Clarke Dryden Camper is Senior Vice President, Head of Government Affairs and Public Advocacy at NYSE Euronext, a...
As both the recent House debates over cutting $100 billion in federal spending and the ongoing protests in Wisconsin make clear, closing government deficits is rarely a simple proposition. The two available policy levers – raising taxes/revenues and cutting spending/benefits – arouse powerful constituencies that often lead to political deadlock and disappointing results.
But what if, Harvard Professor and provocative author Niall Ferguson asks, there was a third way that bypassed painful tax hikes or spending reductions? In his latest Newsweek column, Ferguson suggests the U.S. government “do exactly what it would if it were a severely indebted company: sell off assets to balance its books.”
No, Ferguson is not suggesting putting a “For Sale” sign on Yellowstone or Yosemite. Instead, he proposes looking at government assets that might be more profitably managed in private hands, including the federal stake in the Tennessee Valley Authority’s electric-power assets, the Southeastern Power Administration, the hydroelectric “empire” of the U.S. Army Corps of Engineers and even Amtrak. The government also owns approximately 30 percent of U.S. land – about 600-700 million acres. Ferguson also proposes a step that countries such as Japan, Turkey and China are already pursuing – allowing private companies to manage the revenues and maintenance of highway systems.
According to Ferguson, since the 1990s, governments around the world have privatized assets worth $735 billion. State and local governments such as Indiana and the City of Chicago are already pursuing asset sales to improve government balance sheets. Rather than try to dig ourselves out of our fiscal troubles with austerity budgets, Ferguson argues federal policymakers should “get smart and start inviting bidders to what could be the sale of the century.”