Selling Government Assets

In November of 2008 I wrote:

The Federal Government owns more than half of Oregon, Utah, Nevada, Idaho and Alaska and it owns nearly half of California, Arizona, New Mexico and Wyoming. See the map (PDF) for more [N.B. the vast majority of this land is NOT parks, AT 2011]. It is time for a sale. Selling even some western land could raise hundreds of billions of dollars – perhaps trillions of dollars – for the Federal government at a time when the funds are badly needed and no one want to raise taxes. At the same time, a sale of western land would improve the efficiency of land allocation.

The Obama administration is beginning to implement just such a proposal. Jonathan Easley of Salon summarizes:

The administration has identified a massive asset class worth unloading. The federal government is the largest owner of real estate in the nation, sitting on hundreds of millions of acres of land that takes up about 30 percent of the country’s surface. The value of Uncle Sam’s nondefense real estate portfolio is estimated at $230 billion, and it carries a maintenance cost of around $20 billion a year.

If Congress moves ahead on the White House’s recommendation, 60 percent of sale proceeds from properties the White House has deemed excess will go to paying down the deficit, with 40 percent to cover costs on other government-run facilities. In addition to the one-time cash from the sale, the government can begin generating tax revenues on land that was previously an expense.

The first set of assets proposed to go on the auction block are mostly empty or little used warehouses, office buildings, barracks and other properties, quite a few of which are now scheduled to be demolished. The total acreage up for sale is very small so Easley greatly exaggerates when he says the proposed sale is Obama’s “libertarian turn,” but heh, it’s a start.


Comments for this post are closed