Published: October 24 2008 09:39 | Last updated: October 24 2008 19:22
To solve a crisis of overleverage, the US government is piling on the debt. Oh, the irony. It is too early to know the exact hit to the public finances because that depends on the timing of the various bail-outs, the matching of bond issuance with the acquisition of assets, additional fiscal packages and, of course, the outlook for the economy. Needless to say, however, last year’s deficit of $455bn will be blown out of the water.
Plunging further into the red may cause interest rate or currency wobbles down the line. But, if any country is good for it, it is the US. Authorities have tax-raising powers, and, as sociologist Max Weber put it, a monopoly on the means of violence within its borders. Also, if push came to shove, the rich bits of Canada are there for the taking. There is, however, another way to help raise money: selling assets.
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At the end of last year, there were $1,580bn of assets on the government’s balance sheet. The fact that printing presses can be switched on at any time makes the number pretty arbitrary. Still, the near-trillion dollars of inventories, property, plant and equipment is real enough, of which almost 70 per cent is defence-related. Obviously, the US is not about to sell its uranium stockpiles but, according to the Government Accountability Office, the government – including the Pentagon – has “many assets it doesn’t need”.
That is only the half of it. Not even included on the balance sheet are the properties, land and heritage assets held in stewardship. How to value the Constitution is anyone’s guess. But neither is a monetary value placed on the 28 per cent of the US landmass owned by the government. Selling national parks (or Alaska) for mineral resources would be controversial but many environmental studies conclude wilderness areas are no better managed under state ownership than they are privately.
Welcome to Blackstone National Park.
