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The Breakup of the United States

Politics / US Politics Jul 26, 2010 - 03:08 AM GMT

By: Michael_S_Rozeff

Politics

Best Financial Markets Analysis ArticleAs the dissatisfactions of Americans with their national government grow, so does the likelihood of the breakup of the United States. I believe that most Americans can improve their well-being by ending the national government, that is, ending the Union. I believe that this goal should shape politics if politics is to do much good.


I don’t think Americans are going to be the first people in the modern era to initiate a large-scale anarchy. But Americans might conceivably move back to a federal form of government something like that under the Articles of Confederation. If so, the problem is how to proceed. Many Americans feel (and are) trapped and thwarted by government power.

I see two paths. Americans can do this either acting as individuals formed into a body politic of 300 million Americans or as 50 body politics organized by state. I think action by state has a better chance of success.

To act as one body, Americans would have to alter their Constitution. The divisions among Americans make this highly unlikely. Even if it were pursued, the results would be highly uncertain.

I like to think of federal programs being made optional at either the state or the personal level, but that means ending the Constitution or radically amending it. This takes me back to the other path of change: the States. This path looks more viable.

We the People created the Constitution through state legislatures. That is a quasi-legal path to undoing the Constitution and thus breaking up the United States. This begins a process by which Americans take back their own government. I say "begins" because most states are also candidates for restructuring. Many local governments are also out of control.

I don’t think Americans can improve their lot by participating in national politics under the current rules of the national game. I think they have to change the rules. They have to end the Union and get out from under the existing Constitution, which is now entirely controlled and interpreted by the national government.

Since there is no consensus for going back to the original Constitution and since it would have to be rewritten and renegotiated, which is a process of uncertain outcome and which is impractical anyway, this leaves one viable path: ending the Union and ending this Constitution.

Rather than thinking in terms of national politics, which at best can only produce marginal changes and which plays into the hands of the national powers-that-be, it would be far smarter to have no national or federal government at all. Although this involves significant political restructuring, We the People and the States can always retain or exercise options to form federated organizations for specific and limited purposes if we so desire.

But by what means can Americans undo the Union?

A viable means is the withdrawal of consent by Vermonters or Texans or Alaskans or Arizonans or Californians or the citizens of any state to the U.S. government. People gain leverage and power against the national Leviathan by acting as citizens of their respective states. They need to act through their state legislatures, not as citizens of the United States. In the old days of whaling, the method of bringing down the whale was by several crews working together in several boats. It was not by individual whalers rowing around by themselves and confronting Leviathan on their own.

The states entered the Union. Secession once before almost ended the Union. The states are the political entities by which the Union and its burdens and injustices can be ended.

Action through one or more states is one of the few and maybe the only viable political means by which the Union can be broken up.

Contrast this with a national tax revolt, something that I believe is not a viable means of achieving a significant and lasting change in our politics. A tax revolt movement that seeks redress at the national level will not cause the U.S. to break up. That is the politics of accommodation and adjustment. It doesn’t challenge Congress itself. It doesn’t challenge the United States. It doesn’t challenge the Constitution. It leaves the power structure intact. As soon as such a movement is tossed a few crumbs, it loses its momentum. The national government divides it and conquers it. The national government lives on. It can regain its dominance over time by any number of means, such as by invoking some imaginary emergency.

A tax revolt that works from and through the state legislatures directly undermines the Union. It directly challenges the power of Congress to tax. That’s a far stronger political platform for restructuring the United States.

Outright secession is one political measure in a spectrum of possible actions by which one or more states stand up to the U.S. government. Nullification is another. Withdrawal from the banking system is another. A separate payments system at the state level is a fourth. Refusal to obey any of hundreds of U.S. directives is a fifth. The formation of alliances among states is another.

In fact, there are so many possible ways by which one or more states stand up to the Union that, given enough time and the right conditions, a breakup is all but assured. The same cannot be said of any movement that seeks to work change by confronting Americans as one large group with their national government.

All that has to happen at present is a spark lit by one or more States and the Union will go up in smoke. The Empire will fall. The tinder is very dry right now. One bolt of lightning will set the U.S. ablaze.

The breakup can start small. Momentum will do the rest. There will be a bandwagon effect. The accumulated dissatisfactions with the monumental corruption, power-mongering, waste, and totalitarian nature of the United States government will seek and find channels of political relief.

The number of potential actions that can set off a chain reaction is very large. Once one or more of the States throw down the gauntlet, the downfall of the U.S. will be sparked.

This will come through the financial markets. The value of the United States paper currency depends critically on the taxing power of the United States. Anything that undermines U.S. tax collections undermines the U.S. dollar.

To bring down the U.S. government, all it may take is for one state to declare that its citizens need no longer pay taxes to the U.S. government. No matter what the national government does next and no matter what complex sequence of political tit for tat ensues, the uncertainty will balloon.

The financial markets will do the rest. A flight from the U.S. dollar will set in. Flight from the dollar will torpedo and sink the national government.

The Chinese and other foreign lenders will be very unhappy about their investments. So will anyone who is a creditor of the U.S.

Financial market prices at present are not factoring in even a small chance of this happening. Lenders to Uncle Sam act as if everything is hunky-dory. U.S. government bonds even look attractive to those who believe further and deeper depression is imminent.

No break up is visible in the short run. This seems to confirm such thinking. But boiling beneath the surface is a rising stream of heated discontent. Major political change is far more likely than it may seem to superficial observation.

Greek bond prices fell very sharply when the government went into crisis. They only recovered when the rest of Euroland decided to bail out the Greek government and bondholders.

There is no external bank or government that can or will extend credit to the U.S. to save the dollar once the perception spreads that its tax-collecting power is permanently impaired.

The Federal Reserve can’t save the dollar or the U.S. government by extending credit. The markets will see right through that. In a politically fragile situation where the tax-collecting power of the national government has sunk, the Fed is powerless to save the national government.

Once enough people in a given state gain the conviction that they will be far better off by shutting off the flow of their incomes to Washington, then they will get their legislature to stand up to Washington’s dictates. This will encourage citizens of other states who are in a similar situation.

There does not have to be a shot heard round the world as on April 19, 1775. A Declaration of Tax Independence will take its place.

Even if such a process of one state standing up against Uncle Sam fails, even if it elicits responses from the national government that thwart immediate success, experience will be gained. The national government is bound to show its true oppressive colors in such an episode. The game changes. A game-changing event or series of events is what is needed.

The government of the United States markets itself as the nation’s defender. It advertises that it provides security nationwide for We the People. It claims that it provides military security, economic security, and social security.

These are all false claims. More and more Americans recognize these claims as false. More and more Americans recognize that the United States government has reduced their security in all its many forms.

The United States government has succeeded in entangling Americans in an endless succession of foreign wars. It has succeeded in retarding and even reversing standards of living. It has succeeded in raising medical care costs and reducing the quality of medical care. It has perpetuated a Ponzi scheme of social security that is doomed to fail. The United States government is responsible for reducing American freedoms, for spying on Americans, for searching them, and for turning travel into a nightmare.

More and more Americans realize that promises of security do not create security. More and more Americans realize that the United States government creates insecurity and disorder.

The United States government does not deserve the tax dollars it collects. This is the fundamental bread-and-butter reason for ending the Union. The Constitution allows massive tax collections for purposes enunciated by Washington. There is no way to stop this process, which is killing the country, except by undoing the political foundation by which it is enforced.

The stream of tax dollars flowing to Washington can be turned off by the action of one or more state legislatures who act on behalf of their citizens. When that source of financing is halted, the United States government will be well on its way to breakup. This is the great gift that we should bestow on ourselves and future Americans.

Americans will remain. America will remain. The nation will remain. The People will remain. The country will remain. The United States government is none of these things. It will go. With that burden lifted from our shoulders, we can once again make our way to better lives. We can renew a process of liberation and liberty that has been frustrated.

Michael S. Rozeff [send him mail] is a retired Professor of Finance living in East Amherst, New York. He is the author of the free e-book Essays on American Empire.

    © 2010 Copyright Michael S. Rozeff - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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