You’ve likely run into this little riddle before: Would you rather have $1 million or an amount that results from starting with a penny and doubling it every day for 30 days?
Even if you don’t know the quiz or bother to do the elementary math, you can tell it’s a trick question that almost demands the selection of the least-obvious answer.
And the least-obvious answer turns out to be the right one. By Day 20, two-thirds of the way through, it looks like you might have been a bad choice — you’re up to only $10,485.76. But by the magic of compounding, on Day 30, you have doubled your way to $10,737,418,24.
It’s a simple lesson about how very small amounts become very big amounts in a very short time, a lesson that seems beyond the U.S. Senate’s comprehension.
Sen. Rand Paul, R-Ky., recently put forward his “penny proposal” in what he called “a litmus test for conservatives,” who failed the test spectacularly. His plan, which he said would balance the federal budget in five years by cutting just 1 percent of spending annually, failed 76-21, with all Senate Democrats being joined in defeating it by 29 Republicans.
That means only 20 members of the GOP, which likes to call itself the party of fiscal responsibility, voted to join Senator Paul in the proposal. Sen. Todd Young, R-Ind, was not one of them.
That’s something to think about the next time you hear him call himself a conservative.
Of course, Paul’s plan isn’t quite as kind and inoffensive as he makes it sound. You can’t make easy, painless cuts and get a real start on a national debt that’s $20 trillion and climbing rapidly.
But it’s not as draconian a plan as the critics would have it, either.
As the Washington Post’s “fact checker” Swamp explains it, Senator Paul’s approach would actually result in much larger cuts that would “threaten entitlements like Medicare and tear into agencies from the Pentagon and CIA to the National Institutes of Health.”
Good grief. He wants to throw Grandma off the cliff and gut the military, too. That’s quite the one-two punch.
Senator Paul’s sins, according to the Post, include wanting to start the process by repealing the recent spending deal enacted by Congress (which also enjoyed generous Republican support and will add about $1.8 trillion to the deficit over the next decade) and ignoring “baseline budgeting.”
You remember baseline budgeting.
Instead of starting at nothing and having to justify every dollar they seek (zero-based budgeting), lawmakers budgeting for next year using baseline budgeting get to use this year’s spending as their starting point. That means they can start out proposing, say, a 10 percent increase over this year’s spending, then reduce the proposal to 5 percent and then brag about making a “cut” that is dutifully reported by the math wizards in the government watchdogs of the Fourth Estate.
That means, heaven help us all, that Rand Paul wants to make real cuts in government spending, not just pretend cuts.
What a monster.
He is obviously a Bad Republican, not like George W. Bush, who, Reason magazine reminds us, spent more than any of the six presidents before him and nearly doubled the spending of predecessor Bill Clinton. GW’s profligacy paved the way for Barack Obama’s depraved recklessness.
Back to our little penny quiz.
If you carry out the doubling exercise for another 30-day period, or roughly two months total, you would zoom right by billions, trillions and quadrillions, amassing a respectable $23 quintillion. That’s a 23 followed by 15 zeros.
To paraphrase the late Illinois Republican Sen. Everett Dirksen, a penny here and a penny there, and pretty soon you’re talking about real money.
Do the math, Senator Young.
Leo Morris is a columnist for The Indiana Policy Review. Send comments to [email protected].
