Give The Man One White Chip*

Via the NYT we learn what constitutes “big” to a Republican congressman.  (No, children…don’t go there.)

(Hell.  This is the internet.  Go there if the spirit moves you.)

By now, just about everyone with a pulse and an interest in politics knows that the budget debate produced much more kabuki than actual cuts.  Rather the reverse in fact:

According to a Congressional Budget Office comparison, the bill would produce only $350 million in tangible savings this year, in part because cuts in domestic programs were offset by an increase of about $5 billion for Pentagon programs.

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When projected emergency contingency spending overseas is figured in by the budget office, estimated outlays for this year will actually increase by more than $3 billion.

There are longer term effects that restrain spending.  Albert Einstein is said to have said that the only true miracle in the universe is compound  interest.  That’s apocryphal, of course, but it is true that cuts in baseline expenditures in discretionary spending will propagate through the years to come:

The agreement does put the brakes on what had been a steady growth in spending by federal agencies. Future savings would be greater as the cuts took hold — a point Republican aides emphasized by noting that the plan is estimated to cut spending by $312 billion over the next decade.

Sounds like a lot of money.  At least, so says those members of the GOP, who quail before the wrath of the pitchfork brigade that they’ve turned into their base.  Hence nonsense like this:

“Big stuff,” said Representative Tom Price, a Georgia Republican and leading conservative.

Yeah, I know.  A billion here and a billion there and pretty soon you’re talking real money.

 

Except that $312 billion, for all that it could buy is …

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…a rounding error — or an example of the kind of numerical trick that confidence men use to gull the unwary, the inattentive, the numerically illiterate.

I’ve beaten the drum elsewhere for the importance of getting minimal quantitative reasoning into the electorate.  I’m not talking much math here.  I’d be happy if we got folks using arithmetic on a daily basis  to test claims like Price’s above.  If the country could do that, then there are lots of cons that would become brutally obvious, even to folks as frightened of numbers as tools of reason as our Village press corps.**

Hell, Price isn’t even trying to hide the tell:   that really big, scary number $312 billion. Sitting there, all by itself like a fresh cow patty steaming on a patch of meadow grass.   Everyone here knows what’s wrong with this:  it ain’t the numerator that matters.  It’s the denominator, dawgs.

And this is where both Obama and the Democrats, and the in-the-bag-for-big-money GOPers (most of the Congressional caucus) made marks of the Tea Party.  Even though we don’t know what the 2012 budget will be, much less spending levels of a decade hence, we can still construct a pretty good picture of the whole load of nothing going on:

Just work through a wholly unrealistically low set of assumptions on spending over the next decade.  Take level budgets from the FY 09 request — George Bush’s last budget — of $3.1 trillion.  That’s below expenditures by about a trillion, by the way, for a variety of reasons, and it is substantially under today’s numbers, which are, of course, the baseline for future cuts.  But hey — let’s make the GOP look as good as it can.

So multiply $3.1T by 10, and you get -the implausibly low figure of $31 trillion.

Price’s “big stuff” — $312 billion — is 1% of that fictitious total. One [more] minor war over the next decade and it’s gone.   A few disasters.  An economic downturn, with its upward pressure on social welfare expenditure.  And so on…

Big stuff.

Oh — by the way, I sent a draft of this post to an economist friend of mine  as a check against slips of my calculator or my logic (not an American, btw, so someone who can look at this with at least some a- or be- mused distance).  He reminds me that it is always useful to contextualize public finance numbers by a per-capita measure.  Given that the most recent population figures show the US as home to just a skosh over 310 million people, the projected budget reductions of $312 billion work out to no more than $100/person/year.  In my friend’s words:

I think most people can see that is not a gnat’s fart but it’s not going to solve anything. Put another way it’s of the order of 1/500 of GDP in round terms.

Consider this another episode in Percentages:  How Do They Work?…

Or else, see it as a reminder of what the GOP is really all about.  Hint:  it ain’t the deficit.

*This title comes from story I heard once, no vouching for its accuracy, about the time some industrialist — a metals guy — came to Detroit to announce his company’s entry into the car business.  He told the assembled automobile journalists about his plans, and his willingness to spend what it would take to compete.

He was, he said, prepared to invest $25 million in the venture.

From the back of the room, an old car hack piped up:

“Give the man one white chip.”

**Numbers as fashion accessory — as above — that’s fine.  But actually thinking with them…

Images:  Victor Dubreuil, Barrels of Money, c. 1897

Gerard van Honthorst, The Cardsharps, before 1656.






30 replies
  1. 1
    matoken_chan says:

    Off-topic, I know, but did anyone else notice that the Atlantic has lost Andrew Sullivan?

  2. 2
  3. 3
    Moik says:

    “Given that the most recent population figures show the US as home to just a skosh over 310 million people, the projected budget reductions of $312 billion work out to no more than $100/person.”

    Great post, though you may want to clarify that as “$100/person, per year” to avoid false McMegan accusations. And skosh is the best word ever.

  4. 4

    @Moik:

    And skosh is the best word ever.

    It’s an example of English’s never ending quest for new words; we imported it from Japanese (sukoshi, a little bit), I guess because English didn’t have quite enough words for a small amount.

  5. 5
    Tom Levenson says:

    @Moik: Yup. Fxt. Thx.*

    *MIT is known as the home of the TLA. The Three Letter Acronym. The above aren’t, of course, but one gets into habits…..;)

  6. 6
    Punchy says:

    Perhaps Tom Price was looking down his pants when he uttered those words, and was in no way actually commenting on the savings.

  7. 7

    I was told there would not be math in this lifetime.

    Damn.

  8. 8
    Mike in NC says:

    Sully has gone off to The Daily Beast Waste to be with soulmates like Howie Kurtz.

  9. 9
    piratedan says:

    @matoken_chan: he’s moved on to more fragrant assholes to sniff

  10. 10
    Cat says:

    Just in case not everyone has been to a casino or partaken in games of chance, the white chip is usually the lowest denomination in gambling chips. Usually one white chip isn’t even enough to sit at the table and make a wager.

  11. 11
    Cat says:

    @Cat: FYWP. Moderatatified…

    Just in case not everyone has been to a cas1no or partaken in games of chance, the white chip is usually the lowest denomination in gambling chips. Usually one white chip isn’t even enough to sit at the table and make a wag3r.

  12. 12
    Martin says:

    @Moik: Um, 312B/310M is 100? And two of you missed it along with the economist, multiplied by ‘we mock McArdle for math errors’?

    ::facepalm::

    Orders of magnitude are EASY, particularly in 3s, guys.

    EDIT: Oh, I see how you were correcting him. Yes, VERY good correction, obviously. LOL.

  13. 13
    JGabriel says:

    Tom Levenson @ Top:

    [An economist friend] reminds me that it is always useful to contextualize public finance numbers by a per-capita measure. Given that the most recent population figures show the US as home to just a skosh over 310 million people, the projected budget reductions of $312 billion work out to no more than $100/person.

    I always try to do the same thing with some of my more innumerate family members. Let’s face it — a million, a billion, a trillion — when you’re a peon in the financial order, it’s hard to tell the difference between a helluva lotta money, a helluva helluva lotta money, and a helluva helluva helluva lotta money. Whichever way you look at, it’s still a big fucking shitpile o’ money.

    Also, it should probably be added that the $100/person is over the course of ten years. So it’s more like $10/person per year. Which is a tiny tiny li’l grain o’ sand.

    Edited to add: Oops, I made the mistake Moiks and Martin warned about. Duh, need caffeine.

    .

  14. 14
    Brother Shotgun of Sweet Reason says:

    I am reminded of nothing more than Dr. Evil:

    Here’s the plan. We get the warhead and we hold the world ransom for… ONE MILLION DOLLARS!

  15. 15
    Amir_Khalid says:

    @Tom Levenson: As an IT journalist, I kept hearing that “IBM is fully institutional TLA” which led me to believe that the three-letter acronym thing came from either them or somewhere nearby in the computer hardware/software business.

  16. 16
    Dork says:

    I apologize for the threadjack, but I have a very simple question I need answered:

    If Ryan’s budget proposal was so serious, so important, and so necessary to reduce the budget….then why did so many R’s vote against it, ensuring its doom?

    So they talked it up for 10 days as if its the most important thing evah, then turn around and kill it? WTF did I miss that allows this to make sense? Serious question.

  17. 17
    MobiusKlein says:

    @matoken_chan: heard a rumor about that, but haven’t followed up.

    Anything worth seeing at the new slight?

  18. 18
    MikeJ says:

    @Tom Levenson: It’s an old joke in the computer industry that the biggest threat to future growth is the fact that there are only 17,576 possible TLAs.

    Excluding non-ASCII characters, of course.

  19. 19

    @MikeJ:

    Excluding non-ASCII characters, of course.

    Why do you think they’ve put so much effort into Unicode?

  20. 20
    Martin says:

    @Dork: That wasn’t Ryan’s plan they were voting on, but the budget committee’s plan. Ryan’s plan is the ‘moderate’ one that they’ll vote on perhaps next week.

    No, not kidding on the moderate part.

  21. 21
    Martin says:

    @Amir_Khalid: I always heard TLA as a reference to ‘three-letter agency‘. It was always in reference to NSA/CIA/FBI etc.

  22. 22
    Gin & Tonic says:

    @Tom Levenson: Did I get FYWP’d? Trying to say that MIT might be home of the TLA, but IHTFP isn’t one.

  23. 23
    Mnemosyne says:

    @Dork:

    As Martin said, the Ryan budget hasn’t been voted on. This was an even nuttier one that the Republicans came up with, hard as that is to believe.

  24. 24
    catmandoodo says:

    The “One white chip” story refers to Henry Kaiser, who made a ton of money during WW2 in steel and shipbuilding, and the amount was 100 mill. The venture lasted five years. The Einstein quote was in response to a question as to what the most powerful force in the universe was, prompting the facetious response: “compound interest”
    On the Ryan plan for Medicare, he has replaced the phony threat of government death panels with real private sector ones. The man’s a genius,I say, a genius!

  25. 25
    Gravenstone says:

    @Dork: They didn’t vote against Ryan’s budget. They voted (eventually) against the budget put forth by the Republican Study Group. Which made Ryan’s idiocy seem almost reasoned and sane.

  26. 26
    Tsukune says:

    @MikeJ:

    It’s an old joke in the computer industry that the biggest threat to future growth is the fact that there are only 17,576 possible TLAs.

    Most lomg-term IT shops end up becoming ETLA compliant.

  27. 27
    Chad N Freude says:

    I gotta weigh in on TLAs. When it comes to TLAs, MIT is dwarfed, DWARFED I tell you, by the DOD (sometimes written as DoD), which will never run out of acronyms because they use nLAs, where n ranges from 2 to ∞ (and Beyond).

  28. 28
    Eric S. says:

    Consider this another episode in Percentages: How Do They Work?… Or else, see it as a reminder of what the GOP is really all about. Hint: it ain’t the deficit.

    The $312B is what a couple of friends and I refer to as the “law of big numbers”. They’re beyond the scope of people’s normal understanding are therefore never questioned. Or understood.

  29. 29
    Mo's Bike Shop says:

    Numbers are intensifiers in our culture. ‘Three billion’, ‘two trillion’, wow what a meaningful debate!

    Before I wandered away from TeeVee I used to puzzle people by asking them what the national budget was, and then when they didn’t know, I’d ask them why the guys on the TeeVee never mentioned it.

  30. 30
    Sasha says:

    I remember seeing the actual painting of Barrels of Money at the St. Petersburg Museum of Fine Arts when I was a kid.

    It was Children’s Day at the museum and there was a scavenger hunt where we were given a list of clues and we had to find the artwork it referred to. The clue for Barrels of Money was “A banker’s dream.”

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