Cutting Spending

Sound financial advice: Cut spending. Most of us are mindful of our budgets and the need more than ever of having some savings for the possible event of becoming unemployed. We are all cutting back.

President Obama is calling on his cabinet to find savings cuts of $100 million. That's $100,000,000. Commendable.

Now, is that 10% of his $3 trillion budget? No, that would be $300 billion of $300,000,000,000. Hmmm. Is it 5% of his budget? No, that would be $150,000,000,000 ($150 billion.)

So what is $100 million compared to $3 trillion? It looks like 1/30,000 or 3/100th of one percent. 0.03%.

If our household budget is $50,000, then we would be looking for a cut of $15. Let's confirm that. $100 million divided by $3 trillion is 1/30,000 or 0.03%. Our budget of $50,000 times 0.0003 equals $15.00. Close enough to make my point.

til later