A trillion dollars is over \$8,900 per American household (calculated by dividing a million million dollars by 112 million American households.)

So, a trillion dollars could be described as a little less than \$10,000 per household.  What I like about this description is that it is easy to recall and to comprehend in terms of how much a subtraction (or addition) of this amount would impact a family budget.

Yet, for some reason, large numbers are often described with some absurd imagery, such as how high would a stack of \$20 bills have to reach in order to make a trillion (which would be 3000 miles according to Congressman Poe).  Or how much distance would a string of \$100 bills have to stretch in order to make a trillion (which would be 38 times the Earth's circumferance according to Senator Thune)

Senator McConnell:

Just to put a trillion dollars in context, if you started spending the day that Jesus was born and you spend a million dollars every single day, you still wouldn't have spent a trillion dollars. This is a lot of money.
Daily Show - Moment of Zen             AFP - How much is a trillion dollars? Well...

So how tiny would you look standing next to a trillion dollars?  You can see for yourself by reviewing the graphics in this diary: What Does One Trillion Dollars Look Like?

But rather than describing a trillion dollars in terms of length, height, time, or volume, I think it's more useful to describe in terms of the goods/services that could be bought as well as in terms of the size of the population for which the good/services would be used.  In the case of a trillion dollars of debt, this represents a shared cost to our country of almost \$10,000 per household (which implies that over future years, Americans will have to pay this money back and thus forego almost \$10,000 worth of goods/services for each of their households).

But will our government actually ask us to pay this debt back?  In theory, taxes could be raised high enough such that we would have an annual budget surplus of \$100 billion per year.  If so, then a trillion dollars would be paid back in 10 years.

I think this is unlikely, because the last year in which there was any reduction in the federal debt was in 1960.  After that year, our federal debt has grown or stayed the same each year.

The last year in which we paid off all of our federal debt was in 1835, during Andrew Jackson's presidency.

So the federal debt has grown steadily, with only a few short periods in which the debt was reduced (e.g., from 1853 to 1857, the debt was reduced by half) before heading back up to new heights.

mises.org - Perpetual Debt: From the British Empire to the American Hegemon - 2004.]

Assuming we never pay down the debt, then what is the actual cost of a trillion dollars of deficit spending and who will pay the cost and what form will it take and when will it be paid?

One possible answer relates to the annual interest that we pay on our federal debt.  According to this diary (Would you believe we pay more in interest than on Medicaid?), for the year 2009, we will pay \$260 billion in interest on our federal debt, which is more than we will spend on Medicaid (i.e., \$215 billion).  So, perhaps, we will pay through higher taxes levied for the purpose of paying this interest.

Yet, what is to stop our government from just borrowing money to pay the interest on the national debt, just as our government annually borrows money to pay for expenditures that exceed tax revenues?  If we're borrowing a trillion per year, then we're not really paying for the \$260 billion in interest.

But eventually, many people would argue that we will have to pay for it, either through higher interest rates, a weaker dollar, higher taxes, reduced social programs, higher inflation, weaker economic growth, fewer jobs, etc.  Although at this moment, interest rates are low, the dollar has stabilized, taxes are not getting appreciably raised, social programs are still meeting the required benefits, the CPI is negative 0.4% (over the last 12 months), and the deficit spending is expected to increase GDP and jobs, there will come a time somewhere in the future, where this extra spending will have a negative impact.

Yet, some of these forms of payment could actually be partially beneficial.  For example, a weaker dollar could reduce outsourcing.  (See this diary: Outsourcing to India will stop in 2.3 years.)  Yes, it would raise the price of all our imports, but our biggest costs are domestically-based (e.g., health care, education, housing).  The strong dollar is mainly beneficial to those with a good paying job with good health care benefits.  If your income is zero, then those cheap goods from abroad are unaffordably expensive.

Also, higher interest rates could encourage savings, which would help to re-capitalize our banks and provide capital for new investments that could lead to economic growth and jobs.  It would also help our retired seniors who are reasonably reluctant to put a large percentage of their savings in the stock market, but at the same time, are discouraged to find that risk-free treasury bonds are paying less than 2.8%.

With respect to inflation, does the printing of trillions for the purpose of paying the debts of bankers necessarily lead to "more money chasing goods" and thus inflation?  Many pundits have said that the Japanese tried to bailout their banks, after which they experienced a decade of deflation.  Or how about printing of trillions for the purpose of investing in new energy technologies?  It's possible that such an investment could lower the price of energy and create new industries/jobs, which could provide a very long-term, high return that would more than compensate for the deficit spending as well as the consequent interest payments.

Perhaps, we could just end all federal taxation and just deficit spend.  If we did this, then we should stop borrowing from the Federal Reserve and instead just have Uncle Sam print the money.  In this way, when we print money, we don't generate debt that needs to be paid back.  Also, it would be good to make sure that there is minimal waste in the spending (e.g., less crazy wars) and much good investment, in order to promote economic growth and keep inflation low.  Also, it would be good to reduce the unequal allocation of government spending, so that we don't ever have a situation where there's high inflation but only some people are getting the government money.  The way we could do this is through a generous Basic Income Guarantee, national health insurance, the gradual elimination of the existing social programs (e.g., Medicaid, Medicare, Social Security), and a cost-efficient federal workforce.

Anyway, the above paragraph is just a half-baked thought that I decided to throw out there.  But getting back to the main question of the diary, the more I think about a trillion dollars, the less I feel I know what it means.

By the way, my next diary is going to be titled "What are clouds?".  I will begin with a clear definition:

A visible body of very fine water droplets or ice particles suspended in the atmosphere at altitudes ranging up to several miles above sea level.

And I will end by quoting Joni Mitchell:

Joni Mitchell - Both Sides Now (Live, 1970)
I've looked at clouds from both sides now
From up and down, and still somehow
It's cloud illusions I recall
I really don't know clouds at all

Here's a good diary that provides a helpful description of what a trillion means.

A Trillion Here, A Trillion There ...
Now that you're properly numbed, what is a trillion dollars besides 10% of the national debt?

It's enough to give every woman, man and child in the United States \$3278, which is \$9 apiece more than what each Alaskan will get from state oil dividends this year.

It's twelve times what the federal government spends each year on transportation.

Ten times what it spends on education.

Six times what Senator Obama has vowed to spend over 10 years for energy independence.

It's 19% more than NASA's budget for the entire half century the space agency has been in existence.

It's 38% more than this year's bloated Pentagon budget.

It's 60% of what's needed to renew and repair America's entire infrastructure of bridges and roads.

It's 50% of what's needed to provide universal health coverage for all Americans.

Here's a libertarian perspective on what wasteful spending means:

Krugman in Need of Remedial Education
Those who sat on the sidelines uninvolved had to fund this mad proposal with their tax dollars or the dollars had to be conjured up out of thin air causing either inflation now or some massive problem down the road (such as paying interest on the national debt).

So, what do you think it generally means when the government borrows and spends a trillion dollars?  What do think it means in our case, with so much of the deficit spending going to those greedy, foolish financial companies and their bond holders?  If you have no idea, you can just throw your hands up in the air and shake your head to the side and say "it beats the hell out of me."  You could use this symbol "Y" for hands in the air and "<@>" for shaking your head.

By the way, the number after a trillion is quadrillion.

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#### Comment Preferences

• ##### One hundred trillion pennies.(3+ / 0-)
Recommended by:
Hedwig, stunzeed, That Anonymous Guy

I've been teabaggin' all week, and boy is my jaw tired.

• ##### 576,754 tons of gold.(1+ / 0-)
Recommended by:
droogie6655321

Rounded.

"Republicans, I think you are confusing tyranny with losing." - John Stewart

[ Parent ]

• ##### Hmm!(1+ / 0-)
Recommended by:
stunzeed

Convert that to platinum, and then uranium-235.

I've been teabaggin' all week, and boy is my jaw tired.

[ Parent ]

• ##### Oh crap, forgot to convert from ounces to pounds.(2+ / 0-)
Recommended by:
droogie6655321, Maimonides

36,047 tons of gold.  Some accountant I am.

"Republicans, I think you are confusing tyranny with losing." - John Stewart

[ Parent ]

• ##### I was about to say, that's equal to more (0+ / 0-)

money than is on the planet!

"When your enemies are throwing Teabagging Protests, mock them." -- Sun Tzu, The Art of War

[ Parent ]

• ##### A million million.(1+ / 0-)
Recommended by:
Quequeg
• ##### Easy there. It's a thousand million. n/t(0+ / 0-)

I've always wanted to be somebody, but I see now I should have been more specific. -- Lily Tomlin

[ Parent ]

• ##### < blushing > Oops. I need to go to sleep.(0+ / 0-)

Apparently my brain only comprehends billions after 10 p.m. Sorry.

I've always wanted to be somebody, but I see now I should have been more specific. -- Lily Tomlin

[ Parent ]

• ##### Leave it to McConnell(2+ / 0-)
Recommended by:
droogie6655321, washunate

to invoke Jesus to describe what a trillion dollars looks like.

"Republicans, I think you are confusing tyranny with losing." - John Stewart

• ##### Yeah, I had that same thought.(2+ / 0-)
Recommended by:
Hedwig, stunzeed

He could have worked some loaves and fishes into that analogy.

I've been teabaggin' all week, and boy is my jaw tired.

[ Parent ]

• ##### a trillion dollars(2+ / 0-)
Recommended by:
Quequeg, stunzeed

Just (barely) enough to pay for the wars in Iraq and Afghanistan.

I'm a progressive conservative: no tea-bagging outside of gay marriage!

• ##### Yes, interminable wars tend to get costly.(0+ / 0-)

I think it was Joseph Stiglitz who estimated the long-term cost of Iraq at 3 trillion and that was several years ago.

Hmmm, maybe we should cut back on our wars.

Recommended by:
Quequeg, dmhlt 66

http://www.pagetutor.com/...

Happy ? Now scoot.

From Alabama to Obama - You've come a long way baby.

• ##### So, a trillion dollars looks like a big corn(1+ / 0-)
Recommended by:
amk for obama

field?  (I live in central Illinois.  So, those rows of pallets reminded me of rows of corn.)

• ##### Tips for a thousandaire. EOM(3+ / 0-)
Recommended by:
LaughingPlanet, stunzeed, washunate
• ##### thousands of miles of subways n/t(1+ / 0-)
Recommended by:
Quequeg
• ##### More than my social security will be(0+ / 0-)

Who will be Obama 2.0?

• ##### The number after a trillion is ...(1+ / 0-)
Recommended by:
Quequeg

one trillion one, if by number you mean integer.

In numerals 1,000,000,000,001.

• ##### I knew someone would point that out!(1+ / 0-)
Recommended by:
Demi Moaned

So, how do you ask the question?  "What's the next bigger numeric unit after a trillion?"

• ##### Question by analogy(1+ / 0-)
Recommended by:
Quequeg

If a trillion is a thousand billion, what's a thousand trillion?

Or

What's the next number in the series:
thousand, million, billion, trillion ...

Maybe there's even a more concise one.

• ##### \$1 X 10 to the 12th Power. nt(0+ / 0-)

"When your enemies are throwing Teabagging Protests, mock them." -- Sun Tzu, The Art of War

• ##### This reminds me of a good one(3+ / 0-)
Recommended by:
Quequeg, dmhlt 66, Mr Magu

Back when Dubya was President, during the early years of the Iraq War, the Joint Chiefs of Staff had a meeting. During these meetings they announce the latest military victories and also recount their losses.

At one point, the recent coalition deaths were being disclosed to the POTUS:

Adviser: Mr. President, yesterday were got the news that two Brazilian soldiers have been killed in Iraq.

Upon receiving this news, Dubya seemed visibly shaken. He put his face in his hands and went silent for a few moments. The other advisers were kind of confused and looked at each other uncomfortably. After a minute of this, the President finally spoke:

How many millions are there in a Brazilian?

The best way to save the planet is to keep laughing.

• ##### I should have added that possible answer to the(1+ / 0-)
Recommended by:
LaughingPlanet

poll.  LOL!

• ##### A trillion dollars(0+ / 0-)

is a stupid number that stupid people claim to understand.
A normal person cannot comprehend this amount, stupid people think they can.
Does the United States of America have a "trillion dollars" in reserve somewhere ?
The short answer is NO !
It is an invented sum to make dumb people look smart :)

I was warned

• ##### take the value of all teams from all major sports(1+ / 0-)
Recommended by:
langerdang

in the US (apologies to MLS).

The NFL, the NHL, the NBA, and MLB = 122 teams.

Combined value of all the teams in all four leagues is approximately \$38 Billion.  Multiply that by 26 and you get approximately \$1 Trillion.

Consider how difficult it is to get one of those teams funded in any major US city - because of how much it costs.  It usually takes years to even attempt to get it done.

All the teams in all four leagues multiplied by 26...lots of dollars.

I need a new signature.

• ##### So, what form will our collective pain take(0+ / 0-)

as result of wastefully spending trillions?

I starting thinking about this, because it hit me that we never pay off our debt and yet interest rates are still low.   Japan actually has the highest federal debt-to-GDP ratio (about 200%) and yet I think interest rates are low in Japan.

In this diary, I posed the question like this:
Assuming we never pay down the debt, then what is the actual cost of a trillion dollars of deficit spending and who will pay the cost and what form will it take and when will it be paid?

• ##### Iraq(1+ / 0-)
Recommended by:
ban nock

I am an atheist. Please don't hate me for my freedom.

• ##### I still use your method of getting a grasp(0+ / 0-)

on money, how much for every person, or how much for my family of four.

But of course, rich folks and big bizness will pay more than I do, still a handle that makes the endless zeros a lot easier to grasp.

At 5% it's only 50B a year, a bargain.

Ya, Iraq, and big tax breaks for filthy rich.

• ##### Yea, it seems such an obvious way to describe(0+ / 0-)

it.  I mean, everyone can picture \$10,000.  And it's still a big number, if you want to rile up the masses.

Where are we going and why are we in this handbasket?

[ Parent ]

• ##### According to my 401K statements ...(1+ / 0-)
Recommended by:
Quequeg

... a trillion dollars is about the amount of money that I have personally lost during the market collapse.  And I only started with \$100K.

• ##### You must have leveraged some mortgage backed(0+ / 0-)

securities.  Maybe you can ask the government for a bailout?

I guess we'll all make our money back in the long run, if we stick in there.  But on the other hand, as Keynes said, "In the long run, we're all dead."  How long will it be?

Where are we going and why are we in this handbasket?

[ Parent ]

• ##### \$999 billion more than i have..n/t(0+ / 0-)

think it. feel it. write it.