The Federal Government taxes away about Half of Every Dollar the Middle Class Earns

Posted by PITHOCRATES - August 19th, 2012

Week in Review

Thanks to withholding tax people don’t fully appreciate how high their taxes are.  They know they’re high.  So high that gross pay means nothing to them.  Workers only speak of ‘net’ pay.  Or ‘take home’ pay.  The money they actually get.  Not that strange fictitious ‘gross’ pay on their paycheck stub.  Whatever that is.  And what is gross pay?  Their pay.  It’s their money.  And they would have had it when they cashed their paychecks if their employers didn’t withhold it so they could give it to the government.  And why does the government use the withholding tax to take our money?  Because if we had to write a check at the end of the year for our full tax amount there would probably be a nationwide tax revolt.  Which is why the taxing authorities take that money before it gets into our hands.  Because once it is in our hands people may be less willing to hand it over to the taxman.  Which is probably why the Founding Fathers didn’t include any withholding taxes in the Constitution.  They did not want to make it easy for the government to take our money.

So how high are the taxes on the middle class?  Pretty high (see Government Will Take Almost Half Your Paycheck in 2013 by Patrick Tyrrell posted 8/13/2012 on The Foundry).

A middle-class taxpayer’s income is subject to a 25 percent federal income tax. Then there is the federal Social Security and Medicare payroll tax of 13.3 percent in 2012—5.65 percent of that is removed from the employee’s paycheck, and the remaining 7.65 percent is paid by the employer. (In reality, the employee pays the entire 13.3 percent, because the employer’s portion of the tax does not affect the cost of labor: The employer would pay the employee 7.65 percent more if there were no employer’s portion of the payroll tax.)

So the 25 percent federal income tax plus 13.3 Social Security and Medicare payroll taxes equals 38.3 percent going to federal taxes in 2012.

And then there are state taxes. According to the Tax Foundation, the average state’s income tax rate for the middle-class taxpayer is 4.82 percent, which brings the total to 43.12 percent in federal and state taxes.

In Billy Joe’s Movin’ Out (Anthony’s Song) he says, “You can pay Uncle Sam with the overtime.  Is that all you get for your money?”  The point being is this.  Yes you can give up your Saturday and work some overtime.  But is it really worth it when you can only keep about $0.57 of each additional dollar you earn?  Not really.  Which is why a lot of people who work with their hands will do ‘side work’ for cash under the table.  So they can keep every penny of every dollar they earn.

Or some will work some hours serving tables in a restaurant.  For a little extra spending cash.  I worked with a lady who did.  A devout liberal Democrat.  And part of the middle class.  I asked her if she reported all her tips so she could pay her fair share of taxes on those earnings.  Even though she was a steadfast liberal Democrat voter who always voted ‘yes’ to increase tax rates on others she said the government had already taxed her enough.  So that those supplemental earnings should be hers free and clear.  Of course, that’s not how the tax law works.  You make more you pay more.  She wouldn’t give me a definitive answer on whether she reported all her tips as income.  But it was interesting to hear her say that high tax rates were fair.  As long as she didn’t have to pay them.  Well, her taxes will be going up.  Fair or not.

And it’s going higher, thanks to the nearly $500 billion in tax increases for 2013 that some have called Taxmageddon. In January of next year, the federal income tax rate for middle-class taxpayers is scheduled to rise from 25 percent to 28 percent, and the payroll tax is scheduled to rise from 13.3 percent to 15.3 percent. This drives the marginal tax rate based on the aforementioned three taxes to 48.12 percent. Add in state and local property, corporate, excise, and other state and local taxes, and the percentage of each additional dollar that is taxed hovers around 50 percent.

When half of each additional dollar earned is taxed away, taxpayers experience a disincentive to start businesses or expand existing ones. This leads to fewer jobs being created.

It’s like we divorced our government in the state of California.  And we lost half of everything we earn to a spiteful ex.  Half!  Yeah, that really encourages you to work hard and build your business and hire more people.  So you can deal with the labyrinth of government regulatory compliance.  Lawsuits.  Insurances.  Drug testing.  Sexual harassment training.  All the while hearing the government tell you, “You didn’t build that.”  That you somehow won life’s lottery to riches.  And that you’re greedy for not wanting to pay more taxes.  And for what?  To keep half of every dollar you earn?  It would be a lot easier just to lay off all your workers. Shut down your business.  And go to work for someone else.  And let them deal with these headaches.  Like they did in the Roman Empire as it was collapsing under the weight of her welfare state.  Until the Romans passed laws forbidding people from quitting the work they were doing.

The sad thing is that so many people will vote to perpetuate this binge of taxation.  While they themselves will do everything within their power to avoid paying their own ‘fair share’ of taxes.  While demanding the rich pay more.  Even though the top 10% are already paying 70% of all federal taxes.  The truth is that the rich can’t pay these taxes.  There just aren’t enough of them.  Even if you take everything they earn.  Which leaves the middle class to make up this tax shortfall.  So they take half of everything they earn.  And will continue to take more as their spending continues to grow.  And if people begin to quit the hard jobs because they can’t keep their earnings perhaps the government will step in like the Romans did.  And force people to be doctors.  To run pharmaceutical companies.  To build the next new technology.  It’s happened before to an empire that began as a limited republican government.  So it can probably happen again.  Besides who would have ever thought that the country borne out of a tax rebellion would one day take half of every dollar a middle class worker made?  No one would have seen this coming.  And yet here we are.  Paying half of every dollar we earn to Uncle Sam.

The Founding Fathers would be flabbergasted.  Upset.  And saddened.  To see what had become of their beloved republic.  And their experiment in limited self-government.

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Federalists, Anti- Federalists, Washington, Adams, Hamilton, Madison, Jefferson, French Revolution and Hamilton’s Three Reports

Posted by PITHOCRATES - August 9th, 2012

Politics 101

Washington looked upon Hamilton, Madison and Jefferson as the Sons he Never Had

With the new Constitution ratified it was time to put the grand experiment into action.  Beginning with America’s first presidential election.  And the system we now call the Electoral College.  Each state chose their electors.  These electors then voted for the president.  Even this first act of the new federal government was a safeguard to keep its power limited.  (And independent of the Congress.)  By keeping the new republican government from becoming a democracy.  The mob-rule that was the ruin of republics.  By putting intermediaries between the people and the most powerful person in America.  The president.  To prevent anyone rising to power simply by promising to shower riches on the people from the federal treasury.

George Washington did something no one has done since.  He received 100% of the vote.  Every elector voted for him for president.  Unanimously.  John Adams came in second.  Each elector had two votes.  One to cast for president.  The other to cast for vice president.  The one with the greatest number of votes was president.  The one with the next most votes became vice president.  As this was a time before party politics.  There were no political parties yet.  But there would be.  And that would change the way we voted for president.

Both Washington and Adams were Federalists.  They both supported the Constitution.  And the federal government.  As did the other Federalists.  Including Alexander Hamilton.  Who Washington selected as secretary of the treasury.  And would be a major player in the Federalist camp.  His fellow Federalist, James Madison, who coauthored the Federalist Papers with Hamilton (and John Jay) won election to the House of Representative.  Where he introduced and fought for passage of the Bill of Rights.  Thomas Jefferson, author of the Declaration of Independence, was in Europe during the Philadelphia Convention and the ratification process of the Constitution.  But he supported it as long as it included a bill of rights.  Washington selected Jefferson for his secretary of state.  Washington looked upon Hamilton, Madison and Jefferson as the sons he never had.  And loved them as sons.  But that would change.

Born out of Wedlock Hamilton was Never Accepted by those ‘Better’ than Him

Washington being the first president everything he did set a precedent.  And he was very conscious of that.  As well as his place in history.  For he wanted to be remembered as America’s first president of many to come.  Not the man who was at the helm when this experiment in self-government failed.  This is why he created a cabinet quickly.  Even though the Constitution included nothing about a cabinet.  After commanding the Continental Army for 8 years he knew how to give orders and delegate authority.  And after battling Congress during those same years he became a good administrator who understood how to compromise.  He hated politics.  But he understood politics.  And knew it meant compromise on the little things.  And standing resolute on the bigger things.

Hamilton was Washington’s aide-de-camp during the war.  He was smart and understood commerce.  During the war he wrote to Congress about the ruinous inflation crippling the economy.  And starving the army.  Proposing a national bank back then.  Washington trusted and respected Hamilton.  And valued his counsel.  Which is why he made him his secretary of treasury.  The country was in a mess.  In debt.  And it needed a plan to raise revenue.  To pay for government.  And to service that debt.  Even just to understand the debt.  For money was owed at every level of government.  Which was what prompted the Philadelphia Convention in the first place.  To put the nation on a sound footing to move forward.  And there wasn’t a better person available than Hamilton.  Who remains even today America’s greatest treasury secretary.

Hamilton was brilliant.  And he had grand plans for the United States.  He saw the potential in the new nation.  And he wanted to use the power of government to hurry it along.  He was also aggressive.  And combative.  Born out of wedlock he was never accepted by those ‘better’ than him.  So he spent a lifetime fighting this social stigma.  Acquiring a competitive nature.  Making him unpopular.  And obstinate.  He fought long and hard for what he wanted.  Knowing that he was right.  And others were wrong.  Even though this may have been true at times it tended to be off-putting.  So Hamilton would spend his political career making political enemies.  And it started in the Washington administration.

After Hamilton’s Three Reports James Madison parted ways with Hamilton and became an Anti-Federalist

While the Americans were setting up their first national government France was well along the way to the French Revolution.  And Thomas Jefferson was there.  Returning to the United States the same year of the Tennis Court Oath and the Storming of the Bastille (1789).  The French had a taste of liberty from helping the Americans.  And now they wanted it, too.  France was drowning in debt.  A bad growing season caused some famine.  The people were restless.  Poor.  Angry.  And sick of the monarchy.  Jefferson felt the spirit of ’76 again.  He joined the conversations in the clubs where the radicals met.  Enjoying their company.  Sharing their hate of monarchy.  Despite the French Monarchy having financed most of the American Revolution.  And provided much of the material to wage war.  Didn’t matter.  The people’s spirit inflamed him, too.  And he brought that spirit home with him.  Upon arrival Washington asked him to join his cabinet.  He accepted.  And the head butting began.

It started with Hamilton’s three reports.  The Report on Public Credit (January 1790).  The Report on a National Bank (December 1790).  And the Report on Manufactures (December 1791).  Taken together they kind of looked like a plan to turn the United States into another Great Britain.  At least to Jefferson, Madison and anti-Federalists everywhere.  What they saw was a nation with lots of debt, where the rich get a little too cozy with the politicians and the financiers reach deep into the halls of government.  That wasn’t Hamilton’s intent.  Other than wanting to accelerate the Industrial Revolution in American to the level it was in Britain.  The subject of his third report.  Which was a bit mercantilist in nature like Britain.  But the other two were about establishing good credit.  To gain the trust of the credit markets.  For a country in debt had to be able to borrow money to service that debt.  As well as pay for government.  Putting the nation on that sound footing to move forward.  Which he did.  He lowered the per capita debt.  And the nation would go on to enjoy a decade of peace and prosperity thanks to his economic policies.

After Hamilton’s three reports came the great schism.  James Madison parted ways with Hamilton.  Becoming an anti-Federalist.  Along with Thomas Jefferson.  While still a member of the Federalist administration of George Washington (though he didn’t label himself a Federalist or join in any partisan action).  Cabinet meetings became insufferable.  As Hamilton and Jefferson just hated each other.  Who could only behave in the presence of their ‘father’.  George Washington.  But the partisan attacks took to the newspapers.  Lies and slander flew with regularity.  From both directions.  Even attacking Washington.  Jefferson eventually left the administration but continued his attacks through his surrogate James Madison.  The attacks on Washington got so ugly that he never spoke to Jefferson again.   Who turned into a radical partisan.  Washington was never happier when his second term ended.  The new president was John Adams.  Federalist.  His vice president was Thomas Jefferson.  Leader of the anti-Federalists.   Who became the new Democrat-Republicans.  Which is why they had to change the election process for president.  So the president and the vice president belonged to the same political party.  So they worked together instead of leading the attack against each other and their party.

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The Constitution, George Washington, Patrick Henry, George Mason, Thomas Jefferson, James Madison and the Bill of Rights

Posted by PITHOCRATES - August 2nd, 2012

Politics 101

The People trusted no One Man with Great Power except, of course, George Washington

America had a new constitution.  It wasn’t easy.  For the American states covered a lot of geography.  And ideology.  These were a very different people.  Who had only joined together in union to resist their common enemy.  Great Britain.  But now that common enemy was no more.  What now?  These delegates who worked behind closed doors for 4 months in some of the hottest and most humid weather had done the best they could.  It was less a triumph of solidarity than the recognition that this was the best anyone was going to do considering how vast and disparate the people were.  So now it was up to the states to ratify it.  But would they?

Good question.  For there was a lot of opposition to transferring power, any power, from the states to a new central authority.  They had just cut the ties to one king.  And they didn’t do this just to submit to another king.  Of course, America would have no king.  For they would simply call their new executive president.  But it was still one man.  And many feared that this one man given some power may take more power.  So whoever the first president was had to be one of impeccable character and integrity.  A true Patriot.  One whose Revolutionary credentials were beyond questioning.  Someone who was in the struggle for independence from the beginning and never wavered in the cause.  Someone the people universally loved.  And respected.  Of course that could be but one man.  George Washington.

This is why we call George Washington the Father of our Country.  For without him there would have been no country.  For the people trusted no one man with great power.  But they trusted Washington.  And respected him.  Would even have made him king they trusted him so.  So because Washington was available to be the first president the delegates in Philadelphia signed the new Constitution.  For all their sectional differences this was one area where everyone agreed.  They were willing to risk having this new central government because they trusted it in the hands of this one man.  George Washington.

When Patrick Henry and George Mason opposed the new Constitution it was Doubtful Virginia would Vote for Ratification

Of course they weren’t just going to hand the presidency to Washington.  But the electors in the Electoral College simply weren’t going to have a better candidate to vote for.  Washington didn’t want the job.  He just wanted to enjoy retirement on his farm before he died.  And based on the longevity of Washington men he was already living on borrowed time.  But he would serve.  Again.  Because he fought too long and too hard to see the new nation collapse before it could even become a nation.  And he had no illusions about how horrible the job would be.  It was one thing giving orders in the Continental Army where people did what he told them.  But it was another dealing with Congress during the war.  Who couldn’t accomplish anything for the spirit of liberty.  As the states tended to look more after their own interests than the army fighting for their liberty.  Leaving his army barefoot, half naked and starving during the winter at Valley Forge.  And through most of the war.

So, no, being the president wasn’t going to give him the peace and serenity he could find under his vine and fig tree at home.  It would just put him closer to the partisan bickering.  But he was willing to sacrifice his own wants and desires yet again.  To serve the people.  But would the people want him?  For it wasn’t up to the delegates at the Constitutional Convention.  All they could do was make their case to the people.  Then let the people decide if they wanted this new government.  And perhaps the most critical state was Virginia.  Which not only gave us George Washington.  But George Mason.  Patrick Henry.  Thomas Jefferson.  And James Madison.

Patrick Henry said, “Give me liberty or give me death!”  He was a great orator whose speeches could awe listeners.  He dripped Patriotism (even refused to attend the Philadelphia Convention as he feared it would lead to monarchy).  So did George Mason.  His Virginia Declaration of Rights (1776) no doubt inspired his fellow Virginian, Thomas Jefferson, who studied the same philosophers as Mason did.  So when Jefferson wrote the Declaration of Independence you could read some Virginia Declaration of Rights in it.  So his Revolutionary credentials were solid.  So when Henry and Mason opposed the new Constitution (Mason was a delegate at the convention but refused to sign it) it cast doubt over whether Virginia would ratify the new Constitution.

George Mason and Patrick Henry joined James Madison in fighting for Ratification of the Bill of Rights

Mason supported republican government.  But he didn’t trust a large republican government.  Not without a bill of rights.  Which is why he refused to sign the Constitution at the convention.  James Madison, the Father of the Constitution, argued against any bill of rights.  For he did not think it was needed.  For the Constitution enumerated the powers of the federal government.  Citing specifically what it could do.  And whatever wasn’t specifically enumerated they couldn’t do.  Madison feared if they included a bill of rights that it could backfire on them later.  For someone would argue that the Constitution stated the government can’t do A, B and C.  But it didn’t say anything about D.  So clearly the federal government can do D because it wasn’t included in the list of things it couldn’t do.  Madison saw that if you listed some rights you must list all rights.  Which changes the Constitution from forbidding the federal government from doing anything not enumerated to something that allows the government do whatever it wants as long as it is not listed in a bill of rights.

For some, though, a bill of rights was conditional for ratification.  George Mason simply wouldn’t vote for ratification unless the Constitution included a bill of rights.  Even Thomas Jefferson wrote Madison from Europe urging him to include a bill of rights.  The tide of Virginian opinion appeared to be against him on the issue.  And Madison needed Virginia.  For if Virginia didn’t ratify the chances were slim for ratification in other states.  Which did not bode well for the country.  Because of how vast and disparate the people were.  The northern states weren’t like the southern states.  And neither was like the western territory.  If there was no union the north would probably form a confederation.  And being a maritime region they’d probably seek out closer ties to Great Britain and their Royal Navy.  With some of the bloodiest fighting in the south perpetrated by the British and their Loyalist allies this would probably align the southern states to Britain’s eternal enemy.  France.  With two of Europe’s greatest powers entrenched in the east the western territories would probably align with that other European power.  Spain.  Who controlled the mouth of the Mississippi River.  The gateway to the world for western agriculture.  Turning America into another Europe.  Wars and all.

Madison worked tirelessly for ratification.  Working with Alexander Hamilton and John Jay on a series of articles published in newspapers making the case for ratification.  Later bound together into the Federalist Papers.  And then changing his stand on a bill of rights.  Promising to include a bill of rights as the first order of business for the new federal congress.  This brought George Mason around.  He even helped Madison on the bill of rights.  Which helped tip Virginia towards ratification despite a fierce opposition led by Patrick Henry.  But after ratification he, too, helped Madison pass the first 10 amendments to the Constitution.  The Bill of Rights.  Which Madison delivered during the first Congress as promised.  And then worked tirelessly for its ratification.

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John Locke, Charles de Montesquieu, Republican Government, Separation of Powers, Enumerated Powers, Federalists and anti-Federalists

Posted by PITHOCRATES - July 26th, 2012

Politics 101

Funny thing about the Americans is that they just didn’t Like Paying Taxes

United we stood.  For awhile.  Until we defeated the British at Yorktown.  And negotiated the Treaty of Paris where Great Britain recognized our independence from the British Crown.  But people grew weary of the war.  On both sides of the Atlantic.  And those in the once united states (small ‘u’ and small ‘s’) were eager to retreat to their states.  And forget about the Continental Congress.  The Continental Army.  And everything to do with the confederation.  Threatening to undo everything they fought for.  Because of their sectional interests.

Shays Rebellion nearly pushed the country into anarchy.  It was the tipping point.  They had to do something.  Because if they weren’t united they would surely fall.  They owed Europe a fortune that they had no hope of repaying.  Funny thing about the Americans.  They just didn’t like paying taxes.  Making it difficult to repay their debts.  The Europeans gave them little respect.  France tried to sell them out during the peace talks to rebalance the balance of power in their favor.  Spain wanted to keep them east of the Mississippi River.  And off of the Mississippi.  Even refused them passage through the Port of New Orleans.  Britain didn’t evacuate their western forts.  The Barbary pirates were capturing American shipping in the Mediterranean and selling their crews into slavery.  And Catherine the Great of Russia wouldn’t even meet the American ambassador.  So the Americans were the Rodney Dangerfield of nations.  They got no respect.

In 1787 delegates gathered in Philadelphia.  To revise the Articles of Confederation to address these problems.  Some enthusiastically.  Some begrudgingly.  While one state refused to attend.  Rhode Island.  For they were quite happy with the way things were.  As the smallest sate in the union they had the power to kill almost any legislation that didn’t benefit Rhode Island.  For some legislation the vote had to be unanimous.  And they enjoyed charging other states tariffs for their goods unloaded in Rhode Island ports.  Things were so nice in Rhode Island that they didn’t need much taxation.  Because they had other states funding their needs.  Thanks to those tariffs.  Of course, this did little to benefit the union.  While imposing taxes on their neighbors in the union.  Sort of like taxation without representation.  Funny thing about Americans, though.  They didn’t like paying taxes.

Montesquieu said a Republican Government must Separate Power into Three Branches

Thomas Jefferson was in Europe in 1787.  John Adams, too.  But just about every other “demi-god” (as Jefferson called those at that gathering) was in Philadelphia in 1787.  America’s patriarch Benjamin Franklin.  The indispensable George Washington.  The financially savvy Alexander Hamilton.  The studious James Madison.  The Framers of the Constitution.  Highly principled men.  Well read men.  Prosperous men.  Who were familiar with world history.  And read the great enlightenment philosophers.  Like John Locke.  Who especially influenced the writing of the Declaration of Independence.  With his inalienable rights.  Consent of the governed.  And property rights.

As they gathered in Philadelphia to revise the Articles it became clear that they needed something more.  A new constitution.  A stronger federal government.  With the power to tax so they could raise money.  For without money the union could not solve any of its problems.  So they set upon writing a new constitution for a new government.  A republican government of republican states.  As they began to frame this constitution they drew on the work of a French philosopher.  Charles de Montesquieu.  Who championed republican government.  The ideal government.  A government of the people who ruled at the consent of the governed.  With built-in safeguards to protect the people’s inalienable rights.  The key requirement being the separation of powers.

Montesquieu said a republican government must separate power into three branches.  The legislature, the executive and the judiciary.  A nation of laws requires a legislature to write the laws.  Because the laws must respect the inalienable rights of the people the people must elect the legislature from the general population.  So the legislature’s interests are the people’s interest.  However, if the legislature was also the executive they could easily write laws that represented their interests instead of the people.  Elevating the legislature into a dictatorship.  If the legislature was also the judiciary they could interpret law to favor their interests instead of the people.  Elevating the legislature into a dictatorship.  Likewise if the executive could write and interpret law the executive could elevate into a dictatorship.  Ditto for the judiciary if they could write the law they were interpreting.  So the separation of powers is the greatest protection the people have against a government’s oppression.

If a Power wasn’t Delegated to the New Federal Government it Remained with the States

During the Constitutional Convention they debated long and they debated hard.  The Federalists were in favor of a stronger central government.  The anti-Federalists were not.  The Federalists included those who served in the Army and the Congress.  The anti-Federalists were those who didn’t serve ‘nationally’ and favored states’ rights.  In general.  So one side wanted to increase the power of the central government while the other side wanted no central government.  For their fear was that a new federal government would consolidate power and subordinate the states to its rule.  As if the last war never happened.  And the states would still bow to a distant central power.  Only this time to one on this side of the Atlantic.

So the balance they struck was a two-house (i.e., bicameral) legislature.  A House of Representatives.  And a Senate.  The people in each state elected a number of representatives proportional to their state’s population.  So a large state had a large representation in the House.  So that house represented the will of the people.  To prevent the tyranny of the minority.  So a small privileged class couldn’t rule as they pleased.  Whereas the Senate prevented the tyranny of the majority.  By giving each state two senators.  So small states had the same say as big states.  Together they represented both the majority and the minority.  Further, states’ legislatures chose their senators (changed later by Constitutional amendment).  Providing the states a check on federal legislation.

To round things out there was an executive they called the president.  And a judiciary.  Providing the separation of powers per Montesquieu.  They further limited the central government’s powers by enumerating their powers.  The new federal government could only do what the Constitution said it could do.  Treat with foreign powers.  Coin a national currency.  Declare war.  Etc.  If a power wasn’t delegated to the new federal government it remained with the states.  To give the new federal government some power.  Including the power to tax.  While leaving most powers with the states.  Striking a compromise between the Federalists and the anti-Federalists.

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States’ Rights, Debt, Interstate Commerce, Russia, Barbary Pirates, Spain, Britain, Shays Rebellion and Miracle of Philadelphia

Posted by PITHOCRATES - July 19th, 2012

Politics 101

After Winning their Independence from Great Britain the Common Enemy was no more Leaving them Little Reason to Unite

The South lost the American Civil War for a few reasons.  Perhaps the greatest was the North’s industrial superiority.  Her industry could make whatever they needed to wage war.  While the South suffered behind the Union’s blockade.  Unable to trade their cotton for the means to wage war.  And then there was the fact that the North was united.  While the states’ rights issue that they were fighting for prevented the South from being united.  The southern states (whose governments were dominated by the planter elite) did not like the federal government in Washington (except when they forced northern states to return southern slaves).  And as it turned out the states didn’t like the federal government in Richmond any better.  They fought Jefferson Davis from consolidating his power.  They put the states’ interests ahead of the national interest.  Such as winning a war to secure their states’ rights.  And any supplies a state had they wouldn’t share them with another state.  Even if they had a warehouse full of surplus shoes while troops from another states fought barefoot.

So the North won the American Civil War because they were united.  They had an advanced economy based on free market capitalism and free labor.  And they were wealthy.  Basically because of the prior two statements.  But it wasn’t always like this.  The United States of America is a large country.  Even before it was a country.  When it was only a confederation of sovereign states.  With independent republican governments.  Still it covered great tracts of land.  Allowing the states to keep to themselves.  Much like it would be some 75 years later in the South.

After winning their independence from Great Britain the common enemy was no more.  And they had little reason to unite.  Which they didn’t.  For the several states included a lot of disparate people.  Who agreed on little with the people beyond their state’s borders.  Which was one of the criticisms of republican government (i.e., an elected representative government).  And one held by perhaps the greatest influence on the Framers of the Constitution.  French philosopher Charles de Montesquieu.  Who believed that the larger the geographic size the more dissimilar the people’s interest.  And therefore making republican government more difficult.  As it was too difficult to arrive at a consensus with such a large electorate.  Which James Madison disagreed with, making this a heated topic during the Constitutional Convention and the ratification process.  But before that convention it would appear to be incontrovertible.  The United States were anything but united.

The Americans defeated one Distant Central Power and were none too keen on Answering to a New Central Power

The first American identity appeared in the Continental Army.  Where soldiers came from different states and fought together as Americans.  General Washington fostered this spirit.  Forbidding any anti-Catholic displays.  One thing that all the Protestant American colonists enjoyed.  No matter which state they came from.  But to fight the British Empire they needed a large army drawn from all the states.  And to get the French Canadians living in British Canada to join them they needed to embrace religious freedom.  Even for Catholics.  Which was even more important if they had any chance of getting support from the most likely foreign power.  The eternal enemy of Britain.  Catholic France.  Washington, as well as those who served in the Continental Army, understood the success of their cause required less infighting and more uniting.  That it was imperative to set aside their sectional interests.  Only then could the new nation join the world of nations.  Strong and independent.  And avoid the European nations pulling them into their intrigues.

But of course that wasn’t going to happen.  After the war no one called themselves American.  Except for a few.  Like Washington.  And some other veterans of the Continental Army.  No.  The country people belonged to was their state.  Thomas Jefferson, the author of the Declaration of Independence, called Virginia his country.  As did most if not all of the Patriots of ’76.  The war was over.  They defeated the distant central power.  And they were none too keen on a new central power to answer to.  Even if it was on their side of the Atlantic.  To these Revolutionary Patriots the Continental Congress was just another foreign legislature trying to infringe on their sovereignty.

The national congress had no power.  Delegates didn’t always show up leaving the congress without a quorum.  Which didn’t matter much as they couldn’t pass anything when they had a quorum.  For any legislation they wanted to pass into law required a unanimous vote of all thirteen states.  Which rarely happened.  They couldn’t levy taxes.  Which meant they couldn’t fund an army or navy to protect their states from foreign aggressors.  Or protect their international trade on the high seas.  Which was a problem as the British no longer provided these services.  And they couldn’t repay any of their debts.  Their prewar debt owed to a lot of British creditors (which they had to repay according to the treaty that ended the war and gave them their independence).  Or their war debt.  States owed other states.  And the Congress owed foreign creditors in Europe.  Especially their war-time ally.  France.  Who they owed a fortune to.  The states charged duties and tariffs on interstate commerce.  They made their own treaties with the Indians.  Some states defaulted on the debt they owed to out of state creditors.  States even fought each other over land.  The Untied States were anything but united.  And it showed.

The Delegates of the Continental Congress agreed to meet in Philadelphia in 1787 to revise the Articles of Confederation

Europe watched the Americans with amusement and contempt.  The Americans didn’t get much respect from Catherine the Great, tsarina of Russia.  The ruler of the world’s largest country viewed the Americans as a bit uppity and not worthy to join the European courts.  Besides, she was more interested in expanding her powers into Turkey.  And into Poland.  Who caught some of that spirit of liberty from the Americans.  That Catherine wanted to squelch.  Making her less of an America fan.  But it wasn’t only Russia.  The Barbary pirates were targeting American shipping in the Mediterranean.  Selling their crews to the slave markets of North Africa.  Western settlers using the Mississippi River to ship their produce were denied passage through the Port of New Orleans by Spain.  The British refused to vacate their forts in the Northwest.  Even worked with the Indians to cause some mischief in the borderlands.  Why did the Europeans do these things?  Because they could.  For the Americans could not stop them.

To make matters worse the Americans were drifting towards civil war.  The northern provinces were talking about leaving the confederation and forming their own.  The North feared the South would do the same.  Even aligning itself more with Europe than the American states.  Meanwhile the economy was tanking.  Trade was down.  People were out of work.  Farmers were unable to pay their debts.  Even losing their farms.  In western Massachusetts Daniel Shays gathered together disgruntled veterans and rebelled.  Again.  Only this time it wasn’t against the British.  It was against the legal authorities in Massachusetts.  Shays Rebellion spread to other states.  And grew violent.  Massachusetts asked the Continental Congress for help.  And the Congress asked the states for $530,000 to raise an army to put down the rebellion.  Twelve of the thirteen states said “no.”

With no other choice Massachusetts went to rich people for funding.  Used it to raise a militia of some 4,400 men.  In time and after some bloody fighting they put down this rebellion.  But some of the rebels continued a guerilla war.  Making many in the new United States live in fear.  Washington, despondent of what was happening to the republic he had fought for so long to secure, pleaded, “Let us look to our national character and to things beyond the present moment.”  And so they did.  The delegates of the Continental Congress agreed to meet in Philadelphia in 1787.  To revise the Articles of Confederation.  To reign in the chaos.  To get their finances in order.  And to gain the respect of the world of nations.  But to do that would require s stronger central government.  And that is exactly what emerged from Philadelphia.  So they did what the Confederates did not do nearly 75 years later.  Which is the reason why they lost the American Civil War.  Because of an ideal.  States’ rights.  That was so absolute that it weakened the Confederacy to the point she could not survive.  Something the Miracle of Philadelphia prevented in 1787.  Which left the states sovereign.  And the new federal government only governed that which extended beyond the states’ borders.  And it worked well.  For some 75 years.  When it hit a road bump.

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