showing off his new clothes and wanting more impressive new clothes. To satisfy his vanity, a weaver told him there were magic clothes that were invisible to anyone who was unusually stupid. The emperor wanted them and the weaver went through the motions of dressing the emperor in magic clothes. While the emperor could not see the clothes the weaver dressed him in, he pretended to see them so he did not appear stupid. The emperor was told by all how fabulous were his new clothes. The emperor paraded everywhere so all could see the magic clothes that fit him to perfection.
One day, a little child saw the emperor, and said out loud, “But he hasn’t got anything on.” The child’s father dismissed his comments as “prattle.” But many in the crowd knew the child was right and whispered to others what the child said. The emperor heard it and suspected the child was right. But not wanting to appear wrong, he continued to walk prouder than ever in his magic clothes, and his nobleman continued to hold the train that wasn’t there.
Like the emperor, the leaders in our federal government dismiss as “prattle” the many in the crowd who cry, “The federal government hasn’t got any money at all.” But the federal government, unwilling to acknowledge it has no money, continues to proudly print more magic money.
The United States is $31 trillion in the hole. In the last several months, the Biden administration persuaded Congress to enact the Inflation Reduction Act ($500 billion), subsidies for the semiconductor industry ($46 billion) and is promising to forgive $400 billion in student loans and transfer another $36 billion to bail out the Teamsters Central States Pension Fund. The federal government of the U.S. is a “Spending Addict.” It is in desperate need of rehabilitation, but like the Emperor, it is too proud to stop doing stupid, shameful acts.
The federal government is the central reigning governmental body in the U.S. It is not the United States, notwithstanding the caption on lawsuits. Rather it is a constitutionally established mechanism in which representatives of the people are granted limited powers to serve the people and advance the common good of the nation. These representatives are not given individual or personal power. They are fiduciaries who must exercise their powers solely for the benefit of the common good of the nation and the American people.
The framework of our Constitution has few guardrails as to the type of government it can create. As long as any government is elected by the people to make laws and serve their interests, it is an acceptable Republican form of government under the Constitution. Today, while the people of the nation elect representatives that have the theoretical power to change the laws, the political culture of the nation is such that these representatives are more loyal to the political party that helped them get elected than to the institution in which they serve. As such, our representatives are elected, but their power to change laws is limited by the power of the political party of which they are a member; not the institution in which they serve.
By giving their loyalty to the political party rather than the institution in which they serve, the power of representative government is severely limited. In this instance, it is the political party that protects freedom. In the other instance, it is the institution of Congress that protects freedom. Under the protection of a political party, our government functions as a combination of capitalist, socialist, oligarchy, kakistocracy, woke cult, and very likely, though unproven, a “deep intelligence state” that allows the optics of a Republic to exist in order to maintain the secrecy of action and the accumulation of greater powers.
The intent of our founders was to place perpetual sovereignty with the people of the country, not the federal government. As such, the federal government is an entity separate from but theoretically subject to control by the people. Unfortunately, those occupying the institutions comprising the federal government manipulate the Constitution and our laws to amass great personal power over the people. The individuals occupying federal positions, especially those in the Executive branch, have used their accumulated powers to become rulers and have transformed the people into servants.
Being separate from the people has allowed the federal government to use its powers to spend our money and impose mandates on us. The question must be asked who will pay off the debt? Notwithstanding its gross mismanagement of the nation, the federal government will tax the people to pay for its mismanagement. It has given itself the power to impose a tax burden of almost any amount needed to pay for what it wants to be done. From 1932 to 1981, the marginal tax rate in the U.S. ranged between 63% – 91%.
The national debt is 102% of the nation’s Gross Domestic Product (“GDP”) of the nation. It is expected to be double the GDP by 2051. Each taxpayer’s share of the national debt today is $245,191. The average personal income in the U.S. is $63,211. If Americans are concerned with inflation, wait until they get the bill for the national debt. The national debt will become so burdensome to future generations that it will undermine democracy. If the federal government taxed current citizens the amounts needed to pay for today’s government, a tax revolt would topple the government. It avoids being confronted for its lack of responsibility by passing the debt to future generations who have no responsibility for creating it.
If it is our responsibility today to ensure the federal government runs the country for the common good, we have failed. The federal government has spent more money than it brings in almost every year since Calvin Coolidge was president in 1930. The American people now send the federal government over $4 – $5 trillion annually for its operations. That amount is never enough. The federal government always spends trillions more annually. It just spends and spends without restraint. 88% of our $31 trillion national debt was accumulated by our last six presidents.
On the asset side of the balance sheet, the federal government holds only $5.6 trillion of assets in cash, accounts receivable, loans receivable, and property, plant, and equipment. Its largest asset is $1.6 trillion of student loan debt, which the government wants to forgive to curry political favor with college students.
The federal government has so far escaped default on its debt obligations by printing magic money.
The federal government has also developed mechanisms for passing the cost of federal programs onto the public without having to account for the cost. Specifically, the federal government has imposed so many statutory laws on the private sector that it is a “fruitless project” to count them. In addition to statutory laws, federal agencies have imposed over 200,000 regulations between 1976 and 2016 and published over 10,000,000 pages of regulations between 1950 – 2021. Regulations are also laws. Additionally, presidents have issued 14,088 Executive Orders, and hundreds of thousands of Guidance Documents to explain the hundreds of thousands of issued regulations. Congress has also enacted 136 Emergency laws that allow the president to rule as a dictator at the time of their choosing. These “laws” are not only costly, but they also restrict our freedom, literally mandate by mandate. The emergency laws come in the form of Covid lockdowns and vaccine mandates that carry a penalty of being fired for non-compliance.
Furthering the tentacles of the federal government, it has thousands of employees in every state in the nation. It also provides state and local governments with $721 billion in grants to manage programs the federal government wants to be implemented but does not have the constitutional authority to impose by law or regulation.
With all of its massive spending and millions of workers, laws, and regulations to control every aspect of life, the federal government oozes incompetence. Not only is it bankrupt, but it is also unable to control its own borders, the essence of sovereignty. Its educational system, the core system for supporting future competition with the world, is in disarray. The U.S. ranks 30th in math and 18th in reading, on international assessments. The American people know the nation is not well governed. Seventy-four percent of its people believe the U.S. is going in the wrong direction. Only 21% think it is going in the right direction. Forty-three percent of Americans believe the U.S. will be in a civil war in the next ten years.
While the federal government continues to print more and more money while dismissing as prattle those claiming it has no money; it will soon find that magic money, like magic clothes, is not real. Eventually, the debt will have to be repaid by people who had no say in its borrowing or spending. As a final act to save itself, the federal government will put future generations of Americans into involuntary servitude to it as a means of paying off the national debt. So much for the federal government worrying about the common good for Americans.
William L. Kovacs, author of Reform the Kakistocracy, winner of the 2021 Independent Press Award for Political/Social Change, and former senior vice president at the U.S. Chamber of Commerce.