Do you think that if the U.S. government doesn't take on more debt in August, it will have to raise taxes, cut spending, use the Ron Paul/Dean Baker solution of having the Federal Reserve Bank extinguish government bonds, or default on the debt? If so, think again. In this month's Econlib Feature Article, "Privatizing Federal Government Assets," Robert P. Murphy suggests a fifth alternative: sell off U.S. government assets. He argues that there are many assets the federal government shouldn't own anyway and that now is an especially propitious time to sell them off. And the government doesn't even need to sell Yosemite.
As of June 3, 2011, the Treasury reported international reserve assets of $144.2 billion. They include gold, securities and deposits denominated in euros and yen, as well as "IMF reserve position" and "Special Drawing Rights" (SDRs). However, this figure is substantially understated, as the Treasury officially values its 261.5 million troy ounces of gold at a price of $42.2222 dollars each. If we priced the Treasury's gold holdings at the current market price of about $1,500 an ounce, then the currency reserve assets have a market value closer to $525 billion. (emphasis added)
Of course, Murphy would also like to cut government spending a lot, as he has laid out here. But his point in the July Feature Article is that if the players in Washington can't agree on that, they still can do something good for the economy by selling assets.