Tuesday, May 15, 2012

How to Balance the Federal Budget

It's really not hard. Stop spending and find something hard to back the buck. It's not Gold by the way.
"The United States government has direct ownership of almost 650 million acres of land (2.63 million square kilometers) – nearly 30% of its total territory. - Big Think"
The Feds for instance "84.5% of Nevada." What's the whole enchalada worth? All the land in the USA? The Feds for instance only own 69.1% of Alaska, but Alaska is our largest state. So the Fed's holdings in Alaska are greater in terms of acreage than a lot of states combined. 15 years ago it was worth "billions." In the age of typewriters, it was worth almost a billion. If you take a deep breath and realize that the real definition of inflation is not "rising prices" but the printing of money, then you know that a Billion in the '80's is a lot more money now.

But what is the actual value of Federal Lands now? Net Right Daily refers to the type written paper I linked to above when guessing at the value of Federal Oil and Gas rights at "$1.8 trillion, adjusted for inflation." It doesn't seem that anyone has a real account grasp of the total value of the holdings of our Federal Government. So how about a Dirt Standard? We don't have the assets outside of our land to back the dollar, so back it with dirt. We've got the dirt. I've been suggesting we should sell it off for years, though I don't recall if I've mentioned it here. It's a big country, so someone else as thought of this as well:
From "Winona 360" - "It might surprise you to hear that the Federal government owns 35% -- just about 650 million acres -- of the land mass of the United States. Most of this land is intended for all citizens (and future generations) to use and enjoy, and includes all National Parks, National Monuments, National Forests, and National Wildlife Refuges."
About a year ago, the Richmond Times Dispatch took a shot at it:
"Suppose, for instance, that 10 percent of the 650 million acres — 65 million acres — would be offered for sale only to domestic energy companies. Of course, each parcel sold would need to be priced at its respective market value and evaluated so as to weigh its comparative merits for producing energy versus being preserved for environmental or scenic value. For the sake of illustration, if these tracts were sold for an average of $1,500 per acre, the resulting revenue to repay our hemorrhaging national debt would be in the range of $97.5 trillion."
But, they must be using an early "Pentium" chip, because the total value of federal land at $1,500 an acre is more like a trillion. The concept of a trillion can be complicated by the fact that the British for instance, have more zeros in their trillion, than we do. For US consumption, a trillion is a "1" followed by 12 zeros. So 650,000,000 is 650 million. If you multiply it by 1000, that's 650,000,000,000. That's not quite 12 zeros. You add another half a thousand to the mix and it rounds up rather neatly to a trillion. It would seem that in dealing with Carl Sagan sized numbers, we can't quite get our minds around them.

Nevertheless, it's a lot of money. It's two trillion if you get an average of $3,000 an acre. I honestly don't know what the average value is, but doubtless oil and mineral right lands are going to pull a prettier penny than a swamp. The Debt Clock is racing toward a national debt figure if $16,000,000,000,000. So that's an eight of the national debt. If we backed the dollar with Federal Land value, in some creative way, I think it's going to take a chunk out of it. An eighth of the debt in terms of raw annual net worth of the lands the US Government holds is somewhat significant. At some point, the dollar must be rationalized to real value, not to numeric face value, or it's going to end up in the gutter. Stop spending and printing the dollar, and start backing it.

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