US national debt at trillions - what really is a trillion

[Drew]

First off there are two definitions of what is actually the US national debt number.  It depends how you do the accounting - the government's official national debt figure is around $13.5 TRILLION.  I say around, because it is hard to pin it down at the time of this post because it is estimated that it increases about $2 to $3 million each minute. 

US Debt Clock ==>  http://www.usdebtclock.org/

But if you were to account for the US federal government's debt the same way American corporations are supposed to account for things then the debt could skyrocket much higher.  If you account for what are termed "unfunded liabilities", such as Social Security, Medicare, and Freddie Mac & Fannie Mae, you arrive at a larger number.  Some calculate it at between $50 - 60 TRILLION, and others as high as $80 TRILLION.  If is indeed up around $80 TRILLION - then that would be pushing 550% of our annual GDP of around $14.5 TRILLION.

And a TRILLION is so much more than a billion.  How much more - well:

• One million seconds will pass in the next 12 days.One billion seconds will take 32 years.One trillion seconds will pass in 31,688 years.
• Time is money, right? If you make one dollar every second, you will have a million dollars in twelve days. You will be a billionaire in 32 years, but it will take you more than 31,000 years to make a trillion dollars.
• A trillion $10 bills, taped end to end, would wrap around the Earth more than 380 times.
• It would take more than 10,000 18-wheelers to transport one trillion $1 bills. Our national debt today would fill up 30 of the largest container ships ever constructed, each holding more than 4,100 containers full of cash.
• See The MegaPenny Project  ==> http://www.kokogiak.com/megapenny/

[Mimi]

Astonishing!

[Richard Myers]

Yes, it is not understood, but by a very few.  A billion is not understood by very many.

How long would it take to follow a line of one billion dollar bills placed end to end? Would it take you a year from beginning to end?

One billion dollar bills placed end to end would reach 96,969 miles.

A dollar bill is .512 feet long.....times 1 billion is 512,000,000 feet.

At the equator the earth is 24,901 miles in circumference. That means that One billions dollar bills end to end will circle the earth almost four times (3.89). 

If one trillion dollars were placed end to end they would circle the earth 3,898 times.

[Drew]

Better pack a few extra shoes before beginning a trek like that.

[colporteur]

What boggles my mind is that how so many seemingly intelligent people have been able to brush off the deficit as though it is not a serious matter. However the deficit is getting so serious that fewer and fewer people are able to take it lightly these days. It was a serious matter several years ago when the debt was a fraction of what it is now. Then they talk today of balancing the budget as though if they accomplished that somehow everything else would be fine.

I remember many years ago seeing a pile of one billion bottle caps. It looked like a mountain.

[Drew]

There has long been a debate as to how large a developed country like the United States could grow its national debt before trouble ensued.  With the U.S. it is an even tougher question to answer because the U.S. dollar is not just our domestic currency but also the world's reserve currency. And very important commodities such as oil are denominated largely in dollars.

Some people look at a countries debt in proportion to its annual GDP to get an idea if it in a danger zone.  The US is very near about 100% of GDP with its $13.5 trillion debt.  But that figure goes much higher when you look at the amount of debt the U.S. would have to show if it presented its debt the way corporations have to account for things.  The U.S. has upwards of $80 trillion in debt when you account for the unfunded liabilities such as social security, medicare, and Freddie and Fannie.  That is getting close to 600% of GDP.  Nobody can really guess when too much is going to actually be too much and those countries that are holding dollars suffer a failure of confidence and start trying to dump dollars in the open currency markets.

With this discussion it is important to note just who is holding on the U.S. dollars.  Wikipedia has a List of countries by foreign exchange reserves ==>  http://is.gd/gStIC

Top ten (in Millions of US dollars)

1     China   2,648,300    Sep 2010
2     Japan    1,050,235    Jun 2010
European Union       753,642    Sep 2010
3     Russia    501,100    Oct 2010
4    Saudi Arabia    410,300    Dec 2009
5     Taiwan    380,505    Sep 2010
6     India    297,956    Oct 2010
7     Korea    293,350    Oct 2010
8     Brazil    287,206    Nov 2010
—    Hong Kong    266,100    Sep 2010
9     Switzerland    249,556    Aug 2010
10     Singapore    214,662    Sep 2010