I heard a couple of breathless radio news updates this AM trumpeting how Lord Obama is demanding a cut of $100 Million from his cabinet this morning. We're supposed to go, "Oh Lordy, he's cuttin' the spendin' now!" If I was a Secretary of Whatchamaccallit at the big cabinet meeting I'd have to cover my face lest the Lord see me smirk.
Sure, $100 Million sounds like a lot to you and me. It isn't even a rounding error in the budget of Health and Human Services. In fact, it's 0.003% of the federal budget.
Greg Mankiw gets out the calculator:
"Just to be clear: $100 million represents .003 percent of $3.5 trillion.To put those numbers in perspective, imagine that the head of a household with annual spending of $100,000 called everyone in the family together to deal with a $34,000 budget shortfall. How much would he or she announce that spending had be cut? By $3 over the course of the year--approximately the cost of one latte at Starbucks. The other $33,997? We can put that on the family credit card and worry about it next year."