Contract Clause
The great majority of Americans today don't seem to know what the Constitution's contract clause is. They don't have much chance to know it, either, because the federal government and the public education system deliberately keep them from knowing about it. And this in turn is because it has been Progressively raped and mutilated by the government for approximately 100 years now.
The contract clause is the first clause in Article 1, section 10, of the U.S. Constitution. And it states: "No State shall . . . pass any . . . ex post facto Law or Law impairing the Obligation of Contracts."
In other words, the contract clause says that as long as a contract is voluntarily (not coercively) entered into by all parties concerned, and as long as it is completely legal at the time of such entering, no state government and no part of the federal government can alter it in any way or nullify any part of it. It does not make any difference if, with the 20/20 vision of hindsight, it later on gets decided that there needs to be legislation on the books that does prevent parts of or all of such contracts from being entered into in the first place. It does not make any difference if some people in the public or in the government are of the personal opinion that the contracts are "unfair" to certain people or groups of people. If the contract is legal at the time it is written and entered into, the government is bound to enforce that contract as is and not allow any violation of it. With regards to all contracts that are legally drawn up and entered into, the government is nothing more or other than soldier, police officer, or judge. It is never arbiter orabridger, but must enforce the rights of all concerned parties with respect to the contract as is, no exceptions.
The contract clause allows for new legislation regarding what private agreements can and can't be entered into, but that new legislation can only ever be strictly going forward. So, in other words, if there is a legally entered into contract already in force at the time when new legislation gets passed that would make part or all of such a contract from that point onward illegal and forbidden, that already-in-force contract is not nullified, it is not abridge, and the government cannot step in to alter it at all. It must, in fact, protect it. It's just that once all such contracts expire or are satisfied, their kind shall cease to exist.
Now, the contract clause was actually one of the very final parts of the Constitution to be added in to the document. It was added in late because, as intelligent people do, the Founders were going over what they had written up and some of them saw that if they didn't stop the government from passing ex post facto laws, especially concerning contracts, that that is exactly what the governments would do. As the Founders knew from hard experience, the state governments, and the federal government, would conspire to show favor to their pocket-padding constituents--and those constituents at any time are those who raise a hue and cry to the government to save them from the evils of those who entered into contracts that don't favor them.
But many of those at the Convention criticized the contract clause, saying that it might prevent or interfere with the government being able to act in times of emergency. But the very wise James Madison recognized this fact as being merely an "inconvenience" compared to the rapacious way that the governments would use their powers if they were not checked with this clause.
He was correct, of course, and so of course the racist, elitest, power-mad Progressives sought to obliterate the contract clause. And of course, it was under the devices of FDR, in 1934, that the great rape really began. In a 5-4 decision in Home Building & Loan Association v. Blaisdell, the Supreme Court upheld federal legislation passed as an "emergency measure" to prevent or stall bank foreclosures on home owners who failed to make their mortgage payments in a timely manner. The Court's majority opinion, written by Chief Justice Hughes, said in part: "Not only is the constitutional provision qualified by the measure of control which the State retains over remedial processes, but the State also continues to possess authority to safeguard the vital interests of its people. It does not matter that legislation appropriate to that end 'has the result of modifying or abrogating contracts already in effect.'"
It doesn't matter?!? Yes, ghost of Injustice Hughes, it does matter--it matters entirely. What did this Supreme Perversion eventually lead to? It lead to what the Obama Administration and his Congress did in 2009 with the gutting of Chrysler and GM. Chrysler's bondholders had their contracts violated to the tune of taking a 70% loss, while the UAW union illegally received stakes in the company--all financed by taxpayer money. Over at GM, bondholders were given a paltry 10% stake in the company while the UAW got 39%--again, all of this in complete violation of all concerned contracts, in complete violation of the Constitution, and at taxpayers' expense.
Obama, this might be how they do things in your precious Indonesia, but it's not how we are supposed to be doing things here in the superior United States. You are a fraud of a President, Emperor Dumbo. Time for you to go. We will bring back recognition of the contract clause to this nation. Get out while you still can.
contract clause