The National Debt
The National Debt
The federal debt of $5.7 Trillion, or $21,000 per child. This chapter covers all U.S. debt,
called National Debt (national debt is here defined as the sum of all recognized debt of
federal, state & local governments, international, private households, business and
domestic financial sectors, including federal debt to trust funds - but excludes the huge
un-funded contingent liabilities of social security, government pensions and medicare).
The National Debt Total is now over $27 Trillion, or $101,000 per man, woman and child.
To get you started since ‘a picture is worth a thousand words’, following is one of the
many pictures shown in the Full National Debt Report via its link at bottom this page.
This is A SCARY CHART - showing 4 decade trends of national debt (the red line,
reaching $25 trillion) vs growth of the economy a measured by national income (blue line),
adjusted for inflation in 1998 dollars.
National debt is here defined as all U.S. debt (sum debt of federal and state & local
governments, international, and private debt, incl. household, business and financial sector,
including federal debt to trust funds).
Note from 1957 to the early 1970s each curve approximately doubled - meaning about the
same ratio of debt was supporting national income growth, despite paying on old WW II
debt and covering Korean and Vietnam wars. e’s a representative chart of the many shown
in the main National Debt Report, linked below. Look at that chart. Which line goes up
faster, the red debt line or the blue
Had the economy become less debt dependent after that we would have expected debt to
slow down. But, instead, it took off.
In just the 1990s real debt increased more than two times faster than growth of the total
economy - - despite zero cold wars.
Other charts show the driving culprits were not only federal government debt ratios
(which stopped falling in early 1970s soon after to reverse strongly to the upside -
growing twice as fast as the economy) - but, not to be left out, other main culprits were
accelerating household debt (growing nearly twice the rate of the economy, and domestic
financial sector debt growth (at rates 4 times faster than general economic growth).
This chart clearly shows the accelerating reliance on debt to drive economic growth in the
past 2 decades, compared to prior periods.
After years of successfully ranching in California, Wayne & Jean Hage (she is now
deceased) purchased a large cattle ranch in Nevada, Pine Creek Ranch, in the spring of
1978. The acreage involved is approximately 752,000 acres. However, as it is mostly
desert land, the land’s ability to support cattle is far less than might be supposed from its
Located in the high desert mountains of central Nevada, the remote operation seemed an
unlikely place for a war that would rock the very foundation of federal land management
agencies. Wayne purchased the operation from the well-respected Arcularius Brothers
who sold the ranch because the regulatory pressure by the U.S. Forest Service had
become unbearable. Since Wayne had always been able to work with the agency, he
believed he could resolve problems that might occur. Wayne soon learned the only way he
could satisfy the Forest Service was to allow them to confiscate his property.
One of the first incidents that drew the line between Wayne and the Forest Service
revolved around a critical spring that Wayne owned. Situated close to the Forest Service
Ranger Station in Meadow Canyon, the district ranger decided they would pipe the water
from the spring, through a newly installed $50,000 water purification facility, into their
Wayne learned of this after the project was complete, and rightfully objected. He
explained that if they needed his water, they could make appropriate arrangements. They
refused to cooperate and would not acknowledge that he owned the water even though he
held two court decrees affirming his water right. Wayne even held a field hearing where
the state water engineer acknowledged Wayne’s ownership and the Forest Service’s illegal
confiscation. But, still today, the Forest Service has maintained a fence around the spring
so that cattle and wildlife cannot drink, and the water is still being piped into the ranger’s
Because Wayne questioned the Forest Service’s actions, the Forest Service began an
unbelievable retaliation campaign. In a 105-day period they sent Wayne 40 certified letters
and personally visited him 70 times, each time citing him in violation of a bureaucratic
regulation. Wayne had to respond in writing and take corrective action to each one of
their allegations, no matter how trivial. In fact, most, if not all, were wild goose chases or
violations the Forest Service themselves had created.
Some of these charges stated Wayne was not maintaining his drift fences. In order to
comply with their rules, Wayne would check and mend if necessary the fences in question.
One of these incidents involved sending a horse and rider to the top of Table Mountain to
ride the 20-mile fence line. After doing this, the rider found only one problem. There was
one staple missing. The Forest Service had dutifully marked it with a blue flag.
Also, among these charges were 45 accounts of trespass where Wayne’s cattle were
allegedly found in the wrong location. For every one of these, Wayne would send a crew
of riders to locate the cattle and attempt to comply with the regulations. Often, there were
no cattle to be found, leaving Wayne to wonder if there ever were. Also, on several
occasions there were eyewitnesses who watched the employees move Wayne’s cattle into
trespass areas, and then immediately cite him for the violation.
Over the next eight years he filed three administrative appeals, and won all three. They
cost him over $150,000 in attorney and consultant fees, not to mention the countless
hours, personal resources, and lost income also expended. Twice, his pickup was shot at
while he was close by, a not so subtle warning. His wife and children were run off the road
personally by the District Ranger.
Even though he , the agency would create new regulations that would wear Wayne down,
force him to expend his time and resources fighting their new regulations, and eventually
run him completely out of business. The final straw came when the Forest Service
confiscated at gunpoint over 100 head of his cattle. Armed with semi-automatic weapons
and bulletproof vests, 30 Forest Service riders confiscated his cattle in July of 1991.
Although they had no legal justification for their actions, they took the cattle, handed
Wayne a bill for their cost of gathering the cattle, transported the cattle to a sale yard
which refused to auction the stolen cattle, and eventually the Forest Service held their own
private sale and kept the proceeds.
The confiscation did not go quite as planned, however. They needed to infuriate Wayne to
the point that he would also come armed and give them the excuse to eliminate Wayne
altogether. Wayne came armed, but with a 35 millimeter camera. Just more evidence for
the case he knew he would have to file.
September 26, 1991, after being forced to sell every cow he owned in order to comply
with federal regulations, Wayne filed a landmark takings case, , for the regulatory and
physical taking of his ranch.
A year later, the same agency filed two felony charges against Wayne for clearing scrub
brush from his legally owned right-of-way. Although the Forest Service knew he was not
in violation and admitted this on the record later, they also knew filing criminal charges
against him might force Wayne to drop his takings suit. After loosing the case at jury trial,
Wayne prevailed before the Ninth Circuit, overturning the felony charges against him.
What’s It All Really About?
In a recent radio interview on in Asheville, NC, Hage spoke about the true nature of the
case. What he said was that basically all of this has to do with our national debt.
Excerpts from WTZY interview:
“During the Civil War we accumulated $2.8 billion worth of debt which the North owed
mainly to the House of Erlinger in London and the House of Rothchild in Paris, who had
financed both sides in the War. We couldn’t pay the debt, so for the first time in our
nation’s history they decided to collateralize that debt with the mineral estate of the
Western lands and Alaska. During the late 1800’s we were able to internalize that debt to
where we owed it to ourselves.
In the 1960’s the general teaching of Economics 101 was that we shouldn’t worry too
much about our national debt as we owed it to ourselves, and hence it wouldn’t have to be
paid off. Besides all that gold, silver, gas, oil and other mineral rights out west more than
adequately collateralize it.
“We got the land and the mineral rights away from the Indians, and we said, oh, we’ll
make a deal, we’ll have a nation-to-nation relationship with you, and we will provide for
the education and health care and housing of your people;”
- President Bill Clinton, July 12, 1999, Remarks to the National Academy Foundation
Conference in Anaheim, California.
But during the initiation of the Great Society and the Vietnam War we began once again
to borrow from overseas, as we didn’t want to tax ourselves enough to pay for what was
needed. We began to “externalize” our debt, a fatal mistake. Well, when we began to
externalize our debt heavily, Charles deGaulle of France said, “I don’t think you fellows
can redeem your dollar debt with gold.” We said, “Oh, yes we can!” So he said that he
would rather have gold and began to raid our Treasury. When Nixon became President, he
was faced with this mess and had to close the gold window; we were running out of gold.
We, in effect, were running out of collateral.
“Finally, the bill includes an unjustified transfer of millions of dollars of mineral rights to
the State of Montana. I intend to use my line item veto authority to cancel the dollar drain
on the (U.S.) Treasury that would result from this unwarranted action.” - President
Clinton, November 14, 1997, Statement on signing the Department of the Interior and
Related Agencies Appropriations Act of 1998.
What Nixon did next, and what stunned a lot of folks, was to set up the Environmental
Protection Agency (EPA), and we began to pass massive laws. And for what real
purpose? All of them have had one effect collectively, whether at the Federal, state or
local level. The one thing they all do is that they effect the transfer of private property out
of the hands of private individuals and place that property into the hands of government.
Now what is that all about?
Well, when we ran out of gold and, in order to keep the foreign interests from cashing in
their bonds and notes and imploding and destroying the US economy, we had to show
them that the resources of the US adequately collateralized their debt. In order for it to be
properly collateralized, we had to show them that US citizens and US interests would not
be developing, drilling and mining those resources. The effect of this was to disenfranchise
American citizens of access to their resources for the purpose of making their resources
available to the international financial interests that hold the debt of the US. Indeed, at the
present time, about 40% of all our debt is held by and owed to foreign interests.
“… This exchange of land, mineral rights, commercial properties, and natural treasures
between the United States and the State of Utah is the largest such land exchange in the
history of the lower 48 States. The exchange will help capitalize a long-neglected State
school trust by putting it on solid footing and allowing it to pay rewards to the children of
Utah for generations to come. The United States will obtain valuable land, thus allowing it
to consolidate resources within the Grand Staircase-Escalante National Monument, the
Goshute and Navajo Indian Reservations, and the national parks and forests in Utah. I
especially wish to thank Secretary of the Interior Bruce Babbitt and Kathleen McGinty,
outgoing Chair of the
Council on Environmental Quality (CEQ),
for their contribution to this major achievement.”
- President Bill Clinton, October 31, 1998 speaking about H.R. 3830, the “Utah Schools
and Land Exchange Act of 1998.
Look at the mines. Where I live, in Nevada, we have major mines all around us. At one
time they were all owned by US citizens. But now the only mines here that operate are
those held by those countries that own the debt of the U.S. If you or I discovered a major
gold deposit, neither our kids nor we would ever live long enough to mine one shovel full
of it. All the rules, regulations, and laws would drive us under. We would have to sell out
for nothing to the government or to a foreign entity, who would find their ability to mine it
would be rather easy. (Editor’s note: The recent seizure by President Clinton of over $1
trillion dollars worth of high grade coal in Utah to establish a “park” was settled by the US
government paying the owners merely $14 million dollars for research and development
costs of the coal. See story on Page 28 of The Asheville Tribune, Hage-Report special
Another little known but important fact that should be remembered is that treasury bills
and debts held by foreign interests are secured while those held by US citizens are not.
Little by little, our entire form of government is being reversed. A fundamental tenant of
economics is that all wealth comes from the land; every bit of wealth originates in the land.
The cornerstone of a truly free society is the ownership of private property by the people.
In such a society the people own the means of production. In a totalitarian society, the
opposite takes place. There, the government owns the land, the wealth, and the means of
production. They, in effect, rent the land to the people.
“As President, I have worked very hard to honor tribal sovereignty and to strengthen our
government-to-government relationships. Long ago, many of your ancestors gave up land,
water, and mineral rights in exchange for peace, security, health care, education from the
It is a solemn pact.”
- President Clinton, Remarks to the Conference on Building Economic Self-Determination
in Indian Communities, August 6, 1998.
And what this means is that in a free society where the people own the land, the
government has to come to the people for its operating budget - for tax dollars in order to
operate. The government has to listen to what the people have to say. That is the essence
of a free society.
In a totalitarian society where the government owns the resources, they don’t have to go
to the people for funds to operate.
over 40% of the resource base of the U.S. (Shaded areas of map above.) The corporate
U.S. government has come to have its own assets and is having to listen less and less to its
citizens. And it is attempting to get more and more property under the guise of
environmentalism. If you really want to find out who is really behind all this, follow the
money of who is behind and invests heavily in the environmental entities. It is big money,
and comes from powerful interest groups from all around the world. A couple of excellent
books I would advise you to read are Trashing the Economy and Undue Influence by Ron
Arnold if you really want to find out who the real powers are. They can both be obtained
from Stewards of the Range in Idaho; their phone number is 208-336-5922.
Now, as I have said, that if laws protecting private property can be weakened, the value of
the property declines. As government regulations increase, the productive capacity of
private property decreases and the value of the property itself is reduced. Government
ownership of and regulation of the lands and resources of a nation have never in history
provided for a free society, nor for a productive one. (Editor’s note: Even today in Russia,
after the recent “democratic” revolution, the government owns all of the land. The Russian
citizens cannot own land in Russia.) Taking productive resources and lands away from
citizens under the guise of “protecting” the environment is simply a method by which the
government steals power for itself.
Karl Marx considered the elimination of private property key to the establishment of a
socialist government. There was good reason behind this premise. If people had no value
left in their property that value must be in the hands of government. The terms property
rights and property control are synonymous. Property rights are the ability of the
individual to exercise control over his property. It is only through the right to control the
use of property that the individual can make the property produce value or wealth. If
regulation or law transfers control over one’s property to the government, then the ability
of the property to produce wealth is also transferred to the government. Marx was right.
The elimination of private property is essential if socialism or is to supplant a free
During a Congressional hearing, regarding Federal land acquisitions that had been done
without State or Congressional consultation, Rep. John Shadegg asked Secretary of the
Interior Bruce Babbitt to provide Congress with a list of other lands that were being
considered for further federal acquisition, Babbitt sternly responded, “No.” After a
stunned silence, the secretary added, “I don’t mean to be disrespectful.” However, Babbitt
told the Committee that if they did not cooperate, he would ask the President to “use his
power” to get more lands with or without their approval.