Remember way back, the last time unemployment was over 10%, when Reagan was President, and his economic flunkies said "deficits don't matter"?
Well they do ... and now the deficits are much much bigger (almost all Bush's fault).
The problem though is most folks have no connection with BILLION or TRILLION or even MILLION. They are all just big numbers.
This is a problem because unless you understand (and really feel) what these mean, you can't have a sense of the mess that the country is in.
So ... Here is how big the deficit is now ...
The estimated budget deficit for the current year (October 2009 to September 2010) is now about $1.5 trillion. On average this works out at a monthly deficit of about $120 billion. Okay billion ... trillion ... million, how much are we talking here? Let's see if we can find some comparisons to help out.
Here are a few examples of business that was done in October of this year (or approximations thereof). Let's see how much business we have to do to match the estimated deficit for the month.
- Cars: October saw 834,517 new cars and trucks sold. If we take an average price of $20,000 that works out at $16.69 billion
- Wal-Mart: Although they no longer publish monthly sales, based on their most recent quarterly report WalMart US sales are about $31.3 billion per month.
- Costco: October 2009 sales - $5.7 billion
- McDonalds: McDonalds sells about $2 billion a month worldwide.
- Coke: Coke 3 month revenues were $8 billion, so $2.7 billion per month.
- Target: October 2009 sales were $4.5 billion.
- Home Depot: Home depot also no longer publishes monthly sales figures, but their latest quarterly report had 3 month sales of $19.1 billion, or roughly $6.4 billion per month.
So if we add all these up we see that in total we get approximately $87 billion.
So if the federal budget deficit in October was as predicted (about $120 billion), the deficit alone (what the government spent more than it took in) would have been enough to buy:
. everything sold by WalMart in the US in October
. everything sold by Costco in October
. everything sold by Coke in October
. everything sold by McDonalds in October
. everything sold by Home Depot in October
. everything sold by Target in October AND
. every new car bought during the month
still had more than $30 billion left to spend!
That is no small amount of stimulus being applied every month! And, despite all of this stimulus, the economy only grew at 3% last quarter. That to me is very, very scary.
The point of this exercise is to show that the government is providing massive stimulus to the economy, whether it feels like it or not. This spending has probably stopped the economy from going into a free-fall, but it does have a cost, because ALL of that money was also borrowed on the country's credit card. It is still there and interest will have to be paid on it until it is repaid.
Unfortunately most people have no idea how much a billion dollars is and as a result they find it hard to grasp the size of the current predicament. Hopefully this diary has helped a little on that score.
Now before anyone flames me for worrying about the deficit ... take a look at the second diary I wrote on DK way back in April of 2005 - Link. I guess if nothing else I have been consistent.