And he said Alaskans wouldn’t need to borrow money to fund their offer. “We could print our own currency to complete the sale,” Treadwell said, “but unlike yours, ours still could be backed by gold as well as vital rare-earth minerals, oil and gas, timber and fish, fur-bearing critters, geothermal and hydro power, flyover rights to Asia, valuable military bases, and of course our fastest-growing export — reality TV shows.”
Like many absurd ideas, the notion of auctioning off Alaska has legs planted on solid ground. The idea comes from Jim Millstein, a former senior Treasury official for restructuring who oversaw the successful, and profitable, federal overhaul of collapsed insurance giant AIG. He now has his own investment and advisory firm.
He floated the proposal (tongue in cheek) in a paper for a Wharton Business School conference on U.S. government debt. Speaking on a panel called “U.S. Ability and Willingness to Pay: Unwinding the Empire,” he also tossed in the possibility of selling off vast federal lands in the Rocky Mountain states and offshore areas. In a book based on the conference, his chapter was called “Burning the Furniture to Heat the House — The Potential Role of Asset Sales in Funding the Federal Government’s Deficits.”
As Millstein noted, there is a serious point beneath all this: Countries that spend with abandon and ask little of taxpayers end up facing some unpleasant choices.
Selling off the national furniture isn’t unusual or far-fetched in other parts of the world. When governments spend beyond their means, the International Monetary Fund usually rolls up and offers aid, often with a condition: Sell state-owned assets. Sometimes that means the state-owned airline or phone company. After the fall of communism, Eastern European countries sold off state-owned enterprises.
This can wound national pride, as in Greece recently. Two right-wing German politicians triggered outrage in Athens in 2010 when they said Greece should sell historic buildings, artwork and unpopulated islands.
But it’s not without precedent. In 1803, France was in a position that should sound vaguely familiar. France, the superpower of continental Europe, had suffered a severe setback in Haiti, where fighting had exacted a steep cost in lives and treasure. Napoleon wanted to bring the troops back home to confront England. So rather than maintaining all of his far-flung empire, he decided to sell the Louisiana Territory — including part or all of 14 modern-day U.S. states — to us for $15 million.