Do you know how much is a trillion dollars? Mathematically this simple equation would be use to express it: A trillion dollars = $1,000,000,000,000.
So you can see that it takes 12 zeroes to the left of the decimal point to make a trillion. Or in other words, we can say that a trillion is a million million dollars.
Credit-card debt that the average person carries
Time magazine has explained it in this way that when you are trying to comprehend a trillion-dollar deficit, then for that you might be willing to calculate how much money that represents per person in the U.S. When you divide one trillion dollars by 300 million Americans then you will get $3,333. Then you may search for a useful comparison. A convenient comparison is to the amount of credit-card debt that the average person in this country carries. That figure is $3,245.
It is difficult for us to wrap our minds around such a large number. This affliction is not shared by President Barack Obama. The U.S. Senate is being pushed by him to raise the U.S. debt ceiling beyond $12.1 trillion. This year’s deficit alone is set to cross $1.8 trillion.
Debt ratios are terrible
If we take a look at the debt ratios then we will find that it look terrible. The ratio of federal debt to gross domestic product (GDP, or the entire output of America’s goods and services) would reach 70 percent, which has raised up from 41 percent in 2008. In over 60 years, these are the worst figures. Sixty years ago we were dealing with the debt accumulated while that we were fighting Hitler and Japan in World War II.
Increased Government Spending
Rather than stimulate the economy with across the board tax cuts as what had been done by Reagan in the early 1980s or what George W. Bush did after the post-September 11, 2001 recession, as his favorite tool to revive the economy Obama has chosen increased government spending. But what the problem is that it doesn’t work.
This week Nobel laureate and economist James Buchanan had told the London Telegraph that from comparable experiences of the 1930s’ Great Depression we have learned some things, but perhaps they are enough to reduce the severity of the current contraction. But no progress has been made by us toward putting limits on political leaders, who act out their natural proclivities without having any basic understanding of what are the factors that makes capitalism work.
Buchanan’s prescription
What ever Buchanan’s prescribe is something to do the exact opposite of Obama. He would restrain spending meanwhile the economy heals.
Ironically, Obama just can’t change his habits, so a universal healthcare program is being proposed by him which will cost no less that $900 billion and probably much more than that. He is willing that new regulations should protect us from global warming called the “cap and trade” bill, and that will cost tax revenue by decreasing the GDP.
Summary of the Actual Problem
In Human Events the problem has been summarized by Professor Terry Easton, he said that by 2020, it has been estimated by some economists that the federal debt will reach over $30 trillion. At 4% per year interest, that constitutes $1.2 trillion annually. Or, 41% of the 2008 federal budget. These figures makes every US citizen worried about their future. If the US government just pay the interest not the principal even on the national debt then what it would mean is that the government would have to eliminate the entire budgets for the US military and Social Security. So no more guns or butter.
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