THE ASSET SALES with which the administration has dressed up its budget the past several years would be a bad idea if they worked. Now it turns out they don't even do that.

The loan sales on which not just the administration but Congress as well was counting for billions of deficit-reducing dollars this year haven't gotten off the ground. The Veterans Administration tried a test sale of housing loans, not on the terms on which it has been laying off such loans for years -- the government will buy them back if they go bad -- but on a so-called non-recourse basis. It got two bids at 15 cents on the dollar -- jokes, we are assured. The "serious" bids ranged from 60 to 67 cents on the dollar and for only about a tenth of the small volume offered. The VA canceled the sale.

The Federal Housing Administration also had some loans up for bid, on low-income housing. Here the problem was not the price but protection of the purpose of the loans. How would the government continue to look after the interests of the tenants? This offering was also canceled.

The two cancellations neatly bracket the problem. The asset sales are a problem most basically because they represent a kind of lie. They use one-time-only infusions of supposed cash to paper over the government's real financial difficulties. Have a yard sale now and let the next administration raise taxes: that's about the cleverness of it.

But beyond this threshold problem, the only assets private investors will buy at a reasonable price are profitable ones that are making the government money, not costing it. Over the long term, these lucrative asset sales add to the deficit they purport to reduce. For loans that aren't particularly profitable, the market won't pay a useful price. But the government made a lot of these loans precisely because they weren't profitable, the market wouldn't make them, yet there seemed to be an important social purpose to be served. If it were a lot of fun and games to build housing for low-income people, there wouldn't be a low-income housing shortage.

The asset sales have never been more than a sideshow to the budget problem. Luckily, the sideshow is going badly