ABC’s Jennifer Loven and Jake Tapper had the following exchanges with Obama press secretary (and NC State alumnus) Robert Gibbs over the Obama administration’s “brave” talk of cutting $100 million from the budget:
LOVEN: The deficit’s giant. $100 million really is only a step.
GIBBS: But no joke.
LOVEN: You sound like you’re joking about it, but it’s not funny.
GIBBS: I’m not making jokes about it. I’m being completely sincere that only in Washington, D.C. is $100 million not a lot of money. It is where I’m from. It is where I grew up. And I think it is for hundreds of millions of Americans.
True, by itself $100 million dollars is a lot of money. But pooled from, in Gibbs’ words, “hundreds of millions of Americans,” it represents a few cents from each of them. Gibbs is relying on the significant sound of “$100 million” in presenting the cuts â€” in dealing with numbers this large, the actual size of such things as “billions” and “trillions” can be obfuscated with political verbiage, and on this point Tapper nails Gibbs:
LOVEN: The point is it’s not a very big portion of the deficit.
TAPPER: You were talking about an appropriations bill a few weeks ago about $8 billion being minuscule — $8 billion in earmarks. We were talking about that and you said that that…
GIBBS: Well, in terms of — in…(CROSSTALK)
TAPPER: …$100 million is a lot but $8 billion is small?
So let’s cut to the chase. Ignore the “-illions”; look at the figure comparatively. Harvard economist Greg Mankiw points out that it represents just 0.003 percent (and he’s rounding up!) of the budget and puts it in these terms:
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 to 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.
At the Locker Room, George Leef passed along George Mason economics chair Donald Boudreaux‘s example of a family making $50K deciding to cut $2.09 in spending (“one less gallon of gasoline or … one less cup of coffee”) while otherwise planning to spend $75K.
The Heritage Foundation makes the same point graphically:
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