The U.S. Constitution: Tool of Centralization and Debt, 1788-Today

04-04-2011 • GaryNorth.com/

The Constitution was established in order to strengthen the powers of the Federal government. It strengthened them vastly beyond what the British had attempted to impose on the colonies in the early 1770s. Before the American Revolution, the British level of taxation on the colonies was in the range of 1%. There were sales taxes on imported goods, but most people, then as now, bought domestically produced goods. There were taxes on paper after 1765. This affected mainly lawyers and newspaper publishers. By alienating these two influential groups, the Parliament stirred up a hornets' nest. When professional talkers and writers get squeezed by the government, the public gets an earful. "The end of liberty is nigh!" On the contrary, the end of a debt-free colonial governments was drawing nigh. Revolutions must be financed. They are always financed with debt and fiat money. Creditors buy the IOUs with good money, then weaker money, and then -- at the end of the revolt -- worthless money. Then they have a supreme political goal: to get the new government to pay off the worthless IOUs at face value in gold or silver. In the 1780s, it was silver. The Constitution was deliberately designed to centralize power vastly beyond what the legitimate constitution -- the Articles of Confederation -- allowed. The Federal government in 1787 was weak. In 1788, it was vastly stronger. The newly created Federal government immediately did two things. It accepted responsibility to pay off state debts. This was Alexander Hamilton's proposal. He proposed it specifically to centralize the government by granting enormous profits to the investment class that had bought state debts for practically nothing.