That position seems to be extremely problematic, since taken to its logical conclusion it would invalidate the judicial branch altogether. The courts exist as a check on the power of "the people", for the specific reason that "the people" can very easily become a tyranny of the majority. Or even a tyranny of the minority, if the minority has enough money and/or influence.
To me, the Stolen Valor act looks very much like a blatant tug at the heartstrings that conceals a very troubling abrogation of free expression. Does military service gives rise to an intangible property interest that should not be impaired by imposters? Yes, I think it does. However, the ideals that the military is in service to override that intangible property interest. Those ideals include free expression--the right, among other things, to mock things that others believe are important. There are no cows so sacred as to be exempt from that. All else being equal, I don't think people should pretend to have served in the military. But part of why I did serve is that I think the ideals that the United States has built itself on--free expression primary among them--need to be defended.
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