Can a Cypriot-like seizure happen here in the United States? Could Congress seize half of my savings and call it a tax? Let's see if there are any constitutional protections against it.
Perhaps the most likely constitutional protection that would be used against something like this is the 8th Amendment protection against excessive fines. However, the term is excessive and it does not prevent the government from seizing a minor or small amount of your savings account, perhaps 10 to 15 percent would not be considered excessive. If it came down to it, it would be whatever Congress felt they could get away with.
A move toward a less excessive and more responsible government is probably the best defense against a bail-out seizure like the one recently witnessed in Cyprus. Let's first work on making certain this type confiscation of can't be deemed as necessary.
But safeguards need to be in place, because of on a voluntary basis, it has happened here in the United States before.
It was the panic of 1907 that led to many big, rich dudes using their own money to bail out banks. That led to the creation of the Federal Reserve System. But what would happen if the Federal Reserve ran out of bail-out cash?
If ever there was a crisis that would cause the US Government to seize the savings of it's citizens, you can bet there would be a run on the banks first. There were be a massive effort to hide assets away into tax shelters and overseas accounts. Now that we have Cypress as an example, people will recognize the signs and prepare. If there is ever a chance that this would happen elsewhere or the US, chances are, there would not be a lot of money to confiscate. This, perhaps, is the best defense against something like this happening in the United States. No matter what a government does, the truly wealthy know how to protect their wealth.
It may be better for Congress to take action now to make such action unlawful. I am not speaking about another 13-hour Rand Paul-type filibuster. We need an actual law that would cause a super-majority of both houses of Congress to repeal. This would be a better option than trying to get a guarantee from a Administration that may be out of power before the crisis arrives. The crisis may be around the corner, and that makes failure to act immediately would be risky.
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