Johnsen in WSJ: Go on a Fiscal Diet

"The U.S. government is no different than a homeowner facing foreclosure," says Professor Bruce Johnsen in an op-ed appearing in The Wall Street Journal. "Either it earns more money, adjusts its spending habits or gives up its assets."

Writing with Terry L. Anderson, Johnsen argues that the sale of parts of the one-third of the country comprising federal assets, such as acreage held by the Bureau of Land Management and the U.S. Forest Service, the Outer Continental Shelf, and national parks, could be sold to meet debt payments. He cites Greece as an example of a nation prepared this past summer to sell public property to raise over $40 billion.

"Instead of selling public properties," Johnsen says, "Washington politicians could start better managing their land portfolio." He cites modest increases in visitor fees for national parks and the lease of more lands for commodity production as alternatives to the sale of assets. 

"Washington has few options for raising more revenue without disrupting long-run growth, and no one wants to see America's public treasures sold," Johnson says. "That only leaves one alternative: Go on a fiscal diet."

Sell Yosemite, Hold a Smithsonian Yard Sale, The Wall Street Journal, December 27, 2012. By Terry L. Anderson and D. Bruce Johnsen.

"Facing the 'fiscal cliff,' perhaps the president and Congress should start thinking in terms of the 'foreclosure crisis.' All lenders, whether a local home-loan bank or the Chinese government, expect to be repaid either from the borrower's income or, if that is insufficient, from the sale of assets. Where does that leave the U.S. government?

"It seems unlikely that Washington could repay its debts by raising more tax revenue. After all, Chris Cox and Bill Archer reported in these pages that the Treasury could not cover the $8 trillion required to avoid going deeper into debt even if the IRS confiscated all taxable corporate income and all the adjusted gross income of taxpayers reporting more than $60,000. 

"So what federal assets could be sold to meet debt payments? Consider the one-third of America held in federal lands. The Bureau of Land Management administers a whopping 253 million acres. Private grazing land goes for at least $1,000 per acre. If you add to that the oil, gas, and mineral potential, that land ought to fetch at least $2,000 per acre, or $500 billion in total."