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Monday, March 23rd, 2009

Time Event
4:22p
Bankruptcy
As of the time of this writing, Treasury Secretary Geithner is asking Congress to hand over another trillion dollars of taxpayer money for additional economic stimulus. A trillion is a thousand billion. When added to the national debt already assumed during the first 60 days of the current administration, the sum is beyond imagination. If printed up in one hundred dollar bills, this would circle the planet thirty times. It is equal to the national debt of all the presidents from George Washington to George W Bush COMBINED. Which means that, if we had to pay once more for the continental railway, the national highway system, the New Deal, the Great Society programs, the moonshot, the Civil War, two world wars, and the Cold War all over again, we could do so with this amount of money and have some left over to spend on buying Alaska from Russia again. Added to what we have already spend, the current trillion of dead comes to over three trillion dollars.

You will never pay down this debt; your children will never pay down this debt; your grandchildren will never pay down this debt. Living under the crushing burden of this debt, your children and grandchildren can look forward to economic conditions created by high taxes, hyperinflation, and the exclusion of private sector borrowing from credit markets, since the Federal Debt will absorb that market.

And, no I am not outraged, or even interested, in the bonuses paid to AIG officers, except, perhaps, a clinical interest in seeing what happens when a once-great nation passes from a mere neurotic aversion to facts and truth, to full-bore psychotic break with reality.

It might be an interest course assignment for  a law student to count the number of Constitutional provisions and Blackstonian legal principles of Anglo-American law a penal tax on specific individuals might offend, when the individual not only broke no law, but did only what their contractual oblations demanded.

That the stimulus package originally contained an (perhaps an unconstitutional, certainly tortous) provision to prevent the payment of bonuses, which language was removed before the bill was signed, merely add insult to folly. That neither the drafters of the bill nor the President who signed it read the bill before its passage adds comedy to insult to folly. The legal precident involved is that the majority in Congress, bound by nothing but their own corrupt will, shall henchforth have the power to take any property, real or personal, in confescation, of any persons of whom they disapprove, for any reason, or no reason.

Let me quote Mark Stein: 

As Charles Krauthammer pointed out, the $165 million in bonuses is less than 1/18,500th of the $3.1 trillion budget. The massive expansion of government the president is planning is forever, and will ensure you that end your days in what Peggy Noonan calls "post-prosperity America." More immediately, what message do you send to the world when legal contracts can be abrogated by retrospective confiscatory bills of attainder? You think that's going to get anyone investing in America again?

The investor class invests in jurisdictions where the rules are clear and stable. Right now, Washington is telling the planet: In our America, there are no rules. Got a legally binding contract? We'll tear it up. Refuse to surrender the dough? We'll pass a law targeted at you, yes, you, Mr. Beau Nuss, of 27 Plutocrat Gardens, Fatcatville. If you want a banana republic on steroids, this is great news. So cheer on thuggish grandstanding by incompetent legislators-for-life like Barney Frank if you wish. But, in any battle between the political class and the business class, you're only fooling yourself if you think it's in your interest for the latter to lose.

Let me quote John Hinderaker;

Wells Fargo didn't want any TARP money, but the government forced it to take more than $5 billion worth, so Wells Fargo employees who receive bonuses would be subject to Pelosi's proposed tax. Say you're a teller at Wells Fargo and you're married to a lawyer who makes $250,000 this year. You get a $10,000 bonus for your good work during 2008. The government steals it all (90 percent federal plus 8.5 percent state plus, unless it's included in the 90 percent, 3 percent Medicare). That is simply insane.

If the Pelosi bill is actually enacted into law (which I still think is doubtful) and upheld by the courts, there is no limit to the arbitrary power of Congress. In that event, we have no property rights and there is no Constitution—no equal protection clause, no due process clause, no impairment of contracts clause, no bill of attainder/ex post facto law clause. Instead, we are living in a majoritarian tyranny.

Since he wrote those words, the House passed the measure. I don't know if it has gone to the Senate yet.


 



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