Monday, May 02, 2011

Millions, Billions, Trillions.......

Back in my much younger days, I recall a television show named "The Millionaire". On the show, some guy would drive around the country in a car or train, and give a million dollars to some unsuspecting person. I was about 7 or 8 years old at the time, and while I didn't really have any conception about how many dollars were in a million, I remember thinking that it sounded like a lot of money. It still does, but just not as much as it used to.

Millionaires are more common than they were 50 years ago. Last year, according to CNN, about 8.4 million households in the United States had a net worth of a million dollars or more. People can make several million dollars a year playing on a baseball, basketball or football team. Or just by coaching a team. Every week we hear about somebody who just won a few million in a lottery somewhere, even if the odds of winning are over a million. While most of us will probably never own a million of anything, we do at least have some concept of what constitutes a million.

Our federal government has taken to dealing in billions and trillions of dollars over the past few decades. That's a whole different concept. I read a simple explanation of the difference between a million, a billion, and a trillion a while back. If we use seconds as a measure, we find a million seconds amounts to about 11 days. That doesn't seem like so much. But a billion seconds amounts to about 32 years, while a trillion seconds amounts to about 317 centuries. I think that's why most people who can grasp the concept of a million, have a little trouble relating to a billion or a trillion.

It sounded like a lot of money when Congress was arguing about whether to reduce next year's projected increase in the federal debt by $30 billion or $60 billion a couple of weeks ago. It still sounded like a lot of money when they settled on $38 billion. It didn't sound like quite as much when we found out that because of some creative government book keeping, the actual reduction in growth was going to be around $350 million.

As hard as it is to visualize a trillion dollars, it's even harder to imagine 14 trillion dollars. That's how big the immediate federal debt is. The federal governments long term obligations are five times that amount. That makes it even harder to envision.

Even if we have a hard time grasping how much the government spends, we don't have too much trouble understanding how much it costs each of us. If you are 35 years old and earn $45,000.00 per year, you can plan on sending the federal government about $425,000.00 between now and whenever the government finally loses interest in you. The amount will vary if you're older or younger, or if you earn more or less, but you get the picture.

I understand one of the main reasons more people aren't upset about a $14 trillion debt is because it is so hard to comprehend. But we can comprehend $425,000.00, and I can't understand why we aren't more upset about that.


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