Secret to Understanding our BIG Budget Problems: Think Small
by KEN BRAUN
As much as the human brain must have developed since caveman times, it still tends to need small, simple numbers to understand much of the information we take in every day. Back then, it was likely, “How many buffalo must I kill this week to feed my tribe?” The answer was not “one million beasts” … nor was it “less than 100 percent of one buffalo.” The math of the caveman didn’t often require more than adding and subtracting the fingers on each hand.
As we are not that biologically far removed from these ancestors, it’s easy to see why a whole number with twelve zeros attached to it loses virtually all meaning. If you were told that the federal budget had swollen up to $3.8 MILLION trillion, rather than a mere $3.8 trillion, would $1 billion removed from that seem a million times smaller … or just as head-scratching irrelevant and confounding?
The federal debt is an even more daunting $16.5 trillion. If you want your head to really hurt, then look at them this way: $3,800,000,000,000 and $16,500,000,000,000.
Eyes glazed over yet?
There is a solution. But first, recognize that you’re not alone: A lot of the big media is right there with you, and just as confused. We’re in this big budget mess because nobody – NOBODY – speaks the language of BIG numbers. Once we get beyond the value of our home or size of our 401k – or MAYBE the annual salary of a star athlete – the zeroes all run together and we start worrying about problems we CAN understand.
Dan Mitchell, budget director of the Cato Institute, showed a near perfect example of the problem involving the Washington Post – the hometown newspaper of the federal government. Last year, in a story about cutting the federal budget, the WaPo said the following:
“The bill will cut $6 billion in federal spending. That makes twice this month that lawmakers from both parties have agreed to slash billions from the budget.”
Taking away $6 billion sure seems like a “slash” to brains not used to big numbers. And our simple whole number noggins do only slightly better knowing that $6 billion taken from $3.8 trillion is a mere reduction of 0.16 percent.
But that slash is really not even a pin-prick. Instead, what if that reporter had whacked off nine of those scary zeroes?
Try it yourself: $3.8 trillion becomes a mere $3,800 – the monthly salary of many middle class Americans.
That $6 billion the Washington Post says was “slashed” from the budget last year?
That’s just $6 out of your $3,800. Or one trip through the McDonald’s drive thru.
The President says the $85 billion budget sequester hitting this year’s spending on March 1 is going to be “harsh.” In reality, think of it as $85 – less than two trips to the gas station out of your $3,800. Or maybe even less than your cell phone or cable tv bill.
Happily, Mr. Mitchell also says simple numbers will get us to balance the federal budget. According to his calculations, the government can continue to grow larger by 3.4 percent per year for the next decade and we would still have a balanced budget by the end of ten years.
How much is 3.4 percent annual growth of government?
The entire U.S. economy hasn’t growth that fast since 2004. Our economy even SHRANK by 3.5 percent as recently as 2009. So the bottom line for our federal bottom line is that we can let government spending grow much faster than the largest economy in human history for a decade and STILL show positive cash flow by the time it’s all done.
His numbers would allow $1.5 trillion to be added to the size of the federal budget over ten years. Instead, we’re on a path to add about $2.5 trillion.
That’s $2,500 on top of your $3,800: Quite a big raise.
It’s important to understand the little numbers. They can add up to big problems … or big solutions.
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Best clarification yet…I can wrap my head around this…and it helps me worry less.
It should probably make you worry more because it further emphasizes how "effed" we are. Too each his own I guess.
not an issue until BY LAW $42 of that $85 HAS to come from the funds used to pay for the security monitoring of your house……. Oh, and YOU work for the security company……
As long as we can keep the Republicans from starting wars they have no intention of paying for, this just might work.
Right, because Obama ended Afghanistan so quickly….oh wait we are still fighting there. Stop eating up your slave master Obama's lies.
Even the WORST estimates (ie, liberal sources) place the cost of wars at about $3.7T over ten+ years, so that's less than $370B per year while we've been running $1T+ deficits for four years and counting. So it's not just the wars. Even if it was, the Democratic Whitehouse, majority House, and supermajority Senate could have defunded the wars anytime they wanted from 2008-2010. Lets face it, government of both parties spends too much money. Period. As long as they can keep subdividing us and pitting us against each other instead of holding them accountable, the longer they will get away with it and the more our future suffers.
Gee pal, I didn't know that the U.S. had ever started a war Dem's or Rep's? We have always fought wars to protect ourselves and our ally's. Go ahead and try to prove wrong? You will find out we tend to stay out of wars started by our ally's and never in U.S. history have we attacked any nation first engaging in war. I do know the animosity runs deep and a lot people say Bush started the war's, but however they attacked us on our own soil.
Who attacked us on our own soil, Glen? The Iraqis?
Andy, if you are going to call someone an "ass", try spelling the word "you're" correctly and perhaps the adults will take you seriously.
John, I'm no fan of Obama, but at least we are not getting our servicemen and women blown up in Iraq these days.
Tom, your points are absurd. The Dems have quite a few members, mostly southern, who do not vote rank-and-file. And pay attention, the Dems did not have a supermajority for three years, not even close. And you don't simply "defund a war" and leave the troops that are stationed in foreign war zones vlnerable. Besides, the Idiot Opposition will immediately accuse you of "cutting and running", which always satisfies the party's base, the flag-waving pseudo-"patriots".
love when self-appointed grammar cops make mistakes in their own posts….. Have you LOOKED at county by county blue vs red in the "southern states?" Most, not all, but most are red.
Gerrymandering
Sad part about all of this is that they aren't even really cuts at all. The government will still have more money than it had last year. Pathetic from both sides of the aisle and also the media that keeps peddling this garbage.
Perspective on Sequestration.
Simple Math for Simple Mind. Congress and the President needs to stop bickering and implement REAL solutions to save our future generation.
2.6% OMG we all are going to starve F' Barry it should be 10% stop believing this propagander if they cut all that they say they will they will save more than 2.6% they are cutting to get people to say gee the president is right he is not he is a Liar.
I explain it in thousands of thousands of millions. A billion dollars you can't get your head around, whereas one thousand million dollars is a lot of money, or one thousand, thousand, million dollars is madness.
The Republicans are coming for your Social Security and Medicare, bwahahahaha say goodbye to that scooter from the Scooter Store that you were planning on picking up for Aunt Bobbie Jo.
Here's another way to break it down. Lets say right now your monthly income is $3518.52. You've been promised an 8% raise to 3800 starting next month but the boss says he can only swing 5% so you'll have to make due with $3695 instead. It's less than you wanted but more than you have now. A sane man would be happy (or at least content) since he is still making more. He would pay back some credit card debt or put it into savings of some sort. He would't scream bloody murder and claim he's got to go without healthcare he could afford before, or cut out the vaccinations for his kids that he was able to afford last year or cut back on well… ANYTHING he can afford to do now. But our President is flying around the country saying a 5% increase to the budget (instead of the 8% we were expecting) is going to result in masive cuts to first responders , who by the way are paid by local taxes, education, FBI agents, ICE agents, and imunizations to name a few. He's also ordered a carrier not to go on a scheduled and previously budgeted deployment saying we can't afford it now, even though we could before the increase. How can anyone possibly believe that budgeting a 5% increase in spending will cause Uncle Sam to make cuts? If the govt can afford it today then with a 5% increase they should by all accounts STILL be able to afford it tomorrow plus 5% more. (I'm intentionally ignoring the fact that we COULDN'T afford it before since much of that spending is borrowed or just printed out of thin air ).