How Much Money Does A Trillion Dollars Really Amount To?

Roughly one month’s GDP for the United States of America.  Thanks for asking.

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I’ve read one too many ‘clever’ ways of presenting the quantities of money involved in the various bailouts, stimuli and deficits. The comparisons are quite silly, even if I do understand why people make them.  A trillion dollars doesn’t naturally fit into one’s frame of reference the way that even a big number like a million dollars does (quick–that one is my total income between now and retirement at my current salary…).  So we reach for more intuitive ways of representing the numbers we’re dealing with.

But once we learn that it would take 84 of these ginormous planes to fly around $1 trillion worth of $100 bills, the natural question is “given that there are 300 million people in the United States, how long would it take them to load those crates of $100 bills into the planes?” and the answer is “are you kidding? it’d be impossible to organize that many people, and they’d just steal the money.  why do we want to fly money around anyway? what if the plane crashes–will we get our money back?  this plan sucks.”

Better to do different comparisons, like the one up top.  One month’s worth of the utilized productive capacity of the USA.  Or one third of the recent federal budget.  Or roughly twice what we spend on defense appropriations in a year, or half what we’ve spent on the Iraq War.  Or even $3,300 for every person in the United States.  Tell me what the consequences of that spending are in real terms.  No amount of cuteness will make massive large numbers more intuitable.

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Did you notice that the federal budget is already measured in trillions? Or that the defense budget is more than $500 billion? And on an ordinary day, no one starts measuring how far we could pave a road in $100 bills with those sums.

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5 responses to “How Much Money Does A Trillion Dollars Really Amount To?

  1. DysfunctionalParrot

    Answer: more than the US will ever be able to pay back.

  2. This is a place where thinking in absolutes doesn’t get us far. The question isn’t whether the US will be able to pay the money back (we will), it’s at what cost. We could always raise taxes–a VAT would be the most efficient candidate. The worry is what effect such a rise in taxes would do to growth, or how it might crowd out other priorities for government spending.

  3. DysfunctionalParrot

    I wouldn’t go so far as to say absolutes as I would just using mathematics.

    But maybe math is an absolute. I’m so confused…

    It’s trade deficits, it’s consumer spending ( still out of control ). America will have to deprive itself…it will have to go without…if she wants to survive.

    At this point, they’re printing money like crazy because I think they know it doesn’t much matter anymore.

  4. No problem with math as an absolute (it’s true on many interpretations of ‘absolute’), but surely you’ve noticed that there’s no math in your comment.

    (Btw, when I said absolutes, I should’ve said ‘binaries’: we can pay it back/we can’t pay it back).

  5. DysfunctionalParrot

    BINARY!!?? My arch-nemesis!! Nooooooooo!