Advancing a Free Society

Government asset sales: Too Little, Too Late

Sunday, October 2, 2011

A story in the New York Times reports happily that the United States, being cash-poor, is now weighing asset sales in order to reduce the deficit. The move seems to have attracted all sorts of bipartisan support, which makes it just the right thing to do. Which it is. But the story raises some troublesome complications about how the United States chooses to do business

The assets that are listed for sale are a motley group that include “an island, courthouses, maybe an airstrip, generally idle or underused vehicles, roads, buildings, land — even the airwaves used to broadcast television.” The only thing that they have in common is that they are all more valuable in private hands than they are in public ones.

Yet if that is the case, two queries have to be raised. The first is why is it taking so long to arrange for these assets sales. In principle, the properties should have been sold off the moment that they became redundant, just was ultimately done once various U.S. military bases were decommissioned.

Second, if that sale had been done in good times, there would be very little left to sell today. But it is not a blessing in disguise to have these assets to offer some tiny set-off to the huge overhang of government liabilities.