Understanding Billions of Dollars

Jed Clampett had a problem. Representatives from the OK Oil Company were willing to pump that pesky oil out of his swamp — even pay him for it. But for some reason, they didn’t want to give him “regular” dollars. No, they wanted to pay him with some kind of new-fangled “million” dollars.

And with that, Jed learned the value of putting six zeroes after a number.

Not content with that, Washington politicians insist on putting nine zeroes after every number. Sometimes twelve. They treat “billion” (and increasingly, “trillion”) as if they were mere adjectives. The words “thousand” and “million” are tossed aside like the quarters and nickels you find under your couch cushions.

In an era where the price of a cruise missile is treated as a rounding error, it’s easy to lose perspective of exactly how much money we’re talking about. Maybe it’s easier to understand if we bring it down to a personal level.

There are about 135 million 1040 tax forms filed each year. So for argument’s sake, let’s say there are about 135 million taxpayers in the country. To get an idea of the impact of federal spending on the “average” taxpayer, simply divide the number in question by 135 million.

Here’s how it works:

One billion dollars represents about $7.41 per tax payer. That doesn’t sound like much. For example, if the government needs to build a billion-dollar bridge across a river, that bridge would cost each tax payer a little over seven dollars.

The problem is most federal projects aren’t measured in billions; they are measured in hundreds of billions. A seven hundred billion dollar bailout costs each taxpayer over five thousand dollars.

A trillion dollars costs each taxpayer almost $7500.

If given the choice, would a taxpayer be willing to spend five thousand dollars to “bail out” the economy by giving it to banks, insurance companies, and mortgage companies that have already shown poor business judgment?

Or would it be more effective to give each taxpayer five thousand dollars to invest in the economy by spending it the way that he wants to?

Or would it be better to cut out the middle-man altogether and simply reduce taxes by five thousand dollars and let each taxpayer keep the money that he earned in the first place?

Washington isn’t just broken; it’s broke, too. It’s my money that they’re spending — and yours, too. There’s no hope for sanity until we replace the ones in charge of the checkbook with people that actually understand that concept.

That’s a Lotta Zeros

I have always loved studying really big numbers. I mean really big. Like the number of grains of sand on a beach. Or on all the beaches in the word. Or the number of hydrogen molecules in the sun.

Or the price of a loaf of bread in Zimbabwe.

This third-world African nation is in the midst of some truly world-class hyper-inflation. The rate is somewhere between 2.2 million percent and 12.5 million percent, give or take a few million percent. When it gets that high, it’s hard to imagine.

Currently, the country with the next highest rate of inflation is Myanmar/Burma (I don’t want to start any arguments here about the official name of that country), with a rate of 39.5%. Not much of a challenge for the inflation gold medal, huh.

A loaf of bread costs around a hundred billion dollars. (When Zimbabwe achieved independence and renamed itself from Rhodesia, they adopted the “dollar” as the name of their currency. Any resemblance to the American dollar is strictly comical.) Next month, it could cost a lot more. Or a lot less, depending on whose math you choose to believe.

The Zimbabwe government, in typical federal government fashion, attempted to stop inflation by making it illegal. Such price controls didn’t work for Richard Nixon in the 1970s and they didn’t work in Zimbabwe, either. It’s funny how the free market demands that it remain free — however rowdy and insane that may be.

So a couple of years ago, they attempted to control inflation by ignoring it. They just lobbed three zeros off the currency and declared the problem fixed. That didn’t work, either.

Last week, they took more drastic action. Gone are ten zeros. Ten. What used to be ten billion dollars is now just one.

Yeah, like that exudes confidence in the federal government.

To understand how they got into this mess would require a study of a complicated history of civil wars, border wars, and generally lousy government. Add to that some over-zealous printing presses in the government capital turning out worthless paper currency with zeros that multiply like rabbits and you have a recipe for disaster.

Through it all, President and resident idiot-for-life Robert Mugabe is clinging to power. He got the job in 1987 by simply abolishing the position of Prime Minister and assuming power. Pretty convenient. He managed to get himself re-elected in 1990, 1996, 2002, and 2008. Apparently, there are more dead voters in Zimbabwe than in Chicago.

Now there is some debate over whether it’s Mugabe or the military who is currently running the county. Whoever is in control has a lot of explaining to do.

It is said that the Illinois Republican Senator Everett Dirksen invented the quote, “A billion here, a billion there; pretty soon, you’re talking real money.” Obviously, Dirksen never went shopping for a loaf of bread in Zimbabwe. He was off by about a dozen zeros.