OAKLAND, CAThe $20 trillion national debt may be the biggest problem that lawmakers in Washington, DC, are unwilling to confrontperhaps because they fear that slashing the debt would require massive, politically unpopular tax hikes and spending cuts. Serious debt reduction, however, need not entail those measures.
According to analysts with the Independent Institute, the best solution to Americas fiscal woes is to sell off federal assets, especially mineral rights to oil, natural gas, and coal.
The road to national solvency is paved with sales receipts from the U.S. governments vast property holdings, particularly its untapped treasure trove of energy deposits, write William F. Shughart II and Carl P. Close in Liquidating Federal Assets: A Promising Tool for Ending the U.S. Debt Crisis, a new Executive Summary about solving major national problems.
Using 2016 average prices, they estimate the value of the federal governments oil and natural gas deposits at about $55.6 trillion, or nearly 2.8 times the size of the U.S. national debt.
Whatever the precise value that the marketplace would set for deposit rights, it is clear that selling them would reap ample rewards for debt reduction, Shughart and Close write.
Although the liquidation of federal assets is a simple way to fund deficit reduction, enacting it initially might seem not to be politically easy. However, non-profit stakeholders across the political spectrum might well be persuaded to support the proposal if they were given the first right to purchase the assets.
This was the successful case with the Federal Asset Sale and Transfer Act of 2016, Shughart and Close note. Signed into law in December 2016, the Act had support from homeless-assistance groups, which in 1987 were given the right of first refusal to purchase surplus federal buildings.
William F. Shughart II is Research Director and Senior Fellow at the Independent Institute and Carl P. Close is Senior Editor and Research Fellow at the Independent Institute. A non-profit, non-partisan, scholarly research and educational organization, the Independent Institute seeks to boldly advance peaceful, prosperous, and free societies grounded in a commitment to human worth and dignity. For more information, visit www.independent.org. Media inquiries: Rob Ade at (RAde@independent.org) or 510-632-1366, ext. 114.