- About Us
- Local Savings
- Green Editions
- Legal Notices
- Weekly Ads
Connect with Us
Relax, it's only paper money | The Pirkle Report
Illinois Sen. Everett Dirkson once said "A billion here and a billion there, and pretty soon you are talking about real money."
He was referring to the way the rich American empire spent money as if it grew on trees.
We seem to have cranked that up a notch, or better put, an order of magnitude. We now talk about a trillion here and a trillion there, especially when talking about rescue packages and stimulus packages. It makes one wonder: Just how much is a trillion dollars?
We often hear that if you stack a million dollars end to end, it would reach to the moon several times. But who has a grasp on how far it is to the moon? We often measure things in what is becoming a standard unit of measurement, along with the centimeter, the inch, the foot, the mile, the kilometer and the football field. We often hear about how many football fields it would take to do this or that.
Still we do not get a grasp on how much money a trillion dollars is. So let's look at it like this. Suppose you spent a million dollars a day. This turns out to be a daunting task. On the first day, you buy an $800,000 house and a $200,000 car. That's a million dollars. So tomorrow, you buy a yacht and a Lear jet. Fine. But what's next? On the third day, you could buy diamonds and gold bars. Fine, but there is still tomorrow. What next? It turns out to be a full-time job spending a million dollars a day.
But let's assume that this could be done. Let's assume that you have been doing this since the birth of Christ. Throughout the Roman Empire, throughout the Middle Ages, throughout the Renaissance, throughout the American Revolution, the Civil War, World War I, the Great Depression, World War II, the 1950s, 1960s, 1970s, 1980s, 1990s and to date. A million dollars a day you spent through all this time. You still would not have spent a trillion dollars.
Do the math. Multiply 2009 times 365 times 1 million. Spending a million dollars a day since the birth of Christ, you would have spent about $733 billion, a few billion short of a trillion (a trillion is 1,000 billion).
This is far short of the stimulus package being recommended by Congress — lately $790 billion.
This may give you a handle on what we are proposing to spend to jump-start the economy. Given all the other spending that has occurred to solve our economic problems, bailing out Fannie Mae and Freddie Mac, the $700 billion for the banks began under George W. Bush and continuing under Barack Obama, we are reaching the point where the government could have just bought all the outstanding mortgages and let the people live there without foreclosures — which is what started this mess in the first place.
Why didn't we just do that? Because the size of this problem has been underestimated by the experts from the very beginning. First, they said that the $700 billion to the banks would fix this. Then they said no, it would take more to jump-start the economy. It's amazing that these experts cannot even get a handle of the size of the problem they are trying to solve.
And what if this doesn't work? No problem. Just throw another trillion dollars at it. But let's not forget the words of Sen. Dirkson, paraphrased: "A trillion here and a trillion there, and pretty soon you are talking about real money."
But we have plenty of trees to make paper and many high-speed printing presses to print paper money. President Richard Nixon removed America from the gold standard, so there is no limit to the amount of money we can print, as long as communist China will continue to buy our debt.
It's a curious quirk of history that the capitalist West is now living off the savings of the communist East. Perhaps Karl Marx is laughing in his grave.