What's $600 million between friends?

Oh noes! The government lost $600 million! And then found it! It's the biggest disaster of our times!

Yeah, yeah, yeah, story-du-jeur that the budget isn't quite what people thought it was. Bashing them makes for an easy (check out those comments with CAPITALISED WORDS!), but my easy blog post is to point out that people aren't thinking of the numbers right.

Sure $600 million sounds a lot. It's after all around 1.5% of the total figure used... yeah, that huge 1.5%. Woo hoo!

But what really should be the point here is that this figure was produced under using two different forecasts. Ie. two different sets of future numbers built of a series of conjectures and assumptions which are only true as long as you squint a bit at the original past numbers. The fact that the two outcomes were different shouldn't be surprising, nor the fact that they shifted so much.

It only matters because we passed over the zero line. Which should tell us something.

Unfortunately, the government doesn't produce confidence intervals. But that the number changed that much should give us an idea of the range of numbers we could end up with, which are above and below the zero line.

In statistics, we say that that is not statistically different from zero. Thus, people are forcing hysterics out of emotionally recognition of in the black versus in the red. The truth is that we aren't different enough from no difference at all for any sudden "$600 million" to mean anything.

[END]