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Friday, July 23, 2010

Article 1, Section 9: Limits On Congress

I was going to save this for a Grumpy Sunday post, but this is just burning my butt.  Not surprisingly, it has to do with the Congress spending more and more of our money, and making a mockery of the Constitution.

Not only have they gone nuts by interpreting the Commerce Clause of the Constitution as giving them carte blanche to spend our money on whatever they wish, in the past week, they have TWICE decided to ignore a portion of Article 1, Section 9 of the Constitution.  In part -
No bill of attainder or ex post facto Law shall be passed.
Hmmm.  Ex post facto.  What might that mean?
An ex post facto law (from the Latin for "from after the action") or retroactive law, is a law that retroactively changes the legal consequences (or status) of actions committed or relationships that existed prior to the enactment of the law.
Simplified:  No retroactive laws.

Obviously, this happens all of the time.  In the Wikipedia link above, if you click, "United States," they give you a rash of high-profile laws that have been passed and retroactively enforced.

Look what has happened just this week:  Both houses of Congress and the president signed the Unemployment Benefit extension bill.  It's not Constitutional all by itself (unless I missed the "extend unemployment benefits" article in the Constitution).  To make matters worse, they made it a retroactive law -
The House voted 272 to 152 earlier in the day to extend unemployment insurance through November for those who have not exhausted up to 99 weeks of aid. The payments are retroactive to late May.

Earlier in the week, the president signed the financial reform bill.  I even discussed it in the last post.  I described how the FDIC deposit insurance was increased from $100,000 per depositor to $250,000 per depositor.

What I haven't talked about is a press release from the FDIC that came out a few hours later.  That $250,000 per depositor threshold was raised, retroactively, all the way back to January of 2008.
The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Barack Obama today permanently raised the maximum deposit insurance amount to $250,000. In addition, the Act made this increase retroactive to January 1, 2008.
Six banks had failed in 2008 prior to the FDIC limit being temporarily raised to $250k in October of 2008.  The press release says that there were 10,000 depositors that had accounts in excess of the old $100k limit.  Those companies and individuals took a loss on that difference.

With this retroactive law, 9,500 of them are going to get all of their money back.

Are there absolutely no consequences for our individual actions?  Even my mother - who has no idea what is going on in the world of finance - knows that you don't keep more than $100k in any one bank.  Ten thousand depositors at 6 banks either didn't know or didn't care about the law.

You and I now get to pay for their ignorance.

My guess is that these 9,500 depositors were getting a sweet interest rate.  Perhaps double or triple the going rate.  That is very common for banks to do that are in financial trouble.  Bring in as many deposits as you can, and hope for the best.  Pay whatever it takes.

These depositors got greedy and didn't review the financials of the bank in question.  They saw the up-side, and it blinded them to the down-side. 

Just like all of the Too Big To Fail banks should have been allowed to fail because of their risky banking practices, these individual depositors should have taken the loss for breaking or ignoring the rules.

Shoulda, coulda, woulda...

So, how can our government get away with this?  How can they blatantly write ex post facto laws?

Now, I'm sure some lawyer will pop off with some sort of convoluted logic along the lines of, "Ex post facto laws are prohibited with regards to punishment.  These weren't punishment, they were benefits."

I just went back and read the sentence in Article 1, Section 9 and it makes no such distinction.  It just says Congress can't do it.  Really.  Scroll back up to the top of the page and check for yourself.

How can they limit who will be rescued?  Why not make it retroactive to depositors who had losses with prior bank failures?   Hell, at least take it back to the S&L Crisis - most of those folks would still be alive.

Does stupidity have a Statute of Limitations?  Apparently so, since every stupid depositor isn't being saved.

Apparently, though, they WERE smarter than the rest of us.  They got the great rates AND they're getting their money back.  Must be nice to have the government accept your risk.

Accept The Challenge

So what do we do?  The easy answer is to vote the bastards out.  Not some of them - all of them.  This group of "leaders" must chuckle to themselves each night:  "Limits on Congress?  Surely you jest!"

I'm not going to go down "the dark road" alternatives - at least not right now.

At this point in time, we're not going to see the direct, immediate impact from these and similar government actions.  The government will continue to pump funny-money into the economy in an attempt to save it. 

Sometime in the not-too-distant future, our bankers - China et al - are going to require we raise taxes and cut expenses, or our national line of credit will be cut off.  We all know that the bill WILL come due and the price will be higher than if we had just taken our lumps 3 years ago.  The gravy train will run out, and all hell will break loose. 

Plan for:

Finance - we've discussed, ad nauseum, about the need to reduce or eliminate debt, and to get as "liquid" as possible.  When the economy falls apart, being able to take advantage of opportunities will mean the difference between just surviving, and thriving.

Personal security - work on your home security plans and seriously work on a civil disturbance/riot plan.  When the money dries up, all hell is going to break loose.  We're already seeing individuals that have been pushed too far going over the edge.  Once those that are dependent upon the state for their "livelihood" have their payments stop, we'll have whole groups going over the edge - all at the same time.

Food/equipment preps - it looks like we're going to have a deflationary period.  Take advantage of it.  Food, medicine, equipment are all slowly dropping in price.  Use this time to complete your "must have" and "want to have" lists while you're still able.

Skills - if we end up with an Argentina-like economic crash (this is my belief), knowing how to stretch a buck and make a buck will be very important skills.  Learn how and what to forage from nature.  Learn how to preserve what you've foraged.  Make it known that you will home preserve any meat, fruit or vegetable in exchange for half of the "haul".  Your time, fuel, jars, lids, rings and skill are valuable.  Take advantage of it.

Learn how to convert starches into alcohol.  Learn how to weld.  Learn how to repair small engines.  Learn how to lay a foundation.  Learn how grow veggies, trap and clean an animal for food, or cook with only basic materials.

Get movin'!
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Tracy Dear said...

This info makes me so mad. However, since I am just me, I figure all I can do is the steps you listed at the end of your post. As I've said before, your blog has a unique place in the prepper blogosphere. Thanks for bringing each post back to what I can do for my family.

Anonymous said...

I second this, mama4x.
I still can't get over how the govt. is suing Arizona for finally working on a problem they begged the govt. for help on for years. The govt. should have stepped up and apologized, taken over and done the job.
As for California, who is as broke as can be, is spending millions of $ making a new map of the coastline. and hold your breath: it should be done by Christmas.
As for the Pentagon. These people are watching porn on the internet on our dime and time. and the govt. is working so very hard to shut down Fox news because it is so harmful!
Chief Inspector, sometimes the news is incredulous. But I agree with mama4x: Thanks for bringing each post back to what I can do for my family.


Anonymous said...

Voting does not work, the U.S. court system is too convoluted and cost prohibitive. Their is only one way to rid ourselves of the cancer.... cut it out.

Chief Instructor said...

Mama, that's all we can do - keep moving forward a little at a time.

Cat, I hadn't heard about the newest map boondoggle. $3.3 million. Really? They are so proud because they'll be able to know "where every boulder and telephone pole is located."

My head wants to explode.

Anon 5:25, voting has put us in this mess we're in. People fell for the "hope and change" snake oil salesman. The thing is, McCain wouldn't have been much worse. We need good, principled candidates to make our votes count for something.

suek said...

>>People fell for the "hope and change" snake oil salesman>>

True...except for two things: the info was out there on the internet if you looked for it, and the majority of voters apparently _didn't_ look on the internet for it, but accepted the reporting done in the MSM. If the MSM had done the job it's supposed to do in a free society, that would have been ok - but once again, it didn't for two reasons: the Journolist problem (coordination between those in the MSM who deliberately skewed their reporting) and the limitation on competition.

In other words, the voters got snookered, and it was deliberate. Should they have known better? Probably, but there _is_ apparently and underlying conspiracy that has been pooh-poohed by exactly those people doing the "snookering" - and _that_ is the matter that should concern us.

Chief Instructor said...

suek, I think most people - from both the left and right - recognized the bias in the MSM. The pro-Obama folks accepted and encouraged it, the anti-Obama folks despised it.

I think the only surprising thing is that the JournoList collusion was made public.

Joseph said...

While we're at it how about we do vote them out and eliminate the cushy post-Congressional pension and make it retroactive.

Or better yet we all swamp 'the hill' phone lines asking that the "Federal Pension Forfeiture Act" (FPFA) be passed and then immediately after passage bring charges against most congressmen for "Conspiracy to commit offense or to defraud the United States" which would forfeit their pensions under the FPFA.

Alas Anon 5:25 is right on but most people don't want to hear it.

Chief Instructor said...

Joseph, I'd never heard of that bill before. In doing some research and reading some websites, I see that this is HUGELY favored by liberals as well. OMG, something we can all agree upon?

Be still, my beating heart...