UK proposes a garage sale, needs the money

The news in the UK reporting that 10 Downing Street is planning on selling "non-core" government assets to make up for a budget shortfall.  Currently, the Brown government is running a budget deficit and is struggling to find ways to meet that difference between revenues and outlays. The sale also was to meet the rising demand to deal with their debt.  One way, the government proposed today, was the sale of assets ranging from stakes in businesses to looking at it's real estate portfolio that was valued at £220 billion .

This also comes into play with a concerted effort to reduce government spending.  I cannot help but think that what we're seeing in the United Kingdom is a future mirror of what will happen here. 

The plan is to sell a "portfolio of non-financial assets" held by Whitehall and local authorities over the next two years.

They will include the Tote bookmakers, Dartford crossing, the student loan book, the Channel Tunnel rail link and - having protected national security - the government's stake in Urenco.

This is a European uranium consortium, in which the government has a 33% stake. It supplies equipment to enrich uranium for the nuclear industry.

The government will also sell surplus real estate which is part of the £220bn owned by its departments and agencies.

- excerpt from "Government's £16bn sale of assets", copyright 2009, BBC

How long until we have to start selling major assets here in the US? Our deficit is now in the trillion area, our national debt is a multiple of this.  The proposed government spending ranging from health care initiatives to our military operations will simply add to this.  Now, I agree, some spending needs to be done to alleviate against the current economic crisis. But unless we get our house in order, we won't have any money at all to help anyone in this country!

You know, at the risk of proposing "economic fiction" on here, it would be nice to see a post on what it is the US federal government could sell.  The federal government owns a lot of land, not to mention a host of other assets.  Robert, my good man, you know where this government and the nation is headed, with all this debt having been accummilated by the public and private sector.  One can only think the mother of all fire sales is coming.  Like I said, it is bordering on economic fiction, in fact, it just may be and we're aware of the rule against such things.  Still...one can't help to wonder.

 

 

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we already have sold assets in the U.S.

Hey JV, glad to see you posting! Your input/insight is invaluable.

Ok, the U.S. has sold many highways, toll roads, leased lands and infrastructure to private interests. It seems to have occurred mostly at the state level.

For ex., this private Australian firm owns the leases for the Chicago Skyway and the Indiana toll road.

Sad isn't it?

That was a Chicago sale

Well, I'm kinda mixed on this. It makes me sad when they sell off highways my tax dollars already paid for. Saying that, I remember when they sold it, it was an unpopular move. But the city and the state were hemorrhaging money, actually they still are. The situation isn't very good state wise. Did you last month, Chicago's government (minus emergency stuff and some critical ops) had shut down for a day twice. Its like California. Still, recently we sold some parking meters, and then the firm that got them doubled the rates. People were pissed.

I have a weird sense of government, thinking it as a services corporation where we're the shareholders and mandatory members of their services. Anyways, it always struck me, and I'm not the first to say this, that they never found enterprises to get into. Yes, it smacks of socialism...ooooh. But hear me out. Instead of selling the Skyway, Daley should have purchased out the various parking facilities. Many places are in desperate need of new spaces. Well a public works project to build new spaces, where the city would earn a revenue off of. Crazy talk, I know, but government needs new ways to get revenue besides taxes and tariffs (because we're too damn stupid not to impose the latter, well you know what I mean).

Yes, it feels great to be posting. I found out every time I say I'm coming back and health has returned, I get a whammy in the health department. So I'm not saying I'm returning, but you get the idea. ;)

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The state of California recently had a garage sale

They even called it a garage sale.

It's inevitable for a 3rd world nation to sell of its assets. That's what happens when you don't produce things you can sell to the world.

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You have to sell something to bring in revenue

It will either be what a nation produces or its sacred assets. One or the other if it wishes to maintain a semblance of operation. The only difference between the two is that rewards of the former far outweigh the latter and that semblance is more concrete.

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legalize pot

I think legalizing marijuana kills so many problems in one swoop, just like prohibition in the 1930's....and they should do it.

I pretty "straight and narrow" personally but it just seems pot is less nasty than alcohol and many prescription drugs we see advertisements for daily.

They should also enforce immigration laws. CA spends $10.5 Billion a year on illegal immigrants/immigration and it's pretty clear they cannot afford this nice philosophy. They could easily do something in the areas where it makes most sense, say criminals, gangs, felons.

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We still have lots of unsold assets

Florida has flirted from time to time with privatizing toll roads. So far, we have not gotten around to selling the Everglades to China. But I'm sure some administration will consider selling our national parks to, say, Marriott Corporation or to developers. And while we're at it, our cities could privatize traffic enforcement -- let Corrections Corporation of America issue tickets and collect fines. With corrupt politicians, the possibilities are only limited by their lobbyists' creativity.
Frank T.

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Frank T.

Something else the UK is doing

Official attempts to re-inflate the property bubble aren't limited to America. The U.K. government is doing it too.

(Bloomberg) -- Stuart Heathcote and his wife never intended to buy a house this year. Then the U.K. government offered an incentive that changed their minds: a no-money-down mortgage.
...
Easy credit is back in the U.K., and this time the government and homebuilders are making the loans. Seeking to recover from the worst recession in a generation, Britain is helping as many as 10,000 buyers obtain 100 percent financing through a 300-million-pound plan called HomeBuy Direct at a time when mortgages are scarce and, according to Ernst & Young LLC, home prices will “stagnate” for at least two more years.
“It’s a catastrophe waiting to happen,” Robin Hardy, a homebuilding analyst at KBC Peel Hunt, said of the plan. “If the only way a certain bit of the market can work is to lend deposits, those people can’t afford a house. It’s being done for the industry and not for the first-time buyers.”

Do government's have any clue at all what makes an economy work?

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