During his debate with Congressman Ryan, Vice President Biden expressed his revulsion at the idea of letting 120,000 families keep $500 Billion of their own money during the next ten years.
Here is his quote, “… $500 billion of the extension of the Bush tax cuts for the wealthy goes to 120,000 families. Hear what I just said! One-half trillion dollars will go to 120,000 American families!”
He and the President believe they can spend that money more wisely than the people who earned it. But, before having that discussion, let’s look at some math.
$500,000,000,000 divided by 10 years equals $50 Billion per year. $50,000,000,000 divided by 120,000 families equals $416,666.67 per year.
Each of these families maintain spending control of $4 Million dollars in a ten year period. (As opposed to the federal government maintaining spending control of those earnings.)
Like members of your family, when there is extra money in the pocket, it gets spent. Spent money buys factory produced goods. More goods must be created by the factory to replenish the empty store shelf. Factory workers get paid. They in turn buy stuff off other store shelves thus creating more demand for more employees to be kept employed.
Extra money in the pocket buys services. Hotel workers are employed. Restaurant workers are employed. Barbers and beauticians are employed. Suppliers for these service industries earn money and pay their employees.
None of the above takes into account the fact that some of the $416,666.67 per year (if they get to keep it) will be put back into those family businesses creating more business activity and generate more taxes.
Let’s go back to the math.
Next year, 2013, the U.S. government will spend $1.3 Trillion more than it receives in revenue. ($1.3 Trillion is the same as saying $1300 Billion.)
Let’s say we take all $500 Billion (the Vice President was speaking about) from those greedy families in one year instead of over a ten year period.
$500 Billion (in additional tax revenues from the Obama-Biden tax increase) minus the $1300 Billion (2013 deficit spending) still equals an $800 Billion deficit for next year. But, because we collected tens years worth of taxes in one year, there is nothing to offset any portion of the 2014 thru 2022 deficits.
When you do the math it turns out that the Obama-Biden tax increase on the wealthy ($500 Billion) is a “drop in the bucket” compared to the $10 Trillion ($10,000 Billion) which this country is about to add to its debt.
If the Obama-Biden government liquidated all of Bill Gates ($61 Billion) and Warren Buffet’s ($44 Billion) business holdings and put the money into the Treasury, all of that money might cover one month’s deficit (government over-spending).
Whose businesses must we liquidate the next month to cover that month’s government over-spending?
What all Americans must soon recognize is that we cannot collect enough taxes to cover the over-spending of the American government bureaucracy. There is not an additional $10 Trillion available to take.
In the words of CNBC business commentator, Rick Santelli, “STOP SPENDING, STOP SPENDING, STOP SPENDING!!!”