Month: October 2009

Money Numbness or Dumbness

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I’m too young to have been around when posters like this one were common place. And my parents who bought US Savings Bonds have passed away, so I can’t ask them. But from the information I have seen, it appears that when our country, our federal government needed more money, in this case to fund our efforts in World War 2, they asked for it and the citizens loaned them the money through the purchase of bonds.

For the past couple of years, decades, we have become numb to big money numbers. In my city there was debate about the spending of just over $1 million dollars to change two blocks of a downtown street from a one way to two way street. And the loudest critics of the project were not the financial conservatives but the folks who were concerned about the removal of trees that lined the street.

When the plans were revealed to the critics that showed how new trees would be included, the majority of the critics quieted down and the project is currently underway.

But what about the money? Perhaps if the media would present the numbers in their full glory, people would understand how much money is being spent by our governments? Which number looks bigger:

$1 million dollars
or
$1,000,000.00

Many people have what I call Money Numbness. We are used to such big numbers that we don’t flinch when we hear about the cost of a house or car that is 5 to 10 times more than they were years ago.

One way we have become Money Numb in those two examples is the use of financing and payments as a guideline for deciding if we can afford it.

“Easy payments of $299” and then a bunch of fine print and disclaimers are now common in auto ads. As consumers, we have been trained to focus on the affordability of payments instead of the price tag.

This Money Numbness has contributed to Money Dumbness in regards to government spending and government income.

There is only one level of government that has the ability to spend more than it has and that is our federal government. Towns, Cities, Counties & States either have to come up with a balanced budget. They can use loans, bonds, taxes, fees, and whatever else their rules and regulations allow, but they cannot simple print their own money.

The Feds, well, they can do whatever they want. They can commit trillions of dollars that they don’t have to projects that they want to fund.

Let’s do a little comparison of what some of these numbers look like:

$25,000.00 Cost of a new car.
$50,000.00 A decent middle class income
$125,000.00 Cost of a middle class three bedroom home in my neighborhood.
$1,000,000.00 Cost to rebuild two blocks of s downtown city street
$2,000,000,000,000.00 Estimated cost of one of the healthcare reform bills

Let’s look at a Trillion dollars. This is from the website DailyCognition.com:

What ONE TRILLION dollars looks like in dollar bills…

Have you ever though about it. What would 1 trillion dollars look like, layed out in front of you?

I mean, these numbers numbers are tossed around like doggie treats.

So I thought I’d take Google Sketchup out for a test drive and try to get a sense of what exactly a trillion dollars looks like.

We’ll start with a $100 dollar bill. Currently it’s the largest U.S. denomination in general circulation.

Pretty much, everyone has seen a $100 bill. But fewer have owned them. 🙂

They’re also guaranteed to make friends wherever you go!

1

A packet of one hundred $100 bills is less than 1/2″ thick and contains $10,000.

It’s fits in your pocket easily and is more than enough for week or two of shamefully decent fun.

2

Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000).

You could stuff that into a grocery bag and walk around with it.

3

While a measly $1 million looked a little unimpressive, $100 million is a little more respectable.

It fits neatly on a standard pallet…

4

And $1 BILLION dollars… now we’re really getting somewhere…

5

Next we’ll look at ONE TRILLION dollars.

This is that number we’ve been hearing about so much.

What is a trillion dollars anyway?

Well, it’s a million million. It’s a thousand billion. It’s a one followed by 12 zeros ($1,000,000,000,000)

You ready for this?

It’s pretty surprising.


6




(And notice those pallets are double stacked.)


So the next time you hear someone toss around the phrase “trillion dollars”… that’s what they’re talking about.

That’s a lot of money. And the problem is too many people who want the government to provide various services have no idea that the money to pay for these goods, services, projects, etc, come from the only source the government has for money.

You and me.

Another area of Money Dumbness is that we need tax the companies that are making excessive profits. However, those companies only get their money from one source, You and me as consumers. So, raising taxes in this manner, means more money that comes out of our monthly budgets.

I don’t have an easy answer to this. But if we can educate those that are either Numb or Dumb, we may at least be headed in a better direction.

Healthcare & Capitalism

Over the weekend, I saw Michael Moore’s latest film, Capitalism: A Love Story. As I was watching the story of political corruption, greed and excess, I saw many things I agreed with.

And Michael Moore appeared to be critical of both Democrats and Republicans in the film.

During the past 24 hours I watched last weeks interview with Sean Hannity and it solidified my negative opinion of Mr. Hannity. You can watch these interviews by going here.

I also read the story of Lunsford Richardson whose name you probably don’t recognize, as much as you would the product he invented, Vicks Vapor Rub. Click here to read it for yourself.
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At the end of the movie, I was hoping that Michael Moore would NOT say that the answer was Socialism, which is what he is accused of saying. No, what Mr. Moore says is Democracy is the answer. Check it out and see for yourself.