Tuesday, April 21, 2009

What Obama's pledge to cut $100 million really means - Apr. 20, 2009

I heard this on the radio before I saw it. I was sure I had heard it wrong. The announcer had to have misspoke. I mean, $100 million? that is nothing. But that is what it was. So here goes:

From CNN: What Obama's pledge to cut $100 million really means - Apr. 20, 2009:
"In essence the president has asked government agencies to trim the equivalent of .003% of the federal budget."
To put this in perspective, suppose that I spend $100 on groceries a week. After a .003% cut I would be cutting back to $99.997 a week. Or in other words over the course of an entire year (52 weeks) of grocery shopping I would save 16 cents!

Update:
Put another way:

1 comment:

Rich said...

It is a tiny amount. But a better analogy would be that you have $100 to spend a week, but you already have committed (entitlements etc) to paying out $98. The savings, therefore must come from the $2 left over. (I made up the proportions, but you get the general idea).

Clearly $100M is not very much, but it is a little misleading to portray it as a percentage of the total federal budget.