"House Republican Proposes Fire-Sale of Utah As Alternative To Raising The Debt Ceiling"
In a legislative bargain you do something you don’t necessarily want to do in order to get the other side to do something they don’t necessarily want to do. And this is the fight that House Republicans want to be having with Barack Obama over the debt ceiling. Except the reality is that House Republicans don’t want the US Treasury to be unable to roll over its outstanding debt. So to execute the tactical move they want to make, they need to talk themselves into the idea that they actually don’t think the debt ceiling needs to be raised. That’s leading to a lot of creative ideas. For example, last night my boss Faiz Shakir wrote about Representative Dennis Ross of Utah’s idea that we should engage in panicky real estate sales:
Dennis Ross, a House Republican and a member of the Tea Party caucus, told Reuters: “I don’t think Treasury has been up front with us. I am not convinced the sky will fall in on August 3.”
Ross added: “I’m not an economist, but I have maintained a household. The federal government owns 70 per cent of Utah, for example. There are federal buildings. If you need cash, let’s start liquidating.”
I’m somewhat sympathetic to the view that the federal government ought to decrease its holdings of western land. But as with the proposal to sell the gold in Fort Knox, if you try to suddenly liquidate all these assets you just wind up with fire sale prices and much less money than you deserve. Besides which, there’s no reason to do this. The federal government’s not running out of cash because it’s not creditworthy. People are eager to lend the cash. We’re running into a cash flow problem solely because of the reluctance of House Republicans to do the right thing on the debt ceiling!