Washington Math: Playing With Numbers

Consider this hypothetical scenario: at the first of the year, my wife tells me she needs to raise her monthly shopping allowance by $200 due to inflation, fashion changes, etc. Being the devout fiscal Conservative I am, and after a long, not-so-loving negotiation, we finally settle on a monthly increase of $125. Did I succeed in cutting our monthly budget by $75?

In the fiery words of John Boehner: Hell No!

Now consider this real-life scenario: According to CBO data, Federal expenditures in 2010 totalled $3.456 trillion producing a deficit of $1.293 trillion. The latest estimate for 2011 total Federal outlays is $3.819 trillion which does not include the negotiated $38B in “cuts.” So with the cuts factored in, 2011’s spending will come in at $3.781 trillion giving us a new record deficit of just over $1.6 trillion.

So let’s get this straight: Government spending will be $325 billion higher this year than last year, and the deficit will grow from $1.3 trillion to $1.6 trillion. But when we look toward Washington, we see politicians from both parties running around with their hair on fire hootin’ and hollerin’ about pulling off the “historic” feat of producing “the largest spending cuts in American history.”

But wait – it gets better.

President Obama’s campaign speech yesterday outlined a plan that would “cut” the deficit by $4 trillion over 12 years. Relative to what? From which baseline did the President start to make that bold, daring proclamation?

The best my research can determine, the starting point is his original 2012 budget proposal. You know, the un-adopted, pie-in-the-sky, wish-list budget that would have – according to his own projections – given us $7 trillion in new debt over 10 years and closer to $10 trillion over his newly-adopted 12-year window. And the same budget that had no chance whatsoever of becoming law. So when the starting point is a phony, artifical baseline that is meaningless, then any resulting comparison to that baseline is just as worthless.

The same questions apply to Paul Ryan‘s $6.2 trillion spending reduction. There are too many baselines running loose out there. There is the CBO projections based on the last budget that was adopted, the one based on Obama’s 2012 budget, and Obama’s own projections made in his 2012 budget. Whether or Ryan has his own projection is not clear to me. Trying to make an accurate comparison of the different spending plans is akin to trying to measure the length of  two farts with a yardstick and calculating the difference.

I don’t like being confused. Tell me what the projected cumulative U.S. debt will be ten years out for each plan, and then I can make some sense out of it.