President Obama plans to convene his Cabinet for the first time today, where he will order members to identify a combined $100 million in budget cuts over the next 90 days, according to a senior administration official.$100 million may sound like a lot, but the federal government is planning to spend $3,500,000 million this year. In other words, Obama wants to cut $1 for every $35,000 his budget is planning to spend. It will be interesting to see the reaction this proposal gets in the media.
Update: Maybe economists do make a difference in setting government policy. From National Reviews Corner blog:
President Obama has reportedly been working closely with noted behavioral economists, and their studies have shown that most people are “insensitive to scope,” meaning they are not very good at putting large numbers in their proper context. People will react about the same to a policy proposal whether the cost/benefit is $10 million, $10 billion, or $10 trillion. Consequently, the $100 million cut may seem huge to many voters.
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