By Scott Tibbs, July 22, 2011
Calvin Woodward of the Associated Press makes the utterly laughable suggestion that liquidating the government's gold reserves "could raise a very handy $400 billion" for deficit reduction, comparing it to selling the family's jewelry during hard economic times. The point is to compare the federal budget to "kitchen table" economics.
Of course, that would be completely meaningless, short-sighted and foolhardy. The estimated budget deficit for 2011 is $1.64 trillion. That's not the national debt, folks. That is the amount that spending exceeds revenue just for one single year. Government spending increased dramatically from $2.98 trillion in 2008 to an estimated $3.82 trillion in 2011, according to the official White House web site.
What that means is this: If we sold every last ounce of gold in our reserves, the federal budget deficit for 2011 alone would be $1.2 trillion. Liquidating our gold would eliminate only 1/4 of the budget deficit and would have absolutely no effect from 2012 and beyond. A silly suggestion like this should not be taken seriously. We are on a path that everyone knows is unsustainable, and we have no other choice but to drastically reduce government spending.
The arguments from Democrats on the deficit represent shifting goalposts. First, they argue that we must increase taxes in order to close the budget shortfall. When conservatives point out (correctly) that spending is the problem, Democrats complain we cannot reduce spending because that would hurt the economy. Hello? Increasing taxes would hurt the economy too - something Barack Obama himself admitted last December when he decided not to raise taxes.
If we are going to get a long-term handle on the deficit, we need to deal with entitlements, which represent a huge portion of government spending. But fear mongering by Leftists makes a rational discussion more difficult. A couple months ago, a Leftist group released a video with a man shoving a terrified elderly woman off a cliff. This supposedly represented what Republicans wanted to do to seniors.
In response, a conservative group released a parody of that ad, pointing out that unless we solve the budget crisis, we will condemn future generations to crushing tax and debt burdens that will strangle both the economy and personal wealth. Whether the image of tossing a child off a cliff is appropriate or not, this is something that must be solved and it is incredibly irresponsible of politicians to keep handing out the cash with no effort to balance the budget.