Monday, April 18, 2011

Let's Get Real About Budget Cuts

One of my clients is a flaming liberal on social issues, and a hard-core conservative on monetary issues - needless to say, I find him quite interesting to talk with during sessions. Oh yeah, he's very smart, so he has no problem rationalizing the cutting of "entitlements" to give tax breaks to the wealthy (he notes that nearly half the population pays no "real" income tax, although this does not account for their payroll taxes, sales taxes, gas taxes, and so on, ad infinitum).

He sent me this video clip today - we've been talking a bit about the federal budget issues in the last couple of weeks, so this is very useful to that discussion. The video is making the rounds in conservative emails, but it's actually from shortly after Obama took office (April, 2009). Still, it's a good lesson in matters of scale.
How much is the $100 million dollars in budget cuts compared to the federal budget as a whole? This video imagines the budget as $100 in pennies to provide the answer.

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teeny yogini said...

Although people truly do have difficulty understanding scale, I was taken aback to see this here. For one thing, the President just agreed to $38 billion worth of budget cuts, not $100 million. (I realize you said the video was old, but it's still misleading, and I keep seeing this posted lately as if it applies to what's happening now!) Second of all, I think this trivializes the extremely difficult work of trying to come up with a budget for an enterprise as large and complex as the United States. It's not just a simple matter of dumping more pennies -- some of those pennies are people's livelihoods as well, which this video does not remind anyone of.

william harryman said...

I agree with you in part - each one of those pennies is 400 million dollars - so it is very misleading in some ways.

I don't think the president actually agreed to $38 billion in cuts (most of those cuts are to social programs that help the poor) as much as he gave them away without a fight.

We could 38 billion from military spending right now and not notice it. We could impose ANY amount of incomes tax on large corporations and make $100 billion in tax revenues that would pay for social programs and reduce the deficit.

Obama went into negotiations on the budget with the goal of keeping spending where it is right now as the economy recovers. Instead he gave the GOP all of the cuts they wanted.

That $38 billion is 19 stacks of those pennies - a very tiny fraction of the budget.

Obama's point in the speech he gave recently on the budget is that each time we take a penny or two out that spending, some poor person has to pay 3,000-4,000 more a year out of pocket for health care or some other necessity.

My thought in posting the video was to give a visual idea of just how out of control federal spending is - and why cutting social programs is absurd when the INTEREST on the national debt is 25% of federal spending right now.

teeny yogini said...

Thanks for writing back! I agree with you that there are many poor decisions made about where and how to cut. I also agree that it's hard for people to understand the vastness of federal spending. But I still don't like the over-simplification of this video -- maybe if it actually labeled how many pennies go to various items it would be more instructive. I do understand why you put it up, but I guess I just worry that it only adds to the general confusion! I remain deeply appreciative of all that you do.