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North Dakota the First to Pass New Tactic Against Federal Debt | The Pelican Post










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North Dakota the First to Pass New Tactic Against Federal Debt

Budget, Constitution, Featured — By on April 12, 2011 5:05 am
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State initiated amendment, potentially an American first, crosses key threshold

NEW ORLEANS, La. – An amendment that would mandate state approval of federal debt has achieved a major milestone towards ratification. On Thursday, North Dakota became the first state legislature to approve a convention for ratification of the National Debt Relief Amendment.

With a 68 to 24 majority, the North Dakota House of Representatives joined their Senate counterparts and called for a limited amendments convention pursuant to Article V of the U.S. Constitution.

At least seven other states, including Louisiana, either have pending resolutions or legislative sponsors for the same proposed amendment. Rep. Kirk Talbot (R – River Ridge) and Rep. Nick Lorusso (R – New Orleans) have agreed to introduce the NDRA resolution into the Louisiana legislature, which reads:

“An increase in the federal debt requires approval from a majority of the legislatures of the separate States.”

State and federal executive branches have no authority in the process, so North Dakota’s resolution goes directly to Congress. If 33 more state legislatures submit an equivalent resolution, an amendments convention will result. Any subsequent amendment would then need approval from 38 states for ratification.

James Booth is cofounder of restoringfreedom.org, which drafted and promotes the NDRA. He says the initiative seeks to remove Congress’s ability to unilaterally raise its debt ceiling, currently at $14.3 trillion, without debate at the state level.

Booth believes North Dakota’s leadership is noteworthy, since it is one of the most fiscally responsible governments in the country. Only North Dakota and Montana, for example, have not faced a budget shortfall in the past three fiscal years. And North Dakota is one of only six states without a projected budget shortfall for fiscal year 2012.

North Dakota State Senator Curtis Olafson (R – Edinburg), who sponsored Senate Concurrent Resolution 4007, says federal debt is “an imminent threat to the very sovereignty of our nation” and not a partisan issue.

“We have changed people and we have changed parties and the problem continues to grow… The problem is systemic and the system and the ground rules need to be changed.” (Read his full testimony here, and click below to hear an audio interview with Olafson – seven minutes.)

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

“It was critical that some state be the first one to pass [the NDRA], and what better state than North Dakota.” Legislators in other states, he says, are reluctant to be the first. “But here in North Dakota we don’t wait for somebody else to do something… We are not afraid to be the first to adopt it.”

The American Legislative Exchange Council, the nation’s largest nonpartisan association of state legislators, has endorsed the NDRA and in January released model legislation. Noble Ellington (R – Winnsboro), a third Louisiana representative, is chair of ALEC, and he too has voiced his support for the National Debt Relief Amendment.

Additionally, the Goldwater Institute, a nonpartisan Arizona-based policy institute, has lead educational events and published research on how the amendments convention would proceed.

While official federal debt is $14.3 trillion, roughly equal to the entire American economy, other credible estimates go as high as $200 trillion. These disparate estimates account for unfunded liabilities such as Social Security and Medicare, and they point to a potential vulnerability of the NDRA.

Steven Sheffrin, an economics professor at Tulane University, believes an enforceable balanced budget amendment, flexible enough to handle recessions, slowdowns, and other adverse economic events is virtually impossible to write.

“The modern budget with all its categories… is too complex to be handled by a simple constitutional amendment,” says Sheffrin. “Congress could easily evade any language by reconfiguring budget categories. Courts could perhaps prevent this, but only at the expense of injecting judicial activism into legislative affairs.”

Many organizations that support restrained federal debt harbor fears of a runaway amendments convention – that it could radically change the U.S. Constitution. The John Birch Society and the Eagle Forum, for example, have worked against NDRA resolutions in Utah, Missouri, and Arizona. Matthew Spalding, a constitutional scholar with the Heritage Foundation, has also described the Article V process as dubious, unpredictable, and inclined to ongoing litigation.

Booth says restoringfreedom.org and the Goldwater Institute are working to debunk the “myths” surrounding the amendments convention. (Click below for one of restoringfreedom.org’s such videos.)

“I have asked those that fear the process to provide me with a list of 38 states that would ratify a dangerous, destructive, or harmful amendment many times, but they cannot…” He notes that in the late 1980s the Heritage Foundation asserted the Article V process “actually may be the safer method” and sought to refute “unfounded” fears.

Olafson goes further and believes organizations hostile to an Article V convention are fear mongering “to empower themselves, to finance themselves, and to justify their existence to their supporters. It’s their marketing tool.”

“They need to recognize and acknowledge this undeniable fact: unless and until 38 states ratify a proposed amendment, the Constitution is untouched and nothing changes… This myth [of a runaway convention] will eventually be put to rest and proven to be totally baseless,” he says.

Fergus Hodgson is the capitol bureau reporter with the Pelican Institute for Public Policy and editor of The Pelican Post. He can be contacted at fhodgson@pelicaninstitute.org, and one can follow him on twitter.

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  • http://profiles.google.com/cecilnewton53 Cecil Newton

    less than 20% of country foots the bill for over 80% of all costs.

    talk about fair…….

  • http://profiles.google.com/cecilnewton53 Cecil Newton

    and the government unions did have a part in crashing stock markets b/c they took excessive risk to keep up with pensions they could not afford.

    How can you work for 20-25 years and get a pension for life when people are living 85 years?

  • http://profiles.google.com/cecilnewton53 Cecil Newton

    so lets just all turn into the 80% of America that are net takers from the system versus net tax payers. i think europe tired that and it worked real nice. go check out greece,portugal, spain, and see how that system works.

  • Anonymous

    The states will not commit suicide so if this is a good idea for them it will pass and if not it will not.

    “HERES a crazy idea did u know if we cut the bush tax cut to the top 2% we stopped teh out of control spending”

    Yes.. That idea is CRAZY.

    Runaway spending is not the result of tax cuts. The two are UTTERLY UNRELATED. Congress has spent more than it takes in for years. No matter how much money they take, they always spend more than that. We own 14 TRILLION. Forget running a 1.7 Trillion deficit, if we ran a 1 BILLION dollar surplus and paid NO interest on the debt, it would take 14 THOUSAND years, to pay it off.. Ponder that..

    They have had a chance to do this on their own, but they have the same odds as Charlie Sheen does for self rehab. Now it’s time for the people that actually pays Federal taxes to step in and say NO MORE. The only way you cure a drunk is to cut off his ability to obtain a drink. The only way you curb congress is to take the money away from them and keep it at home.

    Second point.. if YOU think you are under taxed then send your excess money to Washington. There is a link on the IRS site for contributing to the nation debt and no one will stop you. If you think I should pay more taxes, then I ask you a simple question. By what right do you demand more of my labor to support your causes.

    Isn’t that simply defined as slavery? I’m not one of those, as Obama says “Fortunate” I make good money but I didn’t inherit it, I WORK MY ASS OFF FOR EVERY DOLLAR… You do the same and then we will talk.

    As they say GOD only asks for 10% Why should the feds get more?

  • http://athinkingamerican.blogspot.com/ Methodical

    Sovereign debt and control of the currency are inexorably linked. If we have a central bank that is free to print money, it will cause inflation and make it harder for the government to operate, because it too must pay for goods, services, etc.

    Fed is only allowed to buy treasuries, and theoretically such an amendment would indeed cut off its source. Unfortunately, what we have seen that the law has loopholes big enough to drive 100′s of billions through, whereby the Fed has bought non-government securities to inflate the money supply to benefit the big banks.

    Our founders avoided banking in the Constitution, because each side thought it was covered. What gives the federal government the right to establish a central bank, after all? A big part of the answer is the “promote the general welfare” language, which has been used to justify a myriad of laws including the banking acts and Federal Reserve Act. In otherwords, congress will define “debt” some other way, or work around it by creating off-balance sheet entities or similar legal perversions.

    As much as we like simple language in our Constitution, when it comes to money, debt, and banking… this time we are going to have to spell it out in very precise and unambiguous language.

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  • http://profiles.google.com/raiseaman Man Maker

    I’m sorry but I must respectfully disagree with your attempt to minimize the risk of an amendments convention. Your premise assumes a solid and ethical adherence to the rule of the written law, the constitution. But in recent decades the US Constitution has been stretched, and tweaked, and pulled in so many ways, I have no confidence that a convention to address one issue would not balloon into a fiasco that faces hundreds of amendments specifically designed to remove our rights, change the foundations, and turn the constitution on its ear. For proof, all you have to do is look at the right to keep and bear arms. Do you have to have a license to have the right to free speech? Is free speech different in each state? Owning a gun and traveling from state to state with it, is a dangerous legal tightrope. Take “separation of church and state” that is not in the constitution. It is legal precedent that has made religious discussions at school another legally dangerous activity. I’m sorry, but I am not willing to risk the foundations of the US Constitution with a convention that could go as off course as the first convention. Fortunately, we had ethical honest moral people working for the good of the generations that would follow. If it were to happen now it would be a money grab and to heck with the coming generations. Today we can’t even agree on what marriage means, what is ethical, what is moral, and what it means to be a man or a woman. Sorry. Any effort for a convention too risky for me!

  • http://profiles.google.com/raiseaman Man Maker

    I’m sorry but I must respectfully disagree with your attempt to minimize the risk of an amendments convention. Your premise assumes a solid and ethical adherence to the rule of the written law, the constitution. But in recent decades the US Constitution has been stretched, and tweaked, and pulled in so many ways, I have no confidence that a convention to address one issue would not balloon into a fiasco that faces hundreds of amendments specifically designed to remove our rights, change the foundations, and turn the constitution on its ear. For proof, all you have to do is look at the right to keep and bear arms. Do you have to have a license to have the right to free speech? Is free speech different in each state? Owning a gun and traveling from state to state with it, is a dangerous legal tightrope. Take “separation of church and state” that is not in the constitution. It is legal precedent that has made religious discussions at school another legally dangerous activity. I’m sorry, but I am not willing to risk the foundations of the US Constitution with a convention that could go as off course as the first convention. Fortunately, we had ethical honest moral people working for the good of the generations that would follow. If it were to happen now it would be a money grab and to heck with the coming generations. Today we can’t even agree on what marriage means, what is ethical, what is moral, and what it means to be a man or a woman. Sorry. Any effort for a convention too risky for me!

  • http://zennix2010.myopenid.com/ Doug D.

    The attempt by North Dakota is honorable, and even necessary. However it will accomplish nothing, because it does nothing to change the underlying debt equation. Until we stop borrowing at interest, it doesn’t matter if we freeze all spending forever – we still will have to make payments on debt.

    Let me say that again. We could FREEZE SPENDING entirely – authorize nothing to be spent, not even $1, and the flywheel of interest on debt would cause our payments to continually increase.

    The ultimate killer is and will be *interest* on the debt. That’s the banker’s dirty little secret. It grows exponentially and can never be repaid. It’s a formula designed to destroy, and is as inescapable as a black hole. By design. Everybody is so focused on the total amount of the debt, but they overlook the obvious – that the interest will grow forever – it CANNOT be repaid. Any nation that agrees to borrow instead of acting sovereign over its own money, by definition has given its power to a bank. By agreeing to pay a bank interest, we agree to be slaves.

    What’s that, you say? North Dakota and other states can band together, and clamp down on Federal spending. Eventually, if they really sock it to the Feds, they won’t be able to spend even $1.

    Right. We’ll just tighten down, pay it back, then be smarter going forward and not borrow.

    Only problem is it can’t be done. Why? Because of the equation behind our slavery:

    (P + I) > P

    Huh? In words, Principle plus Interest is bigger than Principle alone. You take some money now, called the Principle, and agree to repay that amount, plus Interest, later.

    The problem is how? Even if you took the P dollars, and did nothing with them, and later give them back, how do you get I more dollars needed to pay the interest? You can’t, since you don’t have them. So you must borrow them, again from the bank. This process compounds, and repeats. No matter how much you borrow, you always have to repay more. It’s a slow process at first, but eventually it begins to really accelerate, and it’s unstoppable.

    The bankers know this. What I can’t figure out is why so many Americans are so ignorant of this fact.

    We fight over debt ceilings. Or inflation. Deficits and debts. Yeah, these suck. But they are symptoms.

    What we need to awaken to is the fact that borrowing at interest is the ultimate cause of our problems. It’s the secret tool used by the bankers against us, with the true power to destroy.

    It’s the ‘interest’, stupid. Debt sucks, but interest kills.

    Until we kick out the Federal Reserve cabal and stop borrowing money with interest, we’re forever doomed to live as slaves. Right now the ZIRP policy hides the fact we’ve pointed a loaded gun to our head. Wait until interest rates rise. Think Congress is spending like crazy? Ain’t seen nuthin’ yet. Once the interest begins to rise from 0 to something even slightly higher, then we’ll really start to feel the pain.

    We don’t need to stop Congressional spending, adjust debt ceilings or set limits, or try to monkey with any of the other symptoms. We need to solve the problem. Refuse to borrow ‘at interest’. Re-establish our national sovereignty over money. Start by kicking out the Federal Reserve bank, mint gold and silver coins with the ounces of gold/silver in each coin stamped on them (instead of some arbitrary dollar amount on the coin). Default on any/all debt to the Federal Reserve. Abolish the 16th amendment, the IRS, and repeal the Federal Reserve act. Socially shun all the Keynsian economist clowns, starting with Paul Krugman. Eliminate fractional reserve banking.

    Refuse to live as slaves, people! Band together now to abolish interest and debt-based money, before it’s too late.

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  • http://nationaldebtcentre.com/ Debts

    asasaassas

  • http://www.togsandclogs.com/ Muhammad Sajjad

    I”m sorry but I must respectfully disagree with your attempt to minimize
    the risk of an amendments convention. Your premise assumes a solid and
    ethical adherence to the rule of the written law, the constitution. But
    in recent decades the US Constitution has been stretched, and tweaked,
    and pulled in so many ways, I have no confidence that a convention to
    address one issue would not balloon into a fiasco that faces hundreds of
    amendments specifically designed to remove our rights, change the
    foundations, and turn the constitution on its ear. For proof, all you
    have to do is look at the right to keep and bear arms. Do you have to
    have a license to have the right to free speech? Is free speech
    different in each state? Owning a gun and traveling from state to state
    with it, is a dangerous legal tightrope. Take “separation of church and
    state” that is not in the constitution. It is legal precedent that has
    made religious discussions at school another legally dangerous activity.
    I’m sorry, but I am not willing to risk the foundations of the US
    Constitution with a convention that could go as off course as the first
    convention. Fortunately, we had ethical honest moral people working for
    the good of the generations that would follow. If it were to happen now
    it would be a money grab and to heck with the coming generations. Today
    we can’t even agree on what marriage means, what is ethical, what is
    moral, and what it means to be a man or a woman. Sorry. Any effort for a
    convention too risky for me!

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  • http://www.rankexperts.com/pricing.php Malik

    I’m sorry but I must respectfully disagree with your attempt to
    minimize the risk of an amendments convention. Your premise assumes a
    solid and ethical adherence to the rule of the written law, the
    constitution. But in recent decades the US Constitution has been
    stretched, and tweaked, and pulled in so many ways, I have no
    confidence that a convention to address one issue would not balloon
    into a fiasco that faces hundreds of amendments specifically designed
    to remove our rights, change the foundations, and turn the constitution
    on its ear. For proof, all you have to do is look at the right to keep
    and bear arms. Do you have to have a license to have the right to free
    speech? Is free speech different in each state? Owning a gun and
    traveling from state to state with it, is a dangerous legal tightrope.
    Take “separation of church and state” that is not in the constitution.
    It is legal precedent that has made religious discussions at school
    another legally dangerous activity. I’m sorry, but I am not willing to
    risk the foundations of the US Constitution with a convention that
    could go as off course as the first convention. Fortunately, we had
    ethical honest moral people working for the good of the generations
    that would follow. If it were to happen now it would be a money grab
    and to heck with the coming generations. Today we can’t even agree on
    what marriage means, what is ethical, what is moral, and what it means
    to be a man or a woman. Sorry. Any effort for a convention too risky
    for me!


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