The federal government owns more than $3 trillion worth of assets. Many assets are underutilized or completely unused and would be more productive if shifted to private hands. Selling even a portion of these assets would greatly reduce the borrowing necessary to keep the government running.
A good place to start would be federal land. The federal government owns about 650 million acres of land, or nearly one-third of the entire country. There is no reason for the government to own this much land. It has proven to be ineffective in both economic and ecological management.
The environmental protection of many national parks is neglected by government administrators whose incentives are for a larger bureaucracy and a larger budget.
All national parks and other environmentally sensitive areas should be put in the hands of private conservation groups. Organizations such as the Audubon Society and the Sierra Club have a stellar record of managing such spaces.
However, these lands make up a small portion of the government’s total. Much land is already being used for economic purposes such as mining, grazing and logging.
Areas such as these should be sold to private buyers, who will manage these resources more efficiently. In terms of debt reduction, the federal government values its land and mineral rights at $753 billion, so even a partial sale could yield significant revenue.
And land isn’t the only asset the government is sitting on. There are currently about 9,000 tons of gold sitting in vaults at Fort Knox and the New York Federal Reserve. These are the United States’ gold reserves, worth about $430 billion at current market prices.
These reserves have served no real purpose since the dollar was taken off the gold standard in 1971. Some argue this gold is necessary in case of a national emergency.
What emergency could be greater than the rapidly approaching fiscal train wreck? Even though the price would drop with the announcement of a sale, current prices are so inflated that the government would still get great value. Why not put the gold into the hands of the American people?
Another great way to reduce debt would be privatizing federal business ventures. The government runs several companies in industries already proven to be effectively served by the private sector. The most prominent examples of these are the U.S. Postal Service, Amtrak and federal power companies such as the Tennessee Valley Authority.
Bureaucratic administrators do not have incentives for efficiency or effectiveness, and thus these agencies are prone to cost overruns and mismanagement.
Often, they also face obstacles outside their control. (Consider a very unprofitable Amtrak line: A manager knows it makes sense to shut it down, but realizes he cannot because it has a stop in the congressional district of a very powerful representative.)
Usually, the only arguments for continuing government involvement are based on narrow self-interests. Residents of Tennessee want to keep their cheap subsidized electricity, and postal-worker unions want to keep their generous pensions. Both are benefiting at the expense of the nation at large.
In terms of sale revenue, the TVA alone is worth $13 billion, according to NASDAQ. A large-scale privatization of all federal business ventures could reduce the debt by tens of billions of dollars.
There are still more unneeded assets. The Treasury Department’s 2010 financial report said more than $10 billion worth of government operating materials and inventory are “excess.”
In addition, a report commissioned by President Barack Obama identified nearly 70,000 federally managed buildings as either excess or underutilized.
Clearly, there is a great deal of money that could be raised through a sale of federal assets. If the government just sold off half its land, half its gold, all excess property and privatized its business ventures, it could reduce the debt by more than $600 billion.
John Kendrick is a Koch Summer Fellow at the Washington Legal Foundation.