Sell gold to reduce federal debt

May 16, 2011

With the debt ceiling deadline upon us, some conservative and libertarian economists say that instead of waiting for Congress to act, Uncle Sam should take advantage of Fort Knox's assets.

With the precious metal's current price at around $1,500 an ounce, they argue, selling a bit of America's gold could make a big dent in the country's federal deficit.

Gold ingots of 1 kg and 500g are seen in this picture illustration taken in the treatment centre at the Banque Cantonal Vaudoise near Lausanne February 17, 2011. REUTERS/Denis Balibouse (SWITZERLAND – Tags: BUSINESS)

"It's just sort of sitting there," said Ron Utt, a senior fellow at the Heritage Foundation told the Washington Post. "Given the high price it is now, and the tremendous debt problem we now have, by all means, sell at the peak."

The gold selling idea comes on the heels of The Onion's satiric suggestion to burglarize the nation's gold depository as a deficit reduction plan, which at the time seemed like a far-fetched lark.

Then life goes and shows us it can get goofier than our imaginations.

OK, the gold selling advocates aren't exactly suggesting that Fort Knox guards head out to a Kentucky equivalent of the late-night cable TV "we buy gold" advertisers, but the suggestion to unload the bullion does smack a bit of the kind of desperation to which those ads cater.

Are we really at that point?

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