Authored by Thorsten Polleit via The Mises Institute,

From March 17, 2022, to the end of January 2023, the US Federal Reserve (Fed) increased its federal funds rate from practically zero to 4.50–4.75 percent. The rise in lending rates came in response to skyrocketing consumer goods price inflation: US inflation rose from 2.5 percent in January 2022 to 9.1 percent in June. Notwithstanding inflation falling to 6.4 percent in January 2023, the Fed continues to signal to markets that it will continue to hike rates to bring down consumer price inflation.

This is understandable. The Fed wants to maintain its inflation-fighting credentials; it wants people to believe it is really determined to bring inflation back to 2 percent. It is presumably well aware that the US dollar’s world reserve currency status needs to be protected more than ever, as it gives the US government (and the powerful special interest groups that harness it for their purposes) tremendous power, not only nationally but internationally.

Higher nominal (and real—i.e., inflation-adjusted) interest rates are now necessary to support the US dollar. These higher rates make the greenback more attractive against other unbacked currencies such as the euro, the Chinese renminbi, the Japanese yen, the British pound, and the Swiss franc. And with other central banks worldwide unable or unwilling to catch up with the Fed’s rate hike sprint, the US dollar exchange rate is expected to remain strong, attracting capital from abroad and allowing the US to run a massive trade deficit with the rest of the world.

However, there is concern that the Fed’s tightening could trigger another bust. Why? From sound economic theory, we know that issuing fiat currency through bank loans that are not backed by real savings creates an artificial upswing (“boom”), which sooner or later must end in a recession (“bust”). This is because the initial increase in the supply of bank credit artificially suppresses the market interest rate below the level that would prevail without an increase in bank credit. This artificially suppressed market interest rate entices consumers and producers to live beyond their means, leading to overconsumption and malinvestment.

All this ends once the inflow of new credit and money stops; then the market interest rate rises. Consumption decreases, savings increase, and investment projects are liquidated. Firms go bankrupt, and unemployment rises. Asset prices, such as the prices of stocks and real estate, which had been inflated during the period of artificially lowered interest rates, plummet. Deflated asset prices squeeze the equity capital of private households, firms, and banks. Higher credit costs put borrowers under increasing pressure to service their debt. The number of loan defaults increases, causing banks to tighten their lending standards. A downward spiral begins: tightening credit market conditions lead to more defaults and even tighter credit market conditions. At the extreme, the credit crunch, asset price deflation, and output and employment losses could collapse the fiat money system.

Where are we right now? At 4.50–4.75 percent, the Fed’s interest rate is still relatively modest by historical standards. Also, adjusted for consumer price inflation, the Fed’s key interest rate is still at −1.8 percent. However, the restrictive impact of the Fed’s latest series of interest rate hikes is much more pronounced than many market observers believe. Most importantly, the US money stock M2 is declining for the first time since 1959. In December 2022, it fell by 1.3 percent on an annualized basis (by a hefty 7.3 percent in inflation-adjusted terms).

The current contraction in nominal M2 is not caused by a contraction in bank lending. What is happening is that the Fed is pulling central bank money out of the system. It does this in two ways. The first is by not reinvesting the payments it receives into its bond portfolio. The second is by resorting to so-called reverse repo operations, in which it offers “eligible counterparties” (those few privileged to do business with the Fed) the ability to park their cash with the Fed overnight and pays them an interest rate close to the federal funds rate.

The Fed does business not only with banks but also with nonbanks (such as asset management firms). When nonbanks move their bank and/or client deposits to the Fed, the banking sector loses central bank money as well as commercial bank money. As a result, the money stock M2 drops. The Fed is sucking liquidity out of the financial system, a move that is at least disinflationary: it will slow the rate of goods price increases in the economy. It may even be deflationary, that is, exerting downward pressure on goods prices across the board.

The Fed has announced that it intends not only to continue to raise interest rates further but also to continue to reduce its balance sheet and sponge up central bank money. What is concerning in this context is that Fed chairman Jerome H. Powell—and presumably the rest of his team—does not really pay attention to the developments in monetary aggregates when making policy decisions.

This, in turn, implies a real risk that the Fed will overtighten, meaning contract the quantity of money further.

The Fed appears to be taking current inflation into account when setting its policy. However, it is fair to say that future inflation is ultimately determined by past or current monetary expansion. And since the nominal (and real) money supply is now contracting—not only in the US but also in many other currency areas, by the way—a deflationary shock is building up, which would then become really problematic if the money stock continues to shrink as bank credit supply starts dwindling. It’s a recipe for disaster (aka the next bust).

Interestingly, financial markets have remained relatively optimistic of late, as various market stress indicators suggest: credit spreads are contained, and stock prices have been drifting higher since their recent low in October 2022. Perhaps markets are confident that the Fed will orchestrate a “soft landing,” bringing sky-high inflation down without tipping the economy into recession and financial markets into turmoil. Or they bet that, should the credit pyramid really start to falter, the Fed will reverse its tightening policy and bail out the system, as it has done so many times in the past, regardless of inflation.

In fact, this is what Murray N. Rothbard (1926–1995) saw coming a long time ago. He wrote in America’s Great Depression, “The American economy will be increasingly faced with two alternatives: either a massive deflationary 1929-type depression to clear out the debt, or a massive inflationary bailout by the Federal Reserve.” In view of the politics of his time, he concluded, “We can look forward, therefore, not precisely to a 1929-type depression, but to an inflationary depression of massive proportions.”

I firmly believe Rothbard’s conclusion is particularly relevant to our times, that markets are right to bet on a Fed bailout in times of trouble but that they grossly underestimate the economic damage and inflationary impact it would have.

Authored by Jonathan Turley,

We have previously discussed the alarming rollback on free speech rights in the West, particularly in France (here and here and here and here and here and here and here). The latest such case is a criminal trial of French Senator Stéphane Ravier for stating that “immigration kills the youth of France.”

It is another example of why free speech is in a virtual free fall in Europe.

Ravier faces trial tomorrow in the criminal court of Marseilles on charges of incitement to discrimination, hatred, or violence. The case is based on a tweet, on January 11, 2022, in which Ravier reacted to the murder of a teen in Paris by a 62-year-old man from Senegal.

He tweeted “Theo, 18 years old, murdered yesterday by a Senegalese [migrant]… Immigration kills the youth of France.”

A complaint was filed by the International League against Racism and Anti-Semitism (Licra) and the League for Human Rights (LDH) against Ravier over allegations of spreading hatred toward migrants.

Alain Lothe also alleged that by publishing his tweet “the elected official is not content to react to a news event but wants to highlight the nationality of its author and to involve all people from immigrant backgrounds.”

It is another example of criminalizing political speech. Just last year, Ravier was convicted for another comment made against a female socialist senator that was deemed to be sexist and given a fine of 1,500 euros.

France has been a leader in the rollback on free speech in the West with ever widening laws curtailing free speech. These laws criminalize speech under vague standards referring to “inciting” or “intimidating” others based on race or religion. For example, fashion designer John Galliano has been found guilty in a French court on charges of making anti-Semitic comments against at least three people in a Paris bar. At his sentencing, Judge Anne Marie Sauteraud read out a list of the bad words used by Galliano to Geraldine Bloch and Philippe Virgitti. “He said ‘dirty whore’ at least a thousand times,” she explained out loud.

In another case, the father of French conservative presidential candidate Marine Le Pen was fined because he had called people from the Roma minority “smelly.” A French mother was prosecuted because her son went to school with a shirt reading “I am a bomb.”

A French teenager was charged for criticizing Islam as a “religion of hate.”

I wrote earlier about the prosecution of famous actress Brigitte Bardot for saying in 2006 that Muslims were ruining France in a letter to then-Interior Minister (and later President) Nicolas Sarkozy. Bardot, an animal rights activist, has been repeatedly hit with such criminal complaints for criticizing different groups. She was later fined for calling the the inhabitants of La Reunion “savages” for their continued sacrificing of animals in religious rituals.

In this case, a politician is speaking about a matter of national importance. One can certainly object and rebut such views or heated rhetoric. The solution to bad speech is better speech. Free speech is its own disinfectant.

Instead of engaging in such debates, however, various individuals and groups now seek to silence their opponents by criminalizing speech. France has led this anti-speech movement. The sad irony of France leading efforts to curb free speech is powerful. Once the bastion of liberty, France has now become one of the greatest international threats to free speech.

Amid the mounting speculation of a soft landing and even talk of a “no landing” (read: here and here), we’ve pointed out multiple strategists who don’t share that sense of optimism but rather one that is typical of an end-cycle environment (read: here & here). 

A new report by Canada-based logistics company Descartes Systems Group indicates that US shipping container imports plunged 20% in the first two months, according to Bloomberg. 

In January and February of this year, the total volume of inbound containers, measured in 20-foot equivalent units, was 3.8 million, which marks a decrease from 4.78 million recorded during the same period in 2022. The latest reading is in line with 3.86 million in January-February of 2019. 

Container rates worldwide for 40-foot boxes have returned to levels before the pandemic. This comes as global central banks aggressively hike interest rates in response to inflation, curbing consumer spending. 

The financial burden of soaring inflation and increasing rates falls heavily on low-income consumers. Given that consumerism represents 68.5% of GDP, the troubling slowdown in container shipping suggests that the economy is showing signs of faltering.

Descartes said container volumes from China, Japan, and Germany slumped the most.

Container import declines into the world’s largest economy is an ominous sign as some strategists believe a recession might unfold in the second half of the year. Also, rate increases from last year are only beginning to filter in and will strongly curb economic activity in the coming months. 

Authored by Bill King via RealClearPolitics.com,

I regularly talk to well-informed people who do not realize that world population growth is rapidly decelerating.

Currently, the UN estimates the most likely case is that the world’s population will top out around 10 billion in 2080 and then begin a long, slow decline. Other modelers are projecting the peak will be reached in 2060 at 9 billion and then decline more rapidly. Some scenarios predict there will be fewer people on the planet at the end of century than there are now.

UN Population Division

The United Nation’s predictions for the U.S. are similar, with our population topping out at around 380 million near the end of the century. This is consistent with the Congressional Budget Office projections, which assume the U.S. annual population growth rate over the next 20 years will decline from 0.5% to 0.2%. Without immigration, the U.S. population would begin to decline around 2035.

Congressional Budget Office

Many of us grew up reading Paul Ehrlich’s runaway best-seller “The Population Bomb,”, which predicted a worldwide apocalypse was just around the corner. The book, written in 1968, categorically predicted that “The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death.” Of course, that did not happen and since around 2000, researchers have found there have been more obese people in the world than those who are undernourished. 

In part, it did not happen because of an explosion of agricultural technology in the 1950s and 1960s known as the Green Revolution. But Ehrlich’s prediction also never came to pass because he missed that at the time of their book, women had already begun having fewer babies.

The critical metric for population growth is the average number of children women are having at any particular time, known as the fertility rate. Other factors, such as childhood survival and longevity, also affect population growth, but the fertility rate is the big driver. It takes a fertility rate of 2.1 children per woman to maintain a stable population, known as the “replacement rate.” Anything above that and the population will grow and below that it falls.

When ”The Population Bomb” was published, the fertility rate was stunningly high at 5. That astronomical rate would go on to cause the world population to double just 40 years later.  But what was not apparent to the author at the time was that the fertility rate had peaked about five years earlier at 5.3. That began a steady slide downward to 2.3 today, just barely above the replacement rate.

World Bank

However, a decline in the fertility rate does not show up at once. It takes a while for that lower rate to work through the generational cycle, something referred as “population momentum.” That is why you still see a hefty 25% increase in the world’s population in the projections before it tops out in 2080.

Many countries around the world are already beginning to feel the effects of slowing population growth.  Japan and Russia both face looming drastic population declines. China announced this year that for the first time its population had declined. Some countries have adopted policies to encourage young couples to have more children.

Of course, there is no question that the decline in population growth is very welcome news. Without the downturn we would be facing the apocalypse that Ehrlich foresaw as we put ever-increasing demands on the earth’s finite resources. 

But our civilization has been based on steady population growth and astronomical population since the mid-20th century. Programs such as Social Security and Medicare will not work in a world where the population is flat or declining, at least not without some substantial modification. Because lower fertility rates are correlated with educational attainment, the most uneducated, poorest parts of the world will be growing the fastest. The only places in the world currently with a fertility rate well above the replacement rate are Africa and central Asia. This dichotomy will result in greater wealth disparity and conflicts.

PRB Data Center, Total Fertility Rate by Subregion, https://www.prb.org/international/indicator/fertility/snapshot. Reproduced by permission.

The new population paradigm will cause many headaches which our children and grandchildren will have to wrestle. Some are obvious and some probably unforeseeable. It would be great if the world could start thinking through those issues now and begin to prepare. However, human behavior over the centuries has shown that kind of long-term planning is not one of our strong suits.

Authored by Michael Maharrey via SchiffGold.com,

Violent protests in Nigeria reveal that getting average people to embrace central bank digital currencies (CBDCs) might be more difficult than government officials would like.

Nigerians recently took to the streets to protest a cash shortage caused by government policies adopted in order to push the country into the adoption of its central bank digital currency (CBDC).

Protesters attacked bank ATMs and blocked streets, and demonstrations turned violent in some cities.

According to The Guardian, “Nigeria has been struggling with a shortage in physical cash since the central bank began to swap old bills of the local naira currency for new ones, leading to a shortfall in banknotes.” According to reporting by the news outlet, the protests erupted when bank customers couldn’t access their cash or change old banknotes for new ones. Tensions ratcheted up when the government set a February deadline to change old notes.

The problem is there aren’t enough new banknotes to go around, and that appears to be on purpose. Bloomberg called the policy “demonetization.”

According to the Associated Press, the Central Bank of Nigeria introduced the redesigned notes last fall. The plan was to recover about 85% of the total currency in circulation outside the banking system. The Nigerian central bank said the policy was implemented to remove counterfeit currency from the system and to discourage cash ransom payments to kidnappers and other criminals. But there is an underlying reason for the new policy that The Guardian only mentions in passing.

The policy was also to promote cashless transactions by limiting the use of cash for businesses.”

The AP report also noted that the central bank said the policy would help “make digital payments the norm.”

What these corporate news outlets failed to report is that Central Bank of Nigeria Governor Godwin Emefiele said, “The destination, as far as I am concerned, is to achieve a 100% cashless economy in Nigeria.”

The issue isn’t just the banknote swap. In December, the central bank limited cash withdrawals to 100,000 naira (US$225) per week for individuals and 500,000 naira ($1,123) for businesses.

Thanks But No Thanks

That seems to be the basic attitude of Nigerians when it comes to the central bank’s digital currency.

CBDCs exist as virtual banknotes or “coins” held in a digital wallet on a computer or smartphone. The difference between a central bank (government) digital currency and peer-to-peer electronic cash such as bitcoin is that the value of the digital currency is backed and controlled by the government, just like traditional fiat currency.

The Central Bank of Nigeria launched its CBDC, called the eNaira, in the fall of 2021. Last October, Bloomberg reported that only about 0.5% of Nigerians had adopted the digital currency.

Ironically, about 50% of Nigerians use cryptocurrencies such as bitcoin. It’s not that they spurn digital currency. They just spurn the government’s digital currency.

Central Bank of Nigeria Deputy Governor Kingsley Obiora said people just need “a little push from the government,” and they will embrace the eNaira.

The government tried several schemes to incentivize the adoption of the CBDC, including offering a 5% discount to taxi drivers and passengers. It also lifted a restriction that required people to have a bank account in order to use the eNaira.

But with those soft approaches failing to achieve the desired results, the government turned to more coercive measures, including limiting bank withdraws and the currency switch – a policy that will effectively reduce the amount of cash in circulation.

War on Cash

Central bank digital currencies are part of a broader “war on cash.”

A cashless society is sold on the promise of providing a safe, convenient, and more secure alternative to physical cash. We’re also told it will help stop dangerous criminals who like the intractability of cash.

But there is a darker side – the promise of control.

The elimination of cash creates the potential for the government to track and even control consumer spending. Digital economies would also make it even easier for central banks to engage in manipulative monetary policies such as negative interest rates.

Nigeria isn’t the only country experimenting with CBDCs. In fact, most countries are interested in eliminating cash. China, India, and the US have all launched pilot programs to test CBDCs.

Imagine if there was no cash. It would be impossible to hide even the smallest transaction from the government’s eyes. Something as simple as your morning trip to Starbucks wouldn’t be a secret from government officials. As Bloomberg put it in an article published when China launched a digital yuan pilot program in 2020, digital currency “offers China’s authorities a degree of control never possible with physical money.”

The government could even “turn off” an individual’s ability to make purchases. Bloomberg described just how much control a digital currency could give Chinese officials.

The PBOC has also indicated that it could put limits on the sizes of some transactions, or even require an appointment to make large ones. Some observers wonder whether payments could be linked to the emerging social-credit system, wherein citizens with exemplary behavior are ‘whitelisted’ for privileges, while those with criminal and other infractions find themselves left out. ‘China’s goal is not to make payments more convenient but to replace cash, so it can keep closer tabs on people than it already does,’ argues Aaron Brown, a crypto investor who writes for Bloomberg Opinion.”

Economist Thorsten Polleit outlined the potential for Big Brother-like government control with the advent of a digital euro in an article published by the Mises Wire. As he put it, “the path to becoming a surveillance state regime will accelerate considerably” if and when a digital currency is issued.

Coming to America

Last year, the Federal Reserve released a “discussion paper” examining the pros and cons of a potential US central bank digital dollar. According to the central bank’s website, there has been no decision on implementing a digital currency, but this pilot program reveals the idea is further along than most people realized.

Ultimately, it would take a congressional act to establish a digital dollar as legal tender.

US officials toyed with the possibility of a digital dollar at the height of the pandemic. A Democratic proposal for stimulus payments in the wake of the coronavirus pandemic featured digital currency deposited into digital wallets.

But Americans don’t seem to be any more interested in digital currency than Nigerians. When the Fed solicited comments on CBDCs, more than 66% of the 2,052 commenters were either concerned or completely opposed to the idea of a digital dollar. According to the Cato Institute, “The most common concerns were over financial privacy, financial oppression, and the risk of disintermediating the banking system.”

The largest demonstration of public outrage yet over Greece’s deadliest train disaster took place in Athens and other surrounding cities on Wednesday as tens of thousands of people marched on city streets, and transportation workers went on strike. Last month’s train disaster resulted in the deaths of 57 people — many of which were university students. 

According to AP News, labor union members and students flooded the streets of Athens, with at least 30,000 individuals participating in the protest. As a result of the strike, ferry services to the islands and public transportation services in Athens were halted.

WATCH: Massive number of people rally in Greece over train tragedy. pic.twitter.com/IEVjAG9umN

— Rafi (@RastaRafi03) March 8, 2023

“Clashes broke out after the rallies in Athens and two other cities,” AP News. 

Violent protests erupted in Athens again on Wednesday.

It’s the third time in a week police and protestors have clashed in #Greece following a train crash that killed 60 people.

📹: @EvangeloSipsas pic.twitter.com/SlUEeUAZZy

— CGTN Europe (@CGTNEurope) March 8, 2023

Anger over a same-track collision between two trains in Greece that killed nearly 60 people spilled onto the streets of Athens Wednesday as a massive protest devolved into chaos.#Athens #GreeceTrainAccident pic.twitter.com/Xf6Q5eJQcw

— INDEPENDENT PRESS (@IpIndependent) March 8, 2023

In Thessaloniki, Greece’s second-largest city, at least 20,000 protesters rallied in the streets. People are furious with the government for underinvestment and understaffing of railroads that might have played a significant factor in the Feb. 28 train crash near the northern Greek town of Tempe. 

Reuters said Wednesday’s demonstrations were the largest since 2019. Police estimate more than 60,000 transport workers, students, and teachers were out in the streets. The media outlet also said some violence broke out against riot police:

Violence briefly broke out when a group of protesters clashed with riot police, who fired tear gas at the crowd. Protesters hurled petrol bombs in front of parliament and set a van and garbage bins on fire.

“You feel angry because the government did nothing for all of those kids. The public transport is a mess,” 19yo Nikomathi Vathi told Reuters. 

Striking transport workers, students and teachers started rallying in central Athens and in the northern city of Thessaloniki to protest over Greece’s deadliest train disaster on record https://t.co/HuzXwzPYQR pic.twitter.com/0qyjSyRozc

— Reuters (@Reuters) March 8, 2023

Another student said: “We’re going to be here until things change.”  

Authored by Will Jones via DailySceptic.org,

COVID-19 was not dangerous enough to justify cutting short vaccine trials as the vaccine had to be “very safe”, Chris Whitty advised the Government in the early weeks of the outbreak, it has emerged.

Writing on WhatsApp on February 29th 2020, the Chief Medical Officer told Government figures:

“For a disease with a low (for the sake of argument 1%) mortality a vaccine has to be very safe so the safety studies can’t be shortcut. So important for the long run.”

The estimate of 1% turned out to be an overestimate, as the infection fatality rate in Europe and the Americas was found to be 0.3-0.4%.

Chief Scientist Patrick Vallance agreed with this advice and wrote that existing drugs should be relied on instead:

“Agree, existing drugs best things to try for this outbreak. Accelerate vaccine testing where we have good candidates for future, and prepare for manufacturing capacity for longer term.”

It has not been reported what led to this approach being changed, but the advice was given before a pandemic had been declared or any country except China had imposed a lockdown. Public opinion, and Government responses around the world, shifted considerably after that point.

The Telegraph has published an article looking at what the Lockdown Files WhatsApp messages show about how the Government came to impose lockdown on March 23rd as it came under pressure during March to do more.

On March 2nd Patrick Vallance said he and Whitty estimated that the chance of a reasonable worst case scenario (at one point reportedly estimated by Whitty to involved up to 820,000 U.K. deaths) was one in five:

For percentage probability of RWCS [reasonable worst case scenario] we don’t have a calculated figure and can’t give one on the data we have. But Chris and I both think that looking at Wuhan so far the RWCS is relatively low probability, say one in five chance. But that is an impression not a calculation.

On March 5th a poll showed the public were still happy with the Government’s calm approach.

However, this was probably the last time that was true. As images from Italy – “where hospitals were overwhelmed by gasping Covid victims and distraught doctors were having to turn away the dying patients” – were beamed into living rooms over the following days the panic buying began as the sense of doom grew.

On March 8th France banned large gatherings as Italy locked down the entire north of the country, and Government figures began to feel the pressure to do more.

By March 11th Boris Johnson’s Chief Adviser Dominic Cummings was stressing how difficult it was to continue to hold the liberal line – and not very subtly implying he agreed with the critics.

On March 12th and 13th Patrick Vallance and other Government figures did one last media round arguing for sticking with a calm, liberal response that would lead to herd immunity, but it was no longer well-received by the media or much of the public. In line with that plan, contact tracing was stopped around March 15th as the country moved from containment (where contact tracing makes sense) to mitigation (where it doesn’t), but behind the scenes this change was opposed and the idea that we should be ramping up testing and contact tracing for indefinite use became a new orthodoxy. Cummings wrote: “We really need to explain our testing policy tomorrow – neither I nor PM understand it and we need to explain and ramp up as fast as humanly possible.”

On the evening of March 16th – the day Neil Ferguson’s Report 9, projecting over 500,000 deaths without severe suppression measures, was published – Boris Johnson told the nation that, without drastic action, the virus would spiral out of control.

These modellers had a track record of drastically exaggerating threats, but this seemed not to matter. As Carl Heneghan and Tom Jefferson write in an excoriating piece in the Mail this morning: “Faith was placed in experts who, in the past two decades, wrongly predicted 136,000 U.K. deaths from new variant CJD contracted by eating meat infected with BSE (or mad cow disease); 65,000 deaths from swine flu; and 700,000 deaths from bird flu.” As a second lockdown loomed later in the year, Dr. Heneghan and others tried to bring actual data and a sense of perspective to bear, but it quickly became clear that most ministers had no interest in anything that might make earlier decisions look unwise: “Our efforts were to no avail. A fixed ideology had rooted itself in Downing Street and the second lockdown in November 2020 went ahead.”

It was in those 11 days, from March 6th to 16th, that the country was transformed from a stoic survivor facing with calm courage the approaching tide to a gibbering wreck cowering in homes and refusing to go to work. The slow recovery from those traumatic days of spring three years ago is still ongoing.

Authored by John and Nisha Whitehead via The Rutherford Institute,

“Experience teaches us to be most on our guard to protect liberty when the government’s purposes are beneficent.”

– Supreme Court Justice Louis D. Brandeis

There was a time when the census was just a head count.

That is no longer the case.

The American Community Survey (ACS), sent to about 3.5 million homes every year, is the byproduct of a government that believes it has the right to know all of your personal business.

If you haven’t already received an ACS, it’s just a matter of time.

A far cry from the traditional census, which is limited to ascertaining the number of persons living in each dwelling, their ages and ethnicities, the ownership of the dwelling and telephone numbers, the ACS contains some of the most detailed and intrusive questions ever put forth in a census questionnaire.

At 28 pages (with an additional 16-page instruction packet), these questions concern matters that the government simply has no business knowing, including questions relating to respondents’ bathing habits, home utility costs, fertility, marital history, work commute, mortgage, and health insurance, among other highly personal and private matters.

For instance, the ACS asks how many persons live in your home, along with their names and detailed information about them such as their relationship to you, marital status, race and their physical, mental and emotional problems, etc. The survey also asks how many bedrooms and bathrooms you have in your house, along with the fuel used to heat your home, the cost of electricity, what type of mortgage you have and monthly mortgage payments, property taxes and so on.

And then the survey drills down even deeper.

The survey demands to know how many days you were sick last year, how many automobiles you own and the number of miles driven, whether you have trouble getting up the stairs, and what time you leave for work every morning, along with highly detailed inquiries about your financial affairs. And the survey demands that you violate the privacy of others by supplying the names and addresses of your friends, relatives and employer.

The questionnaire also demands that you give other information on the people in your home, such as their educational levels, how many years of school were completed, what languages they speak and when they last worked at a job, among other things.

Individuals who receive the ACS must complete it or be subject to monetary penalties.

Although no reports have surfaced of individuals actually being penalized for refusing to answer the survey, the potential fines that can be levied for refusing to participate in the ACS are staggering. For every question not answered, there is a $100 fine. And for every intentionally false response to a question, the fine is $500. Therefore, if a person representing a two-person household refused to fill out any questions or simply answered nonsensically, the total fines could range from upwards of $10,000 and $50,000 for noncompliance.

While some of the ACS’ questions may seem fairly routine, the real danger is in not knowing why the information is needed, how it will be used by the government or with whom it will be shared.

In an age when the government has significant technological resources at its disposal to not only carry out warrantless surveillance on American citizens but also to harvest and mine that data for its own dubious purposes, whether it be crime-mapping or profiling based on whatever criteria the government wants to use to target and segregate the populace, the potential for abuse is grave.

As such, the ACS qualifies as a government program whose purpose, while sold to the public as routine and benign, raises significant constitutional concerns.

The Rutherford Institute has received hundreds of inquiries from individuals who have received the ACS and are not comfortable sharing such private, intimate details with the government or are unsettled by the aggressive tactics utilized by Census Bureau agents seeking to compel responses to ACS questions.

The following Q&A is provided as a resource to those who want to better understand their rights in respect to the ACS.

Q:  What kind of questions are contained in the ACS?

A:  The ACS contains questions that go far beyond typical census questions about the number of individuals within the household and their age, race, and sex. The survey combines intrusive questions with highly detailed inquiries about your financial affairs. Furthermore, the questionnaire also demands that recipients provide information about their family and other  people in their home, such as their educational levels, how many years of school were completed, what languages they speak, when they last worked at a job, and when occupants of your home are away from the house.

Q:  How will this information be used?

A:  The Census Bureau states that information from this survey is used to assist a wide variety of entities, from federal, state and local governments to private corporations, nonprofit organizations, researchers and public advocacy groups. The Bureau lists 35 different categories of questions on its website and offers an explanation on how the information is to be used.  For 12 of those categories, the information is used to assist private corporations.  For another 22, the information is used to aid advocacy groups, and in nine of those cases, the Census Bureau states that the responses will be used by advocacy groups to “advocate for policies that benefit their groups,” including advocacy based on age, race, sex, and marital status. Thus, information obtained through the ACS is not simply used to inform government policy in a neutral manner, but is also being provided to private actors for the purpose of promoting corporate and/or political agendas.

One concern raised by the Brookings Institute is the use of ACS information by law enforcement for  “crime mapping,” a surveillance tool used to predict crime and preemptively target certain neighborhoods for policing. It is “most effective” when “analysts can see the relationship between various types of criminal incidents (e.g., homicides, drug dealing) and neighborhood characteristics (risk factors such as poverty, population density, and vacant housing), pinpoint where crimes are most likely to occur (hot spots), and focus police resources accordingly.” The Brookings Institute notes that because the ACS provides data every year, rather than every ten years, crime mapping is more effective and cheaper.

Q:  Are my responses kept confidential?

A:  While the Census Bureau claims that an individual’s information will be kept strictly confidential, it does require a recipient to put their name on the survey, ostensibly for the purpose of asking follow-up questions in the event of missing or incomplete answers. This means your answers could be linked to you even if it is forbidden by law to share your individual responses.

Q:  Am I required by law to fully complete the American Community Survey?

A:  Federal law makes it mandatory to answer all questions on the ACS. A refusal to answer any question on the ACS or giving an intentionally false answer is a federal offense. The Census Bureau also maintains that responding to the ACS is mandatory and that recipients are legally obligated to answer all questions.

Q:  Is there a penalty for refusing to answer American Community Survey questions?

A:  The law requiring answers to the ACS also provides that a person who fails to answer “shall be fined not more than $100.” The actual fine for a refusal to complete the ACS could be much greater because a failure to respond to certain ACS questions could be considered a separate offense subject to the $100 fine.

Q:  Has the government prosecuted persons for refusing to answer the American Community Survey?

A:  While The Rutherford Institute has been made aware of Census Bureau agents engaging in harassing tactics and threatening behavior, to date, we are unaware of the Census Bureau having levied any financial penalties for non-compliance with the ACS. However, a refusal to answer the survey violates the letter of the law and a prosecution might be brought if the government decides to adopt a policy to do so.

Q:  How does the Census Bureau typically ensure that people complete the survey?

A:  Those who do not answer the ACS risk repeated overtures—by mail, by phone and in person—from Census Bureau employees seeking to compel a response. Typically, the Census Bureau will telephone those who do not respond to the survey and may visit their homes to coerce the targets to respond.

The Census Bureau boasts a 97% response rate to the survey via these methods, but critics argue this constitutes harassment. One recipient who did complete the survey but whose answers were misplaced by the Census Bureau wrote about his experience. First, a Census Bureau employee left a note at his apartment asking him to contact her. When he did, the employee asked him to allow her into his home. When he refused, the employee “turned up twice unannounced at my apartment, demanding entry, and warning me of the fines I would face if I didn’t cooperate.” Only after he filed a complaint with the Census Bureau did the agency realize he had actually completed the survey, thus ending its attempts to enter his home.

Q:  Is this an unconstitutional invasion of privacy?

A:  There are significant and legitimate questions concerning the authority of the government to require, under threat of prosecution and penalty, that persons answer questions posed by the ACS. The ACS is not part of the enumeration required by Article I of the Constitution, and that constitutional provision only applies to a census for purposes of counting the number of people in each state. As noted, the ACS seeks much more information than the number of persons in a household.

In other contexts, the U.S. Supreme Court has ruled that citizens have no obligation to answer questions posed by the government and are free to refuse to do so. This same principle could apply to questions posed by ACS agents.  However, because the government has not brought a prosecution for a refusal to respond to the ACS, the question of a person’s right to refuse has not yet been decided by a court.

Q:  What are my options for objecting to the ACS survey as an intrusion on my Fourth Amendment rights?

A:  If you receive notice that you have been targeted to respond to the ACS and you desire to assert your right of privacy, you can voice those objections and your intent not to respond to the ACS by writing a letter to the Census Bureau. The Rutherford Institute has developed a form letter that you may use in standing up against the government’s attempt to force you to disclose personal information.

If you are contacted by Census Bureau employees, either by telephone or in person, demanding your response, you can assert your rights by politely, but firmly, informing the employee that you believe the ACS is an improper invasion of your privacy, that you do not intend to respond and that they should not attempt to contact you again. Be sure to document any interactions you have with Bureau representatives for your own files.

If you believe you are being unduly harassed by a Census Bureau employee, either by telephone or in person, it is in your best interest to carefully document the time, place and manner of the incidents and file a complaint with the U.S. Census Bureau.

Remember, nothing is ever as simple or as straightforward as the government claims.

As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, any attempt by the government to encroach upon the citizenry’s privacy rights or establish a system by which the populace can be targeted, tracked and singled out must be met with extreme caution.

While government agents can approach, speak to and even question citizens without violating the Fourth Amendment, Americans should jealously guard what Supreme Court Justice Louis Brandeis referred to as the constitutional “right to be let alone.”

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

U.S. National Security Agency Director Paul Nakasone has said he is concerned about what data Chinese-owned TikTok may be collecting on users and how it could influence American children.

Nakasone expressed his concerns during testimony delivered before the Senate Armed Services Committee on March 7.

Asked by Sen. Tommy Tuberville (R-Ala.) about any worries he has about TikTok’s influence on kids in America, Nakasone responded: “TikTok concerns me for a number of different reasons. One is the data that they have.”

“Secondly is the algorithm and the control, who controls the algorithm. Third is the broad platform influence operations, as we talked about previously. It’s not only a fact that you can influence something, but you can also turn off the message as well when you have such a large population of listeners,” Nakasone said.

The NSA is part of the Defense Department and is responsible for U.S. cryptographic and communications intelligence and security.

TikTok, which is owned by Beijing-based ByteDance, has soared in popularity over the years and is now used by more than 100 million Americans.

However, Washington has repeatedly raised concerns that the app poses a threat to national security, with American user data potentially being used by the Chinese Communist Party (CCP).

Expanding Government Power to Ban TikTok

There are also concerns that the recommendation algorithm on the app may be used to manipulate what users see as part of influence operations.

Last month, the White House ordered that TikTok be removed from all government devices and systems within 30 days, although there are exceptions in cases of national security, law enforcement, or security research activities.

Nakasone’s remarks came the same day that Sens. Mark Warner (D-Va.) and John Thune (R-S.D.) led a group of 12 bipartisan senators in introducing legislation intended to expand the federal government’s power in order to ban TikTok and other foreign-owned entities from operating in the United States.

The bill, also known as the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act, would increase the Commerce Department’s power to review and prevent information communications and technology transactions from tech companies that are owned by six adversarial foreign nations: China, Russia, North Korea, Iran, Cuba, and Venezuela.

“Congress needs to stop taking a piecemeal approach when it comes to technology from adversarial nations that pose national security risks,” said Thune in a statement on Tuesday. “Our country needs a process in place to address these risks, which is why I’m pleased to work with Senator Warner to establish a holistic, methodical approach to address the threats posed by technology platforms – like TikTok – from foreign adversaries. This bipartisan legislation would take a necessary step to ensure consumers’ information and our communications technology infrastructure is secure.”

Read more here…