Obama's 100 million dollar challenge visualized

[StatFreak]

Last month, President Obama challenged his cabinet to find a way to cut 100 million dollars from the federal budget within 90 days.

from http://www.cnn.com/2009/POLITICS/04/20/obama.cabinet.cuts/

WASHINGTON (CNN)  -- President Obama on Monday gathered together every confirmed member of his Cabinet for the first time as president and challenged them to cut $100 million in the next 90 days.

Agencies will have to report how they saved on expenses at the end of the period.
The federal government has "a confidence gap when it comes to the American people," Obama said at the White House.
"We've got to earn their trust. They've got to feel confident that their dollars are being spent wisely."
The edict is part of Obama's "commitment to go line by line through the budget to cut spending" and "reform the government," a senior administration official said.
One potential Cabinet officer was missing from the meeting -- Kansas Gov. Kathleen Sebelius, the health and human services secretary-designate. The Senate has not voted on whether to confirm Sebelius to the post.
Obama made his savings request as the House of Representatives and Senate were returning from recess this week, ready to start reconciling their versions of the fiscal 2010 budget resolution. The president's budget request is $3.67 trillion.

To those of us who understand numbers, this is an infuriating, absurd political ploy that needs debunking.
Apparently, this fellow agreed, and posted this cool video. Too bad it's true.

<a href="http://www.youtube.com/watch/v/cWt8hTayupE" target="_blank"><a href="http://www.youtube.com/watch/v/cWt8hTayupE" target="_blank">http://www.youtube.com/watch/v/cWt8hTayupE</a></a>

[Bettor Slots]

 
 
 
 
 
 
 
 
 
 
 

[rickhunter]

Wanna cut 100MM, stop flying all over the place on Air Force One to attend "town meetings."  For crying out loud, you are the PRESIDENT OF THE US, YOU DO NOT NEED TO BE DOING TOWN MEETINGS.  Send your schleppers to do that.

[tacman]

I think that video example should be shown on all news channels. Hold on while I keep dreaming! 

 Dan (tacman)

[tjkeller]

He sure does a GREAT JOB putting things into perspective!

[Slotmaster]

Pennies

The White House offered examples of how agencies already have started cost-cutting measures, including:


The Department of Homeland Security's plan to save an estimated $52 million over five years by purchasing office supplies in bulk.  (That is a joke)


The Department of Agriculture's effort to consolidate 1,500 employees from seven locations into a single facility in 2011. Such a move has been estimated to save $62 million over a 15-year lease.



The Department of Veterans Affairs will cancel or delay 26 conferences, saving nearly $17.8 million. The department also will use video-conferencing to cut costs.


A Department of Education decision to increase the ratio of people using each printer is anticipated to save an additional $6.7 million. Cutting the ratio of computers per employee is expected to save another $2 million

[StatFreak]

Pennies

The White House offered examples of how agencies already have started cost-cutting measures, including:

The Department of Homeland Security's plan to save an estimated $52 million over five years by purchasing office supplies in bulk.  (That is a joke)

The Department of Agriculture's effort to consolidate 1,500 employees from seven locations into a single facility in 2011. Such a move has been estimated to save $62 million over a 15-year lease.

The Department of Veterans Affairs will cancel or delay 26 conferences, saving nearly $17.8 million. The department also will use video-conferencing to cut costs.

A Department of Education decision to increase the ratio of people using each printer is anticipated to save an additional $6.7 million. Cutting the ratio of computers per employee is expected to save another $2 million

Well, that's another 1/3 of a penny off the pile! But, then again, not really, since the 62 million savings would be dragged out over 15 years and would cost jobs, adding to unemployment and furthering the ailing of the economy. BFD.  

[jay]

There are two simple steps that will solve the US economic crisis. 1. Revalue all realestate at 70% of current mortgaged value. This instantly gives everyone 30% equity in their homes - which equates to available lines of credit, lower mortgage payments, ability to pay off credit card and other consumer dept etc. 2. Institute a policy of 20% down for all home purchases. The concept of being able to "own" an asset with the sole acid test of being able to carry the interest payments only lasts as long as the current interest rate holds, and your health holds out. When it takes two incomes to cover the carrying costs neither individual better sneeze, lose their job or get divoriced.

If you want to know what is wrong with the auto industry its not soley crappy cars. Its the whole lease concept with 0 down. When a car comes due at the end of its lease everyone trades them in, subsequently nothing is owned and used cars have no resale value as the whole model is based on selling new cars. Subsequently inventories get huge, profit margins get squeezed, over production prevails. Eventually the model collapses because it is not sustainable.

Both of these solutions are bad for the banks so the goverment wont do it. Freddie May & Mac already are more than 100% goverment backed. The veil that the banks stand independent and are healthy is getting thinner by the day. Until the goverment comes to the realization that the current monetary policy has failed and take control of the banking institutions the crisis will deepen.

[brichter]

1. Revalue all realestate at 70% of current mortgaged value.

I'm not sure that could work, as the people who have been paying their mortgages for a long time will find their homes almost worthless, and they'll have little to no equity.

[StatFreak]

...
 1. Revalue all realestate at 70% of current mortgaged value. This instantly gives everyone 30% equity in their homes -
...

I think it's the other way, isn't it?    For the homeowner to have 30% equity, the value must be 130% of current mortgaged value. How do you plan to arbitrarily set values in a free economy of supply and demand?

[jay]

Assuming you had a house "worth" 200k.... its "worth" 200k nothing you do can change that. Its a hard asset....

On the other hand if you and 150 of your neighborhood buddies are all put out of work because the place you work shuts down... just try selling your house for what you think its worth....or what you paid. Your place of business is going to shut down because no one has any money to spend on the goods you are making, and your company can't afford to keep making them as there is no equity to finance this because everyone is already 110% finananced. Banks/Lenders need savers so they can loan money. No savie = No borowie.

Now assuming you owe 200k because you have been making interest only payments, you also have a mortgage of 200k.
Post the revaluation. You have  a house worth 200k, but only owe 140k. You now have 60k in equity.
For those of you who have the 80k mortgage left on the 200k house, you now owe 56k.
No change for those who outright own their house... but they benefit because the dead beat next door who shouldn't have been able to buy
the house in the first place now won't abandon his house to the crack heads.

The alternative of course is to keep printing money, which devaluates the US dollar when measured against all other commodies. Your 50 dollar oil is now 300 dollars a barrel because the US dollar buys less. Gold is 4000 an ounce, house values are worth nothing because there is no work and there is an over supply of vacant properties. There is no housing market as lumber and other supplies will be at an all time high. No buyers = no lumber jobs etc. The US dollar is backed by Tbills sold to foreign goverments. Once they determine that the greenback is worthless and start investing in other currencies the dollar will continue to free fall and you will see interest rates soar. Welcome to the American Peso.
Its time to become fisically responsible. You can't spend your way to prosperity.

[brichter]

If you revalue the house at 140k, then the value of the house is 140k, not 200k.

Or do you mean renegotiate the amount owed on the mortgage, and not revalue the house?

[a69mopar]

There isn't any Canadian conspiracy with pennies, in fact it costs more than a penny to make Canadian pennies.   Isn't it illegal to deface U.S. currency?

Thanks,
Wayne

[tacman]

Hi, my names Bubba your cell mate. I killed six people and raped farm animals. What you in here for?

Uh, I cut a penny in quarters with a snipper and put it on YouTube.


 Dan (tacman)

[a69mopar]

Hi, my names Bubba your cell mate. I killed six people and raped farm animals. What you in here for?

Uh, I cut a penny in quarters with a snipper and put it on YouTube.


 Dan (tacman)

There are definitely laws that make even less cents, er.  I mean sense  .

[jay]

I meant restating what is owed on an outstanding mortgage....