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

Jim Millsteinwould likely command a premium to that estimate if it was sold toprivate companies.165The US government could do even better selling its mineral rightsin the states. Recent political debate has focused on whether to exploitresources located under the Coastal Plain of the Arctic NationalWildlife Refuge. According to Arctic Power, a non-profit organizationof Alaskan companies in a variety of industries, lease sale revenues,royalties, and taxes to the Federal government from developingthe Coastal Plain could be between $89 billion and $244 billion. 21The US Chamber of Commerce puts the upper estimate at $167 billion.22 In 1985, Boskin et al. estimated that the value of all Federaloil and gas rights in Alaska was $335 billion, 23 an estimate that mustbe viewed as conservative, given discoveries and improvements inextraction technology since.So $500 billion to $600 billion would appear to be the minimumthe Federal Government could obtain from the sale of all Federalland and mineral rights in Alaska. If applied to the reduction of theFederal Government’s outstanding indebtedness, that would representabout five percent of the $10.9 trillion of US debt currently heldby the public, reducing debt as a share of GDP to 64 percent.The US government could take a more aggressive approach to Alaska’smineral and land rights. The state’s share of oil revenues is between2 to 2.5 times the Federal government’s share. If the Federalgovernment expropriated the state’s mineral rights as well, then thecombined public mineral rights could be valued between $1 trillionto $1.2 trillion. Similarly, land rights currently held by the Statecould be worth between $100 billion and $150 billion. Transferringfederal sovereignty over the territory as a whole therefore might gar-21 See anwr.org. The organization also argues that developing the Coastal Plaincould further decrease US reliance on oil imports and create between 250,000 and750,000 jobs.22 Issue Advertisment, Feb. 28, 2012, available at http://www.uschamber.com/ads/mr-president-make-american-energy-next-big-thing.23 Boskin, M. et al., New Estimates of the Value of Federal Mineral Rights and Land,American Economic Review, 75, pp. 923-936, 1985; see also Boskin, M. and Robinson,M., The Value of Federal Mineral Rights, Correction and Update, AmericanEconomic Review, 77, pp.1073-1074, 1987.