My wife asked me Sunday just how much is the agreed $38 Billion budget cut compared to what our federal government is spending (2011 budgeted spending is $3.83 Trillion). So to put this cut into its proper perspective according to what the U.S. Office of Management and Budget estimated for the 2011 U.S. budget:
+ Revenues of $2.57 Trillion
– Expenditures of $3.83 Trillion
= Deficit of $1.26 Trillion
So based on all these numbers this agreed upon cut is approximately a 1% reduction. So how much is that? Well that’s kind of like a couple that makes $75,000 per year choosing to eat out one less time per week. And if you’re like me, eating a couple less cheeseburgers per week would probably be a good thing and certainly not a sacrifice.
For some reason our congressmen (both Republicans and Democrats) may not realize that their electorate is more aware, knowledgeable and educated than ever before. Could the average American recognize a “spin” when they hear it? Below is a quote from Dennis Gartman in his financial newsletter on Monday, April 11th:
“Both the Republicans and the Democrats have been out over the weekend touting this agreement to include ‘the largest spending cut in U.S. history.’ This is utter and complete nonsense for all they’ve done is cut back the even larger sum of spending they’d agreed to previously. If you agree to spend an additional several trillion dollars and then cut a few tens of billions from it, you can indeed say… hoping to keep a straight face in the process… that you’ve made the largest budget cut in history. Shame on these men and women. They embarass us all.“