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Government should get down to business

June 08, 2008|By Robert Gary

A chilly day in Washington, but with bright sunshine as President Canute approaches the dais to deliver his inaugural speech and here's what he says. "I have waited many years to be president and to exercise the awesome powers of the office, and now finally I have entered this marvelous condition of supreme power. So, because I love my fellow citizens, and my country, I am hereby ordering gold and silver to come up out of the ground and to fill the coffers at Fort Knox.

"I command that millions of tons of gold and tens of millions of tons of silver arise from the earth where they are dormant and enter the secure rooms of my national treasury. To assure that this order is obeyed, I am appointing hereby the following persons to serve on my National Audit Commission (a list of names is read). They will proceed with all deliberate speed to the great vaults of this nation and confirm the newly acquired gold and silver. They will report their marvelous findings in 30 days to a joint session of the Congress, and give a complete list of the new assets which will then be in place."

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King Canute gave a similar speech before all his ministers, only instead of ordering gold and silver to arise from the Earth and fill his treasury, he set up his throne on the beach and ordered the tide not to come in. Of course the tide did come in, as the wise king knew it would. The ministers were amazed that the tide had the temerity to disobey a direct command of the king. How dare it?

We are moving toward a time when the free cash flow available to the government will be negative. In other words, it will have to print new paper money to pay its rent and light bill. Landlords and utilities will say they want to be paid in gold, or they would prefer not to have the government as a tenant or a customer. The government will say, with a Canute-like voice, "You have to take my paper money - it's the law - written right there on the paper money!" The landlords will say the paper must be accepted for all debts public and private - so we are declining to make a contract with you under which a debt may be incurred by you. So use your paper money to pay your debts - but you will incur no debts with us because we won't rent or sell to you.

It's morally bankrupt to fight a $3 trillion war and to cut taxes at the same time. What it means is that Mr. Bigpants will do exactly as he pleases during his term in office, and leave the wreckage to be cleaned up by someone else - maybe several generations of people after he is out of office. Actual financial bankruptcy is the natural and ordinary consequence of moral bankruptcy.

Easy politics is based on push-button issues like abortion and low taxes. Low taxes are the nonthinking man's panacea - so, if a politician offers low taxes, he gets votes. Of course, paper money becomes practically worthless, food costs go up 50 percent per year and oil doubles every six months - the nonthinking man says "Yes I'm truly broke, but my taxes at least are low - see I only pay 15 percent of my capital gains - wow! - I'm getting a great deal here."

The abortion issue is one that killed the conservative movement and destroyed the GOP. Conservatism came to be associated with religious right conservatism. Actual conservatism - less government intrusion into the private lives of citizens, went by the boards - it's gone now and it's not coming back anytime soon, killed by the hijackers of the word "conservative."

The Republican Party is now the party of truly bad national policy. Barack Obama has appeared to drive the final stake through its heart. Even if Obama were the smartest and best qualified man in the world, it is exceedingly difficult to manage an organization with negative free cash flow. The dollar doesn't need to be formally devalued - it is devaluing itself - that's what makes the stock market go up, along with milk, oil and your electric bill.

The government has to make and sell something at a profit. Here are my suggestions. Electricity, valuable metals and land are the three things the government might get into the business or selling.

It doesn't even have to sell the land it owns - it could just develop it for 99-year leases. I'm not talking about the National Parks, but land near those parks - beautiful, habitable land. There would be plenty of takers for 99-year leases. Valuable metals include a lot of alloy materials that are on federal lands and on the sea floor. Electricity would be the product that again requires lots of land for solar and wind, and lots of very high quality engineering for geothermal and nuclear.

Going into business would not be unprecedented, and under the Constitution, it would not be illegal. I recommend it only because it's the last available alternative. I don't know if smart government bureaucrats could be found to make the government businesses work.

NASA seems to work, and so do the national labs - they use a lot of the same skills that would be needed for Big Solar, Big Mineral, and Big Real Estate operations, conducted for a profit by the federal government, using its unique advantage of owning about a third of the land in the U.S. FDR put it best when he said, "Above all, try something." If we don't save ourselves, we will surely not be saved. The tide comes in; Canute knew it.

Robert Gary is a Hagerstown resident who writes for The Herald-Mail.

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