Sunday, July 20, 2008

The war on personal freedom

The war on your liberty has been being waged in this country for decades. Starting at least as early as the cartelization of the banking industry under the "Federal" Reserve Act in 1913, industrial power players, entrenched political interests and government bureaucracies have been waging all out war on personal freedom.

I want to be clear that I am not engaging in some kind of paranoid exaggeration of the facts to rile you up. The facts are dramatic enough on their own, when you look at the right facts.

Let's look at some of the specific tyrannical powers the Founding Fathers worried about government having. They were concerned with government having the power to:

- Detain indefinitely without cause
- Arrest without cause
- Search without cause
- Suppress dissent and peaceful protest
- Torture or otherwise coerce confessions
- Alter private contracts, ex post facto

If you consider the history of US government growth during the 20th century, you see each and every one of these personal freedoms being eroded or abrogated completely by (just a select few milestone pieces of legislation):

Federal Reserve Act of 1913
Executive Order 6102 of 1933
Bank Secrecy Act of 1970
Money Laundering Control Act of 1986
PATRIOT Act of 2001
Sarbanes-Oxley of 2002
Real ID Act of 2005

Under the Federal Reserve Act, Congress created a private banking cartel with the power to regulate the banking industry. Banks must follow the rules handed down by the largest banks that make up the 12 regional Federal Reserve boards. The consequences of this cartelization to freedom are immense because freedom cannot be separated from money.

Under Executive Order 6102, FDR confiscated all non-jewelry, non-collectible gold in the United States and a subsequent act by Congress outlawed gold ownership completely. Gold ownership has only been legal since 1974 (1975, really).

Under the Bank Secrecy Act of 1970, any cash transaction exceeding $10,000 must be reported to the government.

Under the 1986 Money Laundering Control Act, transactions which are "structured" for the express purpose of avoiding the $10,000 reporting requirement are criminalize. To translate that into English, the act of making two $5,000 cash deposits to your bank in the same day will probably get you investigated, if not arrested, no matter your reasons.

Under the PATRIOT Act, this insanity is extended even further: any financial institution who even suspects structuring is required to file a Suspicious Activity Report. If the government decides after the fact that a financial institution should have filed an SAR but did not, the financial institution itself can be severely penalized.

What is this all about? Is it really about fighting crime or terrorism? It has nothing, absolutely nothing to do with fighting crime, except insomuch as prosecutors and police always want more arbitrary powers.

These laws are only about one thing: GOVERNMENT REVENUE. Let me break it down step-by-step:

1) The creation of the Federal Reserve system enabled government to circumvent the Constitutional prohibition (Article I, Section 10) on making anything other than gold or silver legal tender. Since the government is Constitutionally prohibited from doing this, the private banking industry offered to do it in exchange for cartelization in 1913.

The creation of paper legal tender is all-important since, without paper legal tender, government is powerless to inflate the currency. Without a legal tender law, private citizens can legally refuse payment of inflated paper currency in satisfaction of debts and contractual obligations.

2) The confiscation of gold in 1933 served two functions: It imposed a 69% one-time tax on anyone who happened to be holding gold and forced everyone thereafter to transact with Federal Reserve notes. The importance of holding Federal Reserve notes is that tax laws apply to the legal currency of the United States, which is the dollar. Converting people from the use of gold coins to paper dollars as a medium of exchange was requisite to ensure that all transactions could be taxed.

3) The next step is requiring all transactions not only to be performed with Federal Reserve Notes but to be written down. It is basically impossible to tax cash transactions that aren't written down somewhere. The Bank Secrecy Act of 1970 applied this arbitrary $10,000 ceiling (which gets lower every year as a consequence of inflation) to all cash transactions. The ostensible purpose is to "prevent money laundering" and so on, but the government doesn't care about money laundering because it wants to stop crime - it only cares about money laundering because criminal proceeds are untaxed transactions*.

4) The Money Laundering Control Act of 1986 - how appropriate it would have been had this law been passed in 1984 - criminalizes patterns of banks deposits. If you deposit your money at the bank in a certain way, that in itself is a criminal act. This has absolutely nothing to do with stopping crime and absolutely everything to do with making sure that all transactions are being taxed.

5) The PATRIOT Act then takes this to its ultimate, Orwellian end: Suspicious Activity Reports. You'd think they would have at least bothered to give it a sufficiently doublespeak name like, "Friendly Money Reminder" or something but apparently they figure they can get away with anything at this point. And they have good reason to be so smug, when you consider the last 95 years of financial fascism the government has been incrementally implementing.

If the bank even so much as suspsects that someone is engaging in structuring (avoiding the $10,000 reporting requirement), they must file an SAR on penalty of severe fines and even imprisonment. Over 1 million of these SARs were filed in 2006. To avoid the insane penalties, an entire industry of data-mining software has cropped up. This software searches through transaction records looking for any patterns which may look like structuring. For example, if you deposit $5,000 in branch A and the next day deposit another $5,000 in branch B of your bank, the data-mining software will detect that the sum of these two transactions is $10,000 or greater and - even though they occurred in different branches on different days - will automatically flag the transaction as an SAR candidate. In other words, the law requires your bank to spy on you in a manner reminiscent of the thoroughness for which the Gestapo was so proud.

Gotta keep track of every last penny so we can justify taxing it.

6) Sarbanes-Oxley - this monstrosity implements a board in Washington DC tasked with overseeing corporate accounting requirements throughout the entire United States. The costs of SOX-imposed regulations run well into the billions and for what? SOX was justified by the Enron scandal but was just one more Washington power grab. SOX amounts to a cartelization of the accounting industry. Of course, the link between accounting and taxation could not be more obvious.

7) Real ID Act. Now, in order to fly on an airplane - coming up in 2009 - you are going to be required to have what amounts to a Federal identification card. Of course, we've had Federal ID for some time now in the form of SSNs but their insecurity fortuitously prevented their overuse.

The link between taxes and identification should also be obvious.

Taxes are slavery, nothing more, nothing less. It is easy to see that this is the case because taxes are absurd. When I say "absurd," I do not mean some generic expression of disgust, I mean that they are actually irrational. Taxes actually don't make any sense at all. Let me illustrate:

A couple years ago, the IRS passed rules requiring barter transactions to be reported. Cash transactions - even at a yard sale - have always been required to be reported. The view of the IRS is that when I receive $5 in payment for some toys I sold at a yard sale, that $5 is income. As income, it is taxable. But our heroic, ever-vigilant taxmen realized that people could exchange a couple pairs of pants for some toys and this would be an untaxed transaction.

But the heroes that they are, they came up with a solution: You must report the fair market value of the item you received in exchange on your taxes. So, what is the fair market value? And what about the FMV of the thing you traded in exchange? If I trade a pair of pants for you box of toys, I may have barely preferred the toys to the pants, I did not profit by the full "fair-market value" of the pants.

The problem is that the government must view all transactions as a zero-sum game of exchange of objectively-valued objects in order to tax the transactions. In reality, transactions constitute a positive-sum game of exchange of subjectively-valued objects. The pants are worth more to me than the toys. The toys are worth more to you than the pants. How much more? That's a nonsense question once you admit that both parties are better off after the transaction. Each object would have to have two dollar valuations for the government to be able to tax both parties for the "income" they generated by the barter exchange.

Let us say a neighborhood of people are all in the 10% tax bracket. 10 people have yard sales in that neighborhood on the same day. Person 1 looks at the yard sale next door and sees something she wants, and pays Person 2 $5 for it. Person 2 looks at the next yard sale down the street, sees something she wants and hands the very same $5 to Person 3. And so on and so forth until Person 9 hands Person 10 the $5.

All the people in this neighborhood are also studiously law-abiding citizens. Since the IRS stipulates that even cash income from yard sales is taxable, each citizen includes that $5 in their year-end taxes. Ten people will pay 10% taxes on the same $5 as it traveled down the street that day. That adds up to a 100% taxation on that $5 between the 10 yard salers. And for what? For simply shifting one item one house over for each of the 10 households with yard sales that day.

So, taxes are absurd. They say they tax us on "income," but they're not really taxing income, they're taxing the positive rate of change of dollar holdings (they don't untax the negative rate of change, that is, they don't untax the money you spend). Of course, the larger the rate of change of dollar holdings, the more transactions are taking place in the market and the better off everyone is becoming. But government does this huge service to us by dampening that rate of change. Yeah!

If taxes are absurd, then collecting them is just slavery. Government dictates that it intends to take such and such money from such and such people according to such and such "rules." Taxes are the last vestige of slavery. Rather than constantly giving the government even more power to enslave us in the name of "stopping crime" or "fighting terror", we need to start moving towards a future of freedom from slavery.

The government keeps rooms full of secrets (it has to hide all the criminal things it does) but wants the power to track every detail of your waking life so they can tax every bit of it. I say, if their intent is just to enslave us, why not drop the pretenses and get on with it? Quit pretending to be enslaving us in the name of fighting crime. Quit pretending to be enslaving us in the name of fighting the "global war on Terror." Taxes are barbaric and immoral. It's long past time we stood up and said that enough is enough. We threw off racial slavery over 100 years ago, but we have yet to throw off slavery altogether.

Two last closing points:

- I'm not going off on taxes because I want more money... I make a plenty comfortable living after taxes and if I want more money I can always go out and make more. I am going off on taxes because of what I just said: they are an immoral and barbaric enslavement.

- Neither of the Presidential candidates is going to solve any of this - they will only extend it further. Do you think that Obama is going to work to scale back the PATRIOT Act or the Money Laundering Control Act or the Bank Secrecy Act or the Federal Reserve Act? No. Why would he reduce the revenues which empower his executive bureaucracies? Our enemy is, ultimately, not the elected officials. It is the long-term bureaucracies, the entrenched lobby interests and international power players.

These people just want power because they are criminal and power-seeking is a criminal mindset. Power is ultimately measured in the ability to destroy - you only have power over something to the extent you can destroy it. To demonstrate power over people, you must be able to destroy their wealth and their lives. Taxes are nothing more than the vicious, pointless destruction of wealth to demonstrate power. The government taxes us because it can. And the financial fascists who are obsessed with power will continue to work to enslave us.

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