Forget Succession - Become A Free American Territory

Introduction

Americans have finally dared to start whispering about state secession. Others propose “nullification” by states, where they refuse to implement certain odious federal edicts. Citizens more openly quote Thomas Jefferson on fertilizing the tree of liberty with the blood of patriots.  The number of Citizens pushed toward radical solutions is now staggering.


The recent mid-term elections revealed broad dissatisfaction with both major political parties, and the formation of the tea party as a non-party.

These solutions to the country’s problems all fall short.  The line-drawing of nullification is slow and narrowly focused, and state succession is political suicide. The fever of Washington’s spending has never successfully been turned back. Even in Reagan’s revolution its growth was only slowed.  And forget succession; It will never be allowed by the federal government, as the events of 1860-65 proved. 

We propose a real solution to the ever-growing federal monster that is both Constitutional and more likely to actually succeed in restoring liberty to those who value it. It lets citizens live in these United States under the US Constitution, but outside the grasping reach of Congress and the Courts: a state dedicated to freedom can convert to an American Territory.

We envision the ultimate startup venture in the form of an Organized Incorporated Territory, created from an existing state or states. The entity would remain in the union, but would be a re-boot of an old American idea – territorial self-government.

This status could be established by individual states, who could vote to create or join a modern-day territory, or citizens could migrate within the U.S. to a state where the formation of such a territory was likely. These territories would still be part of the United States, fully subject to the U.S. Constitution, and protected by its Bill of Rights. This political structure would create a path for those who remain loyal Americans, but who want more autonomy and Constitutional fealty, and who see true reform at the ballot box as unlikely.

Such a venture would give those liberty-minded Citizens a chance to prove, or to fail at, the ideas about limited government which they promote.

The Current Problem

It is hardly necessary to catalog the ailments which plague the country, most of which have been brought on by excessive government power, regulation, wars, taxation, and intrusion. What makes those things objectionable is that they displace citizen’s control over their own lives, families, and finances, and substitute government control over these personal matters. 

If we ask the question, “What should government be doing for the people,” we will always get the wrong answer – a growing list of costly programs. “Necessity is the plea of every infringement of human freedom,” argued British Prime Minister William Pitt in 1783, just as we were struggling to perfect our split from his government.

We must ask the opposite question: How much control do Citizens keep over their own lives?  That is the vantage point of our Bill of Rights. Framing the question this way gives a uniquely American answer: Citizens must directly control the vast majority of their lives. That is the Constitutional mandate, and the core of the freedom that Americans have fought and died for.

The Wrong Fix

We recognize the forces driving the discussion of secession, namely legitimate concerns about the intrusion and burden of our government. But secession didn’t succeed in 1861, nor would it succeed today. Nullification is indirect, risky, and slow. The reality is that our President would respond to these strategies as did his mentor Abraham Lincoln, with overwhelming force to keep the union whole and under the federal thumb.

The good news is that the problem can be resolved both peaceably and constitutionally. This article will lay out a macro view of the concept of the American Territory. Further refinement will be needed to apply these ideas to the complex new venture, but that is the process in any start up: it goes from initial vision, to strategy, to details.

The Solution: “Incorporated Organized Territory”

The key to this change is to travel a known political path - to be, as President Johnson described, “easy to lift”.

Since the U.S. founding, there have been numerous political arrangements to govern land not part of the original  thirteen colonies, as the country has gone from an English outpost to the current fifty states. Some regions have gone through non-homogenous political structures prior to becoming states. Others have settled into varying degrees of territorial sovereignty, such as Puerto Rico and Guam. Still others have come into the orbit of the U.S., such as the Philippines, and left to become self-governing countries.  

Thirty-one of the current states were originally Incorporated Organized Territories of the United States. Each was created by an organic act of Congress, and while they fell under the U.S. Constitution, each had some variant of local governance.

The Constitution Does Not Prohibit States From Changing Form

Article IV, Section 3 of the U.S. Constitution regulates the admission of new states and the control of territories:

New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.  The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.

Our understanding of this constitutional provision, and the U.S. Supreme Court cases interpreting it, is that a state could take its own vote to become a “territory”, and thereafter would petition Congress to enact an organic act to enable the creation of the territorial government.

Such a territory would be governed by its own semi-autonomous legislative, executive and judicial branches, paralleling the structure described in the U.S. Constitution. The US Congress would predictably intervene in some unpleasant ways, but territories have worked out many arrangements over the years. It may be messy, but all start-up efforts require a willingness to confront and resolve ambiguity.

While this arrangement creates a type of political entity well-known under the American system, no state has ever reverted from statehood to the status of a territory. While we are proposing a new path to this political form, the core entity is tested and found to be constitutional.  By working with a political structure that is defined by precedent, law, and custom, we make it possible to achieve what the authors perceive as the goals of the freedom movement: living under the US Constitution, on US soil, but with a government that they judge as more firmly aligned with the intent of the Founders.

Would They Allow a State to Become A Territory? 

So why would the current U.S. administration allow its power to be so reduced by loosening its grip on a state?  Politicians of all stripes want to grow their power. Our current president Obama adds to that a dream of “transforming America” into the liberal's idealized state.

This plan may appeal to both the U.S. President and to Congress because it will likely increase their power, counterintuitive as that may sound.

Advocates for territorial restructuring can offer Mr. Obama two powerful tools for reaching his goal, namely to be able to increase federal power and control and to impose “fairness” upon all.  


First, these new territories are likely to attract freedom lovers who oppose Obama’s policies.  These 'trouble makers' are “the impediments to progress” he often cites, and his political opposition in the remaining states will be robbed of key leaders and motivated inner circle followers who inspire and lead the opposition to Mr. Obama, once they move out to the new territory.

Second, by draining away the voters who support those liberty-minded “trouble makers”, the formation of the new territories hands Mr. Obama more secure electoral victories in marginal states and a Congressional majority to implement his Marxist ideals into policy.  

Some on the side of increased individual freedom will oppose a plan which would drain resources from their hometown or home state, feeling that this cedes much of America to the radical left. They feel, rightly, that this is their country, and to be herded into a few states or regions is to admit defeat, to accept that liberalism has won the day.

Perhaps they are correct, but the example of a successful territory, whose freedom opens tremendous opportunity and widespread economic growth, is the only path to create pressure in the remaining states to emulate that freedom. Freedom spreads more effectively by example than by force.

How to Move Forward: New American Territories

What motive would a state governor and legislature have to participate in such a plan? The same: Money and power. Their domains would be substantially increased by adding new, highly productive citizens, and vast new wealth creation would inevitably follow such a migration, as it transformed the territory into a low tax, high productivity region. 

If a territory allowed capital to move freely without government interference and control, and without confiscatory taxation on its profits, a breathtaking quantity of capital would immediately flow to such a region. This money would be invested in infrastructure, employees, start-ups, investments, and would produce taxable profit. The Territory would almost immediately become the Hong Kong of the west. 

There are endless numbers of questions to be considered when contemplating a new venture of this sort. The market will answer many, if not most of them, and the most vexing problems, as usual, will be how to deal with the U.S. Government. The new territory will begin with all current U.S. laws in place. This will reduce disruption and uncertainty, and give some comfort to the existing power structure in the main country. 

This article can only summarize this concept – we have developed an action plan and time line to get us to this “promised land” as we head towards that shining city upon the hill. Many specific policy initiatives which would complement and enhance a freer political entity are already well known among scholars of freedom, and could be implemented by skilled leaders.

Issues of “federalism” would have to be negotiated as well, particularly the amount of power ceded upward to local, territorial, and U.S. governments by the citizens. Many significant social questions would arise, such as how to handle a sizable class now dependent on government largess for their support, most of whom could not remain in that dependency relationship to government. Would former U.S. residents still be entitled to social security? What about government pension commitments? What happens to U.S. possessions in the territory, such as interstate highways and national parks? Answers will come.

Americans are not prisoners – not yet at least.  However, because of the extraordinary power of the federal government, they have not been able to effectively vote with their feet by going to a state which offers substantially more freedom. The "laboratory of democracy" concept has been nullified by the vast imbalance of power to the feds.  


This is a new experiment that has the potential to restore that balance, and one whose outcome is by no means assured. However, it can work if we can ride forward with our eyes on the north star divined by our Founders – that of individual freedom and responsibility, unhampered by tyrannical government.  

Auto-Topia - Why Universal Health Care Will Not Work

The intent of forming a new Territory is to increase individual freedom, which will expand as government cedes control over Citizens’ lives. What issues might we anticipate from creating a smaller government than our existing one?  

The natural tendency of all governments is to expand their own power. So wrestling any power away from government may require a stronger quantum of force than is currently available to be harnessed by mankind. But lets assume that we can overcome the gravitational pull of government power for a moment and look at one of the most controversial issues in governance today.


We Cannot Buy Actual Health Insurance Any More?

Some of the most strident objections to reducing the size of government surround health insurance regulation. Some big-government apologists foretell people dying in the streets if we eliminate a single one of the thousands of pages of government controls over our relationship with our physician, much less actually letting people manage their own health and the relationship with their own doctor.

In this posting we look at the impact of unwinding a small sub-set of the complex web of health insurance regulations that make it all but impossible to buy actual health insurance. A high-deductible plan, like true insurance, covers you in case of serious illness, but leaves you to pay for the ordinary costs of health care – routine doctor visits, a checkup for a sore throat, and the like. 

Today, most insurance, due to complex regulations, operates more like “pre-paid health care”, with a low set maximum on “out-of-pocket” costs; the result is that in most states people can’t buy true insurance, but instead have to buy plans that cap their out-of-insurance spending at a number like $2,200 in any given year. The result is that nearly all US health care costs must be funneled through insurance, rather than being part of the patient-doctor relationship, managed by the patient as part of taking care of their health and that of their family.

It sounds wonderful- the poor aren’t burdened by high health care costs (according to this theory), and everyone can go to the doctor when they are sick. But shoving health care costs under the health insurance blanket doesn’t really make them go away…

[Harps play, fog rolls in, the scene shimmers and we are in a different world…]

Autotopia - The Land Where Cars and Driving Are "Free"

In this wonderful world we’ll call Autotopia, “Auto Insurance” would cover all expenses for our cars.  Once drivers had spent $2,200 in a given year, everything would be “covered”, including gasoline, regular check-ups, repairs, accidents, perhaps even quarters for vacuuming at those car wash places. Since most everyone would spend at least the minimum, the perception would be that gas, maintenance, and repairs would essentially be “free”.  

Doesn’t that sound great? It would ensure that everyone could drive. Even the poor could buy this kind of Auto “Insurance”, since state “Insurance Commissioners” and the federal automotive insurance regulators would be there to control the price, the coverage, and generally manage everything an individual might buy for his car.  Since there would be no additional costs to drivers, cars would always be safely maintained, and it would reduce accidents on the road since no one would drive a “junker”.

But once we all were on that plan, things would start to change in the now “free” world of transportation. Since driving costs nothing, once the minimum is met, we would all drive anywhere, everywhere.  Why not, since every nickel spent over $2,200 would be someone else’s? Gas stations would start charging more for gas, and why not? Since no one would stop buying gas as the price went up, oil companies would raise prices by large percentages every year. Gas would hit $6, $8, $12 a gallon; there would be no ceiling. But who cares? It's free!

Repair and maintenance costs would rise, as would fraud and abuse, since car owners buying the repairs would not benefit by negotiating or even by picking a lower cost source. Repair stations would sport espresso machines, comfortable chairs, and current magazines, covered of course by the ordinary cost of repairs. In fact, we would all want to go to the best, most expensive repair places, since it’s our car after all, and our health and safety are involved.

The makers of specialty automotive devices such as additional airbags, filtration systems, and sun roofs (for safe exit in an emergency, don’t you see) would petition the government (and make campaign donations) to enact legislation requiring that all insurance include coverage for purchase of their particular products.

Insurance companies wouldn’t mind, since more requirements mean higher premiums, more profits and bigger bonuses.  

All Is Not Well In Autotopia

But soon, problems would start to surface in Autotopia. Pushing essentially all transportation costs through insurance companies would force up costs. Even at its most basic, all costs would be marked up for administering the relationship with our gas station, our repair shops, etc. While this job COULD be done by each of us according to our own preferences, paying the insurance company to handle this does much more than just force us to pay for administering something we could do for ourselves- it changes our behavior as consumers of automotive services.

The system separates the people who buy and consume the stuff – us citizens – from those who make the billing decisions; buying would be made by individuals, on the basis of "no additional cost", while prices for insurance would be set by the combined behavior of all consumers using LOTS of transportation. Individuals would not care about the particular cost to us, so there would be no real price pressure at the pump or the repair shop, no natural price damping mechanism – people would just continue to consume more and more transportation, while costs rose without limit.

Over time, America would be spending an ever larger and growing fraction of her wealth on getting from here to there, with nothing to stop the rise in costs. Our competitive economic status would weaken, as more of our economy went to pay for transportation than in other industrialized countries. Soon transportation would become a major drag on the economy, pulling funds away from other urgent needs.

Prices, predicted to fall by legislators (see Massachusetts), would rise, surprising the pro-auto-insurance community organizers. While the road infrastructure expanded, traffic jams would increase, and cars would become less, not more, reliable. Think-tanks would complain that European countries had better transportation at less cost than the U.S., with numbers and graphs to back it up.

All this time, the cost of car insurance would rise much faster than inflation, and politicians would scream about the evil auto, oil, and insurance companies, about how they were hurting the “working poor”, how the rich were getting richer. They would demand laws to limit the profits of these companies, or add special taxes to their income.

Socialist Congressman Bernie Sanders would filibuster, demanding a government take-over of the insurance companies, accusing the evil Republicans of rewarding the rich by de-regulating the auto insurance industry, further punishing the downtrodden.

[Harps again – we return to today, to our world, where health insurance premiums have been rising faster than inflation for 2 decades, and no one can figure out why…]




How To Realistically Get Control of Health Care Costs Here and in the Territory

Today, health care costs continue to soar, and it is no coincidence that the most regulated industry in America – health care – delivers the most the most expensive health care in the world, and sports the fastest growing costs of anything Americans buy. 

(Note to Mitt Romney, former governor of Massachusetts: Your state universal health care program, which was the model for ObamaCare, which you predicted would lower costs, has resulted in the highest health care costs of any state.)

With a simple modification – shifting from “pre-paid health care” to true insurance- Americans would change from mere “Patients Without a Say” into “Health Care Customers.” They would care about costs as well as about quality, would decide on health care purchases carefully, would check prices, options, and a personal budget, rather than just saying “YES” to everything because it is free.

In the end, America will spend less on health care, because individuals will be spending their own money. Health care will take its rightful place among the many important goods and services we buy as Americans, because WE will be managing it, not remote bureaucrats who decide how to spend our money.

We estimate that this single change could drive down health care costs by 15-20% in the short term, and substantially slow the rate of cost increases in the near future.  Prices decrease over time for every good or service which is driven by the free market, whereas they increase when government substantially controls the parameters of the industry. Think about the difference between the price trajectories on computers and telephones versus those on mail and medical care.  

In other words, we citizens will behave like normal, rational, everyday consumers that have, through our individual concerted actions, created the most vibrant and dynamic marketplace in the world. We will behave like free Americans.

Conclusion

We need to make the purchase of medical care work as well as the rest of America.  We can do that by getting the government out of our relationships with our doctors.  With this change, health care costs will stop their reach for the stratosphere, and return to their appropriate place as decided by ordinary Americans, for themselves. In the end that will help all Americans be healthier and more able to afford medical care.