Assets and Liabilities in State Budgets


In Order to cope with burdensome Liabilities of States


In order to observe international interest with the issue of "Assets and Liabilities in State Budgets" this is a condensed  English version of the issue in the “German Version”



USA is considering productive Assets of States

Niall Ferguson, Harvard, published in Newsweek  on the same issue an article

The  ECONOMIST published an  extensive essay  on the topic in the issue of January 11th 2014


This very policy of the following proposal is now being designed by the EURO-Group of Jean-Claude Junker to cope with the Greek Crisis of burdensome debt by liquidation of State-Assets through a body of trust estate (acc. German Treuhand-Anstalt). Problems in Liquidation of Greek productive State-Assets is no objection in principle.


Loans and Collaterals


EURO-Bonds and further loans to States of EURO-System should be secured by COLLATERALS issued by a TRUSTEESHIP - Body (like German Treuhandanstalt) managing assets deposited as securities.


This policy is matching to manage Greece-Problems but also for other countries of the EUROPEAN UNION like Italy, Portugal and Spain.


The very Problem of a 3-stage Banking-System

After Elections in France and Greece Fiscal-Union again in discussion

The problem of a 3-stage Banking-System ( = EURO-Countries) in comparison to a 2-stage Banking-System in principle. Just to say it simple: If in UK with its two-stage banking-system a City is not in line with policy of MP Cameron, Cameron could send troops. However, when in EURO-States Greece is out of Budget-Control Holland /Merkel could not send troops to discipline Greece.



Graphik 2 / 3 - Stage-System


Proneness to Crisis of the Euro Bank System

The initiative of the President of the ECB (22. January 2015) to move onwards European economy (unemployment and debt conditions) gives strong evidence that the Three Stage Bank System with its many competencies is cumbersome and regarding released speculations as crisis trouble spot.




The Problem of Managing Assets in Principle

If one considers the actively working total assets of STATE contributing directly to the Gross National Product (= highways, railways, interests in industry, real-estate,  business etc) a gap between assets and debt is apparent. Such active property of STATE is regarded as spent expenditure as if never recoverable because of GOVERNMENTAL ACCOUNTING (= fund accounting ).  But these assets parts participate in the process of the creation of the Gross National Product. The entrepreneur government counts itself as if poor and complains about its debts, however, the debts are covered by active parts of assets in their property. This gap is the issue.


The usual way to cope with the problem is to sell such active parts of National Assets to cover gap in State Budgets, leaving aside to cover lasting debts of state. Moreover, such government spending is attracting additional expenditures. A way must be found to cover debts from the capital market other then by surrendering important state assets to private entrepreneurs. Since it should be agreed that Government sometimes has a solid interest in ruling certain enterprises this could be managed by selling fond-shares in such assets.


Fiscal accounting is taking every expenditure in principle as never recoverable. But a big part as airports, highways, railways etc. further contribute to the Gross National Product.(see FAZ of the 11.1.2011.)


Nearly all States try to cope with such burdensome heavy debts


States could manage their active assets in a Fond. Fond-Shares are sold in the capital-market and credited to Debt of State.


Provided the fond is organised shrewdly by clear-headed managers and the assets are transparently managed such additional market to co-operate in Public–private partnership (PPP) is a promising new approach.






As a result the interest of future generations is born in mind. Lamentation about neglecting their interest is considered. Have a look to   The Case of Germany



A Contribution in


RE: [WH Blog] White House White Board: OMB Director Jack Lew on the President's Budget

Budget deficits are challenging. But this problem is in nearly all countries.

You can manage a big scale of deficit if you realised that The VERY US is harbouring a lot of unguarded assets, I do not mean recovering GM, but US got a lot of assets. Bring this in a fond and sell fond-shares. Such proposals are discussed in Germany, see