I really never thought we would be tossing around the term trillion right and left, but we are. Or, rather Congress is. But, I don’t think they really know how much money — or rather debt — we are incurring with each new trillion dollar commitment.
So, just how much is a trillion? The late Illinois Senator, Everett Dirksen once said,
A billion here and a billion there. After a while, it adds up to real money.
Dirksen was referring sarcastically to the aplomb with which Congressional leaders of that day spent taxpayers’ money in round lots of billion dollars.
Now, in less than a year, we have moved on from budget deficits in the billions to trillion dollar plus deficits. So, I wondered, what comes next? This Associated Press report gives us the answer [emphasis added]:
A New Hampshire man says he swiped his debit card at a gas station to buy a pack of cigarettes and was charged over 23 quadrillion dollars.
Josh Muszynski (Moo-SIN’-ski) checked his account online a few hours later and saw the 17-digit number — a stunning $23,148,855,308,184,500 (twenty-three quadrillion, one hundred forty-eight trillion, eight hundred fifty-five billion, three hundred eight million, one hundred eighty-four thousand, five hundred dollars).
Muszynski says he spent two hours on the phone with Bank of America trying to sort out the string of numbers and the $15 overdraft fee…
If a guy in New Hampshire can spend quadrillions on gas, just think what the Congress could do?
Seriously though. Take a look at this news item from a previous post about a new world’s record of $7 trillion in bonds for the fiscal year that will end next week:
U.S. issues $7 trillion debt, supply to stabilize (Reuters, September 23, 2009, Burton Frierson)
The U.S. government will have issued $7 trillion in bonds by the time the current fiscal year ends next week, but it expects the debt deluge to stabilize by mid 2010, a Treasury official said on Wednesday.
…However, this expansion may take place in an environment where investors consider leaving the safe-haven Treasury market for riskier assets, and debt issuance is likely to level off mid next year, said Treasury Acting Assistant Secretary for Financial Markets Karthik Ramanathan.
“In fiscal year 2009, which ends next week, Treasury will have issued $7 trillion in gross issuance — that’s in a 12-month period,” Ramanathan told a financial markets conference in New York…
A trillion here and a trillion there. After a while, it adds up. Not all of these bonds were brand new. In fact, most of the bonds issued replaced bonds that were maturing. Nonetheless, the new debt issuance is huge. Reuters continues:
“This issuance was necessary to meet nearly $1.7 trillion in net marketable borrowing needs, nearly $1 trillion more than what we raised last year,” he added.
That’s sizeable. $1.7 trillion in net new borrowing.
Finally, the headline of this piece cracks me up. ‘U.S. issues $7 trillion debt, supply to stabilize.’ Since the Treasury determines what the supply is, I guess that’s like saying, “We’re borrowing scads of money now, but we plan to borrow less in the future.” OK, that’s nice, but we’ll believe it when we see it.
After seeing how quickly Congress made the leap from spending billions to trillions, I am hoping that no one tells them what comes next. If they figure it out, we’ll soon be seeing quadrillion dollar deficits.