Dr. Moreno is Dean of Faculty and the William and Berniece Grewcock Chair in Constitutional History and Associate Professor of History at Hillsdale College in Hillsdale, Michigan.
Dr. Paul Moreno
The Education of Congressman Hoyer
by Dr. Paul MorenoCongress is moving closer to enacting a law requiring all Americans to purchase health insurance. House Majority Leader Steny Hoyer says that this is “like paying taxes.”
He’s right about that. But Hoyer made this statement as part of an effort to justify the health-care mandate on constitutional grounds. Here he indicates that he doesn’t understand the Constitution that he took an oath to support.
When asked what power the Constitution gives to Congress to enact this legislation, Hoyer claimed that it came from the Constitution’s “general welfare” clause.
Article One, section eight says that Congress can “lay and collect taxes… to pay the debts and provide for the common defense and general welfare of the United States.”
But what defines the “general welfare”?
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Obama’s Paper Chase
by Dr. Paul MorenoThe Federal Reserve’s purchase of $300 billion in Treasury debt, as well as its purchase of mortgage-backed securities, has aptly been described as “monetizing the U.S. government debt,” with appropriate concern that it will fuel inflation.
If President Obama fancies himself a twenty-first century Abraham Lincoln, then we need Timothy Geithner to be his Salmon Chase. Lincoln’s Treasury Secretary was remarkably successful at financing the Civil War, with only limited inflation, and remarkable fidelity to the Constitution.
Chase was a radical Ohio abolitionist before the war (sometimes called the state’s “attorney general for runaway Negroes”), and a relentlessly ambitious rival of Abraham Lincoln. After Lincoln beat Chase for the 1860 Republican nomination, he made him his Secretary of the Treasury. Almost all historians regard Lincoln’s ability to keep Chase on board as one of the marks of his genius as a statesman.
Chase was also a hard-money man, and abhorred paper money—especially the paper emitted by state banks, excoriated (if somewhat exaggeratedly) as “wildcat banks”– creditors were said to have to battle wildcats to attempt to redeem the worthless notes of these reckless frontier banks. Chase believed that the United States needed a national currency, issued by a national banking system. As the Civil War’s costs grew exponentially, Congress pressed him to monetize the government’s debt by issuing Treasury notes unredeemable in gold or silver, and to declare them to be legal tender for all debts—the “greenbacks,” which color our paper money to this day. Chase stuck to his constitutional guns for as long as he could, but finally gave in. But he “hated the crime about to be committed,” as historian Bray Hammond put it. By the end of the war, Chase got his national banking system, and had eliminated unconstitutional state-bank paper currency.
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