Regarding Congressional Duties - Article 1, Section 8 of the U.S. Constitution:

“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

To establish Post Offices and post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United  States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards and other needful Buildings; -And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”

There you have it. That’s it! The Founding Fathers purposely limited the authorized spending of Congress to leave power in the hands of the States and the people. They designed Congressional duties in such a way that The Common Man could understand it. But Congress would have us believe it is beyond our understanding.

So what happens when the authorized expenditures not followed? What could go wrong? Take a look at the next page.

By the end of 2012 the National Debt is forecast to be $16 trillion with interest expense of $875 million per day!

And what makes all this debt possible? The culprit is the Federal Reserve (see TCM Principle #4), created in 1913. They print money that is not backed by assets thus creating false market conditions affecting interest rates, supply and demand, and inflation. The end result is elongated recessions and the adverse bursting of economic bubbles. The constitutional responsibility to coin and value money lies with Congress as stated in Article 1, Section 8. If they don’t want to do the hard work, they should stay home.

In addition to abolishing the Federal Reserve, we must pay off the National Debt. To pay it off means paying the interest and principal just like a home mortgage or auto loan. And that means we must balance the federal budget and the federal government again start living within its budget, just like the rest of us! That means a restructuring of receipts and expenditures must occur. This will rival the goal of putting a man on the moon, except this is a 20-Year plan, not merely a decade.

The next page shows current tax receipts and spending levels.

The budget of the federal government is difficult to understand. Its methods of taxing and spending are complicated and, frankly, out of control. The following pages show how to balance the federal budget, pay off the National Debt, and stimulate job and wealth creation surpassing anything in the nation’s history.

Again, every budget number may not be exactly correct but is certainly close enough to create informed judgment. The format is simplified so everyone can understand it and what must be done to make it a revitalized Constitutional Budget.

The proposed changes in the sources of federal taxes over the upcoming years are consistent with Constitution’s original intent and TCM Power Principles. And so is the reduction in the size of federal government. A more limited federal government will adhere to the Tenth Amendment whereby power is reserved to the States and People giving them more control over their lives and communities and allowing them to find innovative solutions to their problems.

A limited federal government will allow it to more precisely perform its constitutional role, thereby properly assisting in providing for the “common Defense” and “general Welfare” as outlined in Article 1, Section 8 of the U.S. Constitution.

Not everyone will agree with the proposed changes in tax collection and expenditures of the federal government. That is understandable. Perfection is hard to obtain.

But as Thomas Jefferson said, “Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty.” Therefore, spend whatever time is necessary for you to understand the federal budget, how to balance it and how to pay off the National Debt. Do not merely pass this responsibility onto others. Only an educated people will preserve liberty.

Those in power confuse the people by acting like only they have the wisdom to understand budgets of this magnitude, when, in fact, the opposite is true. They have lost touch with reality as proven by their disregard of sound economic policy. Budgets are still budgets, whether large or small. Larger budgets simply have more zeros. But they still must be balanced like any household or business and an allowance must be made to pay off debt no matter if it is a car loan, home mortgage or, in the federal government's case, the National Debt.

Beware; the zeros have been intact to show the reader how large the numbers really are. And the following numbers do not include any adjustments for the monumental healthcare legislation under consideration.

Let’s start an examination of the federal budget by reviewing its revenue, which is simply the amount of tax collected from different sources, and comparing that with the intentions of the Founding Fathers.

Obviously a certain amount of wealth must be taxed to fund the government for its vital constitutional role and, according to Article 1, Section 8 of the Constitution, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises…but all Duties, Imposts and Excises shall be uniform throughout the United States.”

Duties and Imposts are known as tariffs, taxes levied on goods coming into the country while an Excise tax is based on consumption such as gasoline tax paying for road construction and maintenance.

In Article 1, Section 9 the Constitution goes on to say, “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.” The Founders wanted a wealthy people. No direct tax was allowed on a person’s income. Imagine a life without having to pay taxes on your income! The federal government would have to directly depend on the states for a good share of its revenue based on a state’s census.

President Lincoln and Congress created the Internal Revenue Service in 1862 to finance the Civil War but it was declared unconstitutional in 1895. Of course, it was difficult to consolidate power in Washington, D.C. under those restraints. So changes were made to the Constitution.

The 16th Amendment was ratified in 1913 (same year the Federal Reserve was created). It says, “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” Now a man’s labor was no longer safe.

One more important step was still needed to congregate power in Washington, D.C. At that time U.S. Senators were still each elected by their state’s legislature, ensuring Senators acted wisely with the tax dollars provided by their state. (See the logic the Founders implemented?) But the 17th Amendment, also ratified in 1913 (why does that year keep coming up?) eliminated that wisdom, saying, “The Senate of the United States shall be composed of two Senators from each State, elected by the people thereof…” No longer would Senators represent their state.

Not only could Congress now tax, tax, tax and simultaneously the supervision of how those taxes were spent was severely curtailed. A mighty transfer of power from the States and the people to the federal government had occurred.

The proposed changes to the sources of tax revenue promoted by The Common Man simply revert back to the original intent of the Founding Fathers. Nothing prevents this from occurring today. However, The Common Man advocates TCM Power Principle #2 to repeal the 16th Amendment and TCM Power Principle #3 to repeal the 17th Amendment to permanently ensure the return of power to the States and the people. (Do not think it impossible to repeal an amendment that has proven to be a terrible idea. Consider the lawlessness and corruption created by the 18th Amendment making illegal “the manufacture, sale, or transportation of intoxicating liquors.” It was repealed 16 years later by the 21st Amendment.)

The following page shows what can happen when the sources of federal tax revenue reflect that intended by the Founding Fathers

2) Excise Tax – Article 1, Section 8 of the original Constitution that states, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts…” An Excise tax is based on consumption such as gasoline tax paying for road construction and maintenance. When reasonably applied, this tax is uncontroversial.

3) Tariffs – Duties and Imposts are known as tariffs, a tax levied on goods coming into the country. Duties were the federal government’s main source of tax revenue until 1913. Tariffs are levied on imported goods ensuring similar costs to that of goods produced within the country. Some say duties are “protectionist” and claim they deepened the Great Depression citing The Smoot-Hawley Tariff Act signed into law on June 17, 1930 which raised tariffs on thousands of goods imported into the U.S. This is not backed up by history. Throughout most of the 1800s tariffs averaged almost 30%, peaking at 57% in 1830, while the maximum average for Smoot-Hawley was 20%, peaking at 60% for some products.

Tariffs ensure the wages of American workers are not in “a race to the bottom” with low wages around the world. Why let our jobs leave the country by the millions? Let others compete for our business, but, after all, it is our business. Tariffs will rejuvenate small business and aid the creation of jobs throughout our nation. Small communities throughout the nation will again prosper. They will restore the country to again being a creditor nation, where we loan and not borrow.

4) State Apportioned Taxes – Again, in Article 1, Section 9 the Constitution says, “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.” The Founding Fathers envsioned that if the federal government needed more revenue than afforded through other means, they would tax the states directly pro rata based on population. Senators should protect their states instead of looking out for their largest contributors.

5) Estate & Gift Taxes – Over the course of history estate and gift taxes are normally invoked to pay for military campaigns. Our military is over-reaching and continually involved in affairs other than our own. Any “obligation” owed by the wealthy to those less fortunate will be voluntary contributions the distribution of which is carefully guarded by the giver in contrast to the waste of the federal government. These taxes will be reduced to zero.

6) Social Security & Medicare Taxes – Mandatory expenditures of Social Security and Medicare now exceed the tax revenue being collected for these benefit plans. In previous years the tax collection exceeded expenditures. Unfortunately, the federal government spent the excess leaving only IOUs. It is now faced with collecting from current payers and using those funds to pay the current beneficiaries. Also quite unfortunate is that the number of potential retirees is growing much faster than new contributors.

The federal government has proven to be an inept fiduciary. So, collections from these plans will no longer be under the control of the federal government, but are phased out with the intent that future receipts from Social Security and Medicare are deposited with private institutions for growth and safekeeping much like the County of Galveston has done resulting in much larger and more secure benefits for recipients. With larger benefits, each recipient will purchase their own health insurance just like they do their car insurance and not be dependent on the federal government for any retiree benefits.

7) FairTax and Progressive Taxation – Some argue in favor of a national FairTax. The Common Man does not support a national FairTax. This would easily be subject to much abuse and is not in alignment with the methods of taxation proposed by the Founding Fathers. States may use the FairTax, progressive tax or whatever method they choose to raise funding to pay their pro rata share of the federal government tax burden. Whatever method is ultimately used, the effective tax rate on its citizenry should be clearly understood.

Now it’s time to align expenditures into a constitutional budget…see the next page.

Bringing expenditures in line with the Constitution will be hotly debated as it should be. But, in the minds of most, two things are certain: A) The federal government is much too intrusive, and B) Current spending levels are unsustainable. Let’s look at several categories of expenses requiring tough decisions.

1) National Debt – It is forecast to exceed $16 trillion by 2012. Herein, repayment starts in 2013 and are made over a 20-year period with 2% annual interest. Annual payments of interest and principal are $978.5 million. The last payment will be made 2032.

2)  Social Security and Medicare – Annual expenditures of Social Security and Medicare now exceed collections by $335,000,000,000. The lack of adequate funding is growing worse as the “Baby Boomers” come of retirement age. There are just three workers paying into it for each recipient. By 2030 this ratio is forecast to be only two workers paying into it for each recipient. Something must be done. Herein this “social insurance” is diverted to a retirement plan resembling that of the County of Galveston, a model easily found online showing the wisdom of this election. Investment will create untold wealth and the common man's financial position will improve accordingly

Obviously, the federal government has made a commitment to those who have paid into the system and that commitment will be honored as our proposed budget reflects ongoing payments for the forseeable future.

3)  Defense – Many will not be happy with the cuts in defense. However, it must be done. With over 700 military bases in over 100 countries, this country has strayed far from the Founders view of avoiding “entangling alliances.” Funds are being used to spy on Americans, monitoring phone calls and Internet usage and creating an untenable suspicion of the federal government. We need a state-of-the-art military. It will be required to adjust to sensibilities.

4)  Executive Branch – Spending cuts here will end the excessive intervention and domination of the federal government. It will perform its duties concisely and effectively within the constraints written in the Constitution and no longer usurp powers belonging to the States and the people. Unconstitutional federal programs such as the Department of Education, Department of Energy, Department of Environment, and domestic and foreign aid will be eliminated. Such power will be returned to the States and the people.

5)  Judicial and Legislative Branches – More effective methods of punishment must be meted out, including restitution. Both branches will share with other programs in the upcoming decrease of federal spending.

6)  Science – The sciences are the only areas exempt from spending cuts but no growth is forecast until the National Debt is paid off the budget is balanced.

7)  TARP, Stimulus and Off-Budget Spending – The accounting practices of the federal government are horrendous. It must be brought from the darkness into the light for all to see and understand. Everything must be laid bare for The Common Man. No more government bailouts. No more government taking over private industry. A leaner, limited federal government is coming.

The next page shows three financial statements for the years ending 2009, 2022 and 2033.

The following will be a challenge, but honest discourse built on individual responsibility will prevail.

As the National Debt is paid off and the budget is balanced our current method of fiat, that is paper currency not backed by gold and silver as required by the Constitution, will start to change. We must do so to restore the strength of the dollar and our independence (this is, after all, at the core of it all – see TCM Power Principle #4).

Again, gold and silver protect your assets. They are a hedge against inflation, a worthless currency and they restrain government spending. Gold and silver establish monetary discipline so money retains it value as it did from 1800 to 1900 when a dollar retained its value for 100 years. As the dollar retained its value, manufacturing efficiencies enhanced the nation’s standard of living – the creation of true wealth.

As George Washington said, “Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice…If ever again our nation stumbles upon unfunded paper, it shall surely be like death to our body politic. This country will crash.”

John Adams warned, “All the perplexities, confusion and distress in America arise not from defects in the Constitution or Confederation, not from a want of honor or virtue so much as from downright ignorance of the nature of coin, credit and circulation.”

And Thomas Jefferson admonished, “The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution. I am an enemy to all banks, discounting bills or notes for anything but coin. If the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”

Article 1, Section 10 of the U.S. Constitution says, “No State shall...make any Thing but gold and silver coin a Tender in Payment of Debts.” According to the Constitution, States must use gold and silver to back up currency. Many States wouldn’t sign the original Constitution unless this provision was inserted.

So, by 2022 all new silver coins in the U.S. will be made of solid silver. No more cheapening of our coins will be allowed.

In 2033 after the National Debt is paid off and trillions of fiat destroyed, a gradual introduction of gold-backed currency will take place. Some will say we cannot return to the gold and silver standard. That is untrue. Granted it will have to be done wisely but it can be done.

When coupled with no national debt, a balanced budget, no trade deficits, plentiful jobs and wealth, the “gold standard” will again provide an underpinning of prosperity.

In his 1796  Farewell Address, George Washington said, “I have already intimated to you the danger of parties in the State, with particular reference to the founding of them on geographical discriminations. Let me now take a more comprehensive view, and warn you in the most solemn manner against the baneful effects of the spirit of party generally.

This spirit, unfortunately, is inseparable from our nature, having its root in the strongest passions of the human mind. It exists under different shapes in all governments, more or less stifled, controlled, or repressed; but, in those of the popular form, it is seen in its greatest rankness, and is truly their worst enemy.

The alternate domination of one faction over another, sharpened by the spirit of revenge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries which result gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of public liberty.

Without looking forward to an extremity of this kind (which nevertheless ought not to be entirely out of sight), the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it.

It serves always to distract the public councils and enfeeble the public administration. It agitates the community with ill-founded jealousies and false alarms, kindles the animosity of one part against another, foments occasionally riot and insurrection. It opens the door to foreign influence and corruption, which finds a facilitated access to the government itself through the channels of party passions. Thus the policy and the will of one country are subjected to the policy and will of another.

There is an opinion that parties in free countries are useful checks upon the administration of the government and serve to keep alive the spirit of liberty. This within certain limits is probably true; and in governments of a monarchical cast, patriotism may look with indulgence, if not with favor, upon the spirit of party. But in those of the popular character, in governments purely elective, it is a spirit not to be encouraged. From their natural tendency, it is certain there will always be enough of that spirit for every salutary purpose. And there being constant danger of excess, the effort ought to be by force of public opinion, to mitigate and assuage it. A fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest, instead of warming, it should consume.”