In the spirit of Astral Rejection’s thread here, I thought I would advance another idea to pay of the National Debt. Why don’t we force the government to sell off some of the federal land it owns. Force it to sell some dollar amount every year for the next ten years when the debt would be paid off? If you look at this map (note: I am not sure if these numbers are completely accurate, but I believe they are close as they match numbers I have seen before) you will see that the US Government has huge tracks of land, mostly in the west in quantities that should pay off the National Debt if sold off.
So, here are a couple of questions: Is this a good idea? If no, why not? What are some of the potential negatives impacts if this plan were implemented?
Solvency depends on (assets - liabilities). Reducing both assets and liabilities doesn’t address solvency … and fear that big creditors like China will eventually worry about U.S. solvency is the big debt fear.
I’m sure right-wingers will like your idea! They’re likely to get the White House in 2012 (and may even take over the House soon) and you can bet asset sales will be designed to enrich their friends.
It’s a bad, bad idea. The land held, once sold, is gone. Our debt is a function of us not matching revenue to outlays. Selling off land creates an appearance of solvency where there is no long-term sustainability.
No, we have to bite the bullet & raise taxes on persons making, say, 2 000 000 + per annum until we get it paid off. Maybe close some overseas bases or slow some DOD buying. And probably cut some of the monies for end-of-life care in Medicare. (I suspect the economic effects of an across the board tax, or even of swingeing cuts in federal employees, are just going to make things worse for the economy.)
Hey, here’s an idea. Reduce spending anyplace we can, and then set taxes to a level that actually covers our level of spending plus a little bit extra to pay off the debt.
Of course we should only do something this radical after we explore all the more sensible approaches such as bake sales, the “president for a day” contest, and auctioning off the rights to replace the stars on the American flag with corporate logos.
Much of the large tracts of land that the federal government owns would be largely valueless desert and mountainous wilderness if put up for sale, wouldn’t it?
Here is the first problem with your idea… All due respect and everything…
While we’re fantasizing, though, couldn’t we also force the federal government to stop sending our precious resources and young people to other countries to be wasted on war??
Good question, back to basics. It seems to be a big deal with everybody these days which is what led me to starting this thread. But in answer to your question, we are currently spending about 2% of our GDP (about 10% of federal government revenue) maintaining the debt. This may not be the worst thing (since I am paying a larger percentage of my earnings on my debt and I am doing OK), but this money could be much better spent.
Really? Damn, now I have to go take a shower. Yuck.
Yes, you are right. This would be a give away to the mainly Republican supporters made up of the wealthy and corporate interests. I am now completely convinced after thinking about it during the light of day that this is a bad idea. A much better idea would be to balance the budget by cutting spending and raising taxes.
You are right.
Yes, but I am sure that there are still Trillions of Dollars worth of valueless desert and mountainous wilderness.
What, you want to stop giving money to Halliburton and Xi (or Xu or whatever the fuck Blackwater is called these days)? Look, by stopping wars and interventions around the globe you are undermining the hard work and investments oh hundreds of lobbyists that have been working for decades to set our American Imperial foreign policy. Why do you hate America?
This is like the plans to pay off the deficit with the gold in Fort Knox. People don’t understand how big the deficit really is.
The United States owns about 650,000,000 acres of land. The national deficit is over $13,000,000,000,000. Now the value of the land owned by the government is going to vary. But it’s definitely going to be less than $20,000 an acre. Most of it is in remote areas with no commercial value where you’d have a hard time selling for $1000 an acre. And that’s before you flood the market.
Why don’t you just look to Canada for the solution? Twenty years ago, we were buried under debt, our government was taking up almost 50% of our GDP, and deficits were exploding. Today, our government is smaller than yours, we were running surpluses until the recession, and even now our deficit is lower than our economic growth and we’re forecasting a return to surpluses in two to four years.
The way we did it was simple - we just held the growth of government below the growth in GDP. The absolute size of the government isn’t the key metric - it’s the size of government relative to GDP that matters. The same is true of the debt and deficit. If you can hold deficit growth below the rate of GDP growth, then the debt as a percentage of GDP will start to come down. If you can hold the growth in the size of government below the rate of GDP growth, then your government will slowly fall back to a reasonable size, without having to enact major cuts.
The problem the U.S. has isn’t the current deficit and debt, although that’s outrageous. The problem is that the situation for both is projected to explode at a rate much faster than the projected rate of GDP growth, consuming an ever-larger slice of the pie.
You aren’t going to solve this with one-time fixes like selling off land. The problem is structural - you’ve promised more in government benefits than you can afford, and you’re really bad at delivering those benefits efficiently due to the fractious nature of American government and the inordinate influence of special interests and rent-seekers.
Just to add on the pile on, if we were to flood the market with a bunch of land we’d massively damp land prices across the nation. That would lower property tax revenues and put a bunch of states in the red.
I think one of the problems is the argument over what we “can” cut versus what we “should not” cut. I’d like to see more money to EPA & a more efficient approach to Medicare, but trying to get that passed is generally frustrating.
We’re also assuming that the reason the government owns all this land is not that nobody wants it, but that like an old man whose shack sits over an oilfield, the Fed unreasonably refuses to sell.
For the most part, that is not the case. Much of the land with commercial value may already be leased, and generates income for the government on an ongoing basis.
The only land held by the federal government that it won’t sell despite commercial interest is likely to be National Parks and military installations. While reducing the national debt is desirable, I don’t think we should be doing it in such a way as to cause the extinction of dozens of protected species… or having to rent parking lots in Minnesota for Army tank drivers to get some practice in.
We need to reduce spending and, if necessary increase taxes such that we balance the budget. We need to spend less than we take in (thus run a surplus) and use that surplus to pay down (not pay off) the national debt.
The trouble is making the government cut it’s budget on the one hand, and convincing the public that paying more taxes will help (as opposed to paying more taxes so that the government can simply spend more money on new programs). So, even though I agree with Dan (on an aspect of what he is saying anyway), I don’t know how realistic it actually is.
I DO know that selling off the governments assets (and why just land? The government also has a lot of other assets…resources, resource rights, national treasures, manuscripts, antiques, etc etc) isn’t a solution to the problem, because as another poster up thread said, once you sell it it’s gone…and we still have the same problem with spending. It’s like people who go on a quick fix diet and lose 50 lbs. Once they stop the quick fix diet they simply go back to their old ways, and end up gaining back 70 lbs…
How about we run that past the Greeks. See what they have to say.
In the early 80s Denmark had a debt problem like the one the Americans has today. So much that our finance minister said we were standing on the edge of the abyss about to tumble over. A decade and a half of painful financial restructuring followed by a decade and a half of paying off the debt, left us debt free just before the financial crises.
Sure…but, afaik, paying off debt completely isn’t a good thing either. The key, again based on my perhaps flawed understanding, is to have a good balance, to keep the debt small and manageable.
No it didn’t. The Netherlands debt-to-GDP ratio in 2006 was just under 50%. By comparison, the US debt to GDP ratio in 2009 after three years of financial crisis was 55%. The Netherlands in 2009 was 62%.
OK, but if the current debt is something like 60% GDP, that means that your going to have to pay something like 4% of GDP to pay it off plus service it next year if you want to get rid of it over the next 30 years, as opposed to just paying the 2% next year to service it. If the option was to have the debt or not, then it would be cheaper not to have it, but its not obvious that its cheaper if the option is between keeping the current debt or paying it off.
