A Republic, If You Can Keep It

“A Republic, If You Can Keep It”
by Dave Coleman

At the close of the Constitutional Convention, a woman asked Benjamin Franklin what type of government the Constitution was bringing into existence. Franklin replied, “A republic, if you can keep it.”

What allows the kind of excesses that drive conservatives and libertarians mad is the fact that most Americans don’t know what the heck Ben Franklin was talking about.

Most Americans today think that “republic” is simply another name for “democracy”.

Not so. The difference between a republic and a democracy lies in the ultimate source of official power. A republic gets its authority from a charter – in America’s case, a Constitution.

The Constitution places limits on both the government and the governed that no referendum can undo without first amending the Constitution. Amending the Constitution requires 2/3s of states (no voters) to accomplish.

The Founders knew the difference between a Republic and a democracy. That is why they chose a republic.

There is but one kind of republic, since a republic is constituted according to the rule of law, rather than the whims of either the government or the governed.

Democracy (from the Greek, “demos=mob” and “kratos=rule”) comes in many forms. A direct democracy is one which is ruled entirely and directly by the people; to decide on an issue, the question is put to the vote of the population and the majority of those votes determine the outcome.

Benjamin Franklin explained the threat democracy poses to liberty thusly: "Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"

In a representative democracy, citizens elect people to represent their interests in the government, and these representatives determine how issues are decided.

In a republic, people may vote for their representatives, but the state’s responsibilities are limited because they are clearly bound by a charter. Freedom is realized by the willingness of the people to live by the dictates of the charter.

The republic’s charter -- in America’s case, the Constitution – is what protects and guarantees the individual’s rights.

The Declaration of Independence spells out the guarantor of those rights, which is why those who wrongly believe America is a direct democracy and those who would like to change America into a direct democracy hate the preamble so much.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights. . . .”

The Founders elected to make God the Guarantor of American civil liberties because what the Creator endows, government cannot take away. Unless the Creator is a myth. If the Creator is a myth, so are your God-given rights. The government then has authority over them as a matter of course.

Founding Father Patrick Henry’s observation has been amply proved over the past half century: "It is when people forget God that tyrants forge their chains."

When America was truly a Republic, the United States was a society in which people could, by and large, engage in any occupation or economic enterprise without a government license, permit, or regulation.

When America was truly a Republic, people could accumulate unlimited amounts of wealth without government interference, because the Constitution did not permit the government to levy taxes on income.

When America was a republic, the government was not permitted to take care of people — no Social Security, Medicare, Medicaid, welfare, education grants, or foreign aid. America was compassionate, but every citizen was expected to pull his own weight. Charity was the province of the family or the church. It was not the responsibility of government.

The Founders understood that once the government got into the charity business, a significant segment of the population would shift their dependence from family and faith to government handouts.

That would empower the government with the ability to introduce practically anything they wanted by saying that opposing it might threaten Social Security, welfare, unemployment insurance, or, as is currently being debated, health care.

The Obama White House wants health care because threatening Social Security only scares seniors. Threatening welfare only scares that segment of the population that depends on their monthly check. Threatening unemployment insurance only scares the unemployed.

But EVERYBODY needs health care. And if the only place to get it is through the government, then a threat to universal health care would scare everybody.

Assessment:

Thomas Jefferson wrote the Charles Yancey in 1816; "If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be."

A recent study of 1000 Oklahoma high school students found that only 3 percent would be able to pass the U.S. Immigration Services' citizenship exam, while incredibly 93 percent of those from foreign countries who took the same test passed.

Only 28 percent of Oklahoma students could name the "supreme law of the land" (the Constitution), while even less could identify Thomas Jefferson as the author of the Declaration of Independence.

Barely one out of every four students knew that George Washington was the nation's first president. None of the students correctly answered 8 or more of the 10 questions, and 97 percent scored 50 percent or less.

The problem is not limited to Oklahoma students. It's a national problem.

A similar study in Arizona found that only 3.5 percent of public high school students would be able to pass the citizenship test. A survey of American adults by the American Civic Literacy Program resulted in some equally disheartening findings.

Seventy-one percent failed the test. Moreover, having a college education does very little to increase civic knowledge, as demonstrated by the abysmal 32 percent pass rate of people holding not just a bachelor's degree but some sort of graduate-level degree.

The Founders understood that the only way to guarantee that freedom would survive in the new republic was through an informed citizenry — one educated on basic rights and freedoms.

As Thomas Jefferson wrote, "I know no safe depositary of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education."

Jefferson also recognized that "[the People] are the only sure reliance for the preservation of our liberty."

But survey after survey proves that most Americans are constitutionally illiterate, and our young people are not much better. Despite the millions of taxpayer dollars spent on education, American schools do a terrible job of teaching the basic freedoms guaranteed in the Constitution and the Bill of Rights.

That’s by design. If Americans don’t understand how their government works, they won’t be able to tell when it is broken. The idea is for it to be so beyond repair as to require a ‘do-over.’
That is one of the reasons that the Obama administration has gone after FoxNews with such venom. This isn’t a defense of FoxNews – if they need defending, they are quite capable of defending themselves on their own.

This is an observation about the state of American government, not FoxNews.

Controlling the news is the first step along the road to totalitarianism. The Democrats control MSNBC, CBS, NBC, CNN, and strongly influence ABC. Fox is the only outlet Obama doesn’t dictate terms to – and so Fox has become an obsession.

Obama has declared FoxNews off-limits to all senior members of his administration, clearly hoping that by shutting FoxNews out, the administration will be more able to control the debate.
Here is the difference between a democracy and a republic. The Palestinian Authority is a democracy. Hamas was elected by a democratic election in Gaza. Hugo Chavez was elected president of Venezuela via a democratic election.

Al Gore was ALMOST elected via a democratic election when the Supreme Court stepped in to enforce the Constitution’s Electoral College system.

That’s the difference. America is still, at least marginally, a republic. But whether or not we can keep it is another question altogether.

CBO Scores Health Care Bill Reform at $829 Billion

CBO today said a modified Senate Finance Committee healthcare overhaul bill would cost $829 billion over 10 years, a modest increase over the original $774 billion price tag, and will decrease the deficit by $81 billion. Changes to the measure appear not have altered coverage, keeping the number of Americans who will have insurance as a result of the proposal at 94 percent.

Cuccinelli Proves Why He is the Grassroots King of Virginia

Va. State Senator Ken Cuccinelli, the Republican nominee for the Commonwealth's Attorney General race, has proved (again...) that his level of grassroots support is second to none.

Here's the latest from Senator Cuccinelli's "Compass" newsletter:

Finance reports were due today, and I wanted to share some interesting figures with all of you about the numbers between us and our opponent:

He had 388 donors over $100. We had 810, more than double.

He had 115 donors of $100 or less. We had 1386, over 10 times as many small donors!

Our total number of donors set the all-time record for number of donors to an AG campaign in one finance period with 2,196 (more than four times our opponent's 503). Mind you, we didn't just break the record, we shattered it. The previous record was 1,179. THIS is a tremendous measure of our grassroots support - thanks to all of you that have donated!

We outraised our opponent, $617K to $534K. We have now outraised him in both reporting periods since the convention; however, his year-long head start (he did not have a Dem nomination contest) has him up in cash by about 2 to 1, so please donate again today at www.Cuccinelli.com!

One of the most interesting factoids from our opponent is that he has 11 donors that gave $10K or more... 7 of the 11 are unions, 1 is a plaintiffs' litigation law firm, and 1 was the Democrat Attorneys General Association.

We will keep pushing to bring more people into this campaign, but we need your help! Please invite friends and family to donate too, as we still have lots of ground to make up.

Why the Stimulus Failed

This piece appeared in "National Review" recently and was written by Heritage Foundation's Brian Riedl. This is the best summary of why the stimulus failed. It is long, but well worth the read...

Why the Stimulus Failed

Fiscal policy cannot exnihilate new demand

Conservatives have correctly declared President Obama’s $787 billion “stimulus” a flop. In a January report, White House economists predicted the bill would create (not merely save) 3.3 million jobs. Since then, 2.8 million jobs have been lost, pushing unemployment toward 10 percent.

Yet few have explained correctly why the stimulus failed. By blaming the slow pace of stimulus spending (even though it’s ahead of schedule), many conservatives have accepted the premise that government spending stimulates the economy. Their thinking implies that we should have spent much more by now.

History proves otherwise. In 1939, after a doubling of federal spending failed to relieve the Great Depression, Treasury Secretary Henry Morgenthau said that “we have tried spending money. We are spending more than we have ever spent before and it does not work. . . . After eight years of this administration we have just as much unemployment as when we started . . . and an enormous debt to boot!” Japan made the same mistake in the 1990s (building the largest government debt in the industrial world), and the United States is making it today.

This repeated failure has nothing to do with the pace or type of spending. Rather, the problem is found in the oft-repeated Keynesian myth that deficit spending “injects new dollars into the economy,” thereby increasing demand and spurring economic growth. According to this theory, government spending adds money to the economy, taxes remove money, and the budget deficit represents net new dollars injected. Therefore, it scarcely matters how the dollars are spent. John Maynard Keynes famously asserted that a government program paying people to dig and then refill ditches would provide new income for those workers to spend and circulate through the economy, creating even more jobs and income. Today, lawmakers cling to estimates by Mark Zandi of Economy.com that on average, $1 in new deficit spending expands the economy by roughly $1.50.

If that were true, the record $1.6 trillion in deficit spending over the past fiscal year would have already overheated the economy. Yet despite this spending, which is equal to fully 9 percent of GDP, the economy is expected to shrink by at least 3 percent this fiscal year. If the spending constitutes an injection of “new money” into the economy, we may conclude that, without it, the economy would contract 12 percent — hardly a plausible claim.

If $1.6 trillion in deficit spending failed to slow the economy’s slide, there’s no reason to believe that adding $185 billion — the 2009 portion of the stimulus bill — will suddenly do the trick. But if budget deficits of nearly $2 trillion are insufficient stimulus, how much would be enough? $3 trillion? $4 trillion?

This is no longer a theoretical exercise. The idea that increased deficit spending can cure recessions has been tested, and it has failed. If growing the economy were as simple as expanding government spending and deficits, then Italy, France, and Germany would be the global economic kings. And there would be no reason to stop at $787 billion: Congress could guarantee unlimited prosperity by endlessly borrowing and spending trillions of dollars.

The simple reason government spending fails to end recessions is that Congress does not have a vault of money waiting to be distributed. Every dollar Congress “injects” into the economy must first be taxed or borrowed out of the economy. No new income, and therefore no new demand, is created. They are merely redistributed from one group of people to another. Congress cannot create new purchasing power out of thin air.

This is intuitively clear in the case of funding new spending with new taxes. Yet funding new spending with new borrowing is also pure redistribution, since the investors who lend Washington the money will have that much less to invest in the economy. The fact that borrowed funds (unlike taxes) must later be repaid by the government makes them no less of a zero-sum transfer today.

Even during recessions — when total production falls, leaving people with less income to spend — Congress cannot create new demand and income. Any government spending that increases production at factories and puts unemployed individuals to work will be financed by removing funds (and thus idling resources) elsewhere in the economy. This is true whether the unemployment rate is 5 percent or 50 percent.

For example, many lawmakers claim that every $1 billion in highway stimulus will create 47,576 new construction jobs. But Congress must first borrow that $1 billion out of the private economy, which will then lose a roughly equivalent number of jobs. As transportation-policy expert Ronald Utt has explained, “the only way that $1 billion of new highway spending can create 47,576 new jobs is if the $1 billion appears out of nowhere as if it were manna from heaven.” Removing water from one end of a swimming pool and dumping it in the other end will not raise the overall water level. Similarly, moving dollars from one part of the economy to the other will not expand the economy. Not even in the short run.

Consider a simpler example. Under normal circumstances, a family might put its $1,000 savings in a certificate of deposit at the local bank. The bank would then lend that $1,000 to the local hardware store. This would have the effect of recycling that spending around the town, supporting local jobs. Now suppose that, induced by an offer of higher interest rates, the family instead buys a $1,000 government bond that funds the stimulus bill. Washington spends that $1,000 in a different town, creating jobs there instead. The stimulus bill has changed only the location of the spending.

The mistaken view of fiscal stimulus persists because we can easily see the people put to work with government funds. We don’t see the jobs that would have been created elsewhere in the economy with those same dollars had they not been lent to Washington.

In his 1848 essay “What Is Seen and What Is Not Seen,” French economist Frédéric Bastiat termed this the “broken window” fallacy, in reference to a local myth that breaking windows would stimulate the economy by creating window-repair jobs. Today, the broken-window fallacy explains why thousands of new stimulus jobs are not improving the total employment picture.

Keynesian economists counter that redistribution can increase demand if the money is transferred from savers to spenders. Yet this “idle savings” theory assumes that savings fall out of the economy, which clearly is not the case. Nearly all individuals and businesses invest their savings or put it in banks (which in turn invest it or lend it out) — so the money is still being spent somewhere in the economy. Even in this recession, with tightened lending standards, banks are performing their traditional role of intermediating between those who have savings and those who need to borrow. They are not building extensive basement vaults to hoard cash.

Since the financial system transfers savings into investment spending, the only savings that drop out of the economy are those dollars literally hoarded in mattresses and safes — and there is no evidence that this is occurring en masse. And even if individuals, businesses, and banks did distrust the financial system enough to hoard their dollars, why would they suddenly lend them to the government to finance a stimulus bill?

Once the idle-savings theory collapses, so does all the intellectual support for government spending as stimulus. If there are no idle savings to acquire, then the government is merely borrowing purchasing power from one part of the economy and moving it into another part of the economy. Washington becomes nothing more than a pricey middleman, redistributing existing demand.

Even foreign borrowing is no free lunch. Before China can lend us dollars, it must acquire them from us. This requires either attracting American investment or raising the Chinese trade surplus (and the American trade deficit). The balance of payments between America and other nations must eventually net out to zero, which means government spending funded from foreign borrowing is zero-sum.

I’ve purposely ignored the Federal Reserve, which actually can inject cash into the economy, but not in a way that constitutes stimulus. Congress can deficit-spend; Treasury can finance the deficit spending by issuing bonds; and the Federal Reserve can buy those bonds by printing money. Any economic boost is then due to the Federal Reserve’s actions, not the deficit spending — and of course the Federal Reserve will have to raise interest rates, slowing the economy again, to bring the resulting inflation under control.

If government spending doesn’t cause economic growth, what does? Growth happens when more goods and services are produced, and the only true source of this is an expanding labor force combined with high productivity. High productivity in turn requires educated and motivated workers, advanced technology, adequate infrastructure, physical capital such as factories and tools, and the rule of law.

Government spending could boost long-run productivity through investments in education and infrastructure — but only if politicians could target those investments better than the private sector would. And it turns out that politicians cannot outsmart the marketplace. Mountains of academic studies show that government spending generally reduces long-term productivity.

Furthermore, most government programs that could increase productivity don’t work fast enough to counteract a recession. Education spending cannot raise productivity until its student beneficiaries graduate and enter the work force. It can take more than a decade to build new highways and bridges.

The only policy proven to increase productivity in the short term is to lower tax rates and reduce regulation. Businesses can grow only through consistent investment and an expanding, skilled workforce. Cutting marginal tax rates promotes these conditions, by creating incentives to work, save, and invest.

It’s happened before. In 1981, President Reagan inherited an economy stagnating under the weight of 70 percent marginal income-tax rates. Under Reagan, the top rate fell to 28 percent, and the subsequent surge in investment and labor supply created the strongest 25-year economic boom in American history.

Such tax-rate reductions are superior to tax rebates designed to “put money in people’s pockets.” Rebates — like government spending — simply redistribute existing dollars. They don’t increase productivity because they don’t change incentives: No one has to work, save, or invest more to get a tax rebate. The 2001 and 2008 rebates failed because Congress borrowed money from investors and foreigners and redistributed it to families. Not surprisingly, any new personal-consumption spending was matched by corresponding declines in investment spending and net exports, and the economy remained stagnant.

If conservatives wish to provide economic leadership, they must get this argument right. The stimulus is not failing because it is too small or because too much of it is being saved. It’s failing because Congress can only redistribute existing demand, not create new demand. This recession will eventually end. The more serious, long-term danger is that President Obama’s Europeanization of the economy will bring the same slow growth, stagnant wages, job losses, high taxes, and lack of competitiveness that have plagued Western Europe, leaving the United States at an ever-growing disadvantage with Asian countries not so afflicted.

To prevent this, conservatives and free marketeers will need to promote policies that support long-term prosperity. The first step will be articulating why big government does not bring economic growth.

Mr. Riedl is a research fellow at the Heritage Foundation.

Taxpayer March on Washington

I was not able to personally attend, but I am watching the event on C-SPAN with my three oldest daughters (12, 9, 7) who are very engaged and interested.

ABC News is now reporting that 1.5 million are in attendance. NY Times just reported that only 500 people are in attendance. Unbelieveable...

Isn't it funny how those who protested government LAST YEAR were being "patriotic", but this year you get called names by Congressional leaders.

Those in Congress on the WRONG side of the issues better take notice. From what I can see, there are not too many "rednecks, mobsters, or terrorists" in the crowd.

Today is a great day in America! Kudos to FreedomWorks for putting this event together...