Trillion is the new billion
One of the stunning features of the recent U.S. budget and debt debate (can we really call it that?) was the way the word “trillion” got thrown around like it was something just a bit bigger than a burger and a Coke.
When I was in grade school I can remember debating the question, “What’s bigger than infinity?” The answer of course is “infinity plus one” and the debate would be on. We would argue forever (another big concept) whether or not such a thing was possible. In the same way, I can recall saying things like “a million billion” and a “trillion zillion” in the same way that I might refer to little green men and dinosaurs from outer space. A billion, yet alone a trillion, was simply beyond comprehension.
A billion here, a billion there
In roughly that same time frame the legendary Congressman Everett Dirksen is reported to have said about federal spending, “A billion here, a billion there, and pretty soon you’re talking real money.” Keep in mind this was in the mid 1960s when that indeed was a lot of money. It turns out there is no written record he uttered that chestnut but there is an equally pointed homily that is in the Congressional Record (June 16, 1965, p. 13884) that Dirksen referred to as the “Cat in the well.”1
Johnny worked assiduously with his slate and slate pencil for quite a while, and then when the teacher came down and said, ‘How are you getting along?’ Johnny said, ‘Teacher, if you give me another slate and a couple of slate pencils, I am pretty sure that in the next 30 minutes I can land that cat in hell.’
If some people get any cheer out of a $328 billion debt ceiling, I do not find much to cheer about concerning it.
Grappling with the numbers
Oh to only owe $328 billion vs. the approximately $14.6 trillion we’re facing now. A look at the U.S. Debt Clock puts that number into some perspective: Approximately $47,000 per citizen and $131,000 per taxpayer as of this date. Those can be difficult sums to grapple with, so here is some additional perspective.2
The bill just signed by President Obama raises the debt ceiling by roughly $1 trillion in exchange for roughly the same in cuts.3 A dollar bill is 2.6 inches by 6.1 inches. The surface area of the United States is 3,537,438 miles. One trillion dollars would lay out like a quilt, covering the U.S. 70 bills deep ( that’s 250,315,656 square miles). Placed long-end to long-end, you’d have a chain over 96 million miles long.
The distance from New York City to Los Angeles is about 2,790 miles, so it would take you less than a week to drive it and half a day to fly it. Now imagine doing the trip 358 million times. I know, I can’t either.4
To put it on another scale, on October 30, 2005, we were about 43 million miles from Mars so those trillion dollar bills would get you there and back with plenty left over. 5
To feed an average adult male costs about $269 per month in 2009 dollars: The average adult woman costs about $230 and the average eight year old about $205. If every man, woman and child in the United States gave up eating for 14 months and gave the money to the Treasury, we’d pay off one of those trillions. 6
Now round the deficit up to the $16 trillion that the new ceiling allows and allocate the whole amount to every person in the U.S. 18 years and younger (which is pretty much what we’ve done). That comes out to approximately $213,000 per young person. That’s just a bit more than four times the median income of $50,221 in 2009 dollars.7
Or, to put it another way, the median home price in the U.S. in June 2011 was $235,200 , so the deficit is roughly what it would cost to buy every person 18 years or younger a house. Ouch.8
Whatever you think of the political process or the wisdom of any particular policy or position, a trillion is a big number. Someday soon it will have the same emotional effect as saying “I like French fries.” Hopefully not too soon.
Kevin Hoffberg is managing director of marketing for Russell Investments’ private client services business. View Kevin’s bio »
Tags: did you knows