This session obviously has been on the minds of not only this group here but other people throughout the country.
So it is a fascinating subject. I'm delighted that Lew invited me to meet with you and speak with you on this
because of course there's all ramifications and thoughts that we can bring up about this particular subject.
My topic for today is the moral promise of political independence.
and Independence. Political independence is really the goal that we seek and it can be achieved in many, many different ways.
You know, many years ago there was a discussion among bankers and a particular governor of one of the states
and they had a project coming up and there was to be a bond issue
and the bonds were to be sold and backed by the banks with a tax connection
and they were concerned that too many of these bond issues were not being used in the proper way and not in a productive manner, which tends to be the case when the government is involved.
And the governor was asked, what do you think, and this particular bond issue was for veteran's benefits.
Nobody can be against veteran's benefits because all veterans deserve anything they ask for.
And you can never vote against the veteran benefit in Washington or you are unpatriotic.
So it was obvious that this was a very popular thing with this particular state, and they asked the governor, and they said,
what do you think the veterans will do with this money? Will it be productively used?
And he said, well, he thought that a third of the money would be spent on booze.
He says another third would be spent on women. He says then the rest would be wasted.
We certainly wouldn't want to waste any money. Today, I think, we send money to Washington.
A third is spent on the bureaucrats, a third is spent on the interest, and the rest is wasted.
So there's a fair amount of waste that is associated with government.
And the bigger the government, the worse the problems are.
And I think that today we certainly hear rumblings.
and the rumblings. The word secession, only somebody like Lew Rockwell and the Mises Institute
would actually say the word secession, you know. Others are a little bit more shy and
they'll say, well, let's talk about the 10th Amendment that's enforced some of these rules.
Let's demand states' rights and a few other things, although they're talking about the
same issue, getting rid of the huge burden and the tremendous cost of this monster that
that we have in Washington.
Not too long ago, this subject came up in the operating room at a slow moment, and we
were discussing this and I was proposing, you know, the Republic of Texas.
I said, you know, I was daydreaming, I was describing this wonderful libertarian state
that had government about this big and no income tax and a sound currency and a thriving
metropolis and no conscription, no military involvement overseas and whatnot.
It sounded so attractive and I said but the only I have not solved one problem. I
haven't solved the problem of immigration and how what would we do
about you know this burden at times it seems to be to many of us about the
immigration. Of course we have to realize that's connected to the welfare state
and possibly the Republic of Texas wouldn't have quite the burden that we
have today but anyway what another physician was there he says yes he says
that would be a problem he says I guess we would have to have a lot of troops
along the Red River for your geography of course I was thinking about the Rio
Grande everything about all you Yankees wanting to come down to Texas but I
I guess that's a good daydream and worth thinking about, and it's a wonderful exercise to go through and talk about this because it is dealing with the theory and the understanding of what liberty is all about.
And if we can bring it about in the context of the right of secession, I think it's very, very productive.
Now, we have heard recently, in these past 100 days, talk about political independence.
We have heard on the television on a daily basis that there has been a revolution in Washington
and that things are so much different.
I guess they spent a million dollars or so on a TV program telling us yesterday that
the revolution is here and the changes have occurred and all of a sudden we have reversed
What's the trends in Washington? I have a little trouble with that. I think the rhetoric
has gotten better. I think it's a reflection of what's happening in the country. I think
it means that the politicians have to speak to those of us who are concerned about the
growth of government, and that's a positive sign. Now, we have to be a little bit concerned
And when we hear a Bob Dole start talking in a way that he is trying to satisfy the
Tenth Amendment Movement, can you imagine anybody who has so little ability and understanding
of what the Tenth Amendment really means for him to come up and say, what we must do is
enforce the Tenth Amendment.
I am sure that he was never aware of the Tenth Amendment with 95 or 98 percent of all his
and all those votes he's ever cast since he's been in Washington.
But nevertheless, that's a positive sign.
We have to look closely for our positive signs.
But that is one, the fact that we do see some things happening in this country.
But how much has happened in these last hundred days?
Could we say that the battle is being won and that we don't have as much need
for the Mises Institute to go out and teach the next generation
about what a free society is all about?
Hardly. I mean, we see these signs, but I would like to suggest that the last 100 days
probably hasn't done a whole lot for us yet.
Besides, besides, even those things that you might have agreed with that were passed in the House
have a long way to go. They have a long way to go
till they get to the Senate, and then through the conference, and then to the President's desk.
But even some of the things done in the name of less government, done in the name of the free society and free enterprise and the things that we believe in and playing to our audience and claiming this has done so much good, but what have they done?
For instance, for years it has been proposed that one of the chief ways you can limit government spending and get us back on the right spending trail is to deliver to the president more power with a line item veto.
doesn't make any sense to give more power to the executive branch of
government my concern is it already has way too much power already and that does
not make a lot of sense what about the balanced budget amendment basically sort
of nice to think that balanced budget amendment would help and possibly it
would help a little bit if done in the right context but in today's context if
If you have a Simon, Senator Simon from Illinois, wildly enthusiastic about the
balanced budget amendment, could we not be a bit suspicious to think that maybe
he believes that taxes will be raised? And I think they will be. If that
particular amendment got passed, I think we would have more taxes and still not a
balanced budget. So hardly should we celebrate about the balanced budget
Amendment being passed. Excuse me. There were other proposals in the first hundred days
and some were passed. One of the most atrocious has been in the area of crime. Crime and punishment.
Conservatives, Republicans are law and order people, which I think is a good idea. We ought
to obey the law. We ought to obey the Constitution. We ought to obey the laws that protect private
of Private Property.
But we shouldn't be deliberately empowering the federal government to further abuse the
rights of private property.
So they have essentially, with the one particular amendment, have undermined, if not destroyed,
the Fourth Amendment, where they have abolished the exclusionary rule and says that no matter
what the circumstances are, they can march into our houses and our businesses and search
Search and Take without a proper search warrant, a vicious violation of the Constitution.
And this is done, the disturbing part about this is it's not done by liberal Democrats
who believe in big government, it's done by those who are leading the charge in Washington
to reduce the size of government and here they are enhancing and making government that
much bigger.
So I am of the opinion that we have a long way to go before we reverse the trends in
in Washington.
But in the same sense, I am very pleased with what is happening in the country because there
are more and more people today than ever before who are questioning things.
The fact that we can have a conference and talk about smaller units of government, 10th
Amendment movements, militia movements, states' rights movements where they're really serious
and saying, we've had enough.
We've had enough of this federal government.
We can't afford any more justice that we're getting from Washington, she says.
We've had about as much justice and fair distribution as we can afford, and the people are waking
up.
I've always been of the opinion that our real trend, our real change will come, and I do
believe it will come, but it won't come gracefully.
It won't come by us automatically coming up with new members of Congress arriving in Washington,
like we had last time, who will deliberately and discreetly change the law and bring about
changes.
I am more convinced that the change will come, but it will come more with a calamity and
with a Bang.
Because the forces are so great against us that the momentum is there, the special interests
are there, that those even who are well-intended, those many new members, believe me, are well-intended
and are still representing our views.
After a few years, I'm not so sure I will say that.
But at the current time, there are many members of Congress who are reflecting the views of
us who would like to see a lot less government.
But their voices will not be heard.
There was one example, a new member by the name of Newman up from the Midwest.
He was dedicated to voting for less government and within the first few weeks, the first
significant vote that came up, these other things, if they don't ever get passed, they're
not significant, but a significant vote came up, they needed supplemental appropriation.
That's in addition to the original appropriation of last year, they came up short.
The supplemental appropriation was for military, so-called, for defense or for this country, no, it was for military.
Operations in Somalia and over in Serbia and Persian Gulf and Columbia, who knows what, but it was maybe $2.3 billion.
And the new member, Newman, said, he can't vote for this.
And he was on the Appropriations Committee and they said, well, we need this vote.
He says, but we came here to cut, not to add.
And they said, well, we're going to have offsets
so that we'll actually cut to make up
for this money we need today for these very important things.
And they were over a five-year period.
They were going to cut $2.3 billion out of the budget.
Now, that's all one thing.
That's daily activity.
That's the way the government functions.
But the important thing was the leadership
of the Republican side said to them,
if you don't play ball, if you don't go wrong with this,
we're going to kick you off the committee.
How can you be on this very important committee if you don't go along with us?
And these are the guys who are supposed to be cutting back up there.
So it's sort of sad when you think about it that the rhetoric is sounding pretty good,
but we still have politics as usual.
After last week, there was a big argument on cutting taxes.
And even the feeble attempt to cut taxes, the media, of course, chews them up and says,
because you know you're taking, you know, all these good programs away from the starving poor and the babies and whatnot.
But this tax cut, some of it is pretty good.
I mean, this idea that everybody who has a child will get $500 of tax credit back, not a bad idea.
Give them their money back. Maybe they can take care of their kids.
But they did a poll. They did a poll with the American people.
All this propaganda, and the American people, they ask the people in the poll,
how many of you think that this is going to come about?
75% of the people said, there's no way.
I mean, most people that I meet, and most people in the country,
aren't even paying a lot of attention to what's going on out there,
and they don't believe them.
And I think that's a healthy skepticism.
It certainly serves our interest for the skepticism to be maintained because otherwise they won't listen to the real reforms that are required because indeed we will have to have real reform when the time comes.
A couple days ago, some of you may have seen this, in the Wall Street Journal there was an article on the front page that had to do with Detroit.
Detroit had a system of government developing.
Detroit, this was mainly an inner city in the poverty-ridden areas where people were living on welfare checks and social security had nothing
and high rates of unemployment.
And what has developed there?
There was a development of a group of individuals who had no jobs
but they weren't necessarily looking for more welfare and they wanted to be productive
and they developed little businesses of going around and providing services for the people who couldn't get out.
They would go and do their shopping and mail and laundry and all these things and help the people
who were still able to live in their own homes but to some degree not be able to take care of all their needs.
And these people, of course, were being paid in cash.
And they, you know, are the law breakers. These are the people, the IRS, are trying to crack down.
Here the market and their local little government is developing, they are just chucking the whole system and trying to take care of people, providing this wonderful service, taking care of themselves, but they don't pay their taxes and they don't report this and these become the enemy of the state.
The state is always trying to figure out how we can crack down on these people and how we can stop this.
As conditions worsen though, I do believe there will be more and more of that.
Eventually, the state disintegrates under the conditions that we have today.
All monolithic states, especially if they're built on and dependent on deficit financing
and they operate with a fiat currency, their time is limited.
They can stay in existence for a long time, but they cannot stay in existence forever.
The Soviet Empire, as Mises predicted, and other strong socialist nations are the same,
they eventually disintegrate because they can't function.
The fact that the Soviet Union lasted as long as it did, lasted that long because they were
dependent on us and our subsidies flowing into them indirectly.
Well, some of that's sort of coming to an end.
Mises didn't have a whole lot more respect for the welfare state than he did for the
social state.
He distinguished the two.
knew, he said the welfare state was somewhat different, but the welfare state eventually
led to the same crises with the tendency for the welfare state to lead to a form of socialism
and most likely in this country it would be a fascist type of socialism, but then again
eventually collapse.
We have that, I think we're seeing the early signs of that.
Not too long ago I was speaking in an audience, a very conservative audience, and I was preaching
I was reading the Gospel as I knew it about less government, and everything was going well until I suggested that even Social Security may need reforms.
One elderly gentleman, obviously on Social Security, he says, fine, everything you've said so far has been okay, but don't mess with Social Security.
That's off limits, because I'm only getting back the money I put in. We've heard that story before.
So I went to check and find out how long it would last if the individual is now receiving that money, only the money that they put in.
How long would the system last? Well, in the literal sense, no days at all, because there's no money there, there's no wealth there.
There are only treasury bills stuffed over into an accounting slot that says that there's so much in a trust fund.
The trust fund has $495 billion. So let us concede that there's $495 billion in the trust fund.
Well, how long would that last to keep those people receiving benefits?
How long would that last if we just paid it out and we didn't tax the people anymore if we quit the Ponzi scheme?
It would last a little over a year and a half.
We're spending about $315 billion a year on social security.
So all these things tell me that there's an end coming to this.
There's an end to the paper money system as well as the welfare system because the bankruptcy will come.
And this then offers us an opportunity, the way I see it, to offer up our ideas about political independence
and the ideas of liberty and whether or not they should be protected at the local level or a national level.
We have two forces going on in this country.
We see the exciting things happening about this full discussion about political independence,
secession, smaller units of government, rejection of the federal government, for reasons sometimes
which are very practical because people are starting to realize they're out of money.
It's not so much they've rejected the notion that it'd be great to get that money, but they're
recognizing that the government is being bankrupt. But we see this tremendous growth in these ideas,
and that's very very encouraging. At the same time what do we see with those in
charge of government? Are they are they less enthused about bigger government? I
mean we're talking about trying to get smaller units of government. At the same
time our two major parties have fully endorsed the notion of the World Trade
Organization. The biggest bureaucracy, good conservative members of Congress
endorsing the World Trade Organization. So we have the World Bank, we have the
IMF. We have the World Trade Organization and we have had just recently a
president willing to speak out and even be blunt about the New World Order,
globalism, one world government. So we see this powerful force pulling us in this
direction at the same time that people are starting to recognize that we need
less government not more government. I think this will lead to a crisis.
It has to because they don't have the moral authority and they don't have the
and the funds to pursue at will this notion that they can run and control the government.
Now how willing will they be to give this power up?
Not very willing.
They will not be.
Those who are in control of the monetary system tenaciously hold on to that power just as
they will tenaciously hold on to these concepts of one world government and trying to keep
together the notions of the New World Order and the international banking system.
So this is the way I see things coming.
I see these two forces coming and eventually there will be a collision.
We obviously want to argue for and work for and promote the ideas of political independence
and individual liberty, mainly because it's in our self-interest, it's in the self-interest
This is an argument that should be enough, that we have a right to our lives, these rights,
this right to our life, granted to us by a creator, and we have a natural right to these
rights.
Then we should argue for that on a moral basis, but just think about the practical basis of
what a society really is like.
When we have this independence and this freedom, of course there's great prosperity and there's
a development of trust in the individual rather than the development of a society that mistrusts.
Today our government teaches us to mistrust each other because they are always coming
in and interfering with our contracts rather than promoting the obedience to contracts.
government is that body that is interfering with the voluntary solutions to so many of our problems.
So the free society and when we honor individual liberty, we obviously have a free market economy
and we obviously have a great deal more prosperity and I'm also convinced a lot more peace in the
world because there would be a lot less need to fight foreign wars. The essence of a free
Murray's society, of course, is individual liberty.
Sometimes that comes across as vague for some individuals not quite comprehending what individual
liberty is, and they think of liberty as civil rights and collective group rights, which
is very, very confusing and misleading.
But Murray used to emphasize, and I agree with the emphasis for political reason, that
is that if you honor and protect and understand property rights, you probably will understand
and just about everything you have to about individual rights.
Because if you can own your own home and own your own business and the government's not to interfere,
then you have your religious freedom, you have your freedom of the press
and all the freedoms that you need which are the civil liberties that we believe in,
but it's the integrity of the property.
It is the lack of the belief in the integrity of the property that we suffer so much from today.
government that serves the interests of these individuals who are in control, the
the lobbyists who can manipulate government and in those forces are way
way too powerful. They're so powerful that the government in order for the
politicians to stay in office then are forced to compromise and say well I must
serve my constituents interests and I know we're coming up short but we better
are spent a little bit more and worry about paying for it later on.
So they violate the concept of property rights in a very general as well as specific sense.
Probably the most vicious attack on the right for you to keep and own that which you produce
and which should be abolished as soon as possible would be the concept of personal income tax.
The way that the government finances the system, they do it through direct taxation, but the
indirect method of taxation, which is to inflate the currency.
So therefore, the monolithic state has to undermine the concept of honesty and money.
They must undermine the concept of commodity money.
They must destroy the gold standard.
So therefore, systematically from 1913 on, we have had, when gold was $20 an ounce and
now it's $400 an ounce, we have had the systematic undermining of a gold standard.
So there is no restraint on the monetary authorities to create new money out of thin air, principally
for the benefit of buying treasury bills so that these deficits can be taken care of.
The one real sad part about these last hundred days is that there has been, if nothing else,
a further endorsement of the Federal Reserve system.
The Republican people in Congress right now are much more enthusiastic about the current
monetary system and they have not they have not challenged it but the the if
you had the rules of honesty and money as we did in the 19th century of course we
didn't have the we didn't have the notion that we should run a welfare
state and police the world that also helped a lot but now we have a welfare
system out of control we still believe we're the policemen of the world and
we've undermined the gold standard so therefore the monetary system is allowed
have begun to be used by the bankers and the politicians to do their will over and above the income tax.
It's every bit as vicious as the income tax.
So while we're abolishing things, we should abolish the Federal Reserve as well.
And the other way there's a vicious and steady attack on our property rights is through that of regulations.
There have been some court rulings somewhat favorable to us in saying that if regulations
destroys the value of your property, the government then is obligated to reimburse you.
Well that's an improvement over what we have, but in a way it doesn't answer our questions
because if my property in Texas has been violated by some regulation and I've lost the value
of my land, is it justifiable for the government to go and tax you to reimburse me for what
they've done to the land?
Obviously, the best correction would be, get the regulators off our back.
I mean, that's what we need to do.
So we have the taxes, we have the Federal Reserve, we have the regulations, and then
basically we undermine private property even when the federal government borrows so-called
legitimately in the market.
They don't borrow from the Fed, but they borrow from those who are willing to loan to the
government.
That is a burden on the future property earnings of the next generation.
And this is where we are today.
We're at a point where that deficit is starting to annoy people, annoy politicians enough
that they'll even talk about it.
You know, they're at least talking about the deficit.
I came across a figure just the other day that I thought was interesting.
It says that it's easy to figure out because our national debt is essentially $5 trillion.
So if interest rates go up 1 percent, the cost to the government, just to finance the
debt, goes up $50 billion.
How many people here expect interest rates to go up over the next two or three years?
Most people would agree, and I think so too.
I think that once a currency is destroyed, the only way you tend to protect it on a short
run is you raise interest rates.
And what do we have happening to the dollar and international exchange markets today?
We have a crashing dollar, and the Fed's saying, well, we're not going to raise interest rates.
They'll raise interest rates.
The market will raise the interest rates, because when the dollar buys 30 yen, maybe
Maybe they'll start thinking that maybe interest rates are going to go up, but that is the case, interest rates are going to go up and that's out of the control of the average politician up there.
I was visiting up there a couple weeks ago and I visited with a group of conservative members and they were very concerned because the big discussion of the day was whether or not the tax credit would be for the people of income of $200,000 a year or $95,000 a year.
I mean that was the issue of the day and I said that's you know important you should always argue for the best and it shouldn't be any limitation for that matter but I said have you have you ever considered what's going on with the dollar and actually they don't I mean it's they don't have a clear understanding about the importance of the dollar the Federal Reserve system most members of Congress do not understand how the Federal Reserve system works the newer members I was
and I think there's sort of lost in the maze of things up there so that if the orders come down that you would vote to have strong law and order, whether it violates the concept of states' rights and individual rights, that's beside the point.
One of the pieces of legislation that would have been most disturbing for me to deal with was that of the reform of civil law and the lawsuits because if there's anything you want me to get riled up about,
They've filed up about talking about litigation and physicians and these outrageous things that are occurring in the courts, but they've literally, if this goes through with the House, they've nationalized, they've superseded everything the states do in civil courts.
People in a box that say that if you don't vote for it, you mean you want to support the trial lawyers and all these other people and you don't think there's a litigation crisis out there, and yet what they've done was literally nationalize all the civil courts and overrule all the state courts.
This is all done in the name of less government.
That is a little bit disturbing.
Most people here I'm sure are aware of a writer in the 18th century, the 19th century, a French
writer by the name of Bastiat.
Bastiat talked a whole lot about the morality of liberty and freedom and most of us like
to quote him because in spite of the shortness of his book, The Law, it packed a lot of information
and a lot of true Senate.
Bastiat said when plunder has become a way of life for a group of people living together in society,
they create for themselves in the course of time a legal system that authorizes it
and a moral code that glorifies it.
And I think we're there. We have a legal system that authorizes it through the welfare state.
And what about the moral code? The moral code that they demand that they have a right to this.
they don't even tell everything is an entitlement entitlement and inferring
that they they have this natural right to be given this nobody really questions
the victims who have to be taxed and regulated in order to pay for this and
yet the the plunderers are still alive and well and more numerous than ever and
they're playing tricks and they'll deceive us and use all kind of language
to pacify us and yet there this is a time and an age when if this crisis is
is building where those of us who believe in liberty are going to be challenged by those who want one-world government if this is coming to pass where we have to meet with it, we have to have our ammunition, we have to have the strength to defend our position on moral terms as well as economic terms because it is crucial.
It would be nice for the Texas Republic to be developed and be a libertarian example for the world. That's not likely to occur.
I'm really quite satisfied, I'd be quite satisfied if we could immediately secede from the United Nations at the moment.
Not too long ago there was a vote in the Congress and it was carried by two-thirds.
The vote was suggested to curtail the power of the President, to curtail his power to authorize United States troops to be put under United Nations commanders.
It failed by two-thirds. Can you believe that? Two-thirds of the people in Congress thought that he should have this power. This came up after Somalia.
I have to say that it did happen before the new Congress was in there, but just the fact that it's happened within the last six months shows you that the movement toward one world government is alive and well.
The movement toward liberty is alive and well, and we can win because we have truth on our side.
on our side and we have events moving in our direction and the people need to be awakened
to the fact that this is indeed a time of crisis in which we live and that we can do
something about it rather than taking the crisis and throwing up our hands and allowing
them to establish a more powerful fascist state, this is the time we must be prepared
to present our views.
This is not a perfect example but it's a pretty good example if you compare what is
is happening today in Russia versus Estonia.
Russia is in total chaos, doing very poorly,
and not a whole lot of hopes.
How many want to go to Russia and invest their money today?
Not a whole lot of people.
But think about Estonia.
They have developed more free market principles.
They have at least lent their name to sound money
and have restrained the monetary authorities.
They have talked about and used a certain amount of gold
to back their currency, and they have a much better economy.
There's nothing that says that they are secure and over and past all the chances of ever becoming a status communist state again, but at least you can see the difference.
And that is what we have to be prepared for.
If it is true that the welfare state is coming to an end, and I think the dollar has to be watched because a total dollar collapse would be the ushering in event that would and could precipitate the total failure of this system,
System, then we must be prepared and we must be willing to be aggressive to present these
views and fortunately for us there are groups like the Mises Institute and others teaching
and educating so many young people that we are much better off and these ideas are much
more receptive.
It is up to us, those who are concerned and those of us who do understand these issues,
to do our very best to preserve liberty here in America.
Thank you very much.