Recently I wrote about the economic theory behind the Wizard of Oz and was a tad surprised at a few of the responses from liberal economists. It seems that some believe that there is nothing wrong with governement budget deficits or national debt as a whole. That belief springs from an assumption that government debt results in real goods and services provided for the people, and with a justifiable increase in taxes on the wealthy and a proper understanding and utilization of the money supply (i.e. the printing of paper money by the Federal Reserve), the country will be in good shape economically. However, I believe the liberal view of economics is built on a corrupt premise. When the medium of exchange (money) is not tied to a precious metal, then the supply of money increases in proportion to the whims, appetites, and desires of the people who control the money supply. If liberals run the government, then the Federal Reserve will spend billions, if not trillions, on social or economic programs with no comprehension of the boomerang effect of inflation caused by the increase in the money supply. I realize that economic theory is something that the average American has little or no understanding of, mainly because most of us live on the premise that if a bank keeps our money on deposit (banks) then our money is actually in that bank. That's not the way it works. Fractional reserve banking is what runs western governments and the fractions having been getting smaller over the years and the reserves held have turned from gold and silver deposits to paper dollars. The Federal Reserve oversees fractional banking and it is through their actions that the money supply increases to allow government expenditures, deficit spending, and gigantic national debt.
Something else that is not understood very well by the average American is the number which measures our national debt--the number trillion. Our national debt is $15,000,000,000,000 (trillion) dollars and growing (watch it grow 5 billion dollars a day on this debt clock). Remember, our country's debt is not the same thing as our annual deficit. A deficit is what the government spends compared to what the government takes in through revenue (taxes) each year. President Obama recently stated that our annual deficits will be over $1,000,000,000,000 (trillion) dollars per year well into the future. That means our annual debt will increase exponentially in the years to come because not only are we NOT paying off past debt, we are rapidly adding to our cumulative debt through deficit spending. If interest rates increase, and they will when too much money is printed, then the amount of our debt will skyrocket through the added interest. Most Americans yawn and say, "Ho hum. So what?" I think the reason for such apathy is because Americans do not understand the number trillion; that number is beyond the comprehension of most. Allow me to help you understand how much a trillion really is.
In Measurements of Time
If a trillion is measured in units of seconds, then one million seconds is eleven and a half days from now. One billion seconds is thirty-two years from now. How big is a trillion? One trillion seconds is 32,000 years from now. Ask me where I will be in eleven days and I can give you a rational answer (in Arizona at the OU Bowl Game). Ask me where I will be 32 years from now and I will have little clue, but I know I'll be turning 82 years old if I'm still alive. Ask me what I will be doing 32,000 years from now and I will think you are either a theologian wishing to discuss heaven or a village idiot.
In Measurements of Space and Travel
Suppose you had a stack of dollar bills and placed them end to end. One million dollars would stretch just under one hundred miles. If you got in your car and traveled that distance averaging 60 miles an hour, it would take you an hour and a half to finish the million dollar stretch. One billion dollars stretched out end-to-end would reach ninety-seven thousand miles. If you got in your car and traveled an average of 60 miles an hour without stopping, it would take you about six months to reach the end of that billion dollar stretch. One trillion dollars stretched end-to-end reaches ninety-seven million miles high which is four million more miles than the distance from the earth to the sun. If you got in your car and traveled 60 miles an hour without stopping it would take you 185 years to travel the distance required to reach the end of the trillion dollar stretch.
In Measurements of Christmas
Suppose you were at Bethlehem for the birth of Jesus and God celebrated by giving you a supply of money and telling you to spend a million dollars a day, but that when your supply ran out you would die. How long would you live if you had a million, a billion, or a trillion dollars in your supply of money? Well, if the supply of money was one million dollars, you would be dead before Jesus was a day old. If your money supply was one billion dollars, at the rate of spending of one million dollars a day, you would die when Jesus was three years old. But if your money supply was a trillion dollars, and you spent a million dollars a day, you would still be living in 2011 and have about another seven hundred years to live.
Now, multiply all the above illustrations by 15 and you will begin to grasp the incomprehensible size of our national debt. Within three years the national debt will be above 20 trillion dollars and climbing rapidly. Some day we Americans will wake up to the fact that the house of cards being built by our government will dramatically collapse. Our nation's fiscal irresponsibility is probably the best reason for why no human being should ever put their trust in governments, countries, political leaders, or earthly things. At some point, they all are destined to fail.