According to their agreement, Congress will supposedly cap its 'discretionary' spending at $1.6 trillion for Fiscal Year 2024. That's down from about $1.7 trillion in FY23.

So, yes, technically this $100 billion reduction represents about a 6% decrease over last year. And if we want to be even more cheerful about it, we could call it a 9% decrease on an inflation-adjusted basis.

If we're being intellectually honest, that's a step in the right direction for the US. A tiny, tiny, tiny step in the right direction.

How tiny, you ask?

Well, pretty much non-existent; the agreement to cut spending is an almost entirely symbolic gesture that won't do much good.

Before we go further, it's important to understand that government spending is generally categorized into three distinct buckets.

The first bucket is interest on the debt. And, at least for now, this is non-negotiable. It has to be paid.

And I don't mean it 'has to be paid' in the moral sense that "America always pays its debts."

I mean, legally, interest on the debt is automatically paid. Just like your monthly mortgage, interest payments on the US national debt get automatically sucked out of the Treasury Department's bank account.

The second bucket is what's known as "Mandatory Spending", which includes programs like Social Security and Medicare. Just like the interest bucket, Mandatory Spending gets sucked out of the Treasury Department's bank account every month.