From: ipser@solomon.technet.sg (Ed Ipser)
Subject: Federal Government and the US Constitution (was Re: deficit/debt)
Organization: TECHNET, Singapore
Date: Fri, 10 Apr 1992 05:13:14 GMT



A number posters and mail respondents to the thread: Confronting the
Deficit/Debt Boogyman, have taken issue with my occassional comments
that what we need is to get the federal government back within its
Constitutional powers. Others have made statements that demonstrate
confusion about the structure of our federal government (de jure and
de facto).

While this subject is not, strictly speaking, an economic issue, the level
of ignorance toward the US Constitution and the specific, limited federal
powers which it grants is truly alarming (if I may borrow that term).

If you are interested only in purely economic issues or if you are totally
uninterested in the legality of the federal government with respect to the
US Constitution, PLEASE, read no further.

On the other hand, if you are interested in understand the true nature
of the federal deficit/debt, you must first understand who and what is
in debt.

(If anyone is interested, I will email them an electronic copy of the US
Constitution upon request.)

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Unlike the constitutions of most other nations and the constitutions of the
several states of the United States (yes, each state has its own
constitution), the US Constitution grants specific, limited powers to the
federal government.

The implicit wording of the body of the Constitution and the explicit
wording of the Tenth Amendment:

      The powers not delegated to the United States by the Constitution,
   nor prohibited by it to the states, are reserved to the states
   respectively, or to the people.

are quite clear in this regard. The federal government has no power, for
example, to administer education. Therefore education administration is
left to the states respectively or to the people in their individual
capacity. It is not up to the congress or the president to decide what
powers to take and what powers to leave to the states or to individual
Americans.

The bulk of federal powers are granted to congress in Article I, Section 8.

      Section 8. The Congress shall have power
      To lay and collect taxes, duties, imposts and excises, to pay the
   debts and provide for the common defense 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 a 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 states in which the same shall be, for the
   erection of forts, magazines, arsenals, dockyards, 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 the Constitution in the government of the United States, or in
   any department or officer thereof.

Various other powers are scattered throughout the Constitution and among
the Amendments, for example:

   15th Amendment
      Section 1. The right of citizens of the United States to vote shall
   not be denied or abridged by the United States or by any State on
   account of race, color, or previous condition of servitude.
      Section 2. The Congress shall have power to enforce this article by
   appropriate legislation.

Now, lets look at what the federal government is spending on:

    31% Social Security, Medicare, and other retirement benefits
    23% Defense
    14% debt interest.
    14% agricultural programs, environmental pgms, education assistance,
        job pgms, bank insurance, NASA, assisted housing
     7% Medicaid, food stamps, AFDC, etc (matched by the states)
     5% Health research, public health, public housing, social services
     2% veterans benefits
     2% law enforcement and general govt
     1% foreign affairs

Over half of federal spending is on programs which the federal government
has no constitutional authority to administer. Of the remaining half,
most is defense spending which is, with the end of the cold war, itself
in decline. In fact, if you exclude unconstitutional programs, defense,
and interest payments, federal spending drops to about 3 to 5% (depending
on whether you consider veterans benefits a welfare program or a
part of defense spending).

Does an end to federal programs like social security, mediare, medicaid,
etc. mean the end of those programs? Not necessarily. A constitutionally
correct administration of these programs would by the states, not the
federal government.

How does all this relate to economics? Simple. A federal system is a system
where governments compete. In a federal system, states compete against one
another to provide the best balance of services for cost. The more public
services are devolved, the more competition there is in their provision.
The more public servies are centralized, the more they become captive to
bureaucratic and political considerations.

There is little incentive, for example, for the federal government to
balance taxes and benefits. States, on the other hand, have to face the
very real prospect of citizens and busineses voting with their feet if
waste gets out of hand much as a shopper might switch from one brand to
another.

Federalism, simply put, means choice in government.