I hope that I did not learn what I am about to write from this list, but I'm pretty sure that I did not. One part of the "cuts" rhetoric that is not getting much mention is how the numbers are being added up, i.e., no matter how you define a "cut," what does it mean when you describe a bill as necessitating a "20% cut in future spending." If it seems obvious that this means spending 20% below whatever your baseline is, you're only partly right. To take a simple numerical example, suppose that a program was slated to have $10 million spent on it each year for the next 7 years, for a total of $70 million. (Attention finance types: I am NOT going to discuss present value discounting here.) Then suppose that the new bill entails the following sequence of annual spending totals: $10 million, $10 million, $9 mil., $9 mil., $8 mil., $5 mil., and $5 mil. Over the seven year span, you will have spent $56 million, or 20% less than $70 million. Yet, with the "back-loading" in this plan, your program is funded at only half of its original level after the fifth year--i.e., a 50% cut. This is a big part of what's happening in Gingrich's spending bills. While many people have (correctly) derided the back-loading in these bills for exposing the lack of courage on the part of the various legislators involved (voting for pain for which they will likely never face the voters' wrath), what is not getting mentioned is how the average numbers are hiding the severity of the cuts. Neil H. Buchanan, Resident Research Associate internet: [EMAIL PROTECTED] The Jerome Levy Economics Institute | Home Address: Bard College, Blithewood | 20 Peacock Road Annandale-on-Hudson, New York 12504 | Rhinebeck, New York 12572 914/758-7730; fax-914/758-1149 | 914/876-8575
