Here is an idea: Greece is getting ready to sell some of its assets to pay for its gigantic debt (Corfu and the Parthenon are not on the auction block yet), and the US should do the same. According to the Financial Statement of the United States, there is about $2.6 trillion of stuff we could sell (See Page 49 of the report, it’s page 69 of the whole document). A few items on my list:
Loans receivable and mortgage backed securities: $540 billion
TARP direct loans and equity investments: $240 billion
Property, plant, and equipment: $784 billion
Freddie and Fannie preferred stocks: $65 billion
I would add California, New Jersey and maybe New York: $500 billion (The three states have a lot of debt and many high maintenance people living there so I am not sure how much we can get for them).
What’s on your list?
I am sure that Republican and Democrats in Congress would protest but it’s not as if we have much choice. The US is broke and is about to get even poorer. This chart shows that the trend in the government’s debt held by the public (that’s what we owe to foreign and domestic investors). When it comes to incurring debt the US has become absolutely pathological.
Plus, this is a very optimistic scenario. First, it assumes that everything the government says about saving money tomorrow, freezing 3 cents out of our total budget and all that jazz is true. Obviously, in real life this doesn’t happen and spending keeps going up even faster that scheduled. It also assumes that interest rates will stay at their current level, which they won’t. It also wishes away, the roughly $3 trillion that the federal government has raided from the Social Security and Medicare Trust funds and that it needs to “pay back” at some points (basically the IOU issued by the Fed to SS and Medicare is just a piece of paper with no value at this point and the government will have to borrow that money soon). And finally, this chart doesn’t show the extra debt explosion that will top this one if Obamacare is adopted.
So let’s start selling.