Has Government Legalized Fraud?

Column by L.K. Samuels.

Exclusive to STR

The federal government must have made fraud a legal practice. What else could one conclude in light of Obamacare?

When President Obama, his administration and his Democratic cohorts promoted the Affordable Health Care Act, they advertised it with a slew of silver-tongued falsehoods, eloquent misstatements and outright lies. In other words, Obamacare was passed by Congress under clearly fraudulent statements of epic proportions. Almost every promise devised to sell Obamacare to the public and Congress was untrue. Millions of people have lost their coverage, although President Obama stated in 30 to 40 versions that, “If you like your health care plan, you'll be able to keep your health care plan, period. No one will take it away, no matter what.” There were no caveats, no exceptions, period.

And yet Obama and his staff knew for years that millions of health care plans had to be cancelled because they would be considered substandard by the new law. Lisa Myers at NBC News revealed this shame. She said that the Obama administration had known since the summer of 2010 that millions of Americans could lose their insurance under the law, where “50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a ‘cancellation’ letter . . . . ” As more information keeps coming out, it turns out that Obama’s polished statements had been carefully vetted by his staff, but coldly calculated to deceive the buying public.

Any salesman employing such deceitful business practices would be prosecuted in a New York second. But nobody has brought a class action suit against Obama or his administration for massive and unmitigated fraud. No attorney general from any one of the 50 states has filed charges. The conclusion one would have to reach is that the government has the right to commit fraud.

This is where everything gets interesting. Under John Locke’s consent of the governed and the social contract, it is the public who possess all rights. The people are the ultimate power, not government. The governed must give consent to a government in exchange for protecting everyone’s rights and to promote the public good. Otherwise, government would lack legitimacy and legal authority. The upshot: the people are the masters and the government is the servant. This is the fundamental bedrock of Western Democracy and individual liberty. But there are limitations to this social contract. The people cannot loan to government rights they do not possess. In other words, you cannot give what you don’t have. For instance, since people do not have the right to commit murder, they cannot lend such power to the state. However, since the people have a right to self-defense, government can be given the means to organize armed citizens into a military structure for the common defense.

But, what about the right to commit fraud? If the government can freely carry out fraud without prosecution, this would mean that every citizen also has the right to commit fraud without legal recourse. Citizens must have the unalienable right to be fraudulent, otherwise where did the government get the right to freely engage in deceptive practice with impunity?

Of course, every government at every level should not be immune to prosecution from fraud. But as is clearly illustrated by Obama’s fraudulent claims about his government-directed health care law, their crime of fraud is being ignored. Therefore, something is amiss. Are the citizenry empowered under the consent of the governed, or have the people been sold a fake bill of goods? Whatever the case, there is apparently a double standard. Fraud is fraud. If it is not, then at least someone should be honest enough to explain why.

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Lawrence Samuels's picture
Columns on STR: 14

L.K. Samuels is the editor and contributing author of Facets of Liberty: A Libertarian Primer, first published in 1985. His new book, In Defense of Chaos: The Chaology of Politics, Economics and Human Action, was published in 2013. All of his books are available at www.lksamuels.com.


Mark Davis's picture

The state is legalized fraud writ large, ObamaCare is only the latest iteration.  The bill of goods called a "social contract" being sold as "the consent of the governed" is massive fraud.  The Constitution is a fraud.  Fractional Reserve Banking is legalized fraud.  All laws condeming perpatrators of victimless crimes are a fraud.  Creating boogeymen to justify the police state and sending soldiers throughout the Empire is pure fraud.  I'm hardpressed to think of anything the state does that's not a fraud.

Jim Davies's picture

A century ago, the health-care industry was in chaos. Every physician offered help on his own terms, with a charge varying at his own discretion;  nobody had a right to health care and if not satisfied in one clinic, one could turn on a dime and consult another. Hospitals often had to rely on charitable contributions. And few people had any insurance at all!
Today, none of those things is true and if all goes according to plan before Obama leaves office, everyone will have the right to care paid for by one government agency. Order will prevail at last.
So Lawrence, I'll take the chance to recommend your fine book "In Defense of Chaos" to one and all. It's a brain-strainer in parts but overall, a masterpiece. And thanks for this article.

livemike's picture

"Has Government Legalized Fraud?"
Where have you been? Social Security "Trust Fund" anyone?

Paul's picture

"The upshot: the people are the masters and the government is the servant."

"Therefore, something is amiss."

You have detected something is wrong with this picture, which is correct - but haven't decided exactly what. I believe one of your premises is questionable, that rights exist at all. See this:

Everything clears up if you abandon this notion, and look at the whole thing as being driven by self-interest and will. Those in government have discovered they can get away with certain behaviors that wouldn't be tolerated normally. Of course the whole notion of a social contract is bogus; see for example:

It is no surprise at all that people in government routinely engage in fraud. Whether it is "legalized" or not is entirely irrelevant; in fact the notion of legalization is itself fraudulent. It is only when you accept *some* government propaganda as true, as a correct description of reality, that you have to indulge in cognitive dissonance to try to make sense of things.

People in government and out of it are always motivated by self interest. Rights are only a meme, and a not very consistent or useful one at that - although it is pretty useful to the ruling class, who have relegated to themselves the job of arbitrators of rights. Will is what matters, not rights.

Woops, on re-reading, I see you are asking questions for others, rather than implying you believe in these fanciful things yourself. Or maybe not? It's a bit hard to see where you stand actually...