A proposal to restore liberty and free enterprise

09 Dec

The following is an overview of  my presentation to both the Middlesex County Tea Party and Americans for Liberty this month.  The title of my talk is “How to get from here—big government—to there—limited government.”  The talk contains suggestions to end the welfare-warfare state and replace it with a constitutional republic.  At the end of the talk I suggest several books and essays for the attendees so they can become better spokespersons for the freedom philosophy. I am available to give this presentation to your association, group, wedding party, etc.

The three Strategic Goals to restore liberty and create sustainable prosperity:

Limited government—constitutional republic, home and abroad; consistent with the principles outlined in the Declaration of Independence and codified in the Bill of Rights.

The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not sufficient warrant. John Stuart Mill

a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government….  Thomas Jefferson, First inaugural address

Even if it were desirable, America is not strong enough to police the world by military force. If that attempt is made, the blessings of liberty will be replaced by coercion and tyranny at home. Our Christian ideals cannot be exported to other lands by dollars and guns. Howard Buffett

If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy. James Madison

I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested. General Smedley Butler

Financial independence—work to obtain income to pay for your needs;

Free enterprise economy, not crony capitalism, creates sustainable prosperity.

Every man and woman in society has one big duty. That is, to take care of his or her own self. This is a social duty. — William Graham Sumner, What Social Classes Owe to Each Other

There are two methods, or means, and only two, whereby man’s needs and desires can be satisfied. One is the production and exchange of wealth; this is the economic means. The other is the uncompensated appropriation of wealth produced by others; this is the political means.Albert Jay Nock

Philanthropy—provide short-term assistance–social services–using charitable institutions

Government has proved incompetent at solving social problems.  Virtually every success we have scored has been achieved by nonprofitsPeter Drucker

Declaration of Independence:

Human beings have natural rights–Life, liberty and pursuit of happiness.  Government instituted to secure—protect–these rights.  Rights, therefore, existed before humans create a government.

U.S. Constitution:

Provide for the common defense and promote the general welfare.

Article I, Section 8—Congress shall have the power to…

Four cabinet departments; State, Justice, Treasury and War

Over the past 100 years, the federal government has created the following cabinet departments, Agriculture, Commerce, Education, Energy, HUD, HHS, Homeland Security, Interior, Labor, and Transportation.  And the most destructive institution of them all, the Federal Reserve.


America has been transformed from a limited government republic to a welfare-warfare state, redistributing income from low and middle income folks to crony capitalists, subsidizing large segments of the population in the name of the common good and the general welfare, systematically violating the fundamental rights of the people for the benefit of America’s political and financial elites and the special interests who depend on taxpayers’ dollars for some or all of their income.

The result:

The federal government’s record: it has created a humongous debt, trillion dollar deficits, two Ponzi schemes—Social Security and Medicare, debased the people’s money, created—via the Federal Reserve–financial bubbles that always end in busts, bailed out crony capitalists, imposed confiscatory taxes, invaded our privacy repeatedly, promoted a culture of entitlement and dependency, and the most reckless policy of all, intervened massively overseas against presumed enemies while disarming the American people at home.

The American people will never knowingly adopt Socialism.  But, under the name of ‘liberalism’, they will adopt every fragment of the Socialist program, until one day America will be a socialist nation, without knowing how it happened. — Norman Thomas, former U.S. Socialist Party Presidential Candidate

How to get from here—big government—to there–limited government–with as little pain as possible so America can once again be a limited government constitutional republic

First principle:  Phase out Social Security, Medicare and Medicaid as quickly as possible.  Why?  They are financially unsustainable and not authorized by the Constitution.  In addition, the first two programs are Ponzi schemes.  Bernie Madoff is in jail for the rest of his life because he conducted a $50 billion Ponzi scheme.  The federal government cannot conduct a Ponzi scheme with impunity.

Social Security:  Current and soon to be beneficiaries will get their benefits, except retired couples who have annual incomes above $250,000 and individuals earning more than $150,000.  They will lose their monthly payments immediately.  Or, we could use a sliding scale to phase out SS benefits.  No COLA for current and future beneficiaries.  Retirees will become ‘inflation hawks.”

The threshold for losing monthly SS benefits will be reduced $10,000-$15,000 per year for the next 20 years, effectively ending SS in 20 years.

Soon to be retirees (aged 50 and above) will receive their promised benefits but the benefits will decline 5% or more each year when they collect monthly benefits.   Young workers, under 50, and their employers, will be exempt from Social Security taxes and will have no further claims against the federal government.

To help workers fund their individual retirement accounts, all Americans will be exempt from paying federal income taxes on dividends and interest and the capital gains tax will be reduced to 10%.  The reduction in tax liability will offset some of their SS benefits so beneficiaries’ monthly payments’ would be reduced in order to accelerate the phase out of SS.

Soon to be retirees will no longer pay Social Security taxes so they can invest in their personal retirement account.

How then will SS pay for the benefits of most people receiving monthly checks?  A portion of the income tax will have to be dedicated to paying off the obligations, which should be reduced dramatically because of the changes outlined above.  In addition, federal asset sales will help fund SS benefits.

Social Security disability payments will continue, but funded primarily by proceeds from federal government asset sales. In the meantime, all working Americans should purchase disability insurance, life insurance, and long-term care insurance as per their needs, reducing the need for these SS outlays.


Individuals making more than $150,000 per year and couples making more than $250,000 will have to pay the full cost of Medicare, approximately $11,500 per year immediately.  Premiums will increase for everyone else in order to make the program less reliant on taxpayer subsidies.

The goal is to self-finance Medicare from the premiums of seniors as quickly as possible.  However, the strategic goal is to phase out government involvement in health care all together.  Lower taxes throughout their lifetimes will help younger Americans fund a health care retirement account. We must restore a culture of personal responsibility as soon as possible.

Medicare taxes would be ended within five years or sooner. During this transition, seniors would have to accumulate funds in an account to pay for their premiums.  The goal is to end taxpayer subsidies for another unauthorized federal program.  Seniors who will not have sufficient savings to pay for premiums will be subsidized by the sale of federal assets.

In the meantime, no Medicare recipient who is being subsidized by taxpayers can purchase liquor, cigarettes, cigar, smoking tobacco, gamble, etc.   A senior’s first responsibility will be to be financially independent, not a burden on taxpayers.


Phasing out Medicaid by the creation of thousand of Volunteer in Medicine health centers in the country.  The model here in New Jersey is the Zarephath Health Center in Somerset County.  Cost per patient visit $15.  Medicaid patient visits cost more than $100.   In the meantime, Medicaid recipients cannot buy liquor, cigarettes, cigars, smoking tobacco, or gamble.

Other downsizing of the federal government:

Foreign aid, and other programs, such as aid to education, and all the federal departments that are unauthorized by Article I, Section 8, would be phased out over five years.

Money and Banking Reform:

Redefine the dollar as a weight of gold.  That would make the dollar as good as gold again.  The dollar would be redefined at more than $6,000 per ounce.

Banks would no longer engage in fractional banking.  One hundred percent 100% reserves for demand deposits.  Equity and CDs would provide the capital to furnish funds to individuals and businesses in a noninflationary manner.


Public schools would become nonprofit institutions funded by tuition, fees, grants, and endowment income.  School property taxes would be abolished and state income taxes devoted to funding public education would be abolished as well.   The same would go for state colleges and universities.

Other strategic goals:

Abolish the income tax.  Eliminate unnecessary regulations.  End the counterproductive war on drugs.  Decentralize political decision-making, leading to a massive downsizing of the federal government.

Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. – Frédéric Bastiat

Recommended Readings:  Henry Hazlitt’s Economics in One Lesson; Murray Rothbard’s archives at for the following:  What Has Government Done to Our Money?, The Case for a 100 Percent Gold Dollar, The Case Against the Fed, The Fallacy of the “Public Sector,” and Wall Street, Banks and U.S. Foreign Policy.  Ludwig von Mises’s books and essays, especially his two essays, Liberty and Property and Middle-of-the-Road Policy Leads to Socialism; Frederic Bastiat’s The Law, Frank Chodorov’s The Income Tax: Root of All Evil; my Tax Free 2000: The Rebirth of American Liberty, Robert Higgs’s, Crisis and Levithan; the just released, Shakedown: The Continuing Conspiracy Against the American Taxpayer by Steve Malanga, and Andrew Napolitano’s books on the Constitution.

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