Focus on Your Oath of Office Mr. President

Dr. Judd W. Patton
Associate Professor of Economics, Bellevue University

Dear President George W. Bush:

     One pundit suggested our nation narrowly avoided being Gored, but he hoped we wouldn't be Bushwhacked! Mr. President, that will never happen if you take-to-heart the following advice which, I believe, if followed, would be historic and lay the foundation for a strong, healthy American economy. I'll call it Constitutional Bush-o-nomics. Maybe the media will pick up on it!

     On January 20th you took the following oath of office as required in Article II, Section 1 of the Constitution: " I (George Walker Bush) do solemnly swear (or affirm) that I will faithfully execute the Office of the President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States. So help me God." Your task is clear, Mr. President. All initiatives and policies of your administration must be consistent with preserving, protecting and defending our founding values and documents. If you maintain this focus you will indeed in time "insure domestic Tranquility,…and secure the Blessings of Liberty…" and unite rather than divide our nation.

     Mr. President, in all honesty and candor, you will need to modify your agenda. The mark of a true leader is his willingness to acknowledge the truth and admit error. Be upfront with the American people. It's a right and proper approach and, I think, a winning political one, too.

Constitution Not a Freestanding Document

     Before discussing economic policy it is essential to grasp an important principle. The organic or fundamental law of our nation consists of the Declaration of Independence and the U.S. Constitution. The former established our existence as a nation and identified our national value system. Few seem to know this. Americanism began with a revolutionary idea, a break from the political history of the world. That idea was and is: "all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness." Moreover, our Founders called upon the "Laws of Nature and of Nature's God" - which they understood as the Creator's moral laws - as the authority to dissolve the Political Bands with Great Britain and provide the foundation for a new Nation of Free and Independent States.

     William Bentley Ball, a Constitutional scholar, put it clearly: "The Declaration is the Preamble to the Preamble of the Constitution." The Declaration of Independence identified the moral laws of God, or the "Rule of Law," that our nation was founded upon. The Constitution eleven years later in 1787 was our necessary "bylaws" establishing the institutions, powers and processes that are to be followed by our officeholders in governing the American people. Thus, in taking your oath of office, Mr. President, you and all officeholders are committed to upholding the "rule of law" - yes the "the Laws of Nature and of Nature's God" and the enumerated powers of the Constitution. You must know both very well.

     In that regard, Mr. President, I have sent you a "wee little book," as Thomas Jefferson phrased it, known as the "Jefferson Bible." It should be very useful to you in carrying out your duties. Mr. Jefferson's 1820 work represents his effort to compile the moral principles upon which our nation was established. He studied these precepts each night before retiring to bed the last seven years of his life. It's a worthy example.

     I have also re-established a congressional tradition, dating back to 1904, of giving the "Jefferson Bible" to all new members of Congress for their use. Each Representative and Senator of the 107th Congress now own a copy. The "Jefferson Bible," along with a handy pocket copy of the U.S. Constitution, which I assume you keep in your Oval Office desk drawer, is an easy and convenient way to review the principles upon which you and Congress must base your decisions as elected officeholders.

Reaganesque Economic Policies

     Mr. President, to put it in a word, you should implement the economic ideas of Reaganomics, not the compromises of bipartisanship. As you may recall, Reaganomics entailed four main objectives: 1) Eliminate price inflation; 2) Cut taxes and tax rates to stimulate work, saving and investment; 3) Decrease government spending while eliminating Federal budget deficits; and 4) Revitalize the economy through deregulating and reducing government interference in the marketplace. Quite honestly very little progress was made on any of these four goals. Mr. President, your oath of office places this agenda in a different context and rationale. That's why I call it Reaganesque. Let me explain.

Take the Recession Now!

     Mr. President, it is an "easy money" monetary policy of the Federal Reserve that causes price inflation. Generally and persistently higher prices in our economy are generated by "printing more money." Between 1995 and the end of 2000, the stock of money (M3) increased by a stunning 55%. That, and ultimately the monetary ideas that underlie the inflation policy, explains why our nation experienced a 3.4% increase in the Consumer Price Index in 2000.

     But there is another perverse consequence of this "legalized counterfeiting" of the Fed. It causes the business cycle! It's like a drug. In fact it is a drug! The new money and the additional credit generated by the banking system artificially lowers interest rates and thereby misleads entrepreneurial decisions. Real savings and real resources are not in fact available to expand production. Eventually, maybe in 2001, the withdrawal effects, as with any drug, emerge with a cluster of entrepreneurial mistakes and a stock market bubble, where much of the new money was invested in the 1990s, that deflates back to reality.

     Chairman Greenspan is not a hero as many suggest. He and his monetary ideas are the source of this intractable inflation problem. It wasn't his failure to lower interest rates soon enough (pump more money into the economy) that is causing the current economic downturn. It is his debasing of the dollar by the "printing of money" that must, through inexorable economic law, cause the fevers and chills known as the business cycle.

     The downturn and possible recession is the necessary "healing" for the economy, just as the withdrawal effects are the necessary medicine for a drug addict, as unprofitable investments are corrected and purged from the economy. Mr. President, don't go back to the drug as most economists and policy wonks advise. Rather, appoint a few Austrian free-market economists to your Council of Economic Advisors, and listen to them! Take the recession now. That means the Fed must cease its open market operations. The economy will recover and inflation and the business cycle will be history. I think your election prospects will soar in 2004!

     You might well ask how this action relates to your oath of office, Mr. President? Well, our national rule of law or moral code requires honest dealings, i.e., no false witness. That translates in the monetary realm into honest money, not money that is constantly depreciating and being debased in purchasing power by the Federal Reserve. Our Constitution gave Congress the power "to coin money, …and fix the Standard of Weights and Measures." They did so in the Coinage Act of 1792 by defining the dollar as a weight of silver. That is the "dollar of our fathers." That is what must be restored ultimately.

     Mr. President, Alan Greenspan has no statutory reason to listen to you. That is why you and Congress, by a simple majority in the House and Senate, can and must abolish the money monopoly known as the Federal Reserve System by repealing the Federal Reserve Act as provided in Section 31 of the same Act. This action alone will set the stage for honest money and banking by eliminating our un-backed, irredeemable paper money. Mr. Greenspan will be upset but our Founders, I'm convinced, would be proud of you.

Constitutional Taxes and Expenditures

     Let's look at tax policy and government spending together - points 2 & 3 in Reaganomics. Your campaign promise, Mr. President, to give an across-the-board tax cut is justified. However, let me re-phrase your promise in terms of your oath. First, the Declaration of Independence mandates equality under the law. Secondly, Article I, Section 8 of the Constitution provides for only 20 powers where the Federal government can impact the general welfare of the nation. This translates into a non-targeted tax policy without progressivity in our income taxes (or perhaps no income taxes!) and a tax revenue level consistent with financing the 20 areas of government.

     In other words, Mr. President, your goal ought to be Constitutional government, which of course, in today's world of big government means drastically less government and less taxes. Our nation doesn't need a tax cut because a recession is coming, though that is an appropriate action, or because you want to stimulate work, saving and investment. Americans need tax cuts because government has grown beyond its Constitutional bounds. Do you see the difference in this focus and why I say Reaganesque?

     Realistically, before you and Congress can cut taxes the American people must be willing to "pull their hands" out of the public trough. This acquired big government "gimme habit" must be broken. Then you can cut taxes! You must get about the business of educating Americans generally that the federal government is not Santa Claus. That it has no resources but what it first takes from the private marketplace. That "taxing Peter to pay Paul" or "inflating the money supply to pay Jones" is contrary to our founding moral principles and the rule of law. If you can articulate this truth in a convincing manner, Mr. President, you will have the greatest legacy of any President.

Social Security?

     In this context let's analyze Social Security reform. First, what does the Constitution say about it? Nothing! Absolutely nothing. Providing retirement income - and disability and survivor's benefits - is not one of the 20 powers given to Congress in the Constitution. Therefore, it is contrary to your oath to say you want to save it. Your oath requires you to eliminate it. Moreover, moral law does not condone legalized plunder - taking money from those who earned it and giving it to those who did not earn it, the essence of the welfare state.

     This doesn't mean you necessarily pull the rug out from under seniors who are now dependent on it. But it does mean you must begin by telling Americans the truth about Social Security. It is a pay-as-you-go program, not a sound insurance program that invests the money in real income earning assets. The current surplus of funds in the SS Trust Fund is not invested, but replaced by non-marketable government securities, and transferred to the general fund. That helps to explain the current so-called Federal budget surplus of the last few years. In fact the national debt, now in excess of $5.7 trillion, continues to grow regardless of the surpluses generated by the payroll taxes.

     Reagan's fourth objective, that of revitalizing the economy through deregulation and reducing government intervention, is also grounded in returning to our moral principles and Constitutional powers. What moral principle or Constitutional power sanctions price controls, farm price supports, preferential treatment, quotas, contract set-asides, protective tariffs, minimum wage laws and all manner of government regulations and codes? Are these programs found in the Constitution? Are they not violations of the property rights of our citizens you are oath-bound to protect?

     Mr. President, you must get about the business of abolishing all non-constitutional welfare-state agencies, departments and programs. Analyze them in terms of our moral code and Constitutional enumerated powers. The effect of this course will be to unleash the creative energies within the private economy to provide and govern education, commerce, energy, charity, housing, labor relationships, etc. It's the vision of our Founders.

Preserve, Protect, and Defend

     Mr. President, we appreciate that you want to be a "uniter, not a divider." If this means bipartisan compromise with your socialist, welfare-state opponents, any unity will be short-lived. Opposing principles can never be the basis of unity. Our nation will be Bushwhacked! But if you work hard to restore the original meaning of your oath, to preserve, protect and defend our moral code and Constitution, then America will begin the process of returning to her roots and the prosperity that will flow from it. God blesses those who obey Him. May God bless you and may God bless America.

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