The federal debt’s $20 trillion, and the fastest growing part of it — entitlements (which make up 60% of all federal spending) — are surging as baby boomers retire in droves. Interest on all this red ink is piling up and rising interest rates are only going to make things worse. So Uncle Sam’s broke, right?
That’s the common view.
Not so fast. If you’re only looking at the liabilities side of a company’s balance sheet, you only get half the story. At the end of its last fiscal year, Apple AAPL, -0.13% had $75 billion in long-term debt. Think Apple’s broke? Of course not: the other side of its balance sheet shows that the company is sitting on tons of assets.
Yet this is how we evaluate the federal government. We look at its liabilities while ignoring its assets. Think the feds are broke? Not so fast, says a 2013 report from the Institute for Energy Research, which points out that the government owns “above ground” assets such as “buildings, lands, roads, railroad infrastructure, levees, dams, and hydroelectric generating facilities, to name just a few, many of which are underutilized,” and “below ground” assets such as “rights to mineral and energy leases, from which they receive royalties, rents, and bonus payments.”
Let’s focus on a giant part of this: Mineral rights for oil and gas reserves.
More @ Market Watch
I've always wondered how much cold cash the government could generate this way. It's a one time shot, however! Once sold, it's gone. The spendthrift ways of Congress would also have to change, or we'd be back in the same shape but without assets to sell.
ReplyDeleteThe Virgin Islands. How much could we get for them?
The Virgin Islands. How much could we get for them?
DeleteDamn, can we actually sell them? If so, as you alluded to, there would have to be a non-changeable resolution passed prohibiting any further debt about the balance we would owe after the sale. Thanks.
Which oligarchs will buy them? Joking aside that is going to be a problem though the idea is sound.
Deletegoing to be a problem though the idea is sound.
DeleteAs the article points out, but maybe some good could come of it.
The Constitution did limit the real estate that the Federal government could hold for itself. The rest should have been dispensed with long ago. Perhaps let the states assume control of some of the park lands and the rest put up for auction in lots that anyone could bid. That would also relieve us of forest service, fish and wildlife, and blm personnel that seem to think they own the federal lands. That would get rid of non producing assets and non producing personnel. indyjonesouthere
ReplyDeleteThat would also relieve us of forest service, fish and wildlife, and blm personnel that seem to think they own the federal lands.
DeleteHadn't thought of that and would be an excellent result.
Potentially good; potentially bad. I kind of like the parkland, keeping things natural. Why develop everything?
ReplyDeleteI'd rather he just defaulted on the debt. And could just cut the empire, as I've said too many times before.
'd rather he just defaulted on the debt. And could just cut the empire, as I've said too many times before.
DeleteThanks.
I'm also on the 'not sure this is a good idea' side. If only the good guys were allowed to purchase these assets, it would be a good thing. If 'bad guys' who only plan to exploit / destroy the land were allowed to purchase, then I would hate for that to happen.
DeleteBut the urban real estate that taxpayers have to pay someone to be maintained - sure, sell them to the highest bidder. We are losing money on that, may as well stop the hemoragging on that front.
Thanks.
DeleteGot strawman? No one said 'develop everything.'
DeleteNothing remains 'natural' (or 'pristine' for the green jihadists) forever.
Continents move, forests burn, deserts become oceans and vice versa.
But for the sake of debate, let's assume the worst and a guy explodes a 'little boy' on the 1000 acres of forest land he's bought. Sure, it'd suck, but in a short amount of time (planetary wise), it'd be back to normal.
Eg. search how Hiroshima and Nagasaki look today.
Excellent.
Deletejoetentpeg,
DeleteThere are some neat things in the US. The Angel Oak in Charleston is ~400 years old. California has a nearly 5K year old pine tree.
Clonal colonies and fungal colonies can be much older.
Conservatives tend to want to preserve things, appreciate the natural.
Classical liberals want to advance "forward" developing everything, making everything efficient and rational. It's just a different philosophy.
You can certainly go overfar in any direction, but I don't want urban sprawl to pave over Yellowstone. You'll reply that won't happen. Well, no, but what will most likely happen is something wonderful will be paved over in some manner.
We have too many dang immigrants. There'd be plenty of space if we just shut off immigration.
Classical liberals are fine with immigrants so long as they support small government. I don't want immigrants. I'd rather nations each had their own little territories to call home.
I'd rather nations each had their own little territories to call home.
Delete100%
Thanks Brock. I've long been angry at most every group. The environmentalists, for example, want more immigration. And the current CofCC pres fussed at me on Disqus saying I don't know true conservatism; He suggested it's classical liberalism.
Delete*However*, now with the Internet, more people are sounding like me! So, maybe it's a generational shift. Before we had one-way communication which was making us all homogeneous in thought.
And the change could be for the worse. I dunno. I'm happy though. To me, it makes sense that I want at least some natural areas. And I want to preserve at least some unique wild species that serve no economic purpose. To me, that sounds "conservative".
To me, that sounds "conservative".
DeleteMe also.
They could always dig up that ten trillion dollars that
ReplyDeletethe Pentagon kiffed.
:)
Delete