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By Ron Holland - July 24, 2010

Economic Reasons These United States Should Restore the Articles of Confederation as the Legitimate Central Government of the US

How would you like to begin a peaceful, legitimate political action which could roll back the last 100 years of government growth and national debt along with the hated federal income tax and the Fed? What if you could force Washington to return to a strong dollar policy and allow real currency competition to escape the near total destruction of the dollar now worth only 5 cents of the 1913 dollar? Imagine a future when the President would be forced to seek a Declaration of War and get the states and citizens behind any new military incursion, invasion or bombing?

Most experts agree Washington's national debt and unfunded liabilities are a ticking time bomb toward national bankruptcy and dollar collapse. Why should we let Washington's global creditors or our nation's enemies decide when to move against us? This could result in a massive confiscation of private wealth due to hyperinflation leaving the vast majority of productive Americans penniless and subsisting on increasingly worthless government handouts but only if they "behave and vote correctly."

We all know that Congress regardless of Democrat or Republican control is now only a tool of special interests that have taken over our government and now direct it primarily to increase their wealth, corporate profits and market share and power. Congress is increasingly irrelevant to control Washington or make foreign policy as this course is also charted by these interests and carried out by the president, now only a pretender and front man to promote their agenda.

Today, the best legitimate solution to Washington tyranny is the right of nullification as presented so well in Tom Woods' new book, Nullification. But should this fail, there is another alternative, secession from the Washington Empire and the restoration of state sovereignty and a limited, debt-free central government under America's first government established by our founding fathers, The Articles of Confederation.

Cut Out the Problem

The American Dream and patriot vision of our founding fathers does not have to end this way. If an individual has cancer, the medical solution is often to remove the cancerous tumor and surrounding tissue to prevent the cancer from killing the patient followed by radiation and chemo to prevent the resurgence of the cancer. In business, when a company is heading toward bankruptcy there is corporate restructuring where the bad assets and liabilities are kept in the old corporate structure while profitable sectors and productive assets are moved to a new profitable debt-free structure. Americans today need to consider how to get rid of the current failing federal government and it's massive debts.

As a nation and a people we must become proactive in solving the Washington debt and tyranny problems rather than wait until they grab our wealth to stay in power and keep their Fed money machine afloat for a while longer. I for one have no interest in waiting for my remaining wealth and liberties to be pulled under by Washington as our politician's flail around like a drowning victim pulling all the rest of us down with them.

When nations face bankruptcy and are unable to rollover their government debt, the first thing to go is often the currency due to hyperinflation but this isn't the end of the debacle but rather the beginning. The politicians and central bankers first try to shore up their control and hang on to the gravy train for a while longer by confiscating more wealth when possible and allowing the hyperinflation to push taxes to the top brackets. Finally only when the population has lost their savings and property and when government pensions and safety net programs are rendered meaningless by hyperinflation does the last terminal stage take place.

Don't Let Foreign Nations Or Creditors Force National Bankruptcy & Collapse

At the end, foreign nations and creditors move to seize any remaining assets of value and the country collapses into a lawless period of violence and plunder as hungry people who have spent their lives on handouts and government employment take what is left. One only has to look recently at Zimbabwe or Russia in 1998 under Yeltsin after the collapse of the Soviet Union to see what can happen. An example more appropriate for the United States might be the German Weimar republic following World War One and observe the massive illegitimate debt load forced on them by the Treaty of Versailles and hyperinflation to see a "worst case" scenario on what can happen here in national bankruptcy.

Far closer to home, read our own history of Reconstruction in the conquered Confederate States of America to see what happens when legitimate government, the rule of law and order and vengeance by former enemies place the full weight of jack boots and revenge on a people and conquered nation unable to defend themselves. I fear this is the future for the United States but it doesn't have to happen.

The Problem

The Washington federal government can never pay off the massive $100 trillion plus national debt and unfunded liabilities the politicians of both parties have placed on this and future generations. Contrary to what the monetary and media elites claim, very little of this debt has gone to benefit productive citizens in the private sector. Sadly the fruits of our productive labors and entrepreneurship have been stolen by high taxes to build voting constituencies of parasitic tax-feeding bureaucrats and others who seldom deliver needed government programs and services.

Rather their useless paper pushing and hundreds of thousands of forms, rules and regulations actually have strangled the US economy with make-work government employment. After funding the necessary voting groups to support the vested interests of both political parties, the difference between revenue and expenses are borrowed. This tremendous debt load has been used to benefit and generate profits and increase market share for favored industries, unions and squandered in military aggression to benefit the Anglo-American interests and cartels fronting for a few wealthy families and banking elites.

In many instances, state and local municipalities have followed the same corrupt path to debt destruction and bankruptcy with even more immediate negative results as they are unable to create fiat currency as does the Washington federal government. In future years as the greatest and longest recession/depression in American history continues, these bankrupt state and local governments along with their bloated tax-feeding bureaucracies will be increasingly bailed out and funded by the federal government thus dramatically increasing the federal debt levels.

In conclusion, the Washington national debt and future unfunded liabilities have been created to support favored industries which will in the coming years be bailed out and survive only by federal life support with our wealth just like Wall Street, the bankers and the automobile industry and unions have been subsidized with the bailouts to date. In other words, Wall Street and the banking elites together with their dollar-destroying and debt-addicted buddies at the Federal Reserve along with less than useless government bureaucracies have destroyed the economic future of our nation.

Just Buying Time

The coming national bankruptcy and a worldwide run from US treasury debt and the terminal dollar will be delayed as Washington bureaucrats, congress and regulatory agencies will seek to continue their parasitic existence. They will also bankrupt most private Americans as confiscatory tax rates and hidden confiscation plans buy them more time as they use the remaining wealth of private Americans to continue the Greatest American Ponzi Scheme.

As our private wealth and assets are confiscated for the duration of the economic crisis at what will be the highest effective income tax rates in American history by the greatest transfer and theft of private wealth in the history of the world, eventually our wealth will be stolen and we will be a nation of paupers. Imagine a new VAT tax on steroids, the wealthy and middle class "means tested" out of Social Security benefits combined with extra taxes and confiscatory penalties on your retirement funds outside of what they can force into becoming the "buyer-of-last-resort" for collapsing Treasury bonds.

After our wealth is confiscated and spent to hold the Treasury market together while the monetary and political insiders sell, then the parasite "feeding frenzy" will finally end. Then and only then will Washington together with Wall Street make sure the remaining Treasury debt and unfunded liabilities will be wiped clean with hyperinflation of the dollar combined with selective national debt repudiation.

Three Questions We Need To Ask

First, why should freedom-loving Americans allow an illegitimate group of wealthy elites and their control of the federal government, the conventional media and an unconstitutional central bank that created the problems continue. They have already made obscene profits at our expense so why should they in the end benefit from our economic loss and get away with this gigantic theft when there is a peaceful and democratic way out of this coming nightmare?

Second, ultimately all government debt levels such as ours are in the final analysis cleaned off the books eventually by government default and hyperinflation of the currency. Therefore why should we go down with the pirates who captured and stole the American ship of state from the citizens of America?

Finally, why should we wait passively for personal bankruptcy and wealth confiscation at the hands of Washington when we can restore the real American Dream at a time decided by us and safeguard our wealth by possibly even the threat of a viable political effort which has been done many times in history.

The Solution Is Back to the Articles

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation…. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

How can we replace the massive national debt of the Washington federal government with a new debt-free national government where taxes and necessary government services and programs are handled more efficiently and appropriately at the individual state level? How do we restore our nation where the unique personal, religious and morality needs of specific states, regions and subsections are met instead of a national standard that meets no objectives? How can we rebuild a strong currency with competition that will preserve the purchasing power of Americans?

Step One: Remove your wealth and savings from the dollar and US regulatory environment and jurisdiction by buying gold, gold stocks and stronger foreign currencies in Switzerland, Asia and other more free market nations and jurisdictions.

Step Two: Since the Washington federal government is the indebted failing entity, it is time to take the same steps a failing corporation would do in our situation something along the lines of General Motors, Merrill Lynch etc. We move the good assets and useful and productive brands into a new corporation and leave the failing operations, deadwood assets and unproductive employees in the existing entity or the present structure and allow or force it to declare bankruptcy. In other words, let's force the Washington federal government to declare bankruptcy on terms which will help safeguard and protect the wealth of productive Americans in the private sector before we find we are pulled down to their level.

Step Three: Political efforts on a state-by-state basis should be directed toward peacefully withdrawing our individual sovereign states and therefore ourselves as productive private citizens from the forced American political union to legally avoid the coming bankruptcy of the federal government and death of the fiat Washington dollar. This should be done following the identical democratic legal procedures as the states used when joining the union through state conventions called by the citizens of each state. As states withdraw or secede from the union, each state should repudiate the national debt and such unfunded liabilities as deemed appropriate by the citizens of each state in constitutional convention.

Step Four: Each newly sovereign state as they withdraw from the union should take the appropriate steps to fund and pay legitimate state debts and to increase necessary state programs and services formerly provided by the bankrupt federal government. The states will be able to raise taxes because the crippling burden of federal income and other Washington taxes will be lifted allowing the states to somewhat expand their state revenues while providing the citizens of the individual sovereign states an overall 50% cut in total taxes.

Some of these new revenues should be utilized together with existing state funds to purchase gold, a basket of assets etc. and create individual state and or regional currencies. This means citizens can choose from the Washington dollar, individual state or foreign currencies and private alternatives which will be available for store of wealth. This free-market environment of currency choice will create currency competition for states and individual citizens from the present crippling dollar and Federal Reserve monopoly status.

Step Five: Our goal should be to ultimately replace the failed Washington federal government that is operated for the benefit of a few wealthy special interests with a central government controlled and responsible to productive working American citizens where the states and people are sovereign. Although some sovereign states might want to remain outside the framework of a central government, our goal should be to remove the offending bankrupt entity and replace it with a debt-free, restored legitimate confederation government based on America's first government, The Articles of Confederation.

Step Six: The individual states in state convention should meet again or once the Articles of Confederation is established, at the secession convention adjourn and immediately reconvene and adopt the Articles thus recreating "these united States" so declared in the original Declaration of Independence. We will have restored the original first government of our patriot founding fathers but with the necessary checks and balances and right of referendum and initiative for the people to keep out the former special interests who have previously stolen our government from the people.

Finally, two key points about this proposal need to be discussed. First, it isn't necessary for all 50 states to go through the state convention process and obtain the necessary majority support to secede from the federal government and then join a restored Articles of Confederation. In fact, it may not be necessary for even one state to actually secede from the current Washington-led forced political union.

Just the birth of a strong "Back to the Articles" movement and the creation of state independence groups with the avowed intention of repudiating the massive national debts placed on this and future generations by political and monetary elites against the will of the people could solve the coming debt and dollar problems. The threat of state independence and debt repudiation together with a new debt-free Articles of Confederation national government could be enough to force Washington and Congress to control the debt and dramatically cut spending themselves.

The other alternative is our efforts will frighten foreign treasury debt holders enough to force Washington to behave responsibly or else they dump the dollar and the debt now rather than after our government has taken our wealth and savings to delay a run on the treasury debt.

Second, a Back to the Articles movement is not necessarily a move to the right or the left in American politics. For example, my friend Tom Naylor in Vermont is leading a Vermont independence movement which is a small is beautiful, progressive and left-leaning movement quite suited to the liberal views of Vermont, while next door, "Live Free Or Die" New Hampshire has the libertarian Free State Project.

The genius of state sovereignty and a decentralized Articles of Confederation government is the ability of different states to compete with conservative or liberal alternative lifestyles as well as on tax rates and associated government programs etc. A one-size-fits-all top down centralized government might have worked somewhat for communists in the Soviet Union, Red China or British socialists but it has no place any longer in what may someday become "these united States." It is a relic of central planning and corrupt elites and it should be eradicated from our nation and sovereign states.

I have a final question for readers. Tom Woods' book, Nullification – How to Resist Tyranny in the 21st Century certainly has the right idea on nullification as a possible solution to our problems with the Washington federal government. But should we also consider a return to the Articles of Confederation as a back-up defensive strategy should nullification fail to control Washington?

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