Saturday, October 18, 2008

If I Had the Power to Transform America

I originally posted this in a forum thread in

I am reproducing it here because I thought it was an interesting exercise.

If I had the power, this is how I would go about changing the political structure of the US.

I am a strong supporter of State economic autonomy, but there is a need for a governmental mechanism to coordinate cross-state infrastructure projects.

In fact, James Madison wanted to allow canals and roads to be built across America, but he could not find the authority in the Constitution:

In his last act before leaving office, Madison vetoed on states' rights grounds a bill for "internal improvements", including roads, bridges, and canals:

Having considered the bill ... I am constrained by the insuperable difficulty I feel in reconciling this bill with the Constitution of the United States.... The legislative powers vested in Congress are specified ... in the ... Constitution, and it does not appear that the power proposed to be exercised by the bill is among the enumerated powers.

He urged Congress to amend the Constitution to permit the federal government to build national infrastructure:

Among the means of advancing the public interest, the occasion is a proper one for recalling the attention of Congress to the great importance of establishing throughout our country the roads and canals which can best be executed under the national authority. No objects within the circle of political economy so richly repay the expense bestowed on them; there are none the utility of which is more universally ascertained and acknowledged; none that do more honor to the government, whose wise and enlarged patriotism duly appreciates them. Nor is there any country which presents a field where Nature invites more the art of man to complete her own work for their accommodation and benefit. These considerations are strengthened, moreover, by the political effect of these facilities for intercommunication, in bringing and binding more closely together the various parts of our extended confederacy.

Whilst the states, individually, with a laudable enterprise and emulation, avail themselves of their local advantages, by new roads, by navigable canals, and by improving the streams susceptible of navigation, the general government is the more urged to similar undertakings, requiring a national jurisdiction, and national means, by the prospect of thus systematically completing so inestimable a work. And it is a happy reflection, that any defect of constitutional authority which may be encountered, can be supplied in a mode which the Constitution itself has providently pointed out.

Federal Infrastructure Board

So what I propose is a Constitutional amendment creating strict, focused provisions allowing the federal government to involve itself in national infrastructure.

I think a distributed collaborative approach is always better than one where a single individual decides on matters.

For this reason, I would have a "federal infrastructure board", which would administer projects voted on by property owners across the US. The projects would be funded by a land tax, and, as mentioned, would be voted on by property owners. Each person's vote would be proportional to how much land they have. So if one individual owns 0.5% of the land in the US, he would have a 0.5% vote.

Some of the provisions would be:

1. The Federal Infrastructure Board (from here on referred to as the Board) would be given the power to build and maintain infrastructure for the continental US (excludes Alaska and Hawaii)

2. The projects the Board undertakes would have to be of vital importance to AT LEAST two states.

3. All efforts to create the proposed project through the coordination of state governments would need to have been exhausted for the Board to have authority to undertake it.

4. The Board's annual spending could not exceed 30% of annual federal budget

5. Property owners with combined ownership holdings that would pay at least a 1% share of the tax revenues towards a given project should it pass need to nominate the project for it to be brought up for a general vote.

6. All property owners would need to participate in the general vote. They can delegate their voting rights to another party.

7. In the first 6 months of the year, projects can be nominated. In the 9th month, all nominated projects would be brought up for a vote

8. Each property owner's vote towards a particular project is proportional to how much of the total revenues needed to be raised for the project would come from taxes levied on property owned by that property owner should the project pass.

9. There is a maximum limit of 30% of the annual federal budget that the cost of the projects that a property owner votes 'Yes' on can be.

10. There are two tax structures that a project can use, a gradient tax structure, or a uniform tax structure.

A gradient tax is higher at a point, or a line, and gradually decreases at a set rate towards the outer rim of the taxed area.

A uniform tax is a uniform fee levied on each acre of the taxed area.

Each project can only use a single tax structure.

11. The share of the fees levied from each property owner for a project have to be proportional to the benefits that property owner derives from the project.

Case Example

In the case of the high-speed maglev rail network that Dave proposed, here is how it could be funded through this governing framework:

1. This infrastructure project would require two official projects to pass for it to be launched. There would be a project that levies a gradient tax along each side of the maglev line up to 150 km from the line and 300 km from its major stations that allow freight loading, and another project that would levy a uniform tax on the rest of the continental US.

2. Property owners with at least a 1% share of the land area that would be taxed under each respective project would need to nominate the two projects.

3. In the general vote, if both projects get over 50% of the vote, then the maglev rail construction project would be launched.

There are 1,995,874,608 acres in the continental US. If the area under the gradient tax structure is 204,177,610 acres, and an average of $200 is levied on each acre within this area (with the fee increasing in proportion to how close an area is to the maglev line or major station), that would raise $40.835 billion.

If $61.80 is levied on each of the 1,791,696,998 acres under the uniform tax structure, that would raise another $110.727 billion.

This would be a total of $151.562 billion for the high speed maglev line.

If the fees are collected over a 5 year period, that would be an average of $40 per acre per year in the area under the gradient tax structure, and $12.36 per acre per year in the area under the uniform tax structure.

Here's a visual of the concept:

Reducing the size of the federal government

That's for infrastructure, now as far as getting federal government spending down to 3% of GDP (from 20% now) and removing the vast unconstitutional regulatory framework (e.g. the federal reserve system) in place now, I would propose following a 15 year plan.

A Constitution board would be setup that would be in power for 15 years, and would have as its task to return the federal government to its Constitutional scope over a 15 year period.

The task of reducing spending and eliminating regulations would be broken down into 15 bite sized portions, and one portion would be tackled each year.

Spending would need to decrease by about $110 billion a year, and exactly how regulations would be phased out could be worked out in consultation with industries to cause the least amount of shock to the economy.


I would allow gold and silver to compete with fiat dollars as legal tender. With a decreased tax burden, there would be a decreased compulsion to hold dollars for government payment purposes, and the economy could for the most part choose its own currency.

Civil Effort

This political effort can only succeed with massive public support. What we need is a coordinated effort by a good portion of the 297 billionaires in the US to make this happen. We need a council, a round table, where the wealthiest Americans congregate and coordinate to spend considerable amounts of money on educating the public of the importance of this kind of effort, and funding candidates that support it.

Sunday, October 12, 2008

Ron Paul and Peter Schiff get flurry of media attention

In the last few weeks, since the market has begun to tank, Ron Paul and his economic advisor Peter Schiff have made several appearances on major media.

Here are a few of the interviews from the last three weeks:

Ron Paul on CNN on 09/19/2008:

Ron Paul Fox Business 10/14/2008:

Peter Schiff on CNBC 10/08/2008:

Ron Paul on Bloomberg 10/02/2008:

Ron Paul "Rescue Plan is not good", Fox Business News 10/10/2008:

Ron Paul on the Late Edition with Wolf Blitzer 09/21/2008:

Ron Paul on CNN: Buying Debt is the Wrong Solution 10/01/2008:

Ron Paul on Fox Business News, 09/24/2008:

Ron Paul on Cavuto, Fox News, AIG bailout, 09/17/2008:

Ron Paul on Cavuto, Fox News, 09/27/2008:

Ron Paul Rescuing The Rescue W/ Cavuto, Fox News, 10/11/2008:

Peter Schiff on Glenn Beck 10/06/2008:

Peter Schiff on Glenn Beck 10/11/2008, Part 1/5:

Peter Schiff on Alex Jones 10/02/2o08, Part 1:

Peter Schiff on CNN, 10/04/2008:

It's not surprising that Ron Paul and Peter Schiff are now being revered by the media, given that they have been predicting this crash since at least five years ago:

Ron Paul predicting collapse of Fannie/Freddie and housing bubble five years ago:

Ron Paul in the House Financial Services Committee, September 10, 2003

Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.

Ron Paul on The Korelin Economics Report 03/2007, part 1:

Ron Paul predicting crash a year ago:

Peter Schiff Mortgage Bankers Speech, 11/2006, Part 1 of 8:

quick summary:

In 2006 Peter Schiff tells over 1000 mortgage brokers they are about to be out of jobs. Watch how he completely nails the coming real estate/mortgage debacle before anyone else even realized it was coming.

Peter Schiff Predicts The US Economic Collapse With Unbelievable Accuracy 8/28/2006: