Monday, March 23, 2009

‘Trillion’ is the new billion [update 3]

Obamessiah Another week, another trillion dollars. 

The Obamessiah has been busy – but even in his busiest moment the country’s chequebook is never far from reach. Fresh from his overtures last week to Iran and Hezbollah early last week, then demonising his new scapegoats (in the form of the AIG bonus recipients), he moved on over the weekend to promise a trillion dollar golden shower last week.  All hail the Messiah.

Yes, the Sainted One  is going to fix America’s banking system with the balm of yet another trillion dollars to be bestowed on the American banking system, this time to bless the so called “toxic assets” – you know, the ones Henry Paulson promised to “fix.”  The new plan is that the Messiah will do what Paulson couldn’t by the benison of his mere touch, performing thereby the miracle of transforming them from “toxic” to “asset” by willpower alone –- with the assistance of one trillion dollars that you and your grandchildren will be paying off for some decades to come.

All hail the Great Leader!

Leaving aside for the moment the impossibility in this world of such miracles coming to pass in the desired manner, notice how quickly we’ve become inured to news of another trillion dollar spending spree.

A trillion has become the new billion – which is certainly what’s going to happen to the purchasing power of one billion dollars under the weight of all the new paper Ben ‘Helicopter’ Bernanke is pumping out at the Messiah’s behest.

A billion dollars is already a big number.  Says Bernard Darnton,

People don’t understand the word ‘billion.’ It sounds like ‘million,’ which means ‘quite a lot,’ and ‘billion’ also means ‘quite a lot’ – maybe a bit more. But the difference is vast. A million dollars is what you’d get earning the average wage for twenty years. A billion dollars is what you’d get if you won Lotto every week for twenty years.

And a trillion dollars is what you’d get if you won Lotto every week for twenty thousand years.

That’s a long time.  Almost as long as it will take to pay off Obama’s debt.

Let’s look at it another way.

Here’s one million dollars worth of one-hundred dollar bills:
million Here’s one billion:
billion  And here’s one trillion dollars:
trillion
Those pallets are double-stacked, to make it easier to see.  And that little dot in the bottom left corner?  No, that’s not a fly spot on your screen, that’s your man.  And by the way, the deficit in the Obamessiah’s big-spending budget – even before this latest announcement, was projected to be 9.3 of those double-stacked football-fields of cash over the next decade:
trilliontrillion  trillion
trilliontrillion  trilliontrilliontrillion  trillion

billion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillion billionbillionbillionbillion billionbillion

That’s not just a truckload of money.  It’s not even a warehouse-load. There is not a building or a fleet of trucks in the world that would hold that amount of cash.  Perhaps if you committed yourself to shovelling it all into the Grand Canyon, you’d find a big enough hole to store it all (and that, to be fair, would be a much better use for it).

This is a president who, in February – just days after announcing a $787 billion stimulus package --   signalled he would “pivot quickly” to address the exploding budget deficit, scheduling a "fiscal-responsibility summit" to “put pressure on politicians to address the country's surging long-term debt crisis.”  As Jeff Perren said at the time,

I'm beginning to wonder if Obama's Progressive pragmatism has led him to an actual psychotic break. Now, now he's worried about the Federal debt and the deficit? After pushing for the largest theft of future taxpayer wealth in history, only a little more than a third of which conceivably has anything to do with the economic crisis?

The “miracle” the Messiah is hoping for is still predicated on the failed Keynesian notion – one that has never worked anywhere – that throwing whole Grand Canyon-loads of money at the problem will fix it.  But here’s a question for Washington's Keynesians, asked by Jeff Jacoby:

If uninhibited deficit spending is the key to economic growth, how could the Bush administration's galloping budget increases and unbroken string of deficits have left the economy in recession? If Keynes was right, why didn't the enormous growth of government outlays stop the Great Depression in its tracks? Federal spending exploded under Herbert Hoover and exploded even more under Franklin Roosevelt, during whose first two terms the federal budget more than doubled. Where was the "stimulus" such furious expenditure should have produced?

The answer today’s Keynesians always give (people like alleged economists Paul Krugman and Brad de Long), is that the`avalanche of spending under previous regimes was not enough.  Not enough! The deficit spending under Roosevelt indebted two generations of Americans, and still failed to lift it out of the slump. But it wasn’t enough. The misnamed “stimulus” packages the Japanese tried in the nineties to rescue their own economy, producing deficits making it the most indebted country in the developed world, didn’t do the job either.  They too weren’t enough.  No stimulus, anywhere ever, has ever been enough in hindsight.  Which leads Tom Woods to ask in the latest Free Radical:

What would be enough, then?  A quadrillion dollars?  A googol dollars?  Infinity minus one dollars?  It’s be interesting to know what “stimulus” figure might make a Keynesian declare, “Now that’s too much!"

Anybody have an answer?  Before your great-great-great grandchildren have to pick up the tab too?

UPDATE:  Ed Cline takes on Obama’s rapid destruction of the once prosperous and productive United States: “As on the popular TV program, ABC’s ‘Extreme Makeover: Home Edition,’ President Barack Obama is overseeing the demolition of the remnants of a republic that upheld individual rights and of the construction of a socialist “republic.“  Read it all here: Obama's “Extreme Makeover” of America.

UPDATE 2: As if to prove I haven’t got what it takes to be US Treasury Secretary (but how has, apart from maybe Bernie Madoff), I had to amend the pictures of that Grand Canyon-load of dosh above.  Silly me, I’d confused a billion for a hundred-billion.  Easy mistake to make, what?

UPDATE 3: Dinther reckons that the area covered by those $100 bills is 10000 square kilometers!  He’s made a Google Earth model that you can view in Google Earth.  Keep zooming in until you see the dollar bills (which is bound to be a metaphor for something extravagant.).

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15 Comments:

Blogger Julian Pistorius said...

Speaking of bailout, bonuses and large numbers... Dishonest media

3/23/2009 10:30:00 am  
Blogger Dinther said...

That is a shitload of money. I calculated that the area covered by those $100 bills is 10000 square kilometers!

http://vandinther.googlepages.com/Trillion.jpg

I made a Google earth model that you can view in Google earth.

http://vandinther.googlepages.com/OneTrillionDollarscoverWashington.kmz

You can keep zooming in until you see the dollar bills (Just)

I ran my calculation several times. Spreadsheet here http://vandinther.googlepages.com/Trillion.xls

3/23/2009 12:18:00 pm  
Blogger Ama-gi said...

9.3 trillion does not mean 9 trillion and 3 billion. It means 9 trillion, 300 billion. I think.

3/23/2009 12:42:00 pm  
Blogger PC said...

AMA-GI: Ooops, yes, you're quite right. I've pasted the wrong picture.
Thanks.

I clearly don't have what it takes to be Treasury Secretary -- but who does apart from, maybe, Bernie Madoff.

3/23/2009 12:53:00 pm  
Blogger brian_smaller said...

But just like Generals in WWI, they are thinking that this time the plan might work. Fools.

3/23/2009 12:54:00 pm  
Blogger Dinther said...

I just can't help myself.

One trillion dollars end to end would take you 155 million kilometres from earth.

That is slightly more than from here to the sun.

Light would take over 8 minutes to travel the distance of a trillion dollars end to end.

3/23/2009 09:37:00 pm  
Blogger Dinther said...

And then you wish you could edit your comments. All those numbers assume 1 dollar bills not $100 dollar bills.

3/23/2009 09:41:00 pm  
Anonymous Sally O'Brien said...

To help get things in perspective I found these figures at http://foxforum.blogs.foxnews.com/2009/02/16/lott_obama_stimulus/
With 90 million tax filers who actually pay taxes, the $787 billion package meant the average taxpayer will pay over $8,700. With the stimulus bill, the $700 billion financial bailout (half spent by Bush and half by Obama), and the bailout for the auto companies, this year’s deficit is already at about$1.7 trillion — almost $19,000 per taxpayer. With more possible bailouts for the auto industry and others, that total might rise further. ............... Just to let this sink in — the amount of money that the US government is committing to spend this year is equivalent to the average taxpayer just writing the government a check today for $62,200.

3/23/2009 09:42:00 pm  
Anonymous LGM said...

Sally

And the best part is listening to all those talking heads in Washington and NY (and even here) saying the end of the recession is right around the corner. Then again, perhaps they are correct- the end is indeed nigh and the depression is yet to begin.

LGM

3/24/2009 06:29:00 am  
Anonymous LGM said...

Dinther

Kinda makes you take a deep breath and realise the scale...

LGM

3/24/2009 06:31:00 am  
Anonymous Anonymous said...

I'd like to find the cost per tax payer of the NZ govt. spending plans. I think this is perhaps the most powerful illustration to spread around.

3/24/2009 08:34:00 am  
Anonymous Sally O'Brien said...

So can one of you clever chaps work out the cost per taxpayer of the NZ governments spending plans?
We need to make sure these figures are well known out on the street.

3/24/2009 08:38:00 am  
Blogger Jeff Perren said...

"...average taxpayer just writing the government a check today for $62,200."

I would willingly write them a check for $62,200 (and encourage my fellow citizens to also) if they would just stop the madness!

Stop creating new market uncertainty, stop the ongoing bailouts, stop printing new money, stop cap and trade talk, stop, stop stop it all.

But that's not going to happen, no matter how much they steal. Progressives are insatiable, so long as any individual in the country has a free choice about anything. They are thinly disguised totalitarians, and the veneer is as shallow as Obama's character.

3/24/2009 11:15:00 am  
Anonymous LGM said...

Jeff

A willingness to pay them anything is a sanction for them to continue to steal yet more.

LGM

3/24/2009 01:08:00 pm  
Anonymous Observer said...

Surely the reality is that money no longer means anything - it is simply an entry of zeros and ones stored in a computer somewhere with no relationship with real life.

When you tell a man in rural Mississippi, living on US$20,000 peer year and all the food that he can grow, that the contribution required from him for this year's government spending is a couple of grand over three year's income, all he's going to do is laugh! What else can he do?

When you tell a young man in Porirua who packs cartons containing chocolate bars onto distribution trucks for minimum wage (NZ$25,ooo pa.) that his share of the National Debt is now $40,000 all he's going to do is laugh! What else can he do?

Cash is finished. A new form of exchange is required, one that balances productive capacity with purchasing on an international scale, and which can't be manipulated by 'traders' for personal life-style at the cost of societal progress. Maybe a Gold or other precious metal could be the basis of this valuate medium? Who knows, what I do know is that it has to be THE SAME for every country - we can no longer afford the idiocy of individual nations having and politically manipulating their own.




PS - I have a "Word Verification" to enter, it is "pacut" is that a prediction or what?! PMSL

3/25/2009 10:01:00 am  

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