How does a sovereign nation assimilate and cope with an acquired debt of seventeen trillion dollars? Just how much is a trillion? Let’s see if we can transform this economic amount into a figure that we can better understand.
If Billy Bank Customer walked into his local bank, approached the teller window and requested the employee to count out to him one million dollars at the rate of one dollar per second, how long do you think it would take that teller to count out the money . . . nonstop . . . no lunch breaks, no potty breaks, no sleeping, no walking around, or talking to anyone, just counting?
The answer is eleven and one half days and nights nonstop!
How long would it take Billy’s banker to count out one billion dollars at the rate of one dollar per second?
The answer is thirty-two years, nonstop.
How long would it take Billy’s banker to count out one trillion dollars at the rate of one dollar per second?
The answer is thirty-two thousand years, nonstop. That is longer than recorded history!
Now, we start losing touch with reality and our brain begins to bounce off the inside of our skull when we attempt to multiply that numerical concept by seventeen, or twenty, or twenty-five!
We are going to be dealing with the subject of inflation. Let’s establish a definition:Inflation is the sustained increase in the general level of all prices.
As long as we are in the question asking mode, let’s try a little quiz. Indicate whether or not you believe the following listed factors to be the cause of the monetary phenomenon called inflation:
- When companies are allowed to have a monopoly on a product or service, they charge more, thus causing inflation, because everyone else then has to charge more.
- Greed and profiteering on the part of business operators causes inflation.
- When labor unions demand higher wages, it forces manufactures to raise their prices and that in turn forces new demands for higher wages, etc., thus causing inflation.
- Imports, such as automobiles, electronics, and clothes, cause inflation.
- Exports, such as wheat or timber to other countries, cause inflation.
- OPEC and other cartels cause inflation since they can demand a higher price for a product, such as oil, which is depended upon so heavily.
- When the supply of money is increased into the economic system without the same amount of goods or services being increased, the result is inflation.
- When products become scarce because of strikes or poor crops, the price goes up and it causes inflation.
The phenomenon of inflation is nothing new in history. Of all the numerous currencies created throughout the world since the 1700s, few to none exist in their original form. Most changes center around deficits and debt. Next week we will further investigate inflation as it relates to the future of our own nation.
(Research ideas from Dr. Jackson’s new writing project on Cultural Economics)