2013 Marks the 100th Anniversary Of the Most Damaging Piece Of Legislation in U.S. History


This year marks the 100th anniversary of perhaps the three most damaging pieces of legislation in U.S. history: the income tax, the creation of the Federal Reserve, and the Seventeenth Amendment. With the current media hype over "sequestration" and panic over minor cuts to the rate of increases in government spending, this is the perfect time to highlight these three altars of modern government power that have put us in this situation and redouble our efforts against them.

It is easy to scan the news and find endless accounts of state crimes, abuse, and horror that should make even non-libertarians squeamish about throwing their support behind the U.S. government and centralized state power in general.

Just last week, the TSA traumatized a wheelchair-bound 3-year old girl during screening. Militarized police departments all around the country are requesting practice shooting targets of children, pregnant women and the elderly so that there is "no hesitation" in dispensing lethal force. The American hero Bradley Manning just spent his 1,000th day in a cage for daring to leak to the world the crimes of our "leaders." The Pentagon's latest expensive killing machine is so inept it lowered the standards so it could pass muster. Drone strikes have killed nearly 5,000 people across the globe (including almost 200 children) in at least six countries. The NDAA, PATRIOT Act, Military Commissions Act, and President Obama's claimed authority to assassinate anyone, anywhere in complete secrecy are all declarations of war against thousands of years of progress on liberty and law.

The U.S. runs a global empire, bombs the countries that don't accept their bribes, maintains torture dungeons, supports police states, and domestically is quickly morphing into the iron-fisted Leviathan it has imposed on the rest of the world since the end of World War II.

The list could go on and on.

All of these specific cases can and should should be exposed — and there are number of great journalists working tirelessly doing just that — but at the heart of all of this state power, weaponry, and growth is that fateful year of 1913 and those pieces of legislation. 

People can exhaust themselves lamenting debts, deficits, wasteful government spending and advocate tinkering around the edges of federal departments, but it is thanks to the federal government's ability to impose an income tax that all of this is possible. Not only does the logic behind the income tax violate all concepts of individual liberty and a free society — that a coercive third-party agent lays claim to the fruits of your labor and decides arbitrality on how much you are allowed to keep — but it also has many other detrimental effects.

The creation of the Sixteenth Amendment and the income tax drew allegiance and loyalty away from local governments and communities and towards an increasingly centralized federal government. Rather than being able to have a much larger say in how money was spent by local representatives, the income tax created a vast auction of stolen loot where the entire country — more specifically, its larger and more powerful interests — could lobby for these wealth transfers. Local government autonomy was destroyed, and today counties (and even states) are little more than appendages of the central government in Washington.

In short, the income tax allowed the U.S. government a vast new stream of money with which to implement the means to violate individual rights and create new agencies to interfere in the market, police non-violent human behavior, and create a situation where people increasingly looked to the federal government for answers to questions that had traditionally been undertaken locally.

In the same year that the income tax was imposed, the Federal Reserve was created in a highly dubious and secretive manner. This central bank would now be in charge of regulating interest rates (the price of money), inflating the money supply, and bailing out large and/or politically favored industries. For nearly 95 years after its creation, the Fed has been seen as an indispensable institution with nearly magical powers of reigning over the economy.

But thanks to the efforts of former Congressman Ron Paul and others, central banks are increasingly being known for what they have created throughout all of human history: boom-and-bust cycles, the concentration of wealth into fewer and fewer hands, allows the fraud of fractional-reserve banking and is the number one enabler of government finance and power. Even worse, in order to pay back the money that is created by the Fed, the U.S. government must look to its only method of acquiring money: wealth extraction from its tax subjects, which also ties in the increasingly growing income tax. 

Thanks to the Fed, the U.S. government could now borrow without a corresponding increase in interest rates, and it quickly began engaging in the expansion of the welfare state and frequent outbursts of imperial aggression. It is no coincidence that the creation of the Federal Reserve has given the U.S. a century of war and debt.

While much less discussed, 1913 also gave us the Seventeenth Amendment and the popular election of U.S. senators. This helped concentrate federal power by removing one of the constitutional bulwarks and checks that state representatives choosing U.S. senators helped create. The direct election of senators was shot down overwhelmingly at the Constitutional Convention because the Founders envisioned a confederacy of independent states delegating select powers to the federal government, and having states represented at the federal level was supposed to help make sure there was balance and jealousy that would discourage federal growth. The centralizers and socialists at the turn of the 20th century knew this, of course, which is why they lobbied so heavily for the Seventeenth Amendment. With this expansion of "direct democracy," power predictably became further centralized in DC and individual rights became subject to the whims of elections.

This is why the libertarian movement, or anyone who feels our rights are being violated and our wealth stolen, should focus their attention on the repeal of the income tax, the Fed, and the Seventeenth Amendment and advocate the repeal of what was essentially the counter-revolution of 1913 against the uniquely American spirit of liberty. Keep in mind that before the income tax and the Fed, we had a sound currency, roads, bridges, schools, unprecedented economic growth, the Army, Navy and Marines. Fiat money, democracy, and massive taxation are not needed, and in fact antithetical, to a free and prosperous society.

I deplore the TSA, FBI, IRS, CIA, EPA, DEA and the hundreds of alphabet soup agencies of tyranny, theft, war, spying, and subjugation as much as anybody, believe me. But we won't get anywhere unless we recognize that at the root of the government's power is controlling the money supply, extracting wealth, and creating popular consent. This is why tirelessly advocating the abolition of these three pillars of plunder is the best thing we can do for the cause of liberty and peace.