Friday, December 7, 2012

All the gold in the Bank of England

Below is an interesting video of the gold stored in the vaults of the Bank of England. It helps illustrate just how bad the federal-spending addiction is. The vault shown is stacked high with gold -- 4,600 tons of gold. That vault is only one room in a complex of vaults in that facility.

According to the video, the total value of all the gold in those vaults is $315 billion. That'd pay about 2% of the US national debt. Then what? All that 4,600 tons of gold would do is pay 2% of the national debt! It won't buy anything new. It only paid 2% of the national debt! Or, we could use it or pay this year's budget deficit. Nope, only 35% of one year's deficit. Then what? The gold is gone and we still have to cover the other 65% of the year's budget deficit!

Obama wants to tax the rich "a little more", giving us the illusion that doing so would fix the budget deficit or the national debt. How much will his tax-the-rich scheme bring in? One estimate is about $500 billion over the next 9 years. That works out to about $55.5 billion in new taxes per year -- enough to pay about 6% of each year's budget deficit. The tax he'd take from the wealthy in the first 6 of those 9 years would be a bit more than all the gold in those Bank of England vaults!

By the way, when you filed your tax return for 2011, remember that line for "Alternative Minimum Tax" (AMT)? Although the AMT was originally enacted to target 155 high-income households, it now affects millions of families each year. You're probably paying that tax. Does the fact that you're paying a tax that is supposed to only target the very wealthy make you feel very wealthy?

With that in mind, when the big spenders in DC say they're only going to "ask a little more" from the very wealthy, know that they're talking about you.

So, what are we getting for all this wild federal spending? New tanks, bombers, and aircraft carriers? Most of the equipment our GIs are going to war with is 20-40 years old! Don't blame the huge deficits on the Department of Defense or even on our eagerness to engage in wars all over the globe. Sure, that's expensive, but about 60% of federal spending is on non-defense programs for which there is absolutely no constitutional authority -- so-called entitlements!

We don't have a revenue problem. We have a spending problem. A spending problem that almost nobody in DC is serious about -- because half the voters aren't serious about it. Think of all the gold we'd save if we stopped spending gold we don't have on federal programs that shouldn't even exist in the dreams of either politicians or voters!

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