Is the U.S. Government Bankrupt? Not Even Close.

We often hear the meme “the U.S. is the next Greece.”   “The government is insolvent.”  Complete nonsense.

We tend to focus too much on the right side of the government’s balance sheet and not the left side — the federal government’s assets.   This is not to downplay the seriousness of the debt issues – current, future, and off-balance sheet obligations – and the need for a long-term viable debt solution.

Just take a look at the chart and tables below, however, which we snagged from the Big Think, of how much land the federal government owns, especially in the west.   Almost half of the land in California and more than 80 percent of Nevada.  Stunning.

Then there are the mineral rights.  Time magazine cites an International for Energy Research report that the U.S. government owns,

Oil and gas resources on and offshore worth $128 trillion

That is several multiples of the current national debt.

President Trump has even mentioned selling off the government assets to reduce debt. Marketwatch recently reported,

Which brings us to one of the president’s more intriguing ideas: why not sell off some of those rights and pay down part of the debt?

Candidate Trump sold this in his usual simplistic terms: I’m a real estate guy, I know how to make the deals. We pay down the debt while putting Americans back to work in the oil and gas industry. We become energy independent and screw the Middle East. What’s not to like? – Marketwatch

We did get some pushback on the feasibility of selling federal land and real assets as it is a very difficult political proposition.  But that is not the point of this post.  The markets implicitly understand the strength of U.S. G’s balance sheet, say, relative to Greece, for example.

What a great Ph.D. dissertation topic — measuring the U.S. government’s net worth by calculating the market value of all its assets.

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This entry was posted in Fiscal Policy, Sovereign Debt and tagged , , . Bookmark the permalink.

5 Responses to Is the U.S. Government Bankrupt? Not Even Close.

  1. Not serious post says:

    Good grief.

    Does this blogger seriously expect us to believe the Feds are going to sell off the Grand Canyon? Or Yellowstone? How about selling Mt Rushmore? Did anyone actually think this post through before allowing it to be posted?

    Selling the oil drilling “rights” is equally clueless. Does the federal government own the oil drilling rights off California, and are we supposed to believe governor Moon beam is going to lift the state sanctions against drilling?

    The queen of England might “own” the crown jewels, but practically speaking she does not — she cannot sell them. The federal government might own Mt Rushmore or Ol’ Faithful, but practically speaking they can’t sell them.

    And oil drilling rights are equally stupid. No one is going to bid for the “right” to be tangled up in state litigation long after the President and Congress retire. All it takes is one clueless washed up movie actress to dictate Obama’s policy on the XL pipeline in defiance of his own state department findings.

    I started reading this blog a couple months ago, after seeing it linked a few times elsewhere. It had some good posts. But this one is absurd

  2. macromon says:

    BTW, Trump has stated it so and Repubs in Congress already moving on it:

    Now that Republicans have quietly drawn a path to give away much of Americans’ public land, US representative Jason Chaffetz of Utah has introduced what the Wilderness Society is calling “step two” in the GOP’s plan to offload federal property.

    The new piece of legislation would direct the interior secretary to immediately sell off an area of public land the size of Connecticut. In a press release for House Bill 621, Chaffetz, a Tea Party Republican, claimed that the 3.3m acres of national land, maintained by the Bureau of Land Management (BLM), served “no purpose for taxpayers”.
    https://www.theguardian.com/environment/2017/jan/31/public-lands-sell-congress-bureau-management-chaffetz

    Thanks for your comments!

    • Not serious post says:

      If you click through your own link, at the top of the article it says the bill has already been withdrawn after public complaint.

      And if you understand US law, a bill is nothing more than a proposal from a member of Congress — hundreds of bills are proposed every year that never even make it into committee discussion.

      Thanks for wasting your readers time. Legally, the Queen owns “her” crown jewels, but practically speaking she cannot sell them. Same with the US government’s parks. They can sell offshore drilling rights, but those rights are worthless unless the state government allows drilling (CA and FL do not, other states have restrictions).

      Please research your posts

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