Saturday, May 30, 2020

Billions, Trillions, Some Perspective

Over the course of my lifetime, we have seen the global money supply and global debt continue to expand endlessly. In the days of old during my youth, people worried that some day the total US debt might reach as high as a Trillion dollars. As you can see from this historical chart, total US debt edged up over time from around 250 Billion starting in the year 1950 to a little over 500 Billion by the year 1975. By this time people my age were about 20 years old and the idea of Billions in total debt seemed normal. As we can see from the chart, total US debt did not hit the Trillion dollar mark until 1982 when people around my age were approaching 30 years old. This seemed like a big deal at that time as we moved in "the Trillions" for the first time.

Of course now we look book back at a one Trillion dollar total debt as mere peanuts. Trillions have become quite acceptable in the public mind and no longer concern most people as we move well over the 20 Trillion mark in total US debt. Trillions for people today seem like Billions did to people when I was growing up. Clearly, the total US debt is headed much higher in coming years and these days no one seems very concerned about that. Every now and then a politician or financial analyst will act concerned about it; but we all know nothing will actually be done to stem the rising tide of debt unless there is no other option available to keep extending the debt. These days, it is even fashionable to promote the idea that debts don't matter at all and that all that matters is that we can pay the interest and roll over the debt. 

With this background in mind, I though it might interesting to try and offer some perspective on the difference between the numbers one million, one billion, and one trillion. If we look at how long each of these numbers is in terms of seconds of time:

1 million seconds is about equal to 11 and 1/2 days 

1 billion seconds is almost 32 years

1 Trillion seconds is about 31,700 years

As we noted above, despite the exponential nature of the increase as we move from billions into trillions, no one is much concerned about it in terms of how much total debt the US builds up over time. No one offers any serious proposal to deal with the situation since no one is really all that concerned about it. Besides, none of the remedies for dealing with the debt are politically appealing except to just continue creating new money as needed to keep they system afloat which is what we do.

As we prepare this upcoming generation for the future; perhaps the question to ask is what comes after trillions? Don't laugh. When I was a kid no one could even imagine 25 Trillion dollars of debt. So it may not be too early to get familiar with the number one qaudrillion. Beyond that we have one quintillion followed by one sextillion. But why piddle with such small numbers. What dwarfs these as we head into the future?

The answer of course is the Googolplex as explained here. How big is this number? Wikipedia provides this perspective to give you some kind of an idea:

"One googol is presumed to be greater than the number of atoms in the observable universe, which has been estimated to be approximately 1078. Thus, in the physical world, it is difficult to give examples of numbers that compare to the vastly greater googolplex. However, in analyzing quantum states and black holes, physicist Don Page writes that "determining experimentally whether or not information is lost down black holes of solar mass ... would require more than 101076.96 measurements to give a rough determination of the final density matrix after a black hole evaporates" The end of the universe via Big Freeze without proton decay is expected to be around 101075 years into the future."

For the few still worried about the rapidly rising tide of total US debt (and our future entitlements obligations), this number should provide great comfort. Recently, Fed Chairman Powell said there are really no limits on the Fed's ability to create monetary liquidity

It's good to know that we won't be limited by running out of numbers to use to record the total debt. We have a number far in excess of the total number of atoms in the entire observable universe available. One can't help but notice the ominous discussion of black holes just above, but it appears that is far, far into the future and certainly beyond the next election cycle -- which is all that really matters. 
Note: If it is not obvious, this article is intended to be a humorous look at the US debt situation. I don't really expect us to get to a total debt of one googolplex any time soon. And if we do, I'm sure we can come up with a perceived googolplex of assets to offset the debt. It's all just a matter of perspective, right? :-)

Added note 6-2-2020: If this kind of issue interests you, Ray Dalio has put out a series of new articles exploring things like this in great detail which I have featured here.


  1. Great mathematical exercise, but the gist of the matter is that our standard of living is headed much lower with all of this Fed printed money coming into the global market, collapsing the Dollar sooner than later, and a hyper-inflationary Depression, the Greatest of All Time, landing on our doorstep making a loaf of bread require a wheelbarrow of rotting, stinking, sinking Greenbacks a la Wiemar Germany after WWI. Case Closed.

    1. Thank you for your comments. No doubt that the stability of the US dollar is under stress and more people seem to be realizing the threat. Ray Dalio just released articles on it which I just featured on the blog.