Arkady at Right Condition Blog has an interesting essay on Shay’s Rebellion and lessons for today’s Big Government. A snippet:
Believe it or not there are two very important lessons we can learn today from a 1786 rebellion. For those not familiar, Shays’ rebellion took place in Massachusetts and involved Daniel Shays and hundreds of other poor farmers crushed by taxes and debt to launch a full scale rebellion. However the story is not about citizens rioting because of injustices they felt were thrust upon them, but a state and federal government printing “money” to finance a war and ultimately failing to deliver the gold and silver promised to the holders of the printed “money”.
Alexander Hamilton wrote in Federalist #6:
“If Shays had not been a desperate debtor, it is much to be doubted whether Massachusetts would have been plunged into a civil war.”
Think how often a similar tactic has been employed recently using a very similar approach.
- The Federal Reserve was created to prevent banking panics and preserve the dollar strength, even though the state and federal government encouraged regional banks to print money,create inflation and actually honored suspension of specie payment (paying out in gold/silver).
- Social Security was created to handle people’s retirements, even though Hoover/FDR prolonged the Great Depression by destroying companies and private pensions with price fixing, crushing taxation and unprecedented federal intervention.
- Congress wants to pass universal coverage because HMOs are too expensive and too many Americas are uninsured, even though Congress essentially created the HMOs while subsidizing their costs via federal tax credits to employers.
What is the second lesson you are wondering? This is the very lesson that Hamilton never understood as can be demonstrated by his central bank, an institution he agitated for despite the objection of Madison and Jefferson. Government cannot be allowed to print money. It is really that simple. Whether it was via the individual state banks during the colonial times or the “private” Federal Reserve, the result is always the same. Printing money systematically bankrupts and impoverishes the citizenry allowing governments to spend with impunity.
Over two hundred years ago Daniel Shays and his neighbors felt the injustice and cruelty of a ruling class without truly understanding how he and others were being systematically plundered. Not much has changed.
There’s much, much more of this very thoughtful essay at Right Condition Blog. You’ll wonder why you haven’t bookmarked it yet.