Half-Trillion-Dollar Budget Deficits Ahead

March 26, 2008 RSS Feed Print

You might think that the housing crisis and economic slowdown would force the presidential candidates to reshuffle some of their economic plans. Certainly, huge budget deficits might. This from Goldman Sachs:

We are raising our forecast for the fiscal 2008 federal budget deficit to $500 billion (3.6% of GDP) from $425 billion. Even with that increase, the risks are skewed to the high side.... Forecasters tend to underestimate the power and extent of a turn in direction when it occurs. So it is with the federal budget, which improved much more sharply than we anticipated from fiscal year (FY) 2004 to FY 2007 but now appears to be deteriorating more quickly than we estimated just a few weeks ago. With five months of the fiscal year now behind us, we are boosting our estimate of the FY federal deficit to $500 billion (bn) from the $425bn that we announced on February 8.

Tags:
federal budget,
deficit and national debt

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The United States Government is capitalizing on a comprehensional failure of the human mind – the inability to fully grasp the magnitude of large numbers. Upon hearing numbers beyond a few thousand our brains interpret it as, “Wow, that’s a big number!” with no tangible image to relay exactly how big. So, let’s start with a One Dollar Bill. We can understand $1.00, right?

According to the United States treasury, a One Dollar Bill has a thickness of 0.0043 inches. One thousand One Dollar Bills would be one thousand times thicker -- 4.3 inches.

One million is one thousand thousands, so the thickness of $1,000,000 is 4300 inches. Converting to feet and this becomes 358.3 feet, an American football field.

One billion -- $1,000,000,000 is one thousand times thicker still or 358,333.3 feet. This is 67.866 miles, the driving distance from New York City to Milford CT.

One Trillion is one thousand billions – one trillion One Dollar Bills stacked one on top of another is 67,866 miles. This would circumnavigate the globe 2.73 times.

The proposed 700 Billion Dollar bailout alone would be a stack of One Dollar Bills stretching 47,506.2 miles, or 1.90 times around the globe.

The 500 Billion Dollar Deficit would be a stack of One Dollar Bills 33,933 miles long and would go around the Earth at the equator 1.36 times

A stack of One Dollar Bills totaling the current national debt cap of 10.6 trillion dollars would go around the equator 28.93 times. The proposed cap of 11.3 trillion dollars would go around 30.85 times.

Is creating a debt that is the equivalent of a stack of One Dollar Bills rounding planet 31 times a responsible act?

JP of GA 11:25PM September 21, 2008

Capital Commerce

Capital Commerce

U.S. News business reporter Matthew Bandyk examines the issues, people, and debates that shape the nexus of political and economic life in the nation's capital.

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