From: ekp@mcnc.org (Edward Pavelchek)
Newsgroups: sci.econ
Subject: Re: Confronting the Deficit/Debt Boogyman
Date: 9 Apr 92 22:25:49 GMT
Reply-To: ekp@mcnc.org (Edward Pavelchek)
Organization: Good place for a disclaimer

In article <1992Apr7.052044.25065@nuscc.nus.sg> ipser@solomon.technet.sg (Ed Ipser) writes:

I wish to respond to several points, but they are diverging, so I am
splitting the responses.

Ed Ipser thinks that lowering the net assets of the government is good,
I asked him for an estimate of the current level, he gave no estimate,
but thought that it must be high, and
opined that the National Parks and interstates were worth at least
"trillions".  I stated that 100K miles of interstate@ $10M/mile was only
$1T.  I haven't obtained interstate mileage, but 100K seems generous.
He failed to respond to this, but upholds the relative worth of the
National Parks.

>>(ekp)The national parks are nearly worthless - resource poor, isolated, poor
>>traffic access, not competitive with Disneyland.

>(Ipser)This is totally baseless. The fact that they are not utilized efficiently
>by the fedederal government is no evidence of an inherent lack of value.

I hope someone with more accurate numbers steps forward, but the total
real estate value of this country is estimated $10T -15T, I believe.
Since the parks were less valuable pieces not developed in the last
century, and amount to less than 0.6% of the lower 48, an
estimate of $60B seems very high.  60B <<2T.

>>If the government started with only the 13 colonies, and has taken in 
>>$X, and spent $X+4 trillion, and has a huge positive net worth, then how
>>can you criticize their performance so strongly?

>$X being the total of taxes collected over two hundred years? Besides, I
>think you are confusing private and public property again.

Surely the total assets serve as an effective upper limit on government
assets???

>To say that the federal government "started with 13 colonies" is to
>totally misunderstand the legal relationship between the people, states,
>and federal government.

Fine!! The federal gov started with nothing, has borrowed $4T, and you
maintain its worth is much more.  Even more complimentary to their
management.

>>I can estimate the assets differently - the GNP is something like
>>$4T, most of which is labor. If 20%, or $800B is the output of the 
>>the capital assets of this country, then at a 20:1 PE ratio, the total
>>net worth of the country is $16T.  Off the cuff, I will guess the
>>governments (state, fed & local) hold 10% of assets, or $1.6T - hence the
>>feds are long bankrupt.

>This is a really bad way to estimate value of assets with respect to a
>quasi-bankrupt entity like the federal government.

But it is an excellent way to estimate corporate worth, and you were
using a corporate analogy.  Please demonstrate a better one.

>What we really need is a Wall Street-style hostile takeover of the federal
>government. Break it up and sell off the pieces. 

When this happens on Wall Street, it is backed up by copious figures and
calculations, be they right or wrong.  You are advocating it, show us
your calculations.  Right now, you won't even estimate present value.


-- 
That is the land of lost content,       Ed Pavelchek   ekp@mcnc.org
  I see it shining plain,
The happy highways where I went
  And cannot come again               AE Housman
Organization: School of Urban & Public Affairs, Carnegie Mellon, Pittsburgh, PA