You all may know me as a writer or gun-monger, but by day, I am an accountant. I don’t post about finance much on my blog, because doing accounting is kind of boring, and watching somebody else doing accounting is worse. But today we will have some math time fun!
There are a lot of really big numbers being thrown around in the news right now, talking about the government spending money. A trillion is a hard number for most people to comprehend. But don’t worry, I’ve seen a bunch of news articles about how the Obamas are cutting a hundred million from the budget. Since this is being heralded as proof of fiscal conservatism, it must be true.
A hundred million? That’s a lot right? Well, the news sure makes it seem like a big deal. So is a 100 Million a lot?
Yes, unless you are the government.
So to illustrate, this is what the numbers look like when you type out all the zeros. Please forgive me if I screw up, because that is a lot of zeros.
Okay, so far, so good. So if we are spending over a trillion dollars that we don’t have all over the last few months, how much is cutting a hundred million from a trillion? Well, that would be a .0001 cut!
To break that down into money units that most normal people would understand, that means that if you had a thousand dollar budget, you would be cutting an entire ten cents! That is a whole DIME!
Think of what you could do with that? Ten cents is like… well… I don’t really know… but it must be a big deal, because Chris Matthews thought it was awesome. You could be all like, hey dude, I just borrowed this thousand bucks from a loan shark, but I totally don’t need this ten cents. Whoo hoo! Now I only borrowed nine hundred nintey nine dollars and nintey cents! Hey, what is the interest on $999.90? Oh wait, that’s my kids and grandkids problems! Let’s go hang out with Hugo Chavez! Yay!
In related news, the new “bank stress test” is designed so that most banks will automatically fail, that way the government can come in and nationalize them. By any other financial measurement, you count both preffered and common stock. But since the government recently weaseled their way into getting a bunch of preffered (non-voting) stock, that won’t count anymore, so if you want to stay in business, you’ll have to convert that to common (voting) stock, which means… wait for it… the government now gets a seat on your board and gets to boss you around.
If you think the economy sucks now, wait until the government actually starts to run all of our financial institutions…
This just keeps getting better and better.