Friday, August 1, 2008

$50 billion

It wasn't so long ago that $50 billion was considered a lot of money. Well, the world has changed and along with it, so has the value of money. General Motors' net losses since 2005, $51.1 billion; the six largest oil companies combined profits this QUARTER, $51.5 billion; Anheuser-Busch cost InBev $52 billion; the US contribution to fighting AIDS, malaria and tuberculosis over the next 5 years, $50 billion; the portion of the latest war funding bill for Iraq and Afghanistan devoted to new weapon systems, $51.8 billion; the amount Microsoft saved by not buying Yahoo, about $50 billion; Obama's emergency economic stimulus package, $50 billion.

These are just a few of the numbers tossed around in the last month or two. The problem is the loss of perspective, just what is 50 billion? It was the GDP of the United States in 1916 in 1916 dollars. It is the estimated (by some) to be the number of galaxies in the universe (although most say 100 billion). Before the currency devaluation the other day (they lopped 10 zeroes off the Zim dollar in an effort to "fight" inflation), it was the cost of the Sunday Independent newspaper in Zimbabwe dollars. It's a 5 with 10 zeroes following it. That's ten to the power of nine (10^9). To make matters more confusing many languages interpret the word billion differently. In a nutshell, there are what are known as short-scales and long-scales. In countries using the short scale, such as the US and Canada, they use a numeric system where every new term greater than a million is 1000 times the previous term, thus a billion is a thousand millions, a trillion a thousand billions...While in long scale countries such as Spain, every term is a million times larger, thus a billion means a million millions (10^12). A Spaniard would say "mil millones" (a thousand millions) to mean my version of a billion!

In order to truly understand such large numbers, one must take a step back and put them in perspective. Exxon Mobil made over $11 billion this quarter, that's a couple bucks for every man, woman and child on the planet. Mexico's Carlos Slim's $60 billion fortune is large enough to place him in the top ten of national GDP's in Africa (yes, I know, GDP is the measurement for one year while his wealth was amassed over his lifetime), just behind Tunisia and ahead of Kenya. The White House predicts that the budget deficit left to the successor of Dubya for 2009 will be $482 billion, ten times 50 billion! (the figure isn't final as it may not include all costs of the wars or an additional economic stimulus package of, you guessed it, $50 billion) That's over $1600 for every person in the USA. Imagine spending that much more than you made in a year, would your bank keep lending you money? (Just a few hundred billion more until $10 trillion total outstanding public debt) You gotta love those fiscally conservative Republicans.

In Arthur C. Clarke's short story The Nine Billion Names of God, once the task of listing all the names of God is completed, the universe is brought to an end. By pumping up the numbers thrown about to ever greater amounts, our governments, corporations and not least of all, the media, are making the task of counting to the end more and more difficult to complete, thus keeping us occupied. A little over six years ago, the Pentagon estimated the war in Iraq would cost $50 billion in total, a number thrown to the public with little meaning behind it, just a number to hold in our heads. Of course the costs have spiralled out of control, but the numbers seem endless, without any real meaning; is the cost $3 trillion, $1.2 trillion or just $600 billion. Sadly for the public, unlike pi, all these amounts are finite and someone will have to pay the bill.


Justin said...

Hey Shane. Yea, another problem is that all these 50 billions are being shared among such a minute portion of the population; that it is sickening. It is not the 50 billion that scares me per se, but the fact that it is shared only among about .1% of the population. Thanks for commenting on my site by the way.

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