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August 2005
Volume 19,
Number 8

  Future History  

What Has Been Done

by Robert Formaini

The Patriot Act was just the beginning.


The 1980 publication of Milton Friedman's "Free to Choose" helped usher in a period of privatization and deregulation. The tide turned toward freedom, and the market worked its magic. Planned economies collapsed, and the world embraced the benefits of capitalism.

Robert Formaini teaches economics in Dallas, Texas.

After the attacks of 9/11, however, the tide turned again.

Benjamin Franklin once famously said that those who prefer security to freedom will wind up with neither. Americans have proven the accuracy of his warning by disregarding it. The New Patriot Act of 2006, modifying the original in the wake of the attack on Las Vegas, and its later super-modification (the Total Security Act of 2012) severely restrict commerce, speech, and travel. Of course, there was little actual debate before the passage of any of these acts — proponents simply labeled opponents "crackpots" and "lunatics."

This has led directly to national identification cards, universal ID chip implants that can be tracked by GPS satellites, and mandatory retina scans for anyone flying domestically or entering the United States from abroad. All vehicles that travel on American roads are required to have so-called "black boxes" and GPS transponders so their exact location and history can always be ascertained. The transponders, the black boxes, and the data they gather belong to the government, not to individual vehicle owners. The only grounds for appeal of any conviction based on these data sources is vehicle malfunction, but it has proven almost impossible to successfully appeal black-box cases, despite the common knowledge that the equipment, like all technology, does sometimes malfunction.

There are now over 1.5 million people on federal and state "Do Not Fly" and "Arrest Immediately" lists. Almost 260,000 people are incarcerated, awaiting disposition of cases based on catch-all terrorist charges, some of which are years old. Federal military laws now control every major transportation system in the nation including, but not limited to: docks, roads, rail, air, even bike paths and hiking trails. School security was federalized after hundreds of children were slaughtered in attacks on public facilities in 2006–7. All substances known to be possible bomb ingredients are rigidly controlled under ATF and Homeland Security regulations, and violators can receive the death penalty for selling or just handling them — even in very small amounts.

There are now over 2,000 Class-A controlled substances, and 14,000 altogether when all classes are summed. As of Dec 31, 2024, every 17th person in the country works in security — 19 million people in all. There are over 400,000 agents on the Mexican border alone, enforcing the National Border Integrity Act of 2007, which was passed by a Republican Congress campaigning for the 2008 elections on an anti-immigration platform. Federal border agents regularly conduct "shoot on site" patrols around known illegal entrance routes. The courts found constitutional the Judicial Interpretations and Reconciliation Act of 2009, which automatically removes any judge who tries to overturn its provisions, or who fails to rigorously apply the act's sentencing guidelines.

Federal military laws now control every major transportation system in the nation including, but not limited to: docks, roads, rail, air, even bike paths and hiking trails.

Of course, during time of war, political speech has always been curtailed, either by law or by public sentiment. America's attempts to curtail free political speech go all the way back to John Adams' Alien and Sedition Acts of 1798. The course to our present state of abridgment was set when the Supreme Court upheld McCain-Feingold (2004). Criticisms of incumbent politicians have been strictly regulated since that point, and are now further restricted by the Preservation and Extension of Free Speech Act (2008). Under that act, you may speak freely only under the following circumstances: (1) on your own, unmortgaged property, to no more than 50 people; (2) on radio call-in shows, provided you are a registered user whose phone is equipped with identity verification hardware; (3) on assignment for news organizations that fit the federal definition, are federally registered, and currently fully paid on their "news organization assessment accounts"; (4) on Internet discussion groups, provided they are federally registered, current on their "Internet assessment accounts," and verify the identity of all participants, (all of whom must also be up to date on their personal Internet tax assessments); (5) in publicly regulated places in full view and hearing of the appropriate public discourse monitors and ultra high-speed, infrared digital cameras.

The Internet Consolidation, Revenue, Registration and Public Airwaves Control Act of 2010 is the source of all current Internet regulatory activities, including Wi-Fi, cable, and any other kind of Internet access available — or that may become available in the future. After terrorist hackers were able to enter key systems to release toxic substances and generally disrupt daily activities, especially air travel and financial transactions leading to crashes of planes as well as markets in 2007 and 2009, all the while using their technical savvy to remain mostly anonymous, Congress took complete control of the system in late 2007 with a preliminary bill. It took an additional two years to craft the final, comprehensive bill under which we now live.

All Internet providers and users are routinely tracked by Homeland Security and NSA computers, users and providers are taxed monthly, based on an assessment of their use of the network, and all computers are federally registered so that they leave a cyber-trail whenever they access the Internet, much like an airplane's transponder reveals who it is and where it is headed. It is a federal crime, punishable by a minimum of ten years imprisonment, to access the Internet on any computer that does not have the cyber-trail hardware. A few hackers have succeeded in bypassing the system, but none has remained free for very long after doing so, and several have been sentenced to ten or more year terms, in maximum security facilities, for attempting to "undermine homeland security."

Of course, there are several popular television programs that deal exclusively in footage from surveillance cameras, which sometimes capture horrific terrorist acts.

There are now over 5 million digital cameras publicly — and privately — employed for security purposes. It is almost impossible to go anywhere without being watched by Homeland Security. Digital cameras that feed directly to the Internet have been built into existing technologies, so few incidents have gone unrecorded, even if they are recorded only by private citizens. Of course, there are several popular television programs that deal exclusively in footage from these digital image displays, which sometimes capture horrific terrorist acts.

Continuing a trend begun with 1973's Bank Secrecy Act and continued in 1980's Financial Institutions Deregulation and Monetary Control Act, the Comprehensive Supervisory Financial Institutions Information, Supervision, and Control Act of 2007 made all financial transactions "transparent," and placed a 15% surcharge on all cash transactions over $1,000 to discourage (as the Act put it) the "anonymous economy," and make it difficult for terrorists to purchase anything with cash. Anyone willing to pay the 15% cash fee gives the government a prima-facie case that the transaction is illegal in some way, since the payer is presumably trying to remain anonymous. Public conveyances no longer accept cash, and they are required to keep detailed records of all fares, passengers, pickup and departure points, and final destinations. All financial transactions are now traced, catalogued, and stored forever. There are no legally operating banks in the world outside this system. Bank secrecy now exists solely in the fugitive banks of Russia and its war-torn former satellites.

The collapse of democracy in Russia and its re-emergence as a totalitarian power with imperialistic ambitions has been blunted, to some extent, by the endless internecine wars within its former satellites among their Islamic and non-Islamic inhabitants. Russia is also a constant target of terrorists. These problems, along with an anemic economy, have prevented Russia from grabbing much in the way of territory, even with the United States and Europe distracted by their own terrorist problems.

China has emerged as the world's largest and fastest-growing economy. After retaking Taiwan in 2007, and annexing North Korea a year later, China then successfully "Finlandized" Japan, and now oversees a vast Pacific empire that would have made the 1942 Japanese government green with envy. China's thirst for the Middle East's oil leads it to support radical Islamic clerics, but this support goes unpunished, as no major country stands a chance if it goes against China's wishes.

The xhiang, introduced in 2009, is now the world's premier currency, followed by the euro, the Canadian dollar, and the U.S. dollar. Years of domestic and international wars have resulted in inflation and poor economic performance here at home, battering the dollar to the point that many in government are beginning to talk about replacing it with a "new dollar," trading each of them for 20 "old" dollars. This long-awaited policy is called the "Argentina two-step."

Many in government are beginning to talk about circulating a "new dollar," trading each of them for 20 "old" dollars. This long-awaited policy is called the "Argentina two-step."

The sealing of the U.S. border and the abandonment and official repudiation of NAFTA have demolished Mexico's economy. The added stress from an influx of immigrants fleeing the Cocaine Wars to its south has caused Mexico to degenerate into near anarchy. These wars have been used by Venezuela as a pretext for trying to spread "Chavezism" to its neighbors. Most of the rest of Latin America is a shambles, run by the usual assortment of leftist politicians and their thuggish supporters, even though they have brought their economies to the point where further looting of their citizens is almost impossible. The Chilean military government has not yet confiscated the private retirement accounts that were the centerpiece of Chilean economic reform, but most analysts believe it is only a matter of time. This development is no doubt partially the product of the demise of the large international aid agencies which collapsed in 2014–15 under mountains of debt. When international markets realized that they were never going to be repaid by anyone, including strapped U.S. taxpayers, the World Bank, IMF, and AID all collapsed. Little time elapsed before the region's nations, deprived of their welfare largess, began the Cocaine Wars.

During the last fifteen years, France and Germany have continued to struggle for control of the European Union, as well as competed to be the — in modern terminology — "front nation" for the so-called "New Europe," a Europe that has been discussed for decades but that looks remarkably like the old Europe. The internal tensions in the EU are troubling, with member countries often threatening military action, and Germany flexing of its military muscle, gained from secret development of laser weapons. Of course, the German government claims that historically it has always been entrusted with enforcing the regulations and policies of the EU, and will use force if necessary, but only as a "last resort." This reassurance offers little comfort.

After the terror war forced America to redeploy many of the troops based in allied countries, it only took a decade for Germany to become the most potent military power in Europe, since most of its neighbors worship peace at any price, including non-retaliation against terrorists. The Germans retaliate fiercely, and use their experiences to further strengthen their emerging military establishment. At first, the U.N. tried to constrain Germany's new military might, but when the German government denounced the U.N. and stopped paying U.N. dues (like America did years ago), talk of sanctions was dropped.

The Middle East has been a colossal mess for decades, but things have deteriorated markedly since 2002. The major civil war that erupted after Iraq's election in late 2005 brought a major U.S. reinforcement to the country, but at the cost of reinstating the military draft. That led to ongoing, domestic rebellion reminiscent of the Vietnam War era. The events in Iraq also destabilized Iran and Saudi Arabia. America's pre-emptive air strikes against Iranian nuclear facilities reignited theological revolution in Iran and led directly to the fall of the House of Saud. When that ruling elite fell, oil exports to the U.S. were shut off for three years. The Riyadh Accord in 2009 allowed resumption of sales of Saudi oil to American companies, but only at a 15% premium above the world price, and required a U.S. pledge that no military actions would ever be taken against the new Saudi Wahhabi-backed government or its allies, which include Syria, Lebanon, Jordan, Algeria, and Libya.

The major civil war that erupted after Iraq's election in late 2005 brought a major U.S. reinforcement to the country, but at the cost of reinstating the military draft.

Israel became a garrison state, with commerce all but impossible, terrorist acts constant, and nuclear annihilation no longer merely possible, but probable. Some analysts believe that Iran is only waiting for the appropriate long-term wind patterns that would make an attack a one-way nuclear disaster for Israel. Meanwhile, Israel consumes vast amounts of American financial aid, as they are one of the few places left in that region from which American military operations can be mounted. Some American policy makers are arguing that we should use nuclear weapons on Iran before it does the same to anyone else, but that position is highly controversial and not supported by a majority of Americans.

Domestically, the burden of war diminished economic performance and regenerated inflationary pressures, and the Baby Boomer retirement bubble significantly strained government budgets at all levels. Deficits and interest rates rose, GDP growth dropped, and markets stagnated, with the Dow Jones average standing today at 17,755. That's an average return of 3% since 2004, but after adjusting for inflation, overall returns in the market have been consistently negative. Chronic energy shortages have become the norm, with stringent regulatory restrictions on energy consumption. Brownouts and blackouts are common in American cities, as are long lines at the few remaining gas stations. The Energy Profits Equalization Tax, combined with onerous excise taxes on energy, have cut American consumption by almost 15%, but population and economic growth have cut in the other direction without any substantial increase in supply. Alternative fuels still have not eliminated the demand for oil, despite tens of billions of dollars in direct subsidies and tax credits to selected corporations for R&D.

Our fiscal position was helped slightly by major benefit reductions in entitlement programs between 2016 and 2022, increased audits and state and federal prosecutions of fraud, and a significant increase in the payroll tax (currently up to 22% and 34% for the self-employed) all phased in over the past eight years. Though some economists feared that raising the payroll tax rate would cause the work force to shrink rapidly, most people found that they couldn't afford not to work. The national debt stands at $38.5 trillion, about twice the current GDP. With GDP currently growing at about 2% annually, and inflation at 7%, the debt is slated to reach five times GDP in 20 more years. The collapse of several large pension plans as they were abandoned by their sponsors and turned over to taxpayers had irrevocably bankrupted the Pension Benefit Guaranty Corporation by 2012. Congress repudiated underwriting private-sector pension plans with public funds. Plans continue to fail and nothing is being done about it.

After Castro's death in 2011, Cuba became the "Hong Kong of the Caribbean" and allied itself with the U.S.

Of course, not every development has been negative. After Castro's death in 2011, Cuba became the "Hong Kong of the Caribbean" and allied itself with the U.S. as a bulwark against the general Latin American trends discussed above. A rare success story, but an important one.

Nevertheless, the ability of the federal government to carry out any coherent fiscal policy is tightly constrained, and the Fed has been unable to find any interest rate structure that is consistent both with growth and price stability. Politicians declare that we are in some kind of New Economy — as they did in prior times, but for very different reasons.

The external fiscal pressures are simply too large to reverse with standard 20th-century policy measures. Needless to say, full employment has not returned even with the draft, and consumer confidence is at a 30-year low.

Where can we go from here? The policy options currently available to alter many of these unpleasant realities are quite limited. A return to classical liberalism is not very likely. Incrementally, however, we can move some things in a direction favorable to freedom.

In that spirit, I offer the Free to Choose Manifesto for 2025:

1. The restoration of free speech is priority number one. If we cannot respect the very first amendment in our own Bill of Rights, we certainly cannot claim to be exporting any ideas other than our own particular form of government oppression.

2. The daily invasions of privacy that occur, generated both by public and private institutions, need to be redressed and contained. It is clear that, given current world realities, they will never be entirely eliminated, or even scaled back to pre-9/11 levels.

3. Free exchange across the Internet must be restored.

4. The right to a reasonably speedy trial should be reinstated, and civilians should not be held accountable to military tribunals operating under the Uniform Code of Military Justice.

5. National identification cards were enacted mostly to ensure smooth travel. That ought to be the goal, not the occasional pleasant surprise.

6. Limits on cash transactions should be raised to at least $5,000. This is not a perfect solution, but unmonitored large transactions are probably gone for good.

7. Energy access should be denationalized. That would go a long way towards alleviating the chronic shortages and high prices of energy. Repeal, or seriously modify, the Kyoto II-Brussels III environmental protocols, which have severely penalized American economic development while subsidizing that of other nations.

8. Privatize medical care, or at least allow a tiered system of care based on ability to pay. The criminalization of privately-provided and funded medial care is one of the worst features of the current American economic and political scene, and one of the worst public policy enactments since the founding of the nation. The use of the federal system to punish certain behaviors by withholding medical care is cruel and a clear denial of individual choice, as well as a denial of human freedom and simple human dignity.

9. Privatize more water delivery systems. The chronic water shortages that have plagued even areas that receive sufficient — or more than sufficient — rainfall each year are unnecessary and bureaucratically generated. The slow depopulation of much of what were once the fastest growing regions of the nation — Arizona, Nevada, and California included — is not the best long-term solution to the water use issue.

The enactment of these reforms would be a good start towards eventually restoring some of our nation's basic liberties. Until then, we can only continue to speak out against governmental abuses, in the times and places appointed for us to do so.

© Copyright 2008, Liberty Foundation


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