A billion here, a billion there, and pretty soon you’re talking real money
–Senator Everett Dirksen
On Terence Tao’s blog a few weeks ago he had a very interesting post about the federal budget of all things. If you watch the news you might remember that the President announced that he had asked the cabinet to cut $100,000,000 from their budgets. On the one hand, 100 million dollars sounds like a heck of a lot of money. But as Greg Mankiw, a Harvard professor of economics, pointed out, if you rescale that to make it comparable to a more real world amount of money, then the cut was comparable to a family with an annual spending of $100,000 and a deficit of $34,000 deciding on a spending cut of $3.
Not very impressive.
Dr. Tao explains how to make that rescaling and also applies the same rescaling to a bunch of different items related to the federal budget. It’s pretty eye opening. For example, the math and science research budget of the National Science Foundation (the government agency which funds virtually all research in math) is $37.50, and the 2008 budget for the wars in Irag and Afghanistan was $5760 (above and beyond the budget for the Department of Defense).
It puts everything in perspective.