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It looks like the ship is sinking... let's see, what can we throw overboard to save weight... I know, let's get rid of the lifeboat. It's really heavy, and it's just sitting there not doing anyone any good.
U.S. should sell assets like gold to get out of debt, conservative economists say
With the United States poised to slam into its debt limit Monday, conservative economists are eyeballing all that gold in Fort Knox. There’s about 147 million ounces of gold parked in the legendary vault. Gold is selling at nearly $1,500 an ounce. That’s many billions of dollars in bullion.
“It’s just sort of sitting there,” said Ron Utt, a senior fellow at the Heritage Foundation. “Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak.” ...
The Heritage Foundation on Tuesday released a plan for balancing the budget that did not include tax increases, but did include a proposal to sell $260 billion in federal assets over 15 years. The plan does not specify the assets. It refers to “partial sales of federal properties, real estate, mineral rights, the electromagnetic spectrum, and energy-generation facilities.”
“We’re not going to say we’re going to sell off the Smithsonian and the Capitol. We would not propose that anyway. There’s no specific building that we would point to,” said Alison Fraser, head of the Economic Policy Studies department at Heritage.
The Heritage group chose not to mention the Fort Knox gold when it included asset sales in the budget plan. Fraser said the group didn’t want to be “sidetracked” into a debate with the hardy band of folks who think the country should return to the gold standard. “We just opted not to go there,” she said.
The administration recently did a rough calculation of the nation’s gold reserves, including the stash at Kentucky’s Fort Knox (technically, it’s in the fortress-like United States Bullion Depository) and concluded that it was worth about $370 billion.
Although the country does not use the gold for anything, Treasury officials believe that selling it could create the impression of desperation, and thereby rattle the markets. Inert though it may be, the mountain of hidden gold may serve an indefinable psychological function.
Selling it during a budget crunch would seem a sure bet to incite derision. The satirical newspaper The Onion recently ran a story in which President Obama vowed to balance the budget through spending cuts, tax increases and a daring midnight heist of Fort Knox. (“I’ve got the blueprints and I think I found a way out through a drainage pipe.”)
A sudden gold sale would also postpone only briefly — two or three months, perhaps — the deadline for raising the debt limit.
“It’s merely a procrastination technique. It would throw markets into turmoil, and you’d have to accept fire-sale prices,” said the senior administration official.
But some economists want to liberate the bullion.
“Why not?” asks Chris Edwards, director of tax policy studies at the libertarian Cato Institute. “I think it shows that the government is getting serious about reforming itself.”
With the United States poised to slam into its debt limit Monday, conservative economists are eyeballing all that gold in Fort Knox. There’s about 147 million ounces of gold parked in the legendary vault. Gold is selling at nearly $1,500 an ounce. That’s many billions of dollars in bullion.
“It’s just sort of sitting there,” said Ron Utt, a senior fellow at the Heritage Foundation. “Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak.” ...
The Heritage Foundation on Tuesday released a plan for balancing the budget that did not include tax increases, but did include a proposal to sell $260 billion in federal assets over 15 years. The plan does not specify the assets. It refers to “partial sales of federal properties, real estate, mineral rights, the electromagnetic spectrum, and energy-generation facilities.”
“We’re not going to say we’re going to sell off the Smithsonian and the Capitol. We would not propose that anyway. There’s no specific building that we would point to,” said Alison Fraser, head of the Economic Policy Studies department at Heritage.
The Heritage group chose not to mention the Fort Knox gold when it included asset sales in the budget plan. Fraser said the group didn’t want to be “sidetracked” into a debate with the hardy band of folks who think the country should return to the gold standard. “We just opted not to go there,” she said.
The administration recently did a rough calculation of the nation’s gold reserves, including the stash at Kentucky’s Fort Knox (technically, it’s in the fortress-like United States Bullion Depository) and concluded that it was worth about $370 billion.
Although the country does not use the gold for anything, Treasury officials believe that selling it could create the impression of desperation, and thereby rattle the markets. Inert though it may be, the mountain of hidden gold may serve an indefinable psychological function.
Selling it during a budget crunch would seem a sure bet to incite derision. The satirical newspaper The Onion recently ran a story in which President Obama vowed to balance the budget through spending cuts, tax increases and a daring midnight heist of Fort Knox. (“I’ve got the blueprints and I think I found a way out through a drainage pipe.”)
A sudden gold sale would also postpone only briefly — two or three months, perhaps — the deadline for raising the debt limit.
“It’s merely a procrastination technique. It would throw markets into turmoil, and you’d have to accept fire-sale prices,” said the senior administration official.
But some economists want to liberate the bullion.
“Why not?” asks Chris Edwards, director of tax policy studies at the libertarian Cato Institute. “I think it shows that the government is getting serious about reforming itself.”
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