OT: 1 Trillion explained

[Tom Adams]

Have you ever asked for something from someone and had them reply "Just give me 5 minutes." Fine --- but what if he says "Just give me 1,000 minutes ... or a million? Or a billion?" Here's the breakdown:

• 1000 minutes would equal just less than 17 hours. You'll get what you asked for before the day is out.
• 100,000 minutes would be almost 70 days. Check back with your friend later.
• One million minutes? Look for whatever you need in just less than 2 years.
• One billion minutes? That's going to take a while. Try 1,900 years.

One trillion minutes? Well, today is 2008. Your wishes will be fulfilled in the year 1,903,377, unless your friend steps things up a bit. That's 1,901,369 years from now. Let us know how that works out for you.

BTW - The total unfunded liabilities for Social Security and Medicare amounts to $41 trillion dollars. Better step up your 401K contributions folks.

Tom

[Edgar]

BTW - The total unfunded liabilities for Social Security and Medicare amounts to $41 trillion dollars.

And here's another way to think of THAT:

I measured a dollar bill, and it's about 0.0035" thick. Forty-one trillion of them, laid flat, would create a stack of cash 2,264,835 miles high. That's enough to reach from the earth to the moon nearly 9½ times.

Greg

[JJkizak]

Tom Adams:

Absolute bunk. If the payroll deductions were not stopped at $90,000 income Social Security/Medicare would be totally solvent. Over half of the daily collected payroll which is over the requirement for Social Security costs for that day is sent to the treasury which in turn is spent by the powers that be for the Iraq war.

JJK

[Daddy Dee]

interesting illustration.

hard to conceive the difference between a billion and a trillion.

[Islander]

Last week, a member of Zimbabwe's opposition MDC party was released from jail after paying bail of 3 billion Zimbabwe dollars, or about $100US. Inflation seems to be a serious issue there.

It may be even worse this week:

Tuesday, July 8, 2008

100 US Dollar = 1635600000000 Zimbabwe Dollar
100 Zimbabwe Dollar (ZWD) = 0.00000001 US Dollar (USD)

Median price = 16050000000 / 16356000000 (bid/ask)
Minimum price = 16050000000 / 16356000000
Maximum price = 16050000000 / 16356000000

FXConverter - Currency Converter for 164 Currencies164 Currency Converter © 1997-2008 by OANDA.com.

[Tom Adams]

Tom Adams:

Absolute bunk. If the payroll deductions were not stopped at $90,000 income Social Security/Medicare would be totally solvent. Over half of the daily collected payroll which is over the requirement for Social Security costs for that day is sent to the treasury which in turn is spent by the powers that be for the Iraq war.

JJK

You have facts to back that statement or just popping off to perpetuate your anit-war position? Maybe you're just baiting?? Yeah - that's it. 'Cause there's no way you could possibly ever believe that a) there's a specific social security account and some little 'ol govenrment lady sits there and traffic cops the money soley to some war fund.

Oh wait - you believe we can solve all liabilites/deficits/debts by confiscating the money that WE earn.

Nevermind.........[:S]

Tom

[pauln]

The world gross product (all the "money" in the world including
investments) is about 60 trillion dollars.

There are 6 billion people in the world (I'm using whole numbers),

If it was all distributed evenly that would be 10 million dollars for
each person on Earth.

Does this make you question the value of money?

Constitutional US money is only made of silver or gold. Those Federal Reserve notes represent debts, as do the accounts on the US and world governments' books. Debts are not money, but they are transfered throughout the US and world economy as if they were; but only real money (silver and gold) can relieve a debt. Why do you think the central banks of the world hold gold instead of "money"?

When it becomes necessary to unwind debts (like now) where fiat currencies fail or even just severely devalue (like this Fall), the value of gold rises, a lot.

The amount of "debt created money" exceeds the amount of true gold at today's price by a factor of over 12000.

If the 60 trillion of "money" was fully backed by gold there would need to be 66 billion oz of gold in the world, but there are only 5 billion oz of gold in the world, not even enough for each person to have just one oz., more like about .83 oz each.

[sputnik]

The world gross product (all the "money" in the world including investments) is about 60 trillion dollars.

There are 6 billion people in the world (I'm using whole numbers),

If it was all distributed evenly that would be 10 million dollars for each person on Earth.

Does this make you question the value of money?

<snip>

Wouldn't it be $10,000 per person using your figures?

[BEC]

"That cap is now about $90K I think."

Actually that number is $102,000 for 2008. Up from $97,500 in 2007. Normally advances higher every year based on a complicated formula.

Anyway, that amounts to $15,606 paid in on the first $102,000 of income. Half of this comes from the employee and half from the employer. After that you still have to continue to pay in 2.9 percent (the Medicare portion) of any earnings over $102,000. Again half of this is from the employee and half from the employer. There is no upper limit on this 2.9 percent.

If you are self employed, you pay in exactly the same except, of course, you have to pay the employer and employee share.

Bob

[pauln]

The world gross product (all the "money" in the world including investments) is about 60 trillion dollars.

There are 6 billion people in the world (I'm using whole numbers),

If it was all distributed evenly that would be 10 million dollars for each person on Earth.

Does this make you question the value of money?

<snip>

Wouldn't it be $10,000 per person using your figures?

OK, well I guess that global money redistribution plan goes back to the drawing board; I feel like I just lost $9,990,000[]

[mungkiman]

We just need to print more money.

[LarryC]

The total unfunded liabilities for Social Security and Medicare amounts to $41 trillion dollars.

That's a non-sequitor just for starters. It has no meaning, because that isn't how the Federal government does accounting. The term "unfunded liability" is a corporate accounting term with absolutely no application to the Social Security program. Some dimwits who frequent the TalkRadio circuit made up this bogus calculation AS IF the government were a corporation. Then they go on Limbo's show and spew nonsense to get the lambs all frightened. You might just as well say something like, "OMG!!! Did you know the Army lost $138 billion dollars last year?" Every bit as meaningless.

Social Security is not a profit center, it is an actuarial program.

"Unfunded liabilities" in this context is being used as a political term more than a real one. The business definition of the term is something like: An unfunded liability is one that is not covered by an asset of equal or greater value.

This use in this context comes from the private insurance industry, in which states require that potential insurance payouts are supposed to be fully covered by financial reserves (I don't know how real that is, viz. Katrina). However, Social Security and Medicare are social insurance programs, and the government's taxing powers have long been deemed a satisfactory substitute for piling up $trillions in public "reserves." No one, especially those who complain about it, is going to want the Federal government to pull anything like that amount out of the economy as "reserves" anyway!

Long-standing opponents of Social Security and Medicare have for many decades tried to score negative political points by claiming the government is failing in management these programs because is hasn't "funded" those liabilities. In fact, There is a carefully managed balance of dollar flows in and out of the various trust funds (OASDI, Medicare Part A, Medicare Part B, etc.), and massive taxation to pile up "reserves" is not the least bit necessary.

Social Security currently runs a surplus of income over outgo, although that will reverse sometime in the next decade. In fact, however, the funds are loaned out to other parts of the government, and the interest on those loans will keep the program from running a deficit until at least 2041. See Candidates Diverge on How to Save Social Security.

The statement elsewhere that half the surplus is sent over to the treasury to be spent elsewhere may well be accurate, but needs qualification -- it's loaned out, at interest. I think someone said or implied that the trust funds don't actually exist, with the implication that we're just being fooled. That is wrong, if that is what was meant.

[mungkiman]

"No one, especially those who complain about
it, is going to want the Federal government to pull anything like that
amount out of the economy as "reserves" anyway!"

Actually, the Federal Government DID pull something like that out of the economy, but they called it a deficit...

[JJkizak]

Little old lady writing the check? Yes, it was a 1hr documentary program on Social Security. The small building with the computer hubs and the little old lady. (the only employee operating the computer) She takes the daily payroll take at the end of the day which at the time the documentary was made was 3.6 billion and the requirement to cover Social Security expenses being approximately 2 billion. She then signs a computer written check for the 1.6 billion overage and sends it to the Treasury department. This occurrs every day. When asked what the money to the Treasury department is used for she didn't have a clue. Congress made this a law during the Lindon Johnson term to allow the Treasury to use the "extra" money as they see fit. I assume that the money is still "owed" to Social Security. There are also "rumors" that the government spin/PR department is using this to make the national debt appear better than it actually is. Don't know how though.

JJK

[pauln]

If "An unfunded liability is one that is not covered by an asset of equal or greater value" then 55.5 trillion of the 60 trillion world product (about 92.5% of all the "money" in the world) qualifies as unfunded liability.

[LarryC]

She takes the daily payroll take at the end of the day which at the time the documentary was made was 3.6 billion and the requirement to cover Social Security expenses being approximately 2 billion. She then signs a computer written check for the 1.6 billion overage and sends it to the Treasury department. This occurrs every day. When asked what the money to the Treasury department is used for she didn't have a clue. Congress made this a law during the Lindon Johnson term to allow the Treasury to use the "extra" money as they see fit. I assume that the money is still "owed" to Social Security. There are also "rumors" that the government spin/PR department is using this to make the national debt appear better than it actually is. Don't know how though.

Probably to buy US Special Purpose bonds. This article from the CPA Journal has an interesting take, though I don't know what to make of some of it. Anyway, by "combining" the (income and other tax) general revenue balance with the SS balance in an accounting or arithmetic sense, the SS surplus offsets some of the GR deficit to make it look smaller than it is. I, too, saw some things about how it affects the national debt (as opposed to the deficit), and didn't understand it. It seemed like spin to me, too, but from lots of parties.

[Jeff Matthews]

Mark, I am not exactly a history buff, but my belief was that the social security program was set up SEPARATE AND APART FROM the income tax. It was supposed to be that you paid in your share, and you received back your share. Now, your argument is that the caps should be lifted. I take it that you did not make that statement because you desire the increased revenues from lifting the cap to go only to those who paid in to the system in excess of the current caps. I am sure you did not believe that would be the proper purpose.

So, the idea you are proposing here is essentially a merger of social security and the income tax. Let the rich pay in, not get a commensurate share back, and let the poor retire on it. I am not crazy about that idea at all.

When will the people be expected to work for what they get? Kind of like in the old days.

If we really want to focus on the imbalance of wealth, then let's do something to enable wealth through earning. There are hoards of able-bodied people who do nothing but complain about the "system," while they collect checks for nothing and demand a political change that results in a bigger check. If you work at the "evil" Wal-Mart, who does not pay enough to keep you off of government benefits, work somewhere else. Work on a skill. Work on something that will get you out of that rut. But don't sit there like your stuck and just whine and make demands to get something for nothing.

"Give a man a fish, and he eats for a day. Teach a man to fish, and he eats for a lifetime."

Just jockeying money from rich to poor is what perpetuates - yes, ENABLES - poverty. There are many who are too proud to get on the government ***. There are a great many that have figured out that this kind of "pride" is a financially losing proposition. This is because our system is structured to take that drive and desire for pride away from people. There will always be many that want more, and who will work for it. But there is no doubt that all of the benefits "programs" that exist have effectively destroyed the initiatives of otherwise capable people.

I realize the many comments you have made about how the system is also skewed toward wealth. In many respects, it is, and I agree with that. BUT.... I am not quite sure how the poor should complain about that because they don't pay into the system. Why complain about where the tax dollars go when you don't pay taxes in the first place? These folks have absolutely no stake in the syatem except what they can suck out of it. It is wrong.

[Chris Robinson]

These folks have absolutely no stake in the syatem except what they can suck out of it. It is wrong.

Amen, brother.

[IndyKlipschFan]

525,600 mins... Ever since the musical RENT, I know how many mins are in a year!

OK, Maybe not in leap year LOL

[bluesboy]

Well put Jeff Mathews.