From the December 1998 Idaho Observer:
How the Idaho School Trust Fund and Endowment Lands became "The Great Giveaway" to the global consortium
One by one we have allowed policians to rape every pot of money that it finds. We have allowed them to tax us heavily to operate our businesses, cater to our vices and amusements and we have allowed them to steal the Social Security Trust fund. By 1998, politicians have been allowed to steal everything including the posteritys' inheritance of deceased family members' belongings. With very few pots of money left to exploit, the state of Idaho convinced voters to approve a constitutional amendment that will allow "our" new governor to play Wall Street roulette with the State of Idaho School Endowment Trust Fund.President John Adams said long ago, "All the perplexities, confusion, and distress in America arise, not from defects in the Constitution or confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation."
Have we been fooled again? Has this last election shown, once again, that President Adams was right?
Are the Idaho people dupes, wholly ignorant of the nature of coin, credit and circulation, as evidenced by the passage of State constitutional amendments allowing the state to "play the market" with our school fund and sell off "our" school lands?
by Hari Heath
In 1889 as Idaho was becoming a state, the founders of our state valued both the importance of education and the stability of the resources and investments which were to fund Idaho's education system.
In simple terms, for those who are unaware of what "we" once had, "our" schools were funded largely by the interest generated by the School Endowment Fund (SEF). This fund was established by the sale of timber and grazing rights on School Endowment Lands.
When Idaho was admitted as a state the federal government provided for sections 16 and 36 of nearly every township in the state to be State Endowment Land. When timber was sold or grazing fees paid, the proceeds were deposited into the SEF, minus 15 percent to operate the Idaho Department of Lands which currently administers the endowment lands.
The SEF is then invested in "secure" investments like government bonds. The interest generated from the bonds is spent on the annual school budget, while the principle remains in the endowment fund to be continually invested in these relatively stable, but lower-interest investments.
In principle, this is a very sound method of funding public education which has been used effectively in the state of Idaho for over a century.
The foundation for the funding of our schools begins with our School Endowment Lands. As the land produces, for example, timber, the resulting revenue is deposited in the fund. This is an economy of "substance," based on the productivity of a renewable resource, held in trust, to fund public education.
Remember, when the current system was instituted, a "dollar" was a dollar of substance that was minted from precious metal. At worst a dollar was a paper "note," redeemable in the same amount of gold or silve (our current "faith in fiction" economy backed by nothing began in 1913 when the foreign owned "Federal Reserve" Bank was formed).
So why change it if it has worked just fine for over a century?
This SEF, where the resulting substance of the bounty of the trust lands is held, "can be invested only in instruments that carry a promise of full repayment. Primarily, this means investment in government bonds," states the Statement For the Proposed Amendment (H.J.R. No.8).
As the same Statement For the Proposed Amendment states, "This narrow investment requirement has cost endowment beneficiaries dearly."
Well yes, government bonds are relatively stable, but low-interest investments which unavoidably provide less return than say, Hillary Clinton's investments in the livestock futures market.
The Statement For the Proposed Amendment further claims, "The current investment restrictions are over 100 years old and do not follow modern business practices. Loosening the investment restrictions will provide the state with the ability to engage in up to date investment strategies and policies, and will enable it to diversify its portfolio and receive higher rates of return."
The claim doesn't state that higher rates of return are only possible with greater investment risk_including the possibility of lower rates of return and the risk of a complete loss of endowment's funds.
The endowment lands themselves are at risk, allowing them to be sold rather than exchanged for land of equivalent value. As the Statement For the Proposed Amendment (H.J.R. No. 6) claims that "Creating a Land Bank Fund lets the state eliminate the current, cumbersome requirement that land exchanges must be performed to acquire land for the public school endowment."
Should the state be unencumbered to broker away our school lands? They will still be limited to sales of no more than 100 sections per year (64,000 acres). With approximately 2 1/2 million acres of endowment lands left, it will take them almost 40 years, at the currently "legal" rate, to sell off the endowment lands held in trust.
Federal delegation, president paved the way
While the voters have chosen to amend the Constitution and allow these changes, none of it would have been possible without the help of the entire Idaho Congressional Delegation of "conservative" Republicans and President Clinton.
"Our" senators and congressmen fast-tracked the legislation necessary to implement these changes to the state Constitution. The 108-year-old Idaho Admissions Act was amended by H.R. 4166, to convert "our" educational funding system from its current economy of "substance" to a real estate and stock market brokerage firm.
President Clinton has signed the legislation and the Idaho voters have passed the amendments, so off "we" go to Tokyo.
A press release from the Idaho Congressional Delegation, dated October 8, 1998, states, "It allows the Board of Land Commissioners to combine state endowments by treating both land and fiscal assets as one trust."
Governor elect and Senator Kempthorne said, "This bill allows the state to use the latest investment techniques in managing our state endowment lands."
When Kempthorne becomes governor next January he will also be the chairman of the Idaho State Land Board who will be less "encumbered" by the Constitution and will be free to use the "latest investment techniques" with endowed education funds.
Should the governor buy a few yen? Should he buy some Brazilian notes? Or, should the governor just thrust the future funding of Idaho's public education into to the hog futures market?
Macintosh or Microsoft? GM or Ford? How should the governor place his bets with "our" 100-year-old school trust fund?
Senator Larry Craig (R-ID) said "This legislation brings the management of endowment lands into modern times and employs today's financial tools for the benefit of Idaho's children. With these changes, funding for public schools will dramatically increase."
Yes, as long as the global super derivative economy doesn't collapse.
"We've pushed the Admissions Act through Congress like a meteor, and now the president must quickly sign our bill or risk millions of dollars for Idaho school children," Representative Helen Chenoweth (R-ID) said.
"Pushed...through," like the 8,000-page omnibus "budget" was "pushed through" recently without a single congressman having been allowed the time to read the things that they have just foisted upon us.
"Risk millions of dollars for our Idaho school children," Chenoweth said.
You bet. The approximately $400 million endowment fund is now at risk. This may be the last generation to benefit from the fund now that the wolves on Wall Street will soon have access to our school fund and, therefore, our endowed and entrusted school lands.
Whenever a politician starts saying that he is doing something "for the sake of the children," watch out_ something bad is coming and it will be wearing that, "it will be good for you and yours" cloak.
With the Asian markets on the brink, Russia's devalued economy teetering, much of Europe about to embark on a continental currency adventure, the bankrupt IMF somehow bailing out Brazil and Y2K less than 400 days away, do we really want "our" school funds thrown into the global super derivative economy?
Do we want to end sound, a century-old economic plan for the promise of better interest with higher risk? Should we put the future of Idaho's education on the Dow Jones Industrial roller coaster?
We did, with the help of "our" "conservative" Republican congressional delegation.
The foundation of our State School Endowment Funds was built upon an economy of substance. Our state founders did understand the nature of coin, credit and circulation. Apparently "our" current leaders took advantage of the fact that the people of this state do not understand the nature of coin, credit and circulation.
"Our" congressional delegation and the state legislature wanted to be allowed to put "our" school endowment funds into the global markets. And the majority of Idaho's voters were duped into voting for it. For the sake of the children.
"All the perplexities, confusion, and distress in America arise, not from defects in the Constitution or confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation."
Mr. Heath is a founding member of the Benewah County Committee of Safety, a logger and a perpetual pro-se litigant.
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