What's the plan for America's gold stash?
In November鈥檚 new issue of The Atlantic, James Picerno poses the question of why, given such lean times, 鈥渋s $300 billion worth of government treasure simply sitting in vaults?鈥� He鈥檚 referring to the US stash of gold reserves. Although there are a number of good reasons for the status, it鈥檚 interesting to consider what reasons the federal government is willing to offer publicly.
From The Atlantic:
鈥淕etting straight answers (or any answers at all) from Washington about our hoard of gold is weirdly difficult. Yes, the government can downsize its holdings, said Congressman Brad Sherman, a member of the Subcommittee on Domestic Monetary Policy and Technology, through a spokesman. No, it鈥檚 not a good idea, he added, offering no elaboration. When I called to interview the subcommittee鈥檚 chairman, Representative Mel Watt, his office begged off in an e-mail, advising only that he 鈥榟adn鈥檛 studied this particular issue as of yet.鈥�
鈥淩epeated calls and e-mails to the White House press office went unanswered. The Treasury Department referred me to the section on gold in the U.S. Code. When I pressed for more information, a public-affairs official e-mailed back: 鈥楪old? Don鈥檛 you have anything better to write about[?]鈥�
鈥溾�nder current law, income from the sale of gold must be used to reduce the national debt. But nothing would stop Congress from rewriting the regulation to permit other uses. By Washington鈥檚 corpulent spending standards, $300 billion may seem modest, but it鈥檚 hardly trivial: it could, for example, reduce our $1.3 trillion budget deficit by more than 20 percent; finance Social Security for nearly six months; or fund unemployment benefits for several years鈥攊n effect, create a stimulus package without pushing us further into debt.鈥�
It seems rather obvious the last thing the feds would do is spend the cash on paying down the national debt while failing to consider any austerity measures. Instead, the recommendations above for simply spending gold 鈥� especially rather than cutting expenses 鈥� are of dubious value. Alongside the US military, the gold reserve is probably one of the nation鈥檚 not-yet diminishing assets that still insulate the US鈥� dwindling credibility as home of the world鈥檚 reserve currency.
You can read the full details in The Atlantic鈥檚 coverage of .
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