The Federal Government’s $128 Trillion Stockpile: The Answer to Our Debt Problems?

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The debate over federal government deficits and debt has consumed Washington for some time, but the arguments for the most part have focused on taxes and spending. One aspect, however, of the debate of American creditworthiness that doesn’t get discussed is what assets the federal government owns. After all, a borrower’s assets should be one of the main factors in determining the wisdom of its borrowing, but when talking about the U.S. government’s debt burden, it seems to get left out of the conversation entirely. And a recent report from the Institute for Energy Research (IER) makes some startling claims about how much U.S. taxpayers own in real assets. According to the report, the U.S. government owns:

  • More than 900,000 separate real assets covering more than 3 billion sq. ft.
  • Mineral rights, on and offshore, covering 2.515 billion acres of land, more than the total surface land in Canada
  • 45,190 underutilized buildings, the operating costs of which are $1.66 billion annually
  • Oil and gas resources on and offshore worth $128 trillion, roughly eight times the national debt of the country

The IER is a think tank that advocates for deregulation in the energy industry, so we should perhaps take these numbers with a grain of salt. Any estimate of oil and mineral wealth in unexplored areas is going to be highly speculative, but even if the true figure is half what the IER estimates, the fact that the federal government owns property worth well in excess of its total debt is instructive in our current debate over government borrowing.

But the federal government owns much more than just land and the minerals and oil beneath it. The federal government also has a very sizable stash of gold. In fact, at 261,498,926.247 oz., it’s the largest in the world. And, in case you haven’t noticed, gold is quite popular among investors who fear the debasement of government currencies in this era of worldwide, aggressive monetary stimulus. At the going rate of $1,660 per ounce, that stash is worth nearly $442 billion. Ever since Richard Nixon broke the link between the dollar and gold in 1971, there’s has been no official justification for sitting on all this gold. And some of it could easily be used to pay down the debt or put toward neglected projects like infrastructure.

And finally, another big chunk of federal assets come in the form of student loans. According to the Federal Student Aid, the office in the Department of Education that manages the federal student-loan program, the feds own $948 billion in outstanding student loans. This appears to be the face value of these loans — the actual market value is probably lower since a portion of these loans are in default and may not be paid back. But the market value for these loans is most likely in the hundreds of billions of dollars, and the performing loans in the portfolio could be sold off to other financial institutions.

There are obviously other factors besides raising revenue that would go into a decision to sell these assets. The federal government has an interest in protecting and preserving America’s environmental assets, and the Department of Education’s student-loan program is there to help young people access higher education. Selling off those assets would potentially put those policy objectives at risk. But the reason the federal government still holds on to so much gold is a bit more difficult to understand. With gold prices so high, it probably makes sense to unload at least some of it.

More than anything, these assets partially illustrate why the world is still so eager to lend the U.S. money. Despite all the doom and gloom you hear about the decline of America’s creditworthiness, it’s still a very rich country in both productive capacity and industrial and natural resources. And the financial crisis and demographic shifts that have caused our budget problems are either temporary effects or problems that could be solved by a mature discussion about priorities.

30 comments
MitchC
MitchC

The gold stockpile is an essential part of confidence in the US dollar, don't be naive

The global elite want to strip America of every resource and perhaps are ready to command an army elsewhere

Maybe they are discouraged that US citizens would rather use US funds and resources for US citizens

US citizens need to be educated because the elite are quick to abuse the power of advanced knowledge

The United States must have a firm handle on global power dynamics, evil to emerge a leader in a future 

Making companies global to avoid taxes, openly denouncing US citizenship is madness that only global 

connections and a pile of gold could make--- I'm proud to be an American 

JakeKilroy
JakeKilroy

Delusional?

Think the Federal Government is capable of having that $128 trillion pop up out of the ground and into the Treasury for free?Even If it did, that would just cover the $126 Trillion in unfunded liabilities.

And,I would endorse "giving you for free"  .....the 45,190 underutilized buildings, the operating costs of which are $1.66 billion annually.......When is an asset an asset, Chris, and when is an asset a LIABILITY?


How much would you pay for the PRIVILEGE to Lose, $1.66 billion per year. Or, do you think those building are sitting "underutilized" because they are prime properties in pristine shape with people begging to use them. Do you recall the great real estate auctions of the 90's? When the government unloaded JUNK, to stop spending money to insure, protect, pay utilities and taxes and maintenance?  

Why do you think the Federal Government just GAVE Detroit and is giving other cities billions to demolish "vacant housing ASSETS"?  Go get a job in the real world for a year and then come back and re-write your lecture!

SuperTech86
SuperTech86

Selling of public property is exactly what the elites want.  it amounts to nothing more than increasing concentration of wealth.  only fools would think this is a "good" idea.

JakeKilroy
JakeKilroy

@SuperTech86  Delusional?

Think the Federal Government is capable of having that $128 trillion pop up out of the ground and into the Treasury for free?Even If it did, that would just cover the $126 Trillion in unfunded liabilities.

And,I would endorse "giving you for free"  .....the 45,190 underutilized buildings, the operating costs of which are $1.66 billion annually.......When is an asset an asset, Chris, and when is an asset a LIABILITY?


How much would you pay for the PRIVILEGE to Lose, $1.66 billion per year. Or, do you think those building are sitting "underutilized" because they are prime properties in pristine shape with people begging to use them. Do you recall the great real estate auctions of the 90's? When the government unloaded JUNK, to stop spending money to insure, protect, pay utilities and taxes and maintenance?  

Why do you think the Federal Government just GAVE Detroit and is giving other cities billions to demolish "vacant housing ASSETS"?  Go get a job in the real world for a year and then come back and re-write your lecture!

GeorgeAllen1
GeorgeAllen1

@SuperTech86 lol, you realize those properties would be used by real people and they would develop those properties and land and drive business by developing those properties, and that would create real jobs and stability and people would trade more and poverty / joblessness would decline, and then tax revenue would increase and pay for those entitlement programs you're so fond of, that keep people in a state of helplessness like drugs.  


Ya, I guess I"m a fool for knowing this, how is sophomore year of college treating you, boy?

blaylocks
blaylocks

One thing that this article leaves out that is worth mentioning. Who is going to buy all of these assets? Currently the Gross World Product, (GDP for the entire world) is at $69 Trillion Dollars. So the US decided to pay off the debt this year by selling assets the world would need to spend 1/4th of its earning power to pay of the US debt. Even if you were to take a 10 year approach this issue, I think that the US would struggle to find enough buyers to purchase that volume of assets.

Along those same lines, the prospect of having foreign powers owning such a large part of the US should be a little scary from a sovereignty issue.

TeddyHunt
TeddyHunt

If you pay attention, you will notice that our 128 trill in assets is being held in reserve. Other countries can pump the oil (like bp) so its basically in reserve for other countries.  Evidently when Russia, Britain and others pump our oil , it comes up green.  When evil americans  (the kind Obama said he hated) pump oil, its comes up yucky black.

Some people think  its possible the Rothchilds who control most central banks, financed the center for global warming in London. The people who think that are in jail. (wikileaks). So  Bp spills oil, years later only the brits can pump in our reserves. Really doesn't make sense does it? Since the spill, only Bp and its partners are given pumping permits by Obama. The solution according to the youngest rothchild is abandon all sovereign currencies and let the world bank issue carbon credits. Britain will pump the oil and share the profits with the world... yeah sure. Anybody remember the East India trading company? Why cant americans pump the oil they own again?

BrannonCarroll
BrannonCarroll

I once owned a boat. Hard times hit and money got tight. I had to sell my boat. I hated it...but it had to be done. One day, when I am in a better financial situation I will buy another one.

wayneveale
wayneveale

Ha! Thats just pathetic. I like the trillion dollar coin solution better. America are officially a punchline.

notLostInSpace
notLostInSpace

This is an excellent article.   We have tons of assets besides these.  We could have signing rights for national parks (the Liberty Mutual Statue of Liberty)...just kidding, but we really do have plenty of underused and under utilized assets that can be sold off.  Why do we need all that gold?  No one is going to the gold standard (sorry Ron Paul).  And the oil rights could be auctioned off a little here, a little there and still have plenty left while reducing our debt percentage.  We really do have the wealth to pay for the things we need, and dream for too.

chetrandom
chetrandom

Let me repeat that last line: "Despite all the doom and gloom you hear about the decline of America’s creditworthiness, it’s still a very rich country in both productive capacity and industrial and natural resources. And the financial crisis and demographic shifts that have caused our budget problems are either temporary effects or problems that could be solved by a mature discussion about priorities."  All this talk about how our DEBT is hurting us is really a big smokescreen to cover the Repugs agenda to obstruct fiscal efforts to get us out of this recession.  Just to make Obama and those pesky liberals look bad, in spite of all the unemployed and regardless of the fact that our GDP would increase by one $Trillion with the economy back on track, which would allow us to deal with debt issue WHEN WE HAVE THE MEANS!  This is not rocket science, it's simple arithmetic.


TomPiper
TomPiper

If you were to look at the federal government like any corporate or individual borrower whether from an asset or revenue standpoint the U.S.A. is golden.

However, the Republican debt isn't really about debt it's about returning this country to the pre-depression economic system of laissez faire capitalism. The fact that system was a constant cycle of boom and bust is irrelevant to the folks who want its return.

RobertBrennan
RobertBrennan

I like the idea of selling a portion of these assets to pay for things like infrastructure or even the Baby Boomer SS drain but once you sell off your grandma's jewelry it's gone for good. Therefore borrowing against these assets as collateral is something this congress needs to better understand. 

KurtSchoedel
KurtSchoedel

The legacy media is finally starting to trip to what my friends and I have been saying for the past 10 years. This is precisely the reason why I do not worry about U.S. sovereign debt. These assets will eventually be auctioned off, starting around 2020 and completing probably around 2040-2050 or so. By then we'll have immortality, thus making the "old age" entitlement programs obsolete.

sixtymile
sixtymile

That's pretty neat, but if we buy the petro-resources from ourselves to payoff federal debt in a deficit budget cycle, exactly how does that help? I guess it cheers up our creditors...

easyed
easyed

Mature discussion about priorities. . . . that's a good one.

JonathanMartin
JonathanMartin

Nations love to hold gold because they understand what the average person does not: that it is real money