It would be the greatest garage sale in history.
The United States Treasury possesses 261.5 million ounces of gold, worth about $392.25 billion at current prices.
Some in Washington say the time has come for the country to sell some of its gold, along with other government assets such as land and buildings, to pay down the $14.3 trillion federal debt and give Congress more time to resolve the federal debt ceiling crisis.
"It's just sort of sitting there," Ron Utt, a senior fellow at the Heritage Foundation, a conservative think tank, told the Washington Post. "Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak."
U.S. Rep. Ron Paul, R-TX, agreed, telling the New York Sun that selling some of the Treasury's gold would be "a good and moral decision. An individual would have to do the same."
The idea isn't as crazy as it might sound. Six nations - Australia, Austria, Belgium, the Netherlands, Portugal and Sweden - collectively sold off 48% of their gold reserves in the late 1990s. Britain sold half of its gold reserves from 1999 to 2002, and the International Monetary Fund (IMF) sold 13% of its gold - over 403 tons of the yellow metal - as recently as 2009.
The ongoing Congressional struggle over raising the debt ceiling took an ominous turn last week when Republicans walked away from the negotiations, citing Democratic demands for tax increases. At the same time, Republican demands for deep spending cuts have met with resistance from Democrats.
With the deadline just five weeks away - Congress must act before Aug. 2 to avoid defaulting on the nation's debt - some are looking at the sale of gold and other federal assets as a way to reduce the debt and give both sides more time to reach a deal.
Beyond Gold
The Treasury's gold is just one asset some Republicans think could be liquidated.
U.S. Rep. Jason Chaffetz, R-UT, introduced a bill in February - the Federal Building and Property Disposal Act - that would require the government to identify and sell approximately $19 billion of unneeded property by 2020.
Chaffetz told Salt Lake City's KSL-TV that data from the Clinton Administration indicated 1% of federal land served no public use.
"We need to, $1 billion at a time, start figuring out how we're going to put a dent in that debt," Chaffetz said.
He has backing from others in government, including U.S. Rep. Dennis A. Ross, R-FL, and Utah Governor Gary Herbert.
"I'm not an economist, but I have maintained a household," Ross told Reuters. "The federal government owns 70% of Utah, for example. There are federal buildings. If you need cash, let's start liquidating."
Although Herbert expressed doubt that property like national parks would ever be sold, he acknowledged that the idea is worth a look.
"It's an idea that's not new - that's been talked about for the last generation," Herbert told KSL-TV. "If we want to reduce the deficit and balance the budget on the federal level, why don't we reduce some of the federal assets."
Rep. Austin Scott, R-GA, told The Wall Street Journal that the government should consider selling off more of its substantial holdings in private companies such as American International Group Inc. (NYSE: AIG) and General Motors Co. (NYSE: GM), which were acquired as part of the effort to address the 2008 financial crisis.
Others have proposed the Treasury start unloading its $125 billion of mortgage-backed securities or $400 billion of student loans.
For several years the Cato Institute, a conservative think tank, has advocated the privatization of such government operations as the Post Office, Amtrak, and electric utilities such as the Tennessee Valley Authority, which it says would raise cash from a sale and create taxable private entities.
Not Viable?
However, as tempting as a national garage sale sounds, it would not be easy, and it could produce unwanted consequences.
The truth is, even if the government sold many of the assets proponents have suggested, it would hardly dent the national debt. If the government sold every ounce of gold in the U.S. Treasury for $1,500 an ounce, for example, it would reduce the debt by less than 3%.
And trying to sell large amounts of any asset would severely disrupt markets and make it harder to get the best price for those assets.
Mary J. Miller, assistant secretary of the Treasury for Financial Markets, wrote a commentary last month explaining why the Treasury is against selling any U.S. assets to reduce the federal debt.
"This idea is not a viable option," Miller wrote. "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."
Miller said selling the Treasury's gold would be "extremely destabilizing to the world financial system" and undercut confidence in the United States. The sale of its mortgage-backed securities "could jeopardize the still-fragile housing market," she said, although she noted that the Treasury is selling those assets at a steady rate of $10 billion a month.
The Obama Administration also expressed no interest in selling federal assets.
"Selling off the gold is just one level of crazy away from selling Mount Rushmore," one unnamed official told the Washington Post.
Despite the negative sentiment from President Obama and the Treasury toward selling government assets, events in the next few weeks may inspire a change of heart. Stubborn partisanship by negotiators of both parties virtually guarantees the debt ceiling game of chicken will go down to the final days, if not the final hours.
And at that point, the unlikely may become the possible.
"A group of House Republicans has questioned the validity of the August deadline, suggesting the Treasury could sell assets, such as gold reserves, to keep paying creditors," a Wall Street Journal story pointed out. "Treasury officials have rejected the idea, but could be forced to rethink if talks stall."
News and Related Story Links:
- Money Morning:
Washington's Debt-Ceiling Debate - A Political Sham - Money Morning:
Don't Get Suckered by Wall Street's Wimpy Gold Price Forecasts - Money Morning:
President Obama Tackles Deficit Reduction and Debt Ceiling as Budget Battle Continues - U.S. Treasury:
Status Report of U.S. Treasury-Owned Gold - Govtrac.us:
H.R. 665: Excess Federal Building and Property DisposalAct of 2011 - MSNBC:
As debt talks break down, clock ticks toward crisis - The Daily Caller:
Government yard sale could help bring down national debt
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I don't like the idea of selling physical assets like gold. I suppose there might be some Federal land which isn't serving much purpose right now. Selling some of the loans might be a decent idea, but let's look at a combination of revamping the tax code to bring in more revenue and altering spending and entitlement programs. How about converting some of the unemployment benefits into jobs for the infrastructure that needs to be replaced?
Thats all thats left. The Zionists that control Wall street and America and 80% of the world. They are corniring the worlds OIL supply. GOLD is the ONLY thing left. Yeah LETS GIVE it all to the 1%ers. ha ha ha NEW WORLD ORDER. RothchildKabala BANKING SYSTEM controls Europe and the GLOBE. WW3 will STOP this, HOPEFULLY, its INEVITABLE. The GAME is OVER the 99%ers are the SLAVES. FEUDALISIM is here. RICH dont PAY shit for TAXES, Multi National Companies PAY no TAXES (GE) example. New World Order Its ALL MOST here. CHINA and RUSSIA wont comply THANK GOD.
Sell the single public asset required to stabilise a credible value of the currently un-backed and rapidly depreciating $ ?! True lunacy compounded.
Observe what most central banks globally are doing today to restore their holdings in gold to shore-up their own currencies. Everyone but the British who are still too embarrassed by Gordon Brown as Exchequer having sold British gold at dead bottom @$250 an ounce.
If the USA wants to retain $ status as the global reserve currency, it will require more than 'creative' GDP statistics and a Fed portfolio of trillions in toxic security repo's to do so. Hard assets, not promises or Fed chair 'assurances' are the future of restructured banking, believable market values and restored confidence.
Selling US Treasury gold now would insure a future of financial, economic and political subservience to those most aggressively acquiring gold at an astonishing rate. The Chinese.
That would be US gold, and that would be treasonous.
Look at the countries that sold off their gold. DO they regret it as gold has continued it's march higher? I agree with cashflowmantra on revamping the tax code and also reducing the entitlement programs to something affordable. They need to spread the pain around and although I am conservative I believe that raising taxes in places may need to be done at the highest levels. Nothing gauls me more then to see companies run into the ground and their executives being paid large sums for poor performance. There is something inherently wrong with that. Also the spread between the lowest paid and the highest has gone out of sight and needs to be brought back to some semblance of sanity. The government soulh get out of AIG and GM and any other companies and get back to what it was created for. Protecting the country/borders from enemies and let States and local governments do their jobs.
MAD DOG Watch R/T today The BANKERS from Switzerland and Germany (Bundas Bankers). Went to New York the FED. There GOLD is missing??? March 12th 2012.. Wheres there GOLD!!! Hmmmm I smell a RAT some where. Why doesnt the NEWS show this in America. Binderberg GROUP may have it?? OR the WALL STREET INVESTMENT BANKERS STOLE IT??? Funny NO BODY has been charge or put to JAIL for causing the MELT DOWN.. New World ORDER is comming. The Zionists HAVE taken over.
The article makes it clear that even if all the mentioned government owned assets were sold off and without depressing market prices, both of which phenomenon are highly unlikely in the real world, the debt would only be reduced a little. We don't have a taxation/revenue problem, except arguably that taxes are too high to encourage business. We have a sociopathic spending problem — a death wish, if you will — due a federal government run by a bunch who feign concern for the well-being of our nation while in reality focusing on their own re-election, not economic, fiscal, or even national security realities. If the government begins selling that gold, I hope to be among those buying, because the amount of gold in existence cannot be increased by fiat. People need to be asking themselves what are the proper purposes and functions of government, and reminding themselves and those in political power that our forms of government derive their power from the citizens, not the other way around. I've written enough letters to our president and my Congressional representatives and received enough replies to know they do not accept any viewpoint except their own, and to see they are determined to impose their views upon us while largely exempting themselves. Their staffs are become propaganda machines.
Stupid beyond belief. The world will be back on some kind of gold standard soon. Why sell our gold cheap now? The United Kingdom already made that mistake.
If you need to sell something. Sell Washington DC The federal government has only cost us money we don't have for years now.
Unloading Fannie Mae, Freddie Mac and Sallie Mae make a lot of sense to me.
Rep. Ron Paul is from Texas by the way, not Kentucky.
The idea of selling gold off to make a dent in the debt is absolutely moronic from the government's point of view, but that's what makes it a fantastic idea from the point of view of the citizenry. Gold belongs in the hands of the people, not a corrupt and criminal government that confiscated it from us in 1933.
I'd be a buyer, wouldn't you? And if they were stupid and obliging enough to sell it all at once, we'd get great prices in terms of clownbucks. I want real money when the currency crisis comes, don't you?
But it's all just idle chatter. Never gonna happen.
Sunking is correct about Ron Paul, of course. Correction has been made to the story. No doubt I had his son, Sen. Rand Paul, in mind.
Money Morning regrets the error.
How intelligent! Sell all you can and continue to let obummer and politicians spend ..spend ..spend and then ,oh no we've sold our assets! now we're really in trouble,because we did not correct the problem ! remember that?fire the assholes in Wash, stop paying the UN (United Nitwitts) EPA and all other none esential services like the king pres and his whole sandbox. Get real our gov is out of control,it is a cash cow with out a fence! wake up America you are being attacked from within,sad as it is the towel heads are going to wait and stroll in and take this country,and first thing they will do is get rid of obummer and all the likes of him that will not pick islamic cotton!
Why sell assets when you can hoard them, pay to store them, pay to guard them, pay to count them and never use them.
On the other side of the coin
Just remember that if you sell them, the party in power can siphon off the money to buy votes like the new program to refinance homes with $50000 taxpayer funded loans that never need to be paid back. A lot of community organizers will get those loans in time to start the next election cycle.
Why, oh why are critical items such as gold in this article, and as usual, benefits (paid for, but the trust fund has been robbed), such as Social Security always mentioned when it comes to reducing costs?
Except for those already engaged, we have Armed Forces stationed throughout the world that could be reduced. The "host" nations should be willing to take on much of the responsibility for policing the world, which we seem to be doing.
In addition, the foreign aid to so many others, including our enemies may be fine when we ourselves are not in need, but this is the first place we should be cutting. In addition, the past pork spending should be curtailed. Research is needed and should be funded, but much of it is useless and is part of the vote getting selfishness of the local representatives.
What about recouping some of the 18 billion which was stolen, in Iraq. Maybe the investigation should be given to a private entity to track down.
Lastly, I have not read of one Republican or Democrat who is willing to sacrifice or reduce their cost to us despite their general personal well being. Consider the savings if their pensions were reduced to Social Security benefits.
I have some severe doubts that the US gold pile still exists. And by the way, what would happen if the Chinese came up on the opposite side to unload all their worthless USD. The US would be their naked, without anything left, except debt.
There is no doubt that the USD's day as reserve currency are numbered, but the replacement is not yet found.
That has to be the dumbest idea I've ever heard. These idiots are selling our country a piece at a time.
Makes me wonder why countries like China and India are buying gold by the ton? What do they know that we're not being told?
even if usa sold everything it owns they can not pay debit
So the top 1% have foreclosed on a couple million of our homes and now want to get most of Utah and our national parks for pennies (who else has the cash to buy?). Looks like they plan to finish us off on Aug.2nd. They already own the patents to our grain and their friends in PETA and HSUS have plans to micro-chip all our meat. Anyone else see where this is going?
No democracy has ever survived long after people start voting themselves money from the public treasury, and ours won't either. People who can vote but don't pay a significant amount in taxes will always vote for more government programs. As long as that condition persists we are doomed. Selling public assets should be held for the next government to do, after we have defaulted on the existing debt.
After the bankruptcy and violence are over, if we can restore our constitution based closely on its original intent and limit the franchise to those who can pass a test on history and economics, and who pay more in taxes than they receive from the government (including promised future benefits), then we can restore ourselves to a freedom and prosperity.
There is no linear process to get from here to there. The next few years are bound to be unpleasant, no matter how events unfold.
I agree with all sugestions.
Why would We The People want anything that is legally ours and all of this great country belongs to us.Why sell anything to bail out a corperation that's legally not part of the country it belongs to the Queen Of England.The corporation is the one in debt not We The People.Roosevelt did this to us in 1933 when they stold all the gold,silver and precious metals then had us defined as enemies of the state.It's time We The People put our differences aside and unite as one and take back what was stolen.
It is no secret that the Reps do not have much brain. Using some populist phrases does not solve a problem. They would rig the garage sale so that their cronies would have a nice windfall profit before the rest of the country knows what is going on.
Selling the family silver is the last step before bankruptcy. But that desperate move has never rescued anyone. On the contrary, if assets are sold that may create revenue, that sale just cuts out future revenue. Real smart! This idea is just another piece of mosaic in the picture of Washington incompevetence. Again, it is trying to avoid real decisions, one billion at a time.
A law should be made that Congress is put under house arrest if they fail the people they claim they work for. Failing also includes not doing things at the appropriate time. The budget process is flawed badly. In fact, the whole political process is flawed. An incoming government should present their own budget shortly after taking office and not work on a budget put forth by a vicious previous administration doing everything to make the new administration's life difficult. Individuals running for president should have a team named and announce what their intentions are. Mud slinging is not a substitute for a plan. Worst of all, as the US government is patterned after the ancient Rome government, the president is supposed to be some kind of Cesar. That means he is expected to fight wars, make big shows, and put his family and friends into preferred positions. Well, with that job comes obviously a personal risk: Getting killed. That risk is higher in the US than in any other country. That should tell us something!
Sell all federal land and building including the White House and do away with the federal government with Obuma to blame for his spending program with union workers in the fed. Let each state runs their own government the way they see fit. States Rights
Instead of doing all that, why doesn't the federal govt float bonds (40 year bonds) for US citizens and residents $100,000 each. The average american debt is $440,000 per family so these bonds will be snapped up by the wealthy and the middleclass in a jiffy and they can raise 1 trillion easily.
There are lots of people in the US who can buy these and the interested payments can start in five years like 2016 so govt will have a respite for 5 years to get their act together.
1. REDUCE THE SIZE OF GOVERNMENT.
2. WE DO NOT NEED 600 BASES AROUND THE WORLD.
3. GERMANY, KOREA, IRAQ AND AFGHANISTAN CAN PAY US FOR KEEPING
OUR TROOPS THERE AND SAFEGUARDING THEIR LIBERTY.
4. CLOSE THE EDUCATION DEPT, DEPT OF COMMERCE.
5-105. GO TO #1.
We sold off Fannie and Freddy to raise money. Didn't that work out great.