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Government yard sale could help bring down national debt
Posted By Caroline May On 1:08 AM 02/25/2011 In Blog - Caroline May | 31 Comments
With the government more than $14 trillion in debt and the Government Accountability Office (GAO) warning that the longer Congress waits to raise the debt ceiling the harder it will be for the Treasury Department to keep the government operating, some have suggested Congress take a note from Sanford and Son and start selling the junk it already owns.
So what kinds of crap can we sell off?
The federal government reportedly owns more than one fourth of the land in the United States. According to the “Budget of the U.S. Government for FY2010,” at the end of FY 2008, the federal government held $767 billion in land, and $421 billion in “mineral rights.”
In addition to land, the Office of Budget and Management reports that Uncle Sam also owns more than $1.17 trillion in fixed reproducible capital (things like buildings and machinery) and $290 billion in inventory.
Chris Edwards, director of tax policy studies at the Cato Institute, points out that many of these assets suffer from poor upkeep anyway,
“Many government assets are neglected and abused, and would likely be better cared for in the private sector,” Edwards noted. “The GAO also notes that the federal government has ‘many assets it does not need,’ including billions of dollars worth of excess and vacant buildings. The federal government spends billions of dollars each year maintaining excess facilities of the Departments of Defense, Energy, and Veterans Affairs.”
Americans for Tax Reform (ATR) has ideas for other, more recent targets. According to ATR, if the government were to sell off their General Motors shares it could bring in an estimated $18 billion. Further, ATR suggests that the government make GM repay the $30 billion it got from Troubled Asset Relief Program and leave the estimated $168 billion in remaining “stimulus” dollars unspent.
“The government is sitting on a hell of a lot of assets to be talking about defaulting on all of our debts.” Mattie Corrao, executive director of the Center for Fiscal Accountability, told TheDC. “GAO routinely estimates that the government’s management of its property and the management of its assets is high risk, because they simply don’t know. Not only does the government not know how many they own, how much it is worth, but they don’t even use half of them because they don’t even know they own them!”
Tad DeHaven, budget analyst for The Cato Institute, told TheDC that though it would be difficult to motivate congressmen to allow it, selling off land and buildings indeed would be a creative way to raise money.
“I’d also throw in the privatization of things like air traffic control, the U.S. Postal Service,” said DeHaven. “All this points to that we have such a massive federal government that is involved in so many things that requires offices and land across the United States. Even the best case scenario you sell the stuff off, but you still have all the programs in place, what is to stop is from growing back?”
For states facing budget shortfalls, Marc Scribner, Land-use and Transportation Policy Analyst at the Competitive Enterprise Institute, says that one way for states to help themselves would be to lease out their roads.
“State governments could grant concessions to private firms to manage their turnpikes/convert free highways to public-private turnpikes,” Scribner told TheDC. “These would result in immediate cash infusions to their coffers (for example,Indiana got $3.8 billion from their lease of the Indiana Toll Road) and improve infrastructure and service delivery.”
ATR believes that just selling some of the government’s junk would help delay and “buy” more time to deal with the debt crisis.
“Simply by selling the assets the government maintains, Congress could gain roughly four months and one week to debate comprehensive spending reform that would prevent lawmakers from fixating on the debt problem and refocus on the problem at hand: government overspending,” wrote Corrao on ATR’s website.
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