Sam Sez

Date: Monday, August 16, 2010

Question: "What’s a trillion dollars?"

Answer: It is many things and possibilities.

It is the minting of 1,000,000 that is, one-million millionaires. That means approximately 1 out of every 300 people in the country would have won/received $1,000,000.

It has been reported that TARP and other financial rescue plans and guarantees are in excess of $10 trillion dollars or notionally $10,000,000,000,000. Therefore applying to the above example, one out of every 30 people would be granted millionaire status. Sure beats the lottery, Powerball and the scratch off cards. How does direct deposit sound? And that grant would result in an increase in spending and saving across the board. That would be a dramatic positive for the economy and well-being of the citizens.

A trillion dollars would buy 10 billion barrels of oil at $100/barrel; 12.5 billions at recent, time of this writing, $80 price; or 20 billion barrels at $50/barrel. To put it into perspective consider Iraq. It has been reported that the production level is approximately 2 million barrels per day. If oil were trading at $100/barrel then the revenue would be $200 million/day or $73 billion per year. You are looking at a lot of years and hope that the country has the reserves. Doing different cost-benefit analyses, some entrepreneurs may find it figuratively cheaper to buy the whole country or at least all its production.

What a trillion dollars is not. It is smaller than the national annual deficit. Presently, you would need approximately 50 percent more to fill that hole/gap.

How much does NASA or various social, medical and educational programs cost? A trillion dollars could go a long way for goods, services, and security. An efficient and equitable application would be productive in a multiplier way. It could make the world a better place.

If the trillion dollars is used inefficiently, it may result in subsidizing sub-standard activities and securitizations. Thus the trillion dollars would be rewarding waste and penalizing economies.





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