While in Russia, Obama not only had to walk back Joe Biden’s comments on Iran, he also had to try dampening the furor over Biden’s remarks about the stimulus. Dan Balz writes:
Vice President Biden opened the door to questions on Sunday, telling ABC’s George Stephanopoulos, “We and everyone else misread the economy.” But he insisted that the stimulus applied “is the right package given the circumstances we’re in.”
Obama, in Moscow, tried to modulate the impact of the vice president’s words that the administration had somehow miscalculated. “No, no, no, no, no,” he told NBC’s Chuck Todd. “Rather than say misread, we had incomplete information.” To ABC’s Jake Tapper, he said, “There’s nothing that we would have done differently. We needed a stimulus and we needed a substantial stimulus.”
What both Obama and Biden were trying to explain away was the dissonance between their early assurances that the big stimulus package would hold the unemployment rate to around 8 percent with Thursday’s report showing it at 9.5 percent. The jobless rate is expected to rise further in the months to come, with some economists projecting that it will go above 10 percent for the first time since 1982.
It is hard to square an assessment that the administration underestimated the severity of the recession and the assertion that the White House wouldn’t have done anything different had it known how bad things really were.
The real problem for Obama is not his loose-lipped VP. It is the soaring unemployment rate and the sense, even among Democrats, as Balz notes, that “Obama and his team may have taken their eye off the economy, that they are not sufficiently vigilant in making sure that they produce the job growth they have promised since January.”
Well, when in doubt, why not more of the same? Yes, the buzz has started that we need a second stimulus. But the public thinks Congress has wasted quite enough of their money on the first one:
Sixty percent (60%) of U.S. voters now oppose the passage of a second economic stimulus plan this year, a five-point increase in opposition since the issue was first raised in March. A new Rasmussen Reports national telephone survey shows that just 27% of voters favor a new stimulus plan, unchanged from the earlier findings.
Perhaps the economy will rebound on its own, although the legislation for cap-and-trade and a round of new taxes to pay for a government take-over of health care may further spook investors and employers. (Small businesses are already up in arms about cap-and-trade.) The solution to our continued economic woes and their political consequences are not apparent. Having blown a trillion dollars for no discernible benefit, the president and Congress now must tough it out and face an increasingly worried electorate.
Here, this may help:
http://www.pagetutor.com/trillion/index.html
One trillion dollars is about $3,300 per U.S. resident. That’s easy to understand.
Robbie – “One trillion dollars is about $3,300 per U.S. resident. That’s easy to understand.”
That would make it about $6,600 per taxpayer.
I feel better now. My wife and I are only in for an extra thirty or so grand since President Obama started spending a couple of months ago.
What’s sad is that people care more about $165 million than they do about $3.6 trillion. As you have mentioned, in the grand scheme of things $165 million is incredibly small, but $3.6 trillion cannot be fathomed.
A trillion dollar deficits per year as far as the budget can be projected, AND we’ve obliterated over $14 trillion of wealth in the market since last fall.
So let’s see – that’s $13,200/yr/per household in deficits (assuming 2 taxpayers/household, on average), AND a meltdown of $92,400/household in wealth reduction so far.
So $132,000 in new tax bills or debt repayment over the next decade, on top of $92,000+/household in wealth loss already.
No WONDER we’re all a little cranky – that’s a quarter of a MILLION dollars in wealth haircuts and/or expense increases so far, per household, on average.
Here’s another way to explain it: Suppose your annual income is $50,000 (GDP = $14T). You aready have $39,000 in credit card debt (current national debt = $11T). You’re going to put another $3,500 in debt on your credit card for each trillion of deficit.
Another 3 trillion in deficit, and your credit card debt will be about 100% of your annual income. Unless your financial planning assumes hitting the lottery, you can understand that. Not good.
By the way, did I mention that you also promised Gramma that you would pay for her care in old age which, if you paid it up right now, would cost $200,000? Unfunded liabilities for social security, medicare and public employee pensions are, at a minimum, $60T.
Oh, and by the way, did I also mention that the $2.3T deficits are a ludicrous misrepresentation, since the government artificially decreases deficits by unilaterally declaring that certain expenses don’t count (known as “off-budget)? The real number to watch is the increase in the national debt. And if anyone believes that the national debt won’t increase by far more that $2.3T in the next four years (never mind ten years), I’ll gladly bet you what’s left of my net worth against yours, and give you 20:1 odds to sweeten it.
ES is becoming truly Galilean. (No, not THAT one.) Thank you for the illustrations.
How about just starting to express everything in $T. So the AIG issue is 0.0002T.
A major Fortune 50 company could have an annual net income of, say, 0.003T on sales of 0.06T
While this is amusing to do, the real problem is (of course) our activist press that breathlessly reports 40 anti-AIG protestors (and in my local paper the obligatory report on the ANSWER DC anti-war protest) while ignoring the 1000s of teaparty people
So in the end, it is all about the information war against the American people.
In management circles they call that mushroom management, keep them in the dark and feed them s***.
Maybe that’s why Obama was so jovial on 60 minutes.
DSM wrote
(By the way, a mathematics journal I read notes that mathematicians cannot fathom such numbers either. These sorts of numbers are simply out of our everyday thoughts and lives.)
sounds odd to me. a trillion is just 10^12, not that big. Perhaps BHO’s borrowing is only just getting started. A mere trillion may soon sound small.
the largest known prime as of August 2008 is 2^{43112609}-1, which has about 12.9 million digits, i.e on the order of 10^ 12,900,000. now that’s starting to get kind of big.
Another measure of really big would be how tall a stack of $1 bills it will take to buy a loaf of bread if we ignite Wiemar style hyper-inflation. According to Wikipedia, in 1993 Yugoslavia was printing bank notes for 500 Billion dinar. and further from Wikipedia: ” recent figures (as of 14 November 2008) estimate Zimbabwe’s annual inflation rate at 89.7 sextillion (10^21) percent. ”
Perhaps our president wants to surpass that mark!
Eppur Si, thanks! YOu certainly made it all very concrete and easy to visualize. Don’t think I’ll be able to sleep tonight.
For Mike M:
The mathematics journal was either the College Mathematics Journal or Mathematics Magazine, I don’t have the copy with me tonight; they’re in my office. In any case, the reference is from a paper on convergent series, as I recall.
Since you mentioned some mathematics, let me outline the idea, as I remember it. As you may know, the harmonic series is divergent. (The sum(1/n) for n=1…infinity, does not converge but slowly grows to infinity.) However, if you throw out all numbers that have the digit 9, say, the series is convergent. So, the number n=9 is not considered; n=19, 29, 39, etc. Note that n=90 to 99 is no longer part of the sum. Numbers 900 to 999, say, are gone.
That may not surprise you, but the paper went on to say the if you throw out numbers that have *any* particular digit, the series still converges. The article goes on to show how to calculate the limit for different excluded digits.
The relevant part for us is that people, even mathematicians, find this fact surprising. The reason the authors cite is that when working with most numbers, these numbers have only a few digits. Even the numbers you kindly mentioned have large values, but only a few digits in their expressions.
However, when you work with numbers with lots of digits and write them out, you will find that it is actually “difficult” to find numbers that do NOT contain a specific digit. Most large numbers, when written out fully, have at least one digit (0,1,…,9). (Try picking a 10-digit number randomly that does not contain an 8.) That’s why the harmonic series converges when you throw out numbers with a specific digit. Because most large numbers have at least one of every digit, you are throwing away a lot of numbers that would have contributed to the series. Hence what was a divergent series is now convergent.
That’s more than you may have wanted, but that’s where the idea originated. Also, my point, which you already know, is that if we are talking about $45 or $223 we all have a sense of what that is. But who has the sense, the feel, of $889,234,056?
Lastly, thank you to everyone who commented.