It’s a new year. In less than three weeks, America’s 45th president — Donald John Trump — will solemnly swear to “preserve, protect, and defend the Constitution of the United States.”
How seriously will Trump take this responsibility? This is, after all, a man who threatened to sue newspapers that criticized him. That represents — at the least — a potential violation of the First Amendment’s guarantee of press freedom. Then there was Trump’s promise to use torture not only against terrorists, but their family members as well. This statement runs afoul of not just one, but two constitutional amendments. The Eighth Amendment prohibits “cruel and unusual punishment”; the Fifth guarantees “due process” before the law.
On the other hand, Trump later reversed this stance, stating that he would “be bound by laws just like all Americans and… will meet those responsibilities.” That begs the question: which Donald Trump will assume the Presidency in 17 days?
Unfortunately, I can’t say that Barack Obama, who occupies the White House for 17 more days, did any better. Obama, who taught constitutional law at Harvard University’s law school, certainly did his part to shred that document.
Indeed, the Obama legacy bequeathed to Donald Trump includes 32 separate declarations of national emergency. With the stroke of a pen, President Trump can commit the US to binding international agreements (or tear them up), impose crippling economic sanctions on entire countries, or assassinate anyone he deems a threat to US security.
Indeed, through the end of 2015, Obama admitted that US drone strikes had killed more than 2,300 “enemy combatants” and as many as 116 civilians, collateral damage from the War on Terror. Keep in mind that all these killings occurred without a congressional declaration of war. And without arrest, trial, or conviction for any crime. All Obama relied on to authorize these targeted killings was a declaration of national emergency originally imposed by President George W. Bush in the aftermath of 9/11.
Trump can even go to war without congressional authority, thanks to that same state of emergency. Indeed, the US is already involved in wars in at least seven Islamic countries: Afghanistan, Iraq, Libya, Pakistan, Somalia, Syria, and Yemen. There may be more we don’t even know about. Powerful members of Trump’s Republican party — interventionists like Senator John McCain (R-AZ), for instance — will lead the charge for further US involvement to “fix” the Middle East. Lots of luck with that, Mr. President.
Congress has also assigned the president the authority to enact — and repeal — international agreements without its consent. Take NAFTA, for instance, the North American Free Trade Agreement, which Trump promised to tear up. Any signatory to NAFTA — Canada, Mexico, or the US — can withdraw after a 60-day notice. Will Trump accommodate his base, whom he convinced NAFTA had led to the loss of millions of American jobs? Only time will tell.
Candidate Trump also promised to deport more than two million “criminal illegal immigrants.” The actual number is closer to 300,000, but again, Trump has considerable executive authority in this area. At the very least, he’ll likely revoke the executive orders signed by Obama giving some categories of illegal immigrants stronger rights against deportation.
The vast majority of you reading this Notes issue would never be mistaken for a terrorist or illegal immigrant. But even if you’ve never broken a law in your life, the president has tremendous authority over your wealth. Indeed, the Treasury Department has asserted that in a state of national emergency, it could confiscate every financial asset, including gold and silver. While I don’t foresee this authority being used except as an absolute last resort, you shouldn’t dismiss it out of hand.
Here’s why. Candidate Trump promised to slash taxes while greatly increasing spending on infrastructure and the military. While he can’t accomplish those goals without congressional approval, his party controls both houses of Congress. He’ll probably be able to keep those promises.
If the Republican leadership persuades him to get involved in additional wars, spending will increase even faster. The $20 trillion debt legacy left to us by Obama will continue to spiral out of control. Not to mention unfunded obligations at least 10 times that high. Plus, if there’s a recession in 2017 or 2018, as some economists predict, Trump will be forced to escalate spending on food stamps and other social benefits.
With soaring deficits and less revenue, where will Trump get the money to pay for it all? The International Monetary Fund has a handy solution that Trump could invoke through a state of emergency: what it calls a “one-off capital levy.” In plain English, this means outright confiscation of 10% or more of private savings.
What would happen is on a weekend or a holiday, the US and other major countries would simply dip into private savings and confiscate some percentage of your assets.
The most obvious target of such a levy would be domestic bank and securities accounts. Using an LLC or other protective entity to hold the account would likely not prevent confiscation, as the government could easily identify you as the ultimate beneficial owner. Relocating the assets outside the US might be more effective, but only if the capital levy was applied only by the US and not in a joint effort by all major countries.
What this means is you should get your Plan B in place — or even Plan C — if you haven’t done so already. And keep fine-tuning it.
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