US Government Debt Different - Finance Department - University of ...

Jim MillsteinHowever, other things may not be equal. For example, it may bepolitically divisive to extract minerals in environmentally-protectedareas. It may simply be easier to sell such an asset to a third party,pocket the proceeds as debt reduction and stand by and watch thatparty seek to balance the competing interests that have stalematedthe exploitation of much of the value of the Federal Government’smineral rights for the past 40 years.163Sale of The 21St Century – What Could the U.S. Raise ThroughAsset Sales?The US government has substantial saleable assets. It owns over 650million acres of land, representing 29 percent of total land in thecountry. 16 Most Federal land is located in western states and Alaska.For example, the US government owns 85 percent of land in Nevada,69 percent of Alaska, and 45 percent of land in California,while it owns less than one percent of land in New York and roughlytwo percent of land in Texas. 17The US government also has a wealth of mineral rights, includingoil, natural gas, coal, and iron. Many are currently off limits to development,including the Eastern Gulf of Mexico, portions of theRocky Mountains, and the Atlantic and Pacific Outer ContinentalShelf. According to Wood Mackenzie, those areas could in the aggregateyield nearly 100 billion barrels of oil equivalent. 18According to the Office of Management and Budget (OMB), theaggregate book value of these and other Federal Government assetswas $4 trillion at the end of 2011. 19 Approximately $1.4 trillion wasfinancial assets with various degrees of liquidity, and $900 billionwas defense-related fixed reproducible capital. The agency attributedonly $942 billion of the total to land and mineral rights: $463 billion16 U.S. General Services Administration, Federal Real Property Profile 2004.17 Id.18 Energy Policy at a Crossroads: An Assessment of the Impacts of Increased AccessVersus Higher Taxes on US Oil and Natural Gas Production, Government Revenue,and Employment 2011 [hereinafter Wood Mackenzie, Energy Policy at a Crossroads].19 President’s Budget for Fiscal Year 2013, Analytical Perspectives, p. 491.