When All Else Fails

Why Conservatives Accept High Taxes, the Federal Reserve System, and Fiat Money

from The Tea Party Economist

TeaParty-SaveUsRecently, I wrote an article in which I argued that there are three political foundations of modern warfare: high graduated tax rates, a central bank, and the abolition of the gold coin standard. I called it “The Triumvirate of Modern Warfare.”

From the day that Ron Paul was sworn in as a Congressman in 1976, his critics inside Congress were consistent. They opposed his position on foreign relations and defense. He opposed the expansion of the American Empire. He wanted a strictly defensive system of military expenditures. He did not approve of the constant meddling of the American government in the domestic policies of other nations. So, he was criticized by conservatives inside Congress as being soft on Communism, or being naïve about the necessity of an aggressive foreign-policy, or by being anti-defense.

These same conservatives regarded themselves as hard-core opponents of the modern welfare state. But the modern welfare state is also supported by the three pillars of the modern warfare state, namely, high marginal tax rates, the central bank, and the abolition of the gold coin standard. The structure of all modern governments favors the expansion of the warfare state and the welfare state.


Some of these elected conservatives said they were in favor of the older gold standard, which was a fake gold standard, which Nixon abolished unilaterally on August 15, 1971. They also said that they wanted lower taxes. They said nothing about the Federal Reserve System.

When it came to their voting records on military affairs, these elected conservatives voted in favor of policies that could only be enforced by means of a highly graduated taxation, central bank inflation, and the abolition of the gold coin standard. No matter what they said about their supposed commitment to conservative fiscal principles and conservative monetary principles, what they voted for when it came time to vote for the funding of the Pentagon was this agenda: high graduated taxes, the central bank, and the abolition of the gold coin standard.

People wonder why it is that elected conservatives cannot seem to understand that marginal tax rates are too high in the United States. They also do not seem to understand that the restoration of a full gold coin standard is mandatory if we are ever to stop the expansion of the modern welfare state. The Federal Reserve System must be privatized. All of its legal connections with the federal government must be abolished. That is what Andrew Jackson did in 1836 with the Second Bank of the United States, and within a few years, that bank was bankrupt. It could not be sustained apart from a monopoly granted to it by the federal government. This is equally true of the Federal Reserve System.

When you see conservatives voting for a larger Pentagon budget than they voted for last year, you can be sure that these conservatives are not ready to vote for reduced tax rates, the abolition of the Federal Reserve System, and the restoration of a full gold coin standard. They are therefore also not willing to take the only stands that could undermine the modern welfare state.


Welfare state Democrats are willing to vote for an aggressive foreign-policy and a larger Pentagon budget, as long as they get to maintain the federal government’s high expenditures on welfare projects. Similarly, conservative Republicans are willing to vote for the welfare state projects, as long as the Democrats continue to fund the Pentagon.

(For the rest of my article, click the link.)

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