"How Much is One Trillion Dollars?"

Sydney M. Williams

www.swtotd.blogspot.com

Thought of the Day

“How Much is One Trillion Dollars?”

May 25, 2020

“It is a popular delusion that the government wastes vast amounts of money through inefficiency

 and sloth. Enormous efforts and elaborate planning are required to waste this much money.”

                                                                                                            P.J. O’Rourke (1947-)

                                                                                                            Parliament of Whores, 1991

Congress is tossing around trillion-dollar relief packages, as we might a car or student loan, or a loan from Aunt Sally. A trillion is a big number, difficult even to conceive. Five thousand round trips to the sun would amount to less than a trillion miles. A trillion hours is greater than 100 million years, which would take one back to the Cretaceous Period when dinosaurs roamed the earth. A stack of a trillion one-dollar bills would reach 67,866 miles into the sky. The earth contains seven and a half billion people, a big number but less than one percent of a trillion

Here in the land of make-believe, the Democrat-led House of Representatives just passed the $3 trillion HEROES Act. A month earlier, Congress passed, and the President signed, the $2 trillion CARES Act. Combined, that Five trillion exceeds the 2020 federal budget. It exceeds, in current dollars, what we spent to conduct World War II. “Desperate times call for desperate measures,” is an ancient adage. However, do American taxpayers fully comprehend the size of the obligation to which Congress has committed them, their children and grandchildren? Senator Everett Dirksen (1896-1969 – R-Il) is alleged to have said: “A billion here, a billion there and pretty soon you’re talking real money.” Here it is, two generations later, and we’ve upped the ante a thousand-fold. In a time of crisis, Americans should not be parsimonious, but we expect our representatives to be prudent and respectful about spending money that is not theirs. To use this money to bail out profligate states and extend already generous benefits to public employees should not be the purpose. America needs to get back to work.

Government generates no income. That is hard to believe, given the lifestyles and the prodigality with which politicians toss money around. Government takes from taxpayers, and it borrows on behalf of those same taxpayers who are legally committed to pay it back. With a median annual household income in the U.S. of $63,000, and assuming a four-person household, the proposed borrowing for COVID-19 and its economic fallout amounts to just under a year’s income for the average household. And, that $5 trillion is on top of total federal debt of $22 trillion, growing at a rate of $1 trillion a year. Unfunded pension and health benefits compound the debt problem for the American taxpayer. Depending on the discount rate one uses, unfunded liabilities approach $50 trillion. Where will the money come from? There are only three answers: one, growth in GDP, which requires free markets, rule of law and limited but sensible regulation; two, higher taxes, which inhibit economic growth, and/or three, a depreciated dollar, which will reduce future living standards.

This is not to suggest the economy does not need a boost. It does. Individuals who have lost jobs and businesses threatened with bankruptcy, especially the thirty million small businesses who have less access to public funds, need cash infusions. In fact, the economy could use a domestic version of the Marshall Plan. But Congress and the Administration must also address run-away entitlements and the inflated incomes and benefits of public sector workers. Government can only raise revenues from individuals and private sector businesses. There is a limit to what they can take, without stalling the economic engine.

Hard truths about our financial situation are not part of the lexicon of politicians, especially during elections. The offer of “free stuff” is their preferred message. “Eat, drink and be merry, for tomorrow we die” is an appropriate aphorism for today’s Washington-bound politician. As a percent of GDP, Federal debt has doubled since 2000 to over 100% today, about where it was at the end of World War II. The growth in federal spending, and the concomitant debt and deficits, are fueled by entitlements, which are mandatory items in the federal budget, while, ironically, defense spending – necessary to maintain our freedom – is treated as discretionary. When one throws in interest expense (abnormally low now, but that will not always be the case), mandatory spending exceeds seventy percent of the federal budget. It is understandable why infrastructure is crumbling, and our high schools are, globally, less competitive.  Most important, on this Memorial Day weekend when we remember and honor those who died so we could live in freedom, the growth in mandatory spending constrains what can be spent on defense. Without a strong military, our nation will crumble, and our liberties will be lost.

But back to the number of a trillion. How much is $1 trillion? A lot. Perhaps to microbiologists and astronomers, with an estimated 37.2 trillion cells in the average human body and with an estimated sextillion stars in the universe, a trillion is no big deal. Even for some naturalists, a trillion doesn’t generate awe.  E.O. Wilson, the Harvard myrmecologist and author of The Social Conquest of Earth, estimates that there are 10 quadrillion ants on the planet. But I would rather Congress not hear these numbers, as they may look upon them as aspirational when prudence is preferred.

"Things I Think About"

It should be remembered in this time of dissonance about Confederate memorials that Memorial Day was first commemorated to honor the dead of our Civil War. Unique among all wars, it honored both the victors and the vanquished. Thus, Memorial Day served to not only remember those who gave their lives for the Union side, but to honor their enemies and help bind the wounds created by four years of fighting. Today, Memorial Day causes us to reflect on our history, on those who gave their lives that we may live in this glorious, though imperfect, land – imperfect in an absolute, not a relative, sense; for there never was a country as good, generous and equitable as the one we are lucky to live in. 

In this essay, I consider some of my opinions – functions of my genes and my experiences – and how they came to be. I refer to an essay I wrote a year ago last March, so have attached a pdf version, should you have an interest.

Next Monday, the Month That Was – May 2017 will be out. In the interim, there will be another “Burrowing into Books,” this time on Anthony Trollope’s Framley Parsonage. 

Happy Memorial Day!

Sydney M. Williams

Thought of the Day

“Things I Think About”

May 29, 2017

“I didn’t like having to explain to them,

 so I just shut up, smoked a cigarette, and looked at the sea.”

                                                                                                            Albert Camus (1913-1960)

                                                                                                            The Stranger, 1942

Agatha Christie wrote, in The Seven Dials Mystery, that “…to rush into explanations is always a sign of weakness.” However, I believe opinion writers should, periodically, explain why they think and write as they do. Flannery O’Connor said: “I write because I don’t know what I think until I read what I say.” I disagree. We know what we want to say, but do our words express what we mean?

Last year, I wrote a TOTD, “I Believe…,” a compendium of things important to me: education, the necessity of family, dignity of work, respect and tolerance for others, rule of law, the importance of democracy and free-market capitalism, and an understanding of the fragility and evanescence of liberty.

Opinion writers are not reporters. We are individuals expressing our perceptions and prejudices; we hope our essays reflect judgement and wisdom, but know we are fallible. We rely on reporters to uncover and present facts, which we use to thresh out opinions. However, media bias has made the job difficult. More time is spent chasing down allegations. But that bias has made what we do more critical. Proliferation of “fake” news must be offset with wisdom and judgment. Time will determine if we are right.

Opinions are formed over many years, and are a consequence of heritage and environment. I grew up in a large family in a small town in New Hampshire, I was raised in a family of protestant Republicans and, apart from a few years in my 20’s, have retained a conservative outlook – an outlook I claim to reflect common sense, rather than ideology. Nevertheless, my political philosophy was influenced by my family and friends, my job, traveling, and a lifetime of reading, fiction as well as history and biographies.

My childhood more closely resembled the rural idyll that Thomas Jefferson admired, than the sophisticated life he lived. My parents were artists, so by definition, non-conformists. We lived simply, but with grandparents and other family members who lived urbanized lives, we had feet in both groups. In some sense, we never felt comfortable in either. My parents were educated, had traveled and were well-read, so we were always aware of the world around us. Our home was filled with books, and British magazines like “Punch” and “Country Life,” not typically found in small New England farm homes.

I grew up, went to college and then, after two years at Eastman Kodak, spent forty-eight years on Wall Street, all but four of them in New York City. One could argue that my essays reflect capitalism and banks – Wall Street, as opposed to Main Street – and no doubt there is some truth to that assertion. But Wall Street never had a single identity. What attracted me in the mid 1960s, besides the money, were the minds of those who worked there, their entrepreneurial spirit, and that merit was rewarded over connections. I liked the idiosyncratic nature of individual firms, and how the industry differed from large corporations.

I began writing essays almost twenty years ago. I had no formal training, but my favorite writer was E.B. White, who still serves as my exemplar. In early 2000, I found the stock market no longer fathomable. People bought stocks with no earnings and no sales. I wrote what I called a Market Note, as a means of helping decipher what was happening. A few years later, the credit crisis of 2007 and 2008 opened floodgates of incomprehension. House prices had been rising faster than speculators could flip them. Banks, with the encouragement of government, granted “no-doc” mortgages to people with no incomes. Investment banks were leveraged at thirty or forty to one. When the credit crisis hit with gale-force winds in September of 2008, it was as though a small boat inadvertently found itself in the Bermuda Triangle during a storm. Then, a couple of months later, when credit market fears began to ebb, alarm bells were re-rung: “You never let a serious crisis go to waste,” declared Rahm Emanuel, speaking for a new Administration. Investing is a deliberative exercise that involves analysis and the anticipation of events, yet investors were only reacting. Perspective was needed. That was the opportunity, and it is what I tried to provide.

Politics call for the same dispassion – a stepping back and viewing the world from 30,000 feet. Partisanship permeates our culture. Trump is accused of volatility, but most politicians and the media have become even more inflammatory. If you are a middleclass, high school-educated, white, working American who believes in God and traditional families – you hate the elites who govern Washington, and who live better than you on dollars you pay them in taxes. If you are of the Left, or an establishment Republican, you hate Trump. If you are a conservative who believes in limited government, who worries that today’s debts will threaten your grandchildren’s well-being, you hate what selfish politicians have done to their future.

Hyperbole is a legitimate tool used by opinion writers, but emotions distort analysis. My opinions are clearly conservative, but I try to view events through a lens of common sense. Opposing arguments, which use reason, are welcome. I try – not always successfully – to be civil. (A few reactions to my essays have been decidedly uncivil.) As one would expect from one living in Connecticut, I have liberal friends and would rather not lose their friendship, but not at the expense of compromising my principles.

I have read enough of history to understand how rare is our democracy, how precarious it is and how ephemeral it can be. We are lucky to live in this country. I worry, however,  about those things that threaten our culture: hypocritical and supercilious politicians; a press that puts partisanship above impartial reporting; multi-culturalism and moral relativism; political correctness; the failure to see dignity in work; intolerance; “safe spaces;” the misuse of science for political gain; the segregating of voters for political expediency; the increase in dependency and concomitant fall in personal responsibility; the failure to celebrate traditional families; the decline in community organizations. I do not understand why the West will not acknowledge we are at war with Radical Islam.  I grieve that the young do not know our history, or understand the role played by capitalism in eradicating poverty. I am concerned with the growth of the administrative state, and the bureaucracies created. I wonder, why feminists condemn Trump for his crude language, yet condoned Bill Clinton when he sexually abused women? I know the path we are on, from a fiscal and monetary perspective, is not sustainable. Consider how far away we are from when President John Kennedy implored people to “ask not what the country can do for them, but what they could do for the country.”

Everyone should periodically undergo self-analysis. We don’t have to be omphaloskeptics, but we should question ourselves: Why do we believe as we do? Are our opinions grounded in history and in an understanding of human behavior? De we reflect compassion and common sense? Or, do we live in a world as we would want it to be? Have we become Walter Mitty’s? Does prejudice not sense, dictate actions? If Congress passes a health care bill, why would they exempt themselves from its provisions? Should those who live in a cocoon of privilege – private schools and armed body guards – be adamant in limiting school choice or opening borders? These are things I think about and which cause me to express the opinions I do.