How Much Is A Trillion?

by Ron Haynes

With billions and even trillions of dollars bandied about like they were birdies in a badminton match, I started trying to get my mind around how much a trillion really is. One trillion (in the USA) is a 1 with twelve zeros. 1,000,000,000,000. Just to get an idea of how large that number is, I did a little comparison research.

The population of California is about 34 million. One trillion people would equal 29,500 Californias.

Texas is roughly 270,000 square miles. One trillion square miles would equal 3.7 million Texas size states.

Earth HologramOne trillion square miles is, in fact, about 20 Earths, since we have 50 billion square miles of land above sea level.

If you travel around the world at the equator 40 million times, you would travel one trillion miles.

One trillion dollar bills laid end-to-end would stretch from the earth to the sun … and back … with a lot of miles to spare.

The budget for the entire state of New York is $121 billion. With one trillion dollars, you could run 8 states the size of New York.

Dig a hole 50 feet deep and 100 feet wide and it would take about one trillion ONE HUNDRED DOLLAR bills to fill it up.

Niagara FallsRoughly 500,000 gallons fall over both sides of Niagara Falls each second. One trillion gallons would equal the amount of water that falls in a little over three weeks.

With one trillion dollars, you could buy 50 aircraft carriers such as the USS Ronald Reagan and outfit each of them with 45 of the newest fighter jet, the F-22 Raptor.

The US Department of State has a budget of only $36 billion. We could run the State Department for almost 30 years with one trillion dollars without even bothering to earn interest on that money.

Speaking of the shuttle, it costs $450 million to launch it. For one trillion dollars we could launch the shuttle over 2,200 times.

Excluding the cost of the current wars in Iraq and Afghanistan, we could run the entire Defense Department (most of which is pensions, btw) for 2 years with one trillion dollars.

The average annual premium that a health insurer charges an employer for a health plan covering a family of four is $12,700. For one trillion dollars, you could cover 78 million people with health insurance for one year.

For one trillion dollars, we could cover the estimated 46 million people without health insurance in the United States for almost 3 years.

One trillion dollars today would allow you buy Coca Cola, Apple, IBM, Bank of America, Ford, General Motors, Toyota, Motorola, AT&T, as well as Exxon Mobil and STILL have enough left over to live comfortably on just the interest from the billions left over– not to mention the profits these companies generate.

One trillion barrels of oil would fuel the ENTIRE WORLD for almost 35 years.

One trillion seconds is longer than all of recorded history, about 32,000 years.

 

Technorati Tags: ,,one trillion,,,

Photo Credits:

photo credit: Joe Shlabotnik

photo credit: ashwin kumar

photo credit: lrargerich

About the author

Ron Haynes has written 1000 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


If you enjoyed what you just read and would like to get FREE email updates with the freshest articles from The Wisdom Journal delivered right to your inbox, subscribe today! It's ridiculously easy and you can unsubscribe at any time. Since your email address is never sold or abused, you can subscribe with confidence, PLUS you'll get free reports/guides/eBooks, subscriber only benefits, and other perks.


{ 17 comments }

Lise

Has no one mentioned that the U.S. debt is now 10 trillion? Or that our budget deficit last year, without any stimulus, was .5 trillion?

I’ll let you have a couple of guesses where all that money went, and you can decide if that’s productive or not.

As huge as it is, a trillion dollars is only about $3,000 per person. And what is it going towards? Here’s a breakdown:
http://manyeyes.alphaworks.ibm.com/manyeyes/datasets/obamas-stimulus-plan-the-breakdown/versions/1

That’s debt that is basically creating money (keep in mind that in the modern financial world, debt = money). Many people criticize, for example, the money that’s set aside for re-beautifying the Mall, forgetting that jobs beautifying the Mall are real jobs.

(And yes, this is a classic Keynesian answer, but people use “classic Keynesian” as though that made it untrue…)

Who is going to pay it back is a silly question, as if it’s hard currency. We’re not going to be handing bags of dollar bills to China. One answer is “our children,” but that doesn’t really answer it. It’s government debt financed by treasury bonds, leveraged against the security of the U.S. ourselves. Unless the U.S. itself defaults on its loans – in which case we’re talking global fiscal armageddon – it’s essentially a non-issue.

Admin

I disagree, it IS an issue. Where does it end? 100 trillion? 1,000 trillion? Why EVER stop if it’s a “silly question?”
The “real jobs” answer doesn’t really cut it either. One the Mall is finished, then what? More debt, of course.

At some point, the US WILL default on it’s loans, it’s inevitable. When you continually print our fiat currency (I hail from the Austrian school of economics), and simultaneously force interest rates down, you automatically create inflation. Printing more money and going into more debt doesn’t create wealth. Reference Argentina . . . “classic Keynesian” is untrue.

Only $3,000 per person? THAT’S ON TOP OF ALL OUR OTHER TAXES WE ALREADY PAY! And since only 138 million people in the US actually pay taxes, it’s closer to $8,000. Eventually debt must be repaid. The US cannot continually raise taxes and increase debt while the amount of the population that actually pays taxes steadily decreases.

Here’s a few other things your money is going toward (from the Wall Street Journal:

Las Vegas wants $2 million for neon signs.

Boynton Beach, Fla., is looking for $4.5 million for an “eco park” featuring butterfly gardens and gopher tortoises.

Chula Vista, Calif., would like $500,000 to create a place for dogs to run off the leash.

Austin, Texas wants about a million for a frisbee golf course.

Virginia Beach wants to replace some tennis courts.

Fiscal responsibility has gone out the window.

khaine

“At some point the US WILL default on its loans..”

Why, exactly? US debt as a percentage of GDP was higher in WWII then it is now, so by that logic, why hasn’t the US already defaulted on its loans?

I agree that fiscal responsiblity has gone out the window; this happened in 2001, when we implemented the biggest tax cut (mostly for the rich) in history, and then managed to squeeze in another one in 2003 despite mounting losses. (Not to mention huge spending increases, even discounting defense.)

Unfortunately, that leaves us a bit stuck at the moment, since what the government needs to do now is spend money like it’s 1939 to avert a second Great Depression.

Admin

“Mostly for the rich?” The tax cuts applied to every single person who paid taxes. And no nation ever spent its way into prosperity, neither did it tax its way into prosperity either.

Lise

So I guess you think the New Deal was a bad idea, too?

I’m not saying there isn’t anything porky about the stimulus – clearly some things are going to work better long-term than short-term. That’s politics – a relentless striving towards the middle. But as a whole, I defend it.

I’m not sure why you think the U.S. defaulting is such a risk. It seems highly unlikely to me. This would have to go much farther for me to be alarmed.
As I’m sure you know, most of our government debt is owed to private individuals through T-bonds and the like. If people aren’t buying them, the rate is increased to make them more attractive. Of course, this increases the size of the deficit. At the extreme end, the government will eventually either raise taxes or cut services, or both – but the government can never really “run out” of money.

So I’m not sure I understand your tax argument – only if the government can’t finance it with Treasury notes is it even going to *touch* taxes. And honestly, having lived in European countries, complaining about a 35% marginal tax rate for the highest bracket seems petty. (Especially looking at the historic marginal tax rates – did we stop being a capitalist country under Kennedy, when the top marginal tax rate was 90%?) We pay much less, and we get much less, than Europeans do for our tax dollars. Not coincidentally, I don’t think, most European nations have a stronger middle class than we do.

Btw, what do you think the “vast majority” of Americans who don’t pay taxes are doing? Do you think they’re all dishonest tax-dodgers? Isn’t it just more likely they don’t make enough money to pay taxes?

And, might I remind you that corporations are some of the biggest tax dodgers: http://washingtonindependent.com/26083/gao-many-bailout-recipients-operating-in-tax-haven-countries

As for the example of Argentina, let us not forget that it was a progressive democracy until the junta – backed by many U.S./IMF interests – decided to stage a coup and throw their opponents from helicopters. Arguably Argentina only survived because it never privatized many of its natural resources. It’s hard to say that Keynesian economics was a “failure” in that case when it was never really given a chance to flourish. (Actually, I might be confusing some of that with Chile, but they are similar cases – both used as playgrounds for neo-liberal economics).

Admin

This comment is rife with opportunities to teach basic economics. Yes, the New Deal was what prolonged the Depression by 7 to 8 years according to economists.

The stimulus isn’t a stimulus bill, it’s simply a spending bill, designed to allow maximum power grab for the Congress. It won’t work to revive the economy, only to cement uneducated voters into keeping politicians in office that gave them funds from the public treasury.

Money, or more specifically, fiat money, is backed up only by the faith that individuals and institutions have in the US government. At the current rate, the US is running a risk of devaluing ins currency by printing more and more of it. Where do you think the new debt came from? Did suddenly one trillion dollars worth of t bills get bought by individuals? Nope. It doesn’t work that way.

Now I gotta tell you, the Kennedy 90% thing made me laugh out loud. Name for me please, just ONE person who actually paid 90% of their income to the Feds in taxes? Please, just one. And I don’t care about what European countries charge their citizens in taxes. It doesn’t and shouldn’t have any bearing on what the US does.

Lise

Er, and somehow I missed your WSJ article.

From what I read – correct me if I’m wrong – those are things the municipalities WANT, not what the money is “going towards.” I have no idea if they’ll get their wishes or not.

Of course, I say there’s nothing wrong with a city wanting a frisbee golf course. Again, is building a frisbee golf course not a real job?

Andy Wood

It’s not a real job when it’s being paid to people who will essentially have to give virtually all of it back in taxes.

It’s not a real job if over the years it has to be paid for by “principal dollars” up front and interest dollars (sometimes an equal amount or more) paid to bond holders. That “real job” just became a “real nightmare.” Would YOU pay someone $40-50 per hour to dig post holes and sod a Frisbee golf course. You WILL be if that ends up in the stimulus and your taxes pay for it.

The best way the government can create “real jobs” is to remove the ridiculously excessive burden for paying local, state, county, and federal taxes that are currently placed on small and large business owners. Imagine being able to use our time to actually conduct business and hire quality help to get it done.

Lise

The best way the government can create “real jobs” is to remove the ridiculously excessive burden for paying local, state, county, and federal taxes that are currently placed on small and large business owners.

I always find this argument challenging because clearly, many large business owners (as in the link I gave) aren’t paying those excessive tax burdens already, illegally. And yet I doubt they’re using the extra money to create new jobs. Plus, if it’s true, as you say, that only 138 million people pay taxes, then why isn’t the economy adequately “stimulated” by that?

Similarly, do you think most business owners would pay more than minimum wage if they didn’t have to?

The problem with trickle-down economics (which it sounds like you’re promoting), as I see it, is that it puts money in the hands of the people who are least likely to use it in ways that stimulate the economy.

Admin

As a business owner of companies ranging in size from $50,000 in annual revenues to one with over $300 million, I can tell you from experience, NO company ever pays taxes. None. Zero. The customers pay the taxes. I set my required returns and when taxes went up, so did my prices. The thought that companies pay taxes is the biggest myth perpetrated by government officials in history and makes us in the know just laugh. Raise my taxes and watch your prices rise.

The 138 million number comes from the IRS, not just something I made up. It’s a fact. Most people don’t pay taxes and if there are companies “illegally” avoiding taxes, I’ll let you in on a secret. YOU can turn them in! Just send the names and proof to the IRS since you’re obviously in possession of this vital information.

Daphne

Just wanted to say I liked this post, because it gives very visual ideas on what an abstract number means. Great work!

Marc and Angel Hack Life

Wow! Talk about getting your point across… well stated!

I couldn’t agree more with your closing line about our country’s debt.

Stumbled! ;-)

Bell

Wow! Thats impressive. Let me try the other side of it!
1000 trillion is one quadrillion, number of atoms in the universe is about million trillion!!!

Lise

es, the New Deal was what prolonged the Depression by 7 to 8 years according to economists

You forgot to add “… of Milton Friedman’s Chicago school.”

I took this from Wikipedia, FWIW: A 1995 survey of economic historians asked whether “Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression.” Of those in economics departments 27% agreed, 22% agreed ‘with provisos’ (what provisos the survey does not state) and 51% disagreed.

Doesn’t sound like most economists to me. Sounds like it’s still an open question (and, I might add, has a lot to do with whether you consider yourself a follower of Keynes or Friedman).

Money, or more specifically, fiat money, is backed up only by the faith that individuals and institutions have in the US government. At the current rate, the US is running a risk of devaluing ins currency by printing more and more of it. Where do you think the new debt came from? Did suddenly one trillion dollars worth of t bills get bought by individuals? Nope. It doesn’t work that way.

Here you’ve going by a very Austrian school belief, which is that inflation is always and everywhere inflation is an increase in the money supply. While that is a risk of increasing the money supply, most economists would say it’s not a 100% correlation.

Obviously, no, a trillion dollars worth of T bills didn’t get bought by individuals, but that’s a fatuous argument, like saying that when your bank writes a loan it immediately has to cover that amount in fiat currency. I doubt any extra fiat currency is being printed as a result of this, because I doubt the Department of Whosiwhatsit wants payment in large sacks of bills. This is a case of money = debt. And in large part that debt will be paid by private individuals.

I will echo what khaine said above: given that we cleared off our WWII debt without a challenge, I have every reason to believe that the U.S. will not default on its current loans. I also believe it can be covered by individual or institutional investors, without printing more money or increasing tax rates. I imagine there’s a strong demand for U.S. treasuries right now, given the current bear market.

As a business owner of companies ranging in size from $50,000 in annual revenues to one with over $300 million, I can tell you from experience, NO company ever pays taxes. None. Zero. The customers pay the taxes.

So, if you redefine what it means to pay taxes, then sure, you’re right.

But let me ask you this. If the marginal tax rates go down, do you feel the need to lower your prices? Somehow I doubt it… I suspect you will have become quite comfortable at the price point you’re at, and you’ll pocket that extra cash.

if there are companies “illegally” avoiding taxes, I’ll let you in on a secret. YOU can turn them in!

“Illegal” is a poor choice of words on my part . Having tax shelters in Aruba and the Isle of Man – which the article in question discusses – is unethical, I would argue, but not illegal.

But really, taxes have no bearing on this discussion, because I really don’t think this will have a direct effect on the marginal tax rates we pay. Some politicians may choose to portray it as that, but I r

Now I gotta tell you, the Kennedy 90% thing made me laugh out loud. Name for me please, just ONE person who actually paid 90% of their income to the Feds in taxes? Please, just one.

Since I don’t happen to know anyone who was wealthy during that time, I’ll simply refer you to this chart of top marginal tax rates throughout U.S. history.

You’ll notice that after Reagan took office, the top marginal tax rates began to decline sharply – that was part of his platform, of course. They’ve wavered since then, reaching their lowest under George Sr., but they’ve generally remained lower than at any point before the Depression.

We’ve given supply-side economics almost 30 years to work… so why hasn’t it?

Admin

Where, oh where to begin? (this is a good debate btw! – thanks!)

FWIW? That would be zero. NEVER use Wikipedia as a reliable source. I can go in and change those numbers anytime I want to read anything I want.

Supply side economics haven’t been given a chance. The Keynesian theories embedded in our government (that government is the be all and end all of the economy) have consistently prevented it. I could easily ask the same question: Keynesian theories have been tried for 70 years. Why haven’t THEY worked?

The scary thing is that we are walking down the exact same path as we did in 1929. BUY AMERICAN – then Obama got his hand slapped by Europe (reference Smoot Hawley Act). Crash of the stock market followed by the Fed lowering interest rates (150 basis points in 1929! TARP and the Reconstruction Finance Corporation (both of which refuse to disclose their loan activities). Infrastructure Jobs, Government Jobs! (Public works was widely accepted by economists to reduce unemployment in 1930). Expectation of a recovery in 2010 – many politicians and economists expected a full recovery in 1931, too. Federal spending increasing 42 percent — guess whether that was 2009 or 1931? Tax increases in 1932 under Hoover (which resulted in lower revenues to the Treasury of 12 percent) and the fact that we will probably see a tax increase — as promised by Obama — in 2010 or 2011… the list goes on and on.

Remember that after all the stimulating that FDR and the Congress in the 30′s did … it didn’t work. We had three recessions DURING the Great Depression. Roosevelt’s programs were first passed in 1933 but economists generally agree that the Great Depression did not end until 1939, when the country began preparing for World War II. Unemployment rates, which reached as high as 25%, took several years to recover and did not get below 9% until 1940. In reality, Hitler and Hirohito did more to end the Great Depression than John Maynard Keynes, FDR, and the New Deal.

And the marginal rates link was interesting, but again. NO ONE paid those rates. NOT ONE SINGLE PERSON. Do you really believe that someone making $400,000 in 1960 actually paid $360,000 in Federal taxes? Really, c’mon. Under the Reagan administration, the Congress lowered rates but also eliminated deductions and cash flows to the Treasury actually improved. Remember, it’s Congress that taxes and spends and that sets tax rates. The President is basically just a figurehead and spokesperson who signs bills and raises more money for his party.

I still am baffled why you think tax rates won’t increase. It’s like saying you make $40,000 annually and plan to double your debt from $100,000 to $200,000 and don’t plan to increase your income in any way. Oh yeah, Keynesians believe that the government isn’t subject to common sense …

What do you think would happen if my business’s tax rates were lowered? Since I don’t operate in a vacuum, they would also be lowered for my competitors. Then what? My competitors would more than likely lower their prices and the market would correct itself. BTW, this actually happens on a daily basis in my industry.

Does debt = money? Yes, in accounting terms. Accounts receivable is an asset, but if you’ve ever needed real cash to make payroll and had a $345,000 account go bankrupt on you, you quickly learn that debt = money only on the books. When it comes time for a check to clear, it’s a different story altogether.

In the preface to the German edition [of his General Theory], Keynes boasted that his theory was particularly well suited for totalitarian regimes and lamented that it was less fit for the conditions prevailing in freer societies. His words, not mine.

On p. xxvi of his Collected Writings Keynes writes:

“Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire.”

There was a time, many years ago, that many people thought smoking was good for you. Today we know that this was just an excuse because it provided cover for what people wanted to do anyway: smoke. Today, people smoke even though they know for sure that it is not good for them. At least the illusions are gone.

Keynesianism is both similar and different. Sixty years ago, governments attempted macroeconomic stimulation through spending, debt accumulation, and eventual inflation and taxation. They thought it was good for us. It turns out that it wasn’t good. Nothing has failed so often and in some many places and under as many unique situations as Keynesianism.

Why did governments continue to do it, and why do they do it today? Because they want to, and for the same reason that people smoke. The subjective pleasure it provides the institution exceeds the serious health risks. The irony is that they still claim, despite all evidence, that it is good for us too.

Listening to Obama (and Bush before) tout these “stimulus packages” is not that different from hearing cigarette ads from the 1930s-50s.

To understand more deeply, the analogy with smoking breaks down. Governments do like Keynesianism because it is good for them, but the rest of us pay the price. Keynesianism brings in massive new revenue to spend on projects important to the government and the politicians in power.

Visit Washington DC and you will see something amazing. It’s a boom town, and as never before. Construction hasn’t slowed, the stores are packed with inventory, there are no liquidations, the office market is holding up, vacancies are down not up, and even the high-end stores are packed with people spending like it’s 2007.

That is not surprising after several rounds of stimulus in which trillions have been sucked out of the private economy of the rest of the country. The Imperial City is booming even as the rest of the country is suffering. Keynesian is certainly good for them, but it is not for us.

Hence it is not completely crazy that a discredited economic doctrine — failures piled upon failures (the Netherlands, anyone?) — could have such a sway over economic policy. Listening to the blather from the beltway, you would think that John Maynard Keynes had all the answers. It’s very foolish to believe it.

It seems like a universal principle: those who are out of power favor free markets more than those in power. So the agenda seems clear: keep everyone out of power.

Good luck with that.

Ted

Impressive debate, love finding stuff like this, I couldn’t touch what you guys know, and Ive learned a lot… repeat… a lot from your post.

But a questions sir, Is DC the Imperial City, or NYC?

You guys can study economics until the cows come home, until there is confidence in the market, what difference does it make? There is an emotion factor that needs to be handled. Question is (and Ive read a lot of criticism with little realistic construction) how do you instill confidence?

Confidence in growth so someday I can retire comfortably.
Confidence that I wont loose my job, consequently my home.
Confidence that I can afford to send my kids to college.
Confidence that I can afford to pay doctor bills should something bad happen.

I agree the sky is not falling, as badly as Obama has it described, but its impossible to see a glass half full when no one is hiring, and to me that is the problem. Not the tax rates of history.

Where is the warm an fuzzy that any of this? … or maybe what action, or philosophy would create the best, most effective “warm and fuzzy” to keep the US of A from falling off the tracks?

Admin

Confidence is one component of a healthy economic system, albeit an important one. It does no good to have confidence in a worthless system as it is silly to have no confidence in a functioning system. I think we have components of each problem in this current situation. Capitalism works, but our confidence in it has been shaken by a few bad apples that were politically connected enough to get Paulson to give them some cash from the public treasury.

For another insight, read this:

http://jewishworldreview.com/0209/west021309.php3

It will scare the socks off you.

Previous post:

Next post: