Tuesday, May 19, 2009

President Obama slashes Budget $17 billion dollars

President Obama has taken a fine-tooth comb and a magnifying glass to the Federal Budget and has examined the proposed budget item by item and has cut a whopping $17 billion dollars.

This from CNN Money:

"There is a lot of money being spent inefficiently, ineffectively, and -- in some cases -- in ways that are actually pretty stunning," Obama said.

The $17 billion in savings amounts to roughly 0.5% of the more than $3.5 trillion in spending approved for next year, or 1.2% of the projected $1.4 trillion deficit next year if the president's overall budget is adopted.

Obama said it nevertheless is real money -- even by Washington standards.

"To put this in perspective, this is more than enough savings to pay for a $2,500 tuition tax credit for millions of students as well as a larger Pell Grant -- with enough money left over to pay for everything we do to protect the National Parks," he
said. (link)

Seventeen Billion dollars is a lot of money. Why am I not impressed?

To put this in perspective, let us assume I have a household budget of $60,000. My anticipated income is only $36,000. I take a hard look at where I can cut and I discover $300 of wasteful spending. Maybe I find I can give up my twice a week trip to Starbucks for my Grande latte.

Impressed? But wait, I don’t actually reduce spending by $300. I find that that $300 can be better spend elsewhere, so I reallocate the $300 and use my credit cards to fund the missing $24000. Impressed?

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