Revised: April 12, 2017 The national debt may be the biggest problem in decades that federal policymakers have failed to confront. Even if the Treasury has overdraft protection in the form of the Federal Reserve, the large debt servicing requirements exact a heavy toll on public services and economic growth.
Its importance is measurable not only in dollarsalmost trillion (,552 per capita)but also in the grave threat it poses to the American financial system and therefore to the health and well-being of private businesses and households. This examines the potential for vastly improving the U. governments fiscal position by using a method seldom utilized for the purposes of federal debt-reduction: the sale of federal assets. The sale of federal assets for the purpose of debt-reduction warrants serious consideration mostly because of one fundamental issue: Americas debt obligations are so huge that traditional methods for improving the governments fiscal stancenamely, by raising more tax revenue, printing more money, or refinancing/reissuing government debtare inadequate to the task and would create a host of major problems.
Title V of the Mc Kinney-Vento Homeless Assistance Act, signed into law by President Ronald Reagan in 1987, gave homeless-assistance organizations the right of first refusal to acquire federal properties. Letter in Support of the Federal Assets Sale and Transfer Act of 2016. Feb. But this concept has been applied to such sinful products as soft drinks, margarine, telephone calls, airline tickets, and even fishing gear.
By giving them a stake in the sale of federal assets, Title V encouraged advocates for the homeless to support passage of the Federal Asset Sale and Transfer Act nearly 30 years later. The law, signed by President Barack Obama in December 2016, is expected to raise at least billion, exclusively for debt reduction, through the sale of unneeded, underutilized surplus federal buildings and associated real estate. Although this sum would barely put a dent in a trillion national debt, it takes an essential step: it provides proof of concept.  United States National Debt per Capita from 1990 to 2015 (in U. What is the true record of this selective, often punitive, approach to taxation?
Debt hawks would therefore be wise to keep their eyes on this prize. Shughart II is Research Director and Senior Fellow at the Independent Institute, J.
The Road to Federal Solvency Politics is about building effective coalitions. Fish Smith Professor in Public Choice in the Jon M.
This includes technically recoverable resources totaling 1,194 billion barrels of oil and 2,150 trillion cubic feet of natural gas. Estimated recoverable coal reserves on federal lands total 7.4 billion tons. The considerable cost of developing these reserves must also be factored in.
Assuming that energy developers bid one-third to one-half the current market prices of these commodities, total revenues would amount to .3 trillion to trillion, compared to todays U. debt of trillion. Any estimate of revenues from federal asset liquidation is, of course, fraught with uncertainties.A default on a scheduled federal debt payment, caused by the governments lack of funds necessary to service its debt obligations, could spark a fire sale on U. Treasury securities, prompt a sharp fall in the value of the dollar, and launch a rapid flight to quality as investors and dollar holders flee to the perceived safety of other nations bonds and currenciesall culminating in a U. Raising the necessary tax revenue would, for example, siphon off significant funds from businesses and households, thereby slowing the wheels of commerce and reducing household wealth.Printing moneyeither literally through the Treasurys issuance of more currency or figuratively through the Federal Reserves open market purchases of government securitieswould cause price inflation that distorts relative prices and makes them more volatile, reduces real incomes, undermines savings and capital accumulation, and creates political pressures for counterproductive remedies, such as wage and price controls.Can a coalition form to successfully campaign for federal asset liquidation? Bureau of Land Management, January 2017, Table 5-1, p.  Prices on 4/11/17: WTI crude oil: per barrel; natural gas: .17 per thousand cubic feet; Powder River Basin coal: .42 per ton. Denham to Get Rid of Surplus Federal Properties. Mc Clatchy DC Bureau. Huntsman School of Business at Utah State University, and editor of the Independent Institute book, Taxing Choice: The Predatory Politics of Fiscal Discrimination. Close is a Research Fellow and Senior Editor at the Independent Institute, Assistant Editor of The Independent Review, editor of The Lighthouse, Independents weekly e-mail newsletter. Close is also co-editor or the books Re-Thinking Green: Alternatives to Environmental Bureaucracy and The Challenge of Liberty: Classical Liberalism Today.Grounds for optimism come from an existing federal asset program. Fed Said to Have Emergency Plan to Intervene if U.  National Law Center on Homelessness & Poverty. So-called sin taxesthe taxing of certain products, like alcohol and tobacco, that are deemed to be politically incorrecthave long been a favorite way for politicians to fund programs benefiting special interest groups. tax election and is governed by subchapter S, unless contradicted by subchapter C or otherwise indicated. S corporations are advantageous to small businesses because the business itself is not subject to federal taxation (although, some states subject S corporations to taxation); only the S corporation shareholders are subject to federal taxation.