I was having a discussion the other day when the subject turned to the economy and the current stimulus spending just released. What I found intriguing was, as we were discussing the effects that the $1.9 Trillion may or may not provide, it was when we started down the road of the now openly floated proposal of another, which may be even double this one, to be determined later this year.
What was both fascinating, as it was funny, was when I began putting these $dollar amounts into perspective through a simple exercise that drives the point home. The reactions were priceless, for it goes to show you just how far removed most of us are. Please note: I was once fully ensconced in this category myself, so this isn’t a “dig” at anyone.
We throw around the terms regarding money like “millions, billions and now trillions” like one is just the next step in the classification, without realizing precisely, just what we’re really talking about. i.e., It used to be something to be a “Millionaire.” Now? It barely affords you the ability to live in some locales. (Think: New York City, etc.) Today: “Billionaire” (i.e.,”Three Comma Club”) is now all the rage, as if getting to a $Billion is nothing more than the next logical step up the income ladder. And why not? Everybody’s doing it! Right?
Well, actually, no they aren’t.
There are only 2,095 “Billionaires” world wide according to Forbes™ latest list.
According to the Global Wealth Report – in the U.S. alone – there are 18,600,000 (that’s 18.6 million) “Millionaires.”
So, when it comes to how many Billionaires there are compared to Millionaires, the total amount of Billionaires can be classified as a rounding error in comparison. Again, using the global count of B’s compared to the U.S. count, alone, of M’s.
So, no, not “everyone” is doing it by any measure. Yet, the press makes it appear as if. So it must be so.
As I alluded in the opening, here’s the construct I used to portray what we’re really talking about when it comes to all the stimulus. It goes like this…
If I had an endless supply of one $Dollar bills (much like the Federal Reserve) and I gave you one, every second (Think one, then another, then another, then another, then another…) how long would I have to do that till I reached $1 Million? Again, I gave you one $Dollar every second, hour after hour, day after day, nonstop. How long?
Answer: 12 Days (that’s what one million seconds equates to)
Now, since Billion is just the next step in the classification (e.g., thousands, millions, billions, trillions, etc.) If I did the exact same, repeating the process of one $Dollar every second. How long till I get to $1 Billion?
Answer: 32 years. (that’s what one billion seconds equates to)
Now, let’s go with the “Fun with math” portion of this exercise.
How long, doing the same as the above, to get to $1 Trillion?
When I ask this question is where it gets fun for both myself, as well as the person, because it just goes to show you how lost we are in comprehending large numbers. We think because it’s just the next in the progression, that its just a bigger number in relation to the last. Although that’s true. It’s the relative size of that next step that we have an issue conceptualizing. Here’s how it usually goes…
Their answer: “I don’t know, maybe 100?”
Sorry, no, try again.
“Let’s see. It took 12 days, then 32 years (mumble, mumble, carry the one, mumble…) how about 500 years! I’m way over right?”
Sorry, no, not even close. Wanna try again?
“C’mon, really? More than five centuries?! OK, one thousand years, 10 centuries, that’s gotta be close, as well as completely crazy, but let’s go with it. How close?”
Sorry, not even in the same ballpark.
“OK, let’s hear it, how long?”
If you were to give out one $Dollar every second of every hour, of every day, week after week, month after month, year after year, decade after decade, century after century, millennia after millennia you still would not come close, for it would take you: 31,700 years (that’s what one trillion seconds equates to).
Last time I looked – 31,700 years was a long time. But maybe that’s just me.
Using this latest stimulus as an example, it would take you nearly 60,000 years. We classify BC and AD, or BCE – CE if you like, time-frame represented by today’s date as only two thousand and twenty one years. Sixty thousand years ago we’re told we were still living in caves. And now we’re talking about doing not only that, again, but maybe even doubling it.
But not to worry we’re told. Why?
Because the Magic Money Tree (aka MMT, Modern Monetary Theory) cares not of this thing we call “large numbers.”
Maybe. However, all I’ll add to that, is this…
“Theory” means precisely that: no one can prove “no one cares” – till they do. Then all theory goes out the window replaced by abject fact. Better hope those “facts” are what they planned for, otherwise, the law of large numbers is going to suddenly get everyone’s attention.
© 2021 Mark St.Cyr