Tuesday, May 29, 2012

Why The Rate of Increase in Spending Is a Meaningless Statistic

President Obama has recently been touting that he has presided over one of the smallest rate of increases of spending in history.  He is trying to deceive [or to use his word: bamboozle] the American people by changing what he counts as the base line for a fiscal year's spending.   What Obama does to get his favorable statistic  is to start counting the increase in spending from the year 2010, even though Obama initiated and signed a stimulus bill of almost a trillion dollars [over 10 years] at the beginning of 2009.   Also, although you can't pin the TARP program on Obama, he adds that number [700 billion] to his baseline number [even though that was a one time expenditure].  So, although in 2010 there was no more TARP program spending, Obama still adds that to the baseline number -- so, that means that the first $700 billion spent in 2010 [according to Obama] was like he didn't spend any extra money for that year.

So, Obama ignores the actual outrageous spending done in years 2010 and 2011 [which were totally on his watch] and only talks about the rate of increase in those years.  That is meaningless.  It is the actual spending that counts and what is so damaging to us and if not stopped will lead to a disaster economically for our country.

Here is an easy way to understand why the rate of increase [even if Obama's use of numbers was correct] is a meaningless statistic:  If you have man A who has had credit card debts of $10,000, and then in the following year has increased that debt to $20,000, the rate of increase would be 100%.

Now if  man O has accumulated credit card debts of  $100,000 and the following year after that, has increased his credit card debt to $110,000, his rate of increase would only be 10%. 

Now both men were irresponsible and I would not want to be in either man's shoes, but I think you would agree with me, that you would rather be man A with a debt of $20,000, than man O with a debt of $110,000.

So, even though both man A and man O spent way too much on the credit cards, it is obvious man O was much more reckless with his spending.

Wouldn't it take a lot of chutzpah for man O to come out and say: 'I was much more responsible than man A in my spending because my rate of increase was only 10% while his was 100%?'  That actually would be a true statement by man O, but it would be meaningless.

By the same token, wouldn't it take a lot of chutzpah for a president who has spent more than anyone else in history and increased our national debt to levels that could lead us to bankruptcy if the spending doesn't stop, to say that he is one of the most responsible spending presidents in history, because his rate of increase in spending is so little?

Tales reports, you decide.


bradley said...

perfect common sense brought out in a way that even a naive liberal could understand--great job>

Big Mike said...

Thanks Brad!!