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March, 2004

Infinite Money, Infinite Debt!
By Jim Scanlon

"A billion here and a billion there and pretty soon you're talking real money!"
Former Speaker of the House Tip O'Neil.

Every day we see headlines about huge sums of money in million or billion dollar terms, such as: "President asks congress for $87 billion for Iraq," "Bush Plans $17 Billion to the Moon," "$1.5 Billion for Promotion of Marriage," "Microsoft's First $10 Billion Quarter!," "America Gives Israel $2 Billion," etc.

All too often, we hear a news commentator, perhaps out of mind numbing number fatigue, make a slip, and confuse "million" with "billion" or, as I heard on NPR this morning, "a car with a thousand tons of high explosives" for had to have been "a car with a thousand pounds of high explosives." One thousand tons of TNT would be one fifth the explosive power of our Hiroshima Uranium Bomb. There is a big difference between "tons" and "pounds" and between "million," "billion," and, the really big one, "trillion."

If you have a group, or a pile, or a set of a thousand things, and then you sum up a thousand piles of those thousands you have a million of those piles.

A billion is a thousand piles of a million piles of a thousand piles, each with a thousand things of something or other. (You can also think of a billion as a million piles of a thousand, a thousand piles of a thousand piles of a thousand piles)

But, for most people it is hard to conceive large numbers of things without getting confused and saying things like "lots" or "tons" or "swarms" or "a millions" or "millions and millions," meaning "lots and lots." But when it comes to money, the words just come out seemingly without reference to the actual importance of millions and billions and trillions dollars. Politically the big numbers seem to mean, "I care."

Money makes it harder because money mostly exists abstractly as numbers in an account that might be positive or negative-what we can access or what we must pay. Only rarely do we ever actualize or turn all our money into cash and more rarely yet, are we free of negative money-that is, debt free. Only rarely are we ever completely without money or where, if we have it, it is useless, like alone in a wilderness, or in a foreign country with the wrong kind of money. It can be frightening.

In order to better understand large sums of money, we might think in terms of units of time, since we are more intimately familiar with it. There are 86,400 seconds in a day. There are just about one million seconds in 11.5 days. A billion seconds is about 32 years and a trillion seconds takes 32,000 years to tick away. Big differences there are between million, billion and trillion, although they look similar and sound similar.

Slowly and steadily "trillions" is creeping into our lives. For example, according to the BBC, "The US Federal Budget deficit could reach $2.4 trillion over the next 10 years, $1 trillion more than previously estimated." What does this mean to people? What does this mean to you? Would it mean something else if these numbers had been printed $2,400.000.000.000.00 or $1,000.000.000,000.00? Suppose the estimate was $5.8 billion and $2.87 billion? Would it mean anything different to your?

Language gives us the illusion of power over objects to the point where the things we are referring to sometimes become meaningless-or become free of emotion. Words like "Mrs. Smith, your checking account is overdrawn," or "You're fired Mr. Jones!" - or unexpectedly seeing a bill for lunch for $75.00, might provoke a powerful reaction.

For example, as of February 15, 2005 our national debt was estimated at $7,027,628,101,229.38 (one wonders why the .38 is there) and growing by $1.77 billion a day. Ho Hum! The huge lunch tab would probably effects us more immediately and powerfully.

Each citizen's share of this debt is perhaps $23,960 which is very close to the median annual income of the average worker in California, $23,576 which is about 4% higher than the national average. The "debt" is a little different from the "deficit" which is unfortunately what most people think of as "debt," that is buying more than you have cash on hand to pay. The budget deficit for 2004 is currently estimated at $477 billion with the current bill for "Iraqi Freedom" still outstanding.

What does this all mean? Our nation is living on credit. How long can we borrow? Can we escape the inevitable day when our credit runs out? Will things really get better? Our currency is losing it's value, which is good for some, bad for others. Can anyone, or anything, grow and expand forever? Some say we can. Others don't seem to even want to even hear the question. When all the corporations move their headquarters "offshore," that is, outside the United States, and more and more jobs are outsourced, and the dollar morphs into the Argentinean peso, is that when the credit will stop? Argentina collapsed owing only 132 billion pesos, (Notice how easily I wrote "only"?). It was enough to destitute millions of people like you and me.

There are a couple of hundred million Americans, each with their own little budgets, money coming in and going out, many in families and small organizations, of one sort or another, living in diverse counties and states, all bound together by dollars coming in and out, cash, checks, credit, getting what is needed to survive and make lives satisfying.

The same goes on all over the world, each country with its money, currency, translating other monies from other countries into theirs and back. All bound together by invisible financial threads, threads of ones and zeros on computer disks, that nurture, enslave and sometimes starve, kill, poison and strangle.

It isn't a simple system, despite what some high priests of finance say. (Dick Cheney was quoted, "Reagan proved deficits don't matter." The system sometimes seems to have a life of its own.

So just keep in mind the difference in the following intervals for million, billion and trillion- a week and a half-32 years-and 32,000 years, as our nation staggers and lurches toward bankruptcy.

 

 

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