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Monday, July 20, 2009

Fun With Numbers: Budget Cuts, Deficits, and Interest

Today is the day that Cabinet secretaries are supposed to present budget cuts to the president in order to save $100 million dollars, together, from their combined budgets. So far, the administration has not released those budget cuts. At the same time, the interest on our budget deficit, financed through bonds, costs the country $100 million DAILY. In other words, if the White House finds these cuts, and they're put into effect, then they'd find enough savings to pay for one day's worth of interest in the debt the government pays each and everyday.

If ever there was a numerical indictment of just how poorly our government manages its finances, it's these sets of numbers. Our deficit recently crossed $1 trillion. The administration is delaying releasing the numbers from the last quarter. Our budget deficit will likely be north of $2 trillion for the entire year. Our debt is so large that the daily interest we pay is $100 million. Yet, our government, hopefully, will figure out today how to save $100 million for the year in other parts of the budget.

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