Economics

Thinking in Trillions

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I've pretty much stopped being able to hear or understand the kind of numbers the federal government is trafficking in these days. And those "if you stacked one dollar bills they would reach Jupiter!" explanations simply reinforce the concept which I already grasp: The numbers are very large.

But here's an interesting way to think about trillions:

A trillion dollars is about the total amount collected in income taxes by the U.S. federal government in fiscal year 2006—$1.04 trillion, if you're curious to use the exact number. That gives me a simple rule of thumb for personalizing these numbers. If I want to know what an additional trillion dollars in government borrowing or spending will mean for me, I just imagine what it would be like to pay twice as much in federal income taxes for one year.

So, for example, with the President's proposed budget calling for deficits of $1.75 trillion for 2009 and an additional $1.17 trillion for 2010, after 3 years of paying twice as much as I paid in 2006, I'd have about paid off my share of the bill for the first two years of the proposal.

Don't push this too hard, it's not a strict reckoning of accounts due and no one expects that the government will be asking individuals to cut checks next year to balance the budget. But do take a minute to ponder.

Via BoingBoing

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  1. “I’ve pretty much stopped being able to hear or understand the kind of numbers the federal government is trafficking in these days.”

    I’m not surprised. Not at all.

  2. Doubling your tax burden doesn’t cover it. You also have to double the inflation rate, and a couple other adjustments as well.

    I like the Jesus accounting of a trillion. If Jesus spent a million dollars a day from manger day till today, he’d have only spent three quarters of a trillion dollars.

  3. “If Jesus spent a million dollars a day from manger day till today, he’d have only spent three quarters of a trillion dollars”

    When did this happen?

  4. 1 trillion is a million-million.
    Just think of a million. Then think of that a million more times.

  5. Anyone wanna take a guess at when the government will first use the term “quadrillion”?

    I’m going with 2020.

  6. Just think of $999,999,999,999.

    Then think of that plus another dollar.

  7. Anyone wanna take a guess at when the government will first use the term “quadrillion”?

    They’re going to start using the catch-all terms “gazillion” and “shitload of” before that ever happens.

    As in “the deficit is now a shitload of dollars. A burritos-and-tequila shitload.”

  8. Trillion.

    Isn’t that the planet where Kirk had to fight the thralls in that two-colored ring.

    That Shahna was hot.

  9. A trillion bucks would buy over 200 Nimitz class aircraft carriers. With a fleet that size we could get other countries to loan us any amount of money we need.

  10. Triskelion you stupid thrall

  11. I liked this illustration of a trillion bucks:
    $1 Trillion

  12. Trillion.

    Isn’t that the planet where Kirk had to fight the thralls in that two-colored ring.

    I thought it was the British chick that hung with Zaphod in THGTG.

  13. Anyone wanna take a guess at when the government will first use the term “quadrillion”?

    Right before U.S. Military Humvees start rolling through the streets with roof-mounted megaphones blaring “Looters will be shot. Anyone caught outside after curfew will be arrested and risks being shot”.

  14. So a Nimitz class aircraft carrier costs about $5 billion?

  15. Paul,
    Don’t give us those Pollyanna statements. I expect them to get up to the quadrillions long before they have to resort to martial law.

  16. How many trillions in a quatloo, then?

  17. I thought it was the British chick that hung with Zaphod in THGTG.

    Trisha McMillan to you.

  18. “(And notice those pallets are double stacked.)”

    In my expert opinion, double stacking like that isn’t safe.

  19. A trillion bucks would buy over 200 Nimitz class aircraft carriers. With a fleet that size we could get other countries to loan us any amount of money we need.

    You still need to buy the planes.

    And the undercoating.

  20. And the undercoating.

    Don’t need no sealant…

  21. Anyone wanna take a guess at when the government will first use the term “quadrillion”?

    2140

    @ 5% per annum there’s a doubling every 15 years. 1 quadrillon is 333 times the current 3 tril total budget – between 8 to 9 doublings

    – > about 130 years.

  22. It’s is so hard to explain how truly fucked we are —
    Circumference?
    Depth?
    Anal wreckage?

  23. Don’t push this too hard, it’s not a strict reckoning of accounts due and no one expects that the government will be asking individuals to cut checks next year to balance the budget. But do take a minute to ponder.

    Yes it is like asking individuals to cut checks next year in terms of the weight of the anchor around the neck of the economy. It isn’t magic. The government is 2 trillion dollar sinkhole out of the productiveness the economy whether or not it actually asks for a check. It would be better if they asked for a check, so it would be more visible to people like you.

  24. – > about 130 years.

    Ok, so they won’t be Humvees, it’ll be something else. Some kind of ghey hybrid military vehicle with biodegradable parts, and sustainable, organic manufacturing processes.

  25. @ 5% per annum there’s a doubling every 15 years. 1 quadrillon is 333 times the current 3 tril total budget – between 8 to 9 doublings

    – > about 130 years.

    The rate of increase is going to be considerably above 5% per annum, at least in the short run. I would put at closer to 8% as a relatively conservative number. At 8%, you double every (roughly) 9 years.

    Then you throw in inflation, soon to be in the double digits. Call that an extra 12%, so we’re looking at a nominal increase of 20% per year, which doubles every, say, 4 years (conservatively).

    So you get your 9 doublings in more like 36 years, not 130.

  26. (CAUTION: offensively inaccurate math ahead)

    Or think of it like this:

    A trillion seconds ago our Mission was Accomplished in Afghanistan.
    A trillion minutes ago Al Gore invented the internet.
    A trillion hours ago FDR went on TV after the stock market crash and said everything would be okay.
    A trillion days ago Jesus parted the Red Sea and sunk Atlantis (or something).
    A trillion weeks ago God’s roommate pulled his finger, creating the universe.

  27. “A trillion seconds ago our Mission was Accomplished in Afghanistan.
    A trillion minutes ago Al Gore invented the internet.
    A trillion hours ago FDR went on TV after the stock market crash and said everything would be okay.
    A trillion days ago Jesus parted the Red Sea and sunk Atlantis (or something).
    A trillion weeks ago God’s roommate pulled his finger, creating the universe.”

    So what did all that cost?

  28. FrBunny (inaccuracies noted)

    A trillion seconds is about 31,000 years
    A trillion minutes is about 1.9 million years
    A trillion hours is around 110 million years
    A trillion days is around 2.6 billion years

    You missed your earlier guesstimates by a bit, but it actually has been just under a trillion weeks since that fateful pull of the finger.

    Cost? We’ll bill you.

    .. Hobbit

  29. Anyone wanna take a guess at when the government will first use the term “quadrillion”?

    That won’t happen; the “new dollar” will eliminate a lot of zeros.

  30. And just a year ago, media commentators and political opponents were calling Ron Paul’s proposal to eliminate the income tax “ridiculous”, in part because it could lead to substantially higher deficits is spending was not cut to match (which seemed even more politically non-viable.)

    Now it turns out they’ve increased the deficit far MORE than eliminating the income tax would have, and we still have the income tax to pay.

    I leave it as an exercise to the reader to consider which plan would have provided a stronger stimulus to the economy and a quicker recovery:

    Plan A: Eliminate the income tax and pare government spending as much as possible.

    Plan B: Hike government spending dramatically, keep the income tax, and bail out the financial companies that created the mess, with increased government oversight going forward.

  31. A trillion minutes is about 1.9 million years

    Don’t be silly, Hobbit. The internet hasn’t been around even half that long.

    You know, for a magazine called Reason…

  32. That won’t happen; the “new dollar” will eliminate a lot of zeros.

    Exactly, P Brooks. A trillion is only ten of these. You’ll get used to seeing them in greenbacks real soon.

  33. That won’t happen; the “new dollar” will eliminate a lot of zeros.

    yes, but it will be called the ‘amero’

  34. Here’s a great comparison of what the Treasury is doing to the dollar and it’s analogy to the Mexican Peso in the mid-’80s.

  35. Didn’t the Zimbabwe government issue quadrillion-dollar bills a few months ago?

  36. To expand on The Bearded Hobbit above and to quote a recent blog post by William Gibson:

    A million seconds is 11 days.
    A billion seconds is 32 years.
    A trillion seconds is 32,000 years.

  37. We should eliminate the Income Tax altogether.

    They don’t have one here in Texas, only a sales (or consumption)tax. That’ll reign in government spending real quick.

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