Pareto's Priciple (80/20) is everywhere! Yes, even the federal budget.
Posted: Fri Jan 07, 2011 4:29 pm
I seem to be developing a knack for posting absurd information. Thankfully, Craig allows me the opportunity to post such things on the board.
Ok, random information of the day...
The Pareto Principle (80/20 rule) is a key concept in my life as I'm always looking for the critical 20% of inputs that drive 80% of the outcomes in just about everything. So, as I'm looking over the 2010 U.S. federal budget today figuring out how I'd balance it if I were king for 4 years, I started crunching a few numbers.
There are 32 federal budget departments/categories between mandatory and discretionary spending.
20% of 32 = 6.4
Add up the expenditures of the top 6 departments and what do you get?
$2820 Billion
What are the total expenditures of all 32 departments?
$3552 Billion
The top 20% of all federal departments account for 79.39% of all expenditures. So, you want to balance the budget? Focus your efforts on these 6 departments.
Ok, random information of the day...
The Pareto Principle (80/20 rule) is a key concept in my life as I'm always looking for the critical 20% of inputs that drive 80% of the outcomes in just about everything. So, as I'm looking over the 2010 U.S. federal budget today figuring out how I'd balance it if I were king for 4 years, I started crunching a few numbers.
There are 32 federal budget departments/categories between mandatory and discretionary spending.
20% of 32 = 6.4
Add up the expenditures of the top 6 departments and what do you get?
$2820 Billion
What are the total expenditures of all 32 departments?
$3552 Billion
The top 20% of all federal departments account for 79.39% of all expenditures. So, you want to balance the budget? Focus your efforts on these 6 departments.