$38 Billion In Cuts? Make That $353 Million

Tyler Durden's picture

Warning: people on blood pressure medication are urged not to read this.

Yesterday the media had a field day when it was uncovered that the hard fought $38 billion in budget "cuts" which almost caused America to shut down were in reality $14 billion. We, thus, can't wait to find out what the response will be when it is uncovered that the actual cuts were... $353 million. Yes: the ongoing functioning of the government was a pawn in a soap opera whose benefit to the US debt is $353 million, or about what Goldman's trading desk makes in less than one day.

From Washington Post:

A new budget estimate released Wednesday says that the spending bill negotiated between President Barack Obama and House Speaker John Boehner would produce less than 1 percent of the $38 billion in claimed savings by the end of this budget year.

The Congressional Budget Office estimate shows that the spending bill due for a House vote Thursday would pare just $352 million from the deficit through Sept. 30. About $8 billion in cuts to domestic programs and foreign aid are offset by nearly equal increases in defense spending.

The House began debate on the measure Wednesday with a test vote slated for the early afternoon. The measure appears on track to pass the House and Senate this week before a stopgap spending measure expires Friday at midnight despite opposition from some of the GOP’s most ardent budget cutters.

The budget deficit is projected at $1.6 trillion this year.

The CBO study confirms that the measure trims $38 billion in new spending authority, but says many of the cuts come in slow-spending accounts like water-and-sewer grants that don’t have an immediate deficit impact.

...

Republicans say they wish the measure would cut more but that the cuts negotiated by Boehner are about as good as can be expected giver that Democrats hold the Senate and the White House. In his February budget, Obama pressed a freeze on domestic agency accounts.

“We continue to push this president to places he never said he would go,” said House GOP Whip Kevin McCarthy of California. “The president said he would freeze spending. Our Speaker negotiated, outnumbered 3-1. We have cut spending.”

Speechless yet? You should be. And for those confused how B.H.O. picked the arbitrary number of $4 trillion in "cuts", John Lohman summarizes it best.

How Washington Cuts $38 Billion in 5 Simple Steps:

1.    Announce spending bill that claims $38 billion in cuts
2.    Wait for CBO to announce it only cuts $353 million1
3.    Realize you only do 0.0093% of what you say2
4.    Divide $38 billion by 0.0093% to get necessary target3
5.    Round to the nearest trillion and announce result

1 : Source: Washington Post, April 13, 2011
2 : $353 million divided by $38 billion
3 : $38 billion divided by 0.0093 = 4.1 trillion

 

 

 

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I Stand Alone's picture

Did You expect something different? ~ They are merely custodians for the 1933 mortgagees in possession (revised every so often).

SDRII's picture

Center for Strategic and Budgetary Assessments, in an analysis this month, estimated that the Libyan no-fly zone could cost $100 million to $300 million per week

trav7777's picture

Let France deal with this...it's their baby.

They have their carrier there, get more mfin planes on it and do this shit.

Sandy15's picture

Boehner ---  That's all you can do because they hold the senate and the WH?????  Seriously??  LET THE GOVERNMENT SHUT DOWN!!!!!!!!!!!!  Tell the American People the Truth!!!!!!!!!  It will stop these lefty elitest from robbing us for their organizations.........  shut her down and see the savings we have.  Watch the dollar get stronger.........  Stop with all the PC crap and tell it like it is that the Progressives are ruining this country!!!

f16hoser's picture

Boehner is fucked. He's about as spineless as they come. Pelosi had more "balls" than him.

pazmaker's picture

Pelosi is screwed up in the head...but your absolutely right she had more balls then Boehner, who by the way, is just another hack!

DonnieD's picture

Remember the reports of "tense" negotiations at the WH between Barry, Harry and Boner? Apparently they were one-upping each other on who was more brazen at defrauding the American people.

Our government is like the mafia running a circus.

VisualCSharp's picture

Only problem is, they're all lefty elitists.

DaveyJones's picture

no, they're just elitists. Once you're in the club, directions don't matter

nah's picture

$352 million! lick on my dick and suck on my balls, AMERICA

.

fuck yea

The Axe's picture

Citizens ----thank God for the Second Amendment.

AldoHux_IV's picture

Haha that warning should be blasted on the bottom of the screen on any MSM show.

f16hoser's picture

Obamy make my Silver go higher! Thanx!

BrobamaReds's picture

May I please see your proposal in writing?  Do you have a prospectus that I can read?  Your lips are moving but are you accountable to anyone?  Anyone...anyone, Bueler, Beuler?

 

Our elected officials have zero accountablity to anyone.  Can I file a sales practice complaint with the SRO that oversees our elected officials?  Where is "shitty deal" Levin when you need him?

D.O.D.'s picture

A little Chicago Razzle Dazzle, never failed before....

 

http://www.youtube.com/watch?v=LbxhYxOHMVw

dogismyth's picture

maybe if the illegals got mad enough and held demonstrations (that would be a mass siesta after 3 bean burritos), the gubermint might listen.

Cole Younger's picture

The Republicans are no different than the Deomcrats and now the Tea party candidates will have to deal with pissed off voters. It really does not matter what they spend or don't spend....the U.S. will default on its debt so it really does not matter anymore.

Dr. Richard Head's picture

Could we just get it fucking over with then?  I mean, holy bernanke, I tire of the wait.  When can we finally move to capital creation from capital instead of debt.  I yearn for that day to come. 

pazmaker's picture

I yearn for it too... if doesn't come soon I'm leaving.

Dr. Richard Head's picture

Where the bernanke are you going to go?  I don't see many options, but Iceland is looking more and more promising every day. 

RockyRacoon's picture

Even the women in Iceland have balls it appears.  Told the EU to bite 'em.

Dick Darlington's picture

And here's Bloomberg's spin:

U.S. Stocks Gain Amid Optimism Economy Can Weather Budget Cuts.

LOOOOOOOOOL!

VisualCSharp's picture

I love these sweeping, generalizing headlines.

Amid whose optimism? Everyone's? How did they arrive at that conclusion? And the editorialization "weather" is a false assumption that budgets cuts inherently hurt an economy.

This country is fucked, folks. Be at peace with that truth and maybe the short amount of easy life we all have left can be somewhat enjoyable.

Blotsky's picture

I agree VCS. I'm sure that we've all seen it before, but since its just so damn true, I figure we give another watch.

http://www.youtube.com/watch?v=hYIC0eZYEtI

RobotTrader's picture

I'm not really worried about deficits or debt ceilings.  Those really don't matter.  They will just print more paper.  How hard is that?

Meanwhile, I'm finished loading up on my first batch of dividend stocks today.

Next up:  Looking at SCCO, it pays almost 6%.  I'll wait for it to bottom out and show the signs of a turnaround first.

I'll be fully invested by the time the market is ready to turn back up.

trav7777's picture

kmp pays a 6.1% right now.  But nearly 6 for a copper stock ain't shabby at all

Pool Shark's picture

 

CIM is currently yielding over 14%

 

equity_momo's picture

You nubs keep on buying your pieces of paper yielding 6% , yup , youre gonna avoid the Black Hole that way.  LOL.

ghostfaceinvestah's picture

Dividends can, and will, be cut very quickly in the next downturn.

tmosley's picture

The return on silver beat the shit out of that.  And there is less risk than with a single stock, and arguably less risk than the whole sector.

Maybe it's time for you to hang up your trader hat when you are getting you ass kicked by morons who bury canned ham and silver in their back yards (like me!)?

RockyRacoon's picture

Mmmmmmmmmm...... canned ham!  Share a little with Johnny Bravo, AKA MasterBates.

tmosley's picture

He can have it when I'm done with it.

Then he can have it again, after HE'S done with it.

Shell Game's picture

This is a hard step to take.  Three years ago I was 100% exposed to markets in two trading accts.  Today 90% in physical gold/silver, 10% in trading acct.  Fcking hard to make that mental switch, but I think I'll be damn glad I did.  In fact, I think it will be the trade of my life.

tmosley's picture

It is.  I used to trade.  Made quite a bit of money in paper gold from 01-04, so the transition wasn't nearly as much of a stretch for me as it might have been.  Luckily, I already had a gun safe, so I had a place to put it.  Having made money in the sector before, and having a ready made place to store it removed two huge psychological barriers.

And yes, it has been, and will continue to be the trade of a lifetime.  I like to say it is the trade of the millennium, or possibly the greatest trade in human history, simply because of the clash of seven+ millennia of thought (silver should be less than gold) with the fact of crashing supply due to industrial consumption.

Shell Game's picture

Well done, and couldn't agree more. I'll buy you dinner when the dust settles, you provide the toast.. :)

topcallingtroll's picture

So let us know the day and price of your buys.

I see a lot of vague generalities here.

baby_BLYTHE's picture

Why won't congress wake up?

Don't they know that the dollar is about to collapse and the savings of the majority of Americans are going to be wiped off the face of the earth?

Revolt America!

Get the Revolution started so people like me (children of the later baby boomers) have reason to stay and build a future in the nation that once stood for so much more than world-war and financial insturments of destruction.

I may not be on blood-thinners, but after class I am definitley rolling a joint and pouring a screwdriver before I read any more ZH.

Great work today Tyler, as usual!

Dollar Bill Hiccup's picture

Revolt America or Revolting America ...

Sometimes I have problems with gerunds ...

RockyRacoon's picture

Gerunds are nouns.   "Revolting" is an adjective here.

"Revolting is great fun!"  -- now there's your gerund.

baby_BLYTHE's picture

I advocate a peaceful revolution in vain of that Anonymous group.

For instance, standing outside of the FED until the Bernank resigns.

What happened to the on-the-mall protesting? Does it take a charlatan like Glenn Beck to call you there?

Is it because the S&P has doubled, now there is no reason to be concerned over the economy?

WTF!

X. Kurt OSis's picture

Is it because the S&P has doubled, now there is no reason to be concerned over the economy?

 

Umm... yes. 

Hi, you must be new to this site.

baby_BLYTHE's picture

nope. been reading ZH loyally for almost 1.5 years. My older brother turned me onto it. He has been a faithful ZHer since the blogspot days!

X. Kurt OSis's picture

I was kidding.  Your original question was such a softball that I assumed it was rhetoric.

Seriously though, [cough] wealth effect.

Or in verb form, wealth effecting.  Or past tense, wealth effected. Or as a descriptive, wealth effectish. 

I hope it gets added to Webster along with this year's additions: 'OMG', 'LOL' and 'muffin tops'. 

It should include a smiley picture of the Bernank.  That would awesome.

Oliver Heaviside's picture

I seem to remember seeing something about you protesting in Chicago.  Be sure to let me know about the specifics!  I want to hang out with freedom loving, Ron Paul admiring, pretty women.  

 

That would be nice.  

 

Shell Game's picture

I'd love to see more peaceful, civil disobediece here in the States.  Unfortunately, I'm 99% convinced that people will sit with hands on knees until currency/economic/entitlement collapse come.  I'm afraid politeness will be a memory.

falak pema's picture

the only thing that would make Bernanke resign is a mandatory obligation as FED chairman to make love to HC every night before doing a POMO operation. 

Dave's picture

HC don't do that. She did it once. You see what happened. Think of something else.

SaulA's picture

You are a peaceful terrorist.