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Speak Out
Should the government sell its property to reduce debt?
Say you woke up one morning and realized you owed your friends a bunch of money.
You need to pay the money back, and have some options. Keep putting it off (like you’ve been doing), or scrounge up the money from your savings. As you look around your room, you notice stacks of video games, hangers full of nice clothes you don’t wear, old DVDs, a PlayStation you never play, and a third choice emerges.
If you sold this stuff, you’d be able to pay back a large portion of what you owe to your friends.
The U.S. government is faced with similar choices this month.
Sometimes, in order to pay for the things that run our country – military actions we’re involved in, federal programs like health care – our government needs to borrow money. This is called the national debt, and it’s made up from a bunch of different sources. Sometimes, it’s other countries lending us money. Sometimes the money comes from individuals; when your grandparents buy you a savings bond, that’s money the government owes you. Sometimes, in a complicated, roundabout way, the government is actually able to borrow money from itself.
This week, the government runs into what’s called the “debt ceiling” – the maximum amount of money that, by law, it allows itself to owe.
Its choices are:
• Vote to extend the debt ceiling, allowing it to borrow even more money (Congress last did this in February 2010)
• Sell off its savings of gold in Fort Knox, which is worth $370 billion, according to the Washington Post (Economists and members of the Obama administration are opposed to this.)
• Sell off other government property and use that money to bring down the debt.
According the Post, 650 million acres of land is owned by the U.S. government. That’s over 30 percent of the country’s landmass. It also owns a million buildings, regional electric companies like the Tennessee Valley Authority, rail systems, the interstate highway system, air traffic control operations – the list goes on.
Does the United States need all of these? National parks like Yosemite, monuments like Mount Rushmore and institutions like the Smithsonian are national treasures, and should be held on to – but some suggest that the government shouldn’t be in the rail business or the road business.
Take the interstate system as an example; say the government sold its highways. You’d still be able to drive on them, of course. But there would be a new owner taking care of the roads, and you’d probably have to pay a toll to drive on them. But you have to pay for the roads already – with your tax dollars. Economists suggest that if the interstate system were managed not by the government, but by a company that did nothing else but manage roads, the system would be cleaner and safer – and possibly worth the extra money you’d have to cough up to drive on it.
Others disagree with selling off government property, saying it would be only a temporary fix, and worrying that it creates an image of a struggling, desperate country – when in the global grander scheme of things, we’re anything but.
Mary J. Miller of the U.S. Treasury Department wrote in a Web post: “A ‘fire sale’ of financial assets would be damaging to the economy, taxpayers, and financial markets. It would harm the interests of taxpayers, and would undermine confidence in the United States. Nor would such sales postpone reaching the debt limit for a meaningful amount of time. Congress would still need to raise the debt limit.”
What do you think?
Should the government sell off property to reduce its debt? Should it dip into its savings of gold at Fort Knox? Should Congress simply vote to expand the debt ceiling, as it did in 2010? What do you think would be the consequence of doing that? Is a blemished national image a risky consequence of selling off government property? If you were in charge of managing the debt, what would your priority be? Join the discussion!
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