Tuesday, May 21, 2013

When numbers are no longer meaningful


This morning I saw a headline about how the US budget had exhausted the extra $300bn ceiling that was put on the debt in February.  In my mind, I thought that this is a huge amount of money when considering the NASA budget was around $80bn.  Then I got corrected when I quickly looked up the budget (to make sure I had the right number), and found it was actually 18 - not 80 - billion dollars in 2011.  The 2012 budget was $17.7bn - which makes the exhaustion of the debt ceiling even worse than I'd feared.  And to think that people used to complain about how much NASA cost to run?

I know precisely what happened here. Since 2007, we've gotten used to some very large numbers being bandied about.  So large in fact, that $18bn seems like a puddle to the $800bn ocean of money that was put aside for TARP, or the current military budget of $1-1.4tn.

You can argue that we're just used to inflation eroding the numbers, especially when being a millionaire these days will get you only two normal sized homes.  Back in the day, being a millionaire was a big thing when houses only cost $20,000.  I think this is not the cause though - the increase in numbers is just too staggeringly huge.  What we're seeing is a world that is awash in debts of an unimaginable scale, and government reactions on these same scales.  

The problem for the average person who is exposed to these numbers is we've rarely got experience or benchmarks by which to measure these numbers and make them meaningful.