The Homa Files

President Obama announced plans to cut $100 million from the federal budget, and department heads will have to make the cuts within 90 days. For example, Homeland Security is going to start buying office supplies in bulk instead one at a time.  That’s some out of the box thinking for you …

While the initiative was treated by most media as a big deal.  A few observers — left & right — have tried to put the $100 million in perspective. Here are a couple of my favorites:

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From Tom Bemis at Marketwatch:

“To get a handle on how insultingly trivial the announcement is, one need only compare the targeted cuts to the administration’s spending plan for 2010.
With cuts in federal spending by $100 million, the government will save roughly 1/36,000 of the $3.6 trillion it expects to spend next year.

Put another way, if the budget were a yardstick, the administration would be proposing to shorten it by about half the width of a human hair.
http://www.marketwatch.com/news/story/Obama-makes-puny-effort-budget/story.aspx?guid={AF7E28F0-CEBA-426D-AC0A-448537C5A627}&dist=hplatest

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From Paul Krugman of the NY Times:

” Let’s say the administration finds $100 million in efficiencies every working day for the rest of the Obama administration’s first term. That’s still around $80 billion, or around 2% of one year’s federal spending.

OK, politics is theater. But you could argue that the president shouldn’t feed the bogus claim that we can close fiscal gaps by eliminating a bit of waste.
http://krugman.blogs.nytimes.com/

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From economics guru Greg Minkow’s blog:

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 …  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.
http://gregmankiw.blogspot.com/

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Thanks to Tags for the heads-up

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This entry was posted on April 21, 2009 at 7:59 am and is filed under Financial Crisis, Obama Administration. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.