Sic semper republicae

Our Constitution took effect on March 4, 1789; the first ten amendments (the Bill of Rights) followed in 1791.

It has taken only 224 years to stand the Constitution on its head.

The 1789 version of the Constitution called for three co-equal branches of government: executive, legislative, and judiciary. Each had a role to play in the government's functions, and there were an abundance of checks and balances to keep any one of them from dominating the others.

The 2013 version of the Constitution has the government now dominated by its executive branch. Like Rome's Senate during the Empire period, the legislative branch stands idly by, assembling now and then to add a rubber stamp of approval to whatever the President decides to do, or not to do -- to spend, or not to spend (such as on the National Parks, during a so-called shutdown). The judiciary defers to the legislature's follies, and lets the executive branch mostly do as it pleases.

What has driven this transformation? I will tell you, in just two words: paper money.

Our paper money is, as I explained in this earlier series of posts, not money, properly speaking. It is debt  -- once (long ago) a promise of redemption in silver, but now (take out a dollar bill and read what it says) just a promise to be redeemed by more paper: a "Federal Reserve Note," which you can exchange only for an identical one. What kind of promise is that? One paper dollar backs another, which backs another . . . it is, to paraphrase the old joke, "paper all the way down."

We are now, as of the first weekend since the government resumed full operations, $17+ trillion in debt, and counting. The first day of operations took care of all the backlog that built up during the months leading to the shutdown, and with the help of some Congressional earmarks, piled $328 billion on top of the $16.7 trillion that was already there. (In just one day, the Obama administration borrowed more than half as much as it had in the entire previous fiscal year.)

Take the rough numbers: $17 trillion equals $17 x 10¹². There are around 300 million men, women and children in the United States, or 3 x 10⁸ people. Divide the latter number into the former: the result is (with rounding, because we are dealing in rough numbers) $6 x 10⁴ -- that is sixty thousand dollars per person, for every last one of us, that we owe in debt.

But it's just paper money, right? And we can print as much of it as we need to keep going, right? It's not as though we had to have $17+ trillion in gold and silver standing behind it, right? -- because that would be more gold and silver than has ever been mined since the beginning of the world, including all that has been lost to dross and wastage over the years. (1,411,475 metric tons of silver @ $1 million per metric ton = $1.411 trillion; 166,500 metric tons of gold @ $59 million per metric ton = $9.8 trillion; $1.4 trillion plus $9.8 trillion = $11.2 trillion for all the gold and silver ever mined, while we owe $17+ trillion right now, and counting.)

Wrong. While we may be privileged to print paper money for the time being, the paper behind it is good only for so long as someone else will take it in exchange for goods or services. Washington D.C. seems to think that we can never run out of money, and look how right they have proved with regard to everything else -- starting with the cost of Obamacare.

So we lurch from debt ceiling to debt ceiling, ever raising it, and never, ever lowering it. But now, with the latest legislation, Congress abdicated its Constitutional responsibility (Art. I, sec. 8) "to pay the Debts ... of the United States."

Instead of imposing a new ceiling on debt, Congress authorized the Treasury to borrow whatever amount is necessary to keep the government operating through next February 7, using a formula that is based on current spending. This lets the President alone determine the debt ceiling, in effect, by what his administration spends between now and February. Congress can try to pass a bill to restrict spending in that period, but the President can veto it, and both Houses would need a two-thirds majority to block any such raise by overriding his veto. (When was the last time that two-thirds of both Houses ever agreed on anything?)

After February 7, the ceiling will kick in again at whatever limit has been reached by then, and Congress will once again need to authorize any future increase. The expectation is that Congress will cave, however, and permanently allow the President to increase the spending level thereafter as he deems fit, subject to its theoretical power to override any veto by a two-thirds vote in both Houses. And once that happens, Congress will have relinquished its last and best control over the purse strings.

Just one hundred years ago, in 1913, Congress abdicated its constitutionally-granted power to coin money (Art. I, sec. 8 again) to the Federal Reserve Bank. Since that time, the Fed has printed so much paper money that the value of the dollar in 1913 has steadily shrunk: even using the official (and rather dubitable) inflation rates, it would require $23.62 to be able to buy what you could purchase for just $1 in 1913.

Never in the history of the world has the paper money phenomenon turned out differently. It always results in a devaluation, and never the other way around. The trick of the Federal Reserve has been to stretch out this devaluation over a century, so that the people from one generation to the next barely notice it.

Another characteristic of the paper-money phenomenon, however, is the tendency for the rate of devaluation to increase as the currency nears the point of total collapse. And with our national debt having tripled in just the last twelve years, what do you think has been happening to the rate of devaluation? You guessed it -- and what is worse, the increase in the rate is intentional.

I know what the politicians are thinking -- they hope not to be around when the entire paper machine collapses. (Just as Ben Bernanke plans not to be around when his successor has to start taking away the punchbowl.) But what are we thinking, who send such people to Washington to act for us?

The country has not operated on a budget ever since Obama's second year in office. Question: how is it possible to bring deficit spending under control without a budget? Operating the government by "continuing resolution" is a recipe for continuing to operate at the same deficit as before (depending on tax revenues) -- except that now the President gets to raise the ceiling for cumulative deficits any time he wants to, so there is no downside to spending more and more.

In California, voters finally got fed up with the legislature's budget shenanigans. They passed a Constitutional amendment that suspends legislative salaries for every day that a (balanced - hah!) budget is not enacted. But getting such an amendment passed at the national level would be impossible, because (unlike California, with its power of initiative) it would take the legislators' cooperation to refer an amendment out to the States for passage. (The other method of amendment -- having two-thirds of the State legislatures propose a convention -- is even more impractical.)

Are we, then, locked in on the current course of destruction? Not entirely -- there still will be elections every two years, and if the voters applied themselves, all those who voted to continue business in Washington as usual could be turned out. Given the media's unflagging support for the spenders, however, it will take a lot more grass-roots effort than at any time ever before.

The Greeks had our number long, long ago: they had already observed that governments of the people, by the people and for the people end in ruin once they discover the ability to vote themselves other people's money. A strong figure on a white horse rides into the resulting chaos and disorder and promises to restore "good government" if handed sufficient power, and a tyranny then replaces the people's government.

Ah, well -- Rome's republic lasted for 465 years. But that was then, and this is now, with the effects of every transaction greatly accelerated. Ours will be lucky to see its 250th.