What does one trillion dollars look like?

All this talk about "stimulus packages" and "bailouts"... A billion dollars ... A hundred billion dollars ... Eight hundred billion dollars ... One trillion dollars ... Just words. Most people don’t have a conceptual appreciation of one trillion dollars … how could they?

To illustrate the point, let’s start with a $100 bill, currently the largest denomination bill in general circulation. Most everyone has seen one. I think we can agree that $100 bills are guaranteed to make friends wherever they go, even in foreign countries.

A packet of one hundred $100 bills is less than 1/2" thick and contains $10,000. It fits in your pocket easily and is more than enough for week or two of shamefully decadent fun.

This next little pile of money is $1 million dollars (100 packets $10,000). You could stuff that into a grocery bag and walk around with it.

While a measly $1 million looks a little unimpressive, $100 million is a little more respectable. It fits neatly on a standard pallet.

And $1 billion ... now we're really getting somewhere!

The next image is ONE TRILLION dollars. That’s that number we've been hearing so much about. How much is one trillion dollars? Well, it's a million million dollars. Or if you prefer, it’s a thousand billion. A trillion dollars is $1 followed by 12 zeros.

You ready for this? It's pretty surprising. Ladies and gentlemen, I give you $1 trillion dollars. Note all those pallets of $100 bills, as far as the eye can see, each pallet being $100 million. Did you notice that the pallets are double-stacked? Look at the size of the person.

The graphic above provides us a glimpse of YOUR personal debt, in such a way to grasp its enormity. Yes, your government’s debt is your personal debt. And the graphic only depicts $1 trillion! Because it's YOUR debt, I feel the need to tell you again who is going to have to pay it off - you, your family, your children, your grandchildren, for generations and generations to come. Let the realization sink in slowly and savor it.

Oh, did I mention that the national debt is far greater than $1 trillion, closer in truth to 11 trillion dollars today. Keep in mind that we’ve only been talking about one trillion dollars, and the Obama Administration’s projected deficit spending (vastly expanding the pre-existing national debt) is expected to add another $7-9 trillion in national debt. Can you imagine 20 trillion dollars?

So the next time you hear someone (politician or lame-stream media) toss around the phrase "trillion dollars", now you know what that ‘empty hat’ is talking about.

Furthermore, it isn't your money that Congress is spending! It never was. The bailout and stimulus money didn’t come from your taxes. It was Chinese or Saudi Arabian or Japanese money, which Congress borrowed (in your name and on your behalf) and then spent/directed toward corporate, bank or labor union special interests or redistributed to expand the welfare state. Even though you didn’t authorize Congress to borrow and spend this money, or to spend it irresponsibly, it was YOU who voted for these people and it was you who authorized them to act in your behalf (and in hindsight to beat you figuratively with a rubber hose). Now that you’re ‘hosed’ financially, in debt beyond comprehension in perpetuity, you can better appreciate their callously inept, or in many cases, willful and reckless decisions.

Congress’ relationship and fiduciary responsibility to us is what Bernie Madoff’s relationship was with his investors. While Bernie Madoff will NOT repay the money he lost in a Ponzi scheme with bad investment decisions and bad market timing, you WILL be expected to repay every penny Congress has squandered and redistributed around the world for decades. Congratulations. You now owe tens of trillions of dollars. While Congress borrows, and uses the money to bail out not just domestic banks, but foreign banks as well, counterparties of Goldman Sachs, you have the remarkable privilege of bailing out Congress. While Bernie Madoff goes to jail, your congressman goes free. Is this a great country or what!

Maybe you’re thinking, “Who loaned us trillion’s of dollars?” The answer is foreign governments, foreign banks and multi-national corporations, all of whom purchased our Treasury Bills (debt instruments of the U.S. federal government). Now you’re wondering, “How do we ever pay them back? What do we export anymore beside wheat and corn? Can we give whoever loaned us the money a state, let's say Nevada, as payment?”

Unfortunately, as a result of the other flawed decisions by the genius’ in Congress, a large percentage of the corn is going into the production of Ethanol. We don't sell corn that much any more, at least not in the quantities we once did, to other nations. As for wheat, large tracts of land have been converted by farmers to grow corn. So we don't grow and sell as much wheat any more either, at least not to other nations. While the United States was once-upon-a-time the breadbasket of the world, that is not so true anymore. As far as giving them Nevada, many countries (and particularly the Chinese and Saudis) already have a legal financial claim to many infrastructure assets in the United States as collateral for the United States national debt (your debt). Isn’t that a hoot! They also have a legal and ethical right to claim a large portion of your wages, for your lifetime, to repay the debt your government owes them. Think of it this way. Congress is going to garnish your wages in the form of draconian taxes to pay the indebtedness to foreign nations that they created. They party, and live like royalty, and behave like rock stars, while you pick up their tab.

How many people do you think grasp the fact that taxing United States citizens and businesses is the only tool our government has with which to pay off loans to countries such as Saudi Arabia, China and Japan? Put another way, this is the money YOU personally owe because of the votes of people like Democrat Harry Mitchell. The Honorable Harry Mitchell is the District 5 representative in the House of Representatives from Scottsdale, Arizona. You can tell he’s looking out for you.

Ask yourself - how many people in the United States pay taxes? Roughly, there are 138 million individual taxpayers in the United States. In addition to personal income taxes, taxes are also collected from payroll tax (FICA), corporate tax, estate and gift taxes, and excise taxes (gasoline, alcohol, tobacco, etc.), just to name a few of the 30+ other sources of taxes extracted from the economy.

It is important that you realize, to actually comprehend, that it is you who personally pay every dollar of these taxes, every tax whether it is levied by the federal, state, country, or municipal governments, even the corporate taxes which are embedded in the price of everything we purchase.

There is nothing you can do to avoid responsibility for this debt - short of moving overseas and renouncing United States citizenship. And until you realize that the grass is not much greener anywhere else, why not enjoy a humorous moment and calculate the interest payments on the national debt - your debt? Let me do it for you.

So I ask you, where is the $450 billion in annual interest (1.25 billion dollars in interest payments per day) on the $11 trillion of national debt already outstanding (that includes U.S. Treasury notes and bonds, Foreign and domestic series certificates of indebtedness, notes and bonds, Savings bonds, Government Account Series (GAS), State and Local Government series (SLGs) and other special purpose securities, going to come from? From you and me of course!

Those numbers are from 2008 and do not include the first dime of spending by the Obama Administration and Congress since the 2008 election; the 11 trillion includes none of the so-called bailout or economic stimulus schemes.

Just today, in a surprise and dramatic move, the Fed increased the amount of money it will create out of thin air, ostensibly to thaw out the still-frozen credit markets (read: we’re not lending any more money to those deadbeats that won’t pay it back) that have cramped lending to consumers and businesses alike.

The Fed went on to say it would purchase (read: you will be purchasing with your taxes) an additional $750 billion worth of government-guaranteed mortgage-backed securities, on top of the $500 billion that it is currently in the process of buying. In addition, the Fed said it would buy (read: you will be buying) up to $300 billion worth of longer-term Treasury securities over the next six months. That would tend to artificially push down longer-term interest rates on loans of all types - at least that’s the thinking. All of the Fed’s measures would come in addition to what has already been an unprecedented expansion of lending by the Fed. Since last September, the central bank has roughly doubled the size of its balance sheet to $2 trillion from $900 billion (buying up marginal or worthless debts in your behalf) — even before today’s action — in what appears to be a concerted effort to create $10 per gallon milk.

When the spending (running up of U.S. debt owed to the rest of the world) reaches its predictable crescendo, the interest payments alone will be tens of billions of dollars per day - per day.

And you want to send your child to what school? You want to buy what house? Don’t make me laugh. Your congressmen and women have seen to it that it will never happen - never.

Ask yourself: On whom has most of this borrowed money been spent, or going to be spent?

Regardless of the answer, whether based on knowledge or bias, understand that you’re going to pay for it (and there are a lot of ‘needs’ and ‘wants’ in your life and your children’s and grandchildren’s lives that all of you are going to have to forego). This is not change you should be proud of.

Posted March 18, 2009 05:04 PM
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