Posts Tagged ‘economics’

“At the current rate…” and other assumptions

March 30, 2017

In order to make any predictions in any area of study, one must make assumptions about the data, and what is likely to affect it going forward.  That is why statistical studies often make use of such statements as:

“At the current rate…”

“If things continue as in the past…”

“Based on what we know now…”

“It is reasonable to assume…”

“If history is a guide…”

“If things don’t change…”

But things do change, and that is what makes predicting the future so difficult, and so vulnerable to known and unknown biases.  While these caveats are unavoidable, and need to be stated, they require the consumer of the statistics to have a reasonable amount of skepticism and a large amount knowledge.

A quote in a The Great Race by Levi Tillemann states that “The available supply of gasoline, as is well know, is quite limited and it behooves the farseeing men of the motor car industry to look for likely substitutes.”  This quote is attributed to Thomas J. Fay, in 1905, in a magazine call Horseless Age.


Economics Should be Required in High School

March 3, 2017

Economics is so basic and essential for good citizenship and good personal decisions, that it is a shame high school students can graduate without even being exposed to the subject.  An article by high schooler Benjamin Auslin from Montgomery Blair High School in Silver Spring, Maryland, makes a strong argument that understanding supply and demand, the time value of money, return on investment and the basics of personal finance are skills that would well serve the graduates and society.


Let’s Ban the Word “Trillion”

June 27, 2012

Andrew Tisch: Let’s Ban the Word ‘Trillion’

By Ruth King on June 27th, 2012

U.S. national debt is $15,800,000,000,000. Our lingo shouldn’t obscure how dangerous that is.

Pop quiz: What’s bigger—$15.8 trillion, or $15,772,177,351,447?

Of course, rounding off, they’re about the same. But don’t we all think that the first number seems so much smaller and more manageable than the second?The first number incorporates a tidy unit of measurement called a “trillion.” We can get our heads around the word “trillion,” and so we think we understand what we’re looking at. In this case, it is the size of our national debt.

The thing is, it should be really hard to ever get our heads around a “trillion.” Very few of us have ever seen a trillion of anything with our own eyes. Maybe a trillion grains of sand, but not a trillion trees or a trillion stars.

When you look at the nighttime sky, think about this: We used to know of a few million stars. Then we moved up to billions of stars. Now we’re up to billions of galaxies. But we haven’t gotten to trillions of many things uniquely identifiable yet.

Except dollars.

As a nation, we spent $3.6 trillion last year on federal government services, and about one out of every three of those dollars was borrowed. That’s a lot of money.

Just how much is a trillion dollars? Consider this: If you have a briefcase full of $100 bills, you’d have roughly $1 million. Few of us have ever seen that much money in one place, but we can at least imagine what it looks like. But a trillion dollars in $100 bills would weigh 22 million pounds!

Things get more interesting if you stack the $100 bills on top of each other, rather than pack them tight in a briefcase. You’d have only $10 billion by the time you got as high as a commercial jetliner cruises. Think about that next time you’re up in the air.

If you want to see a trillion dollars of those Benjamin Franklins, you need to penetrate the Earth’s atmosphere and keep on going—678 miles high. Our national debt, at 15.8 times that amount, would form a stack of $100 bills 10,712 miles high.

That’s why this enormous number is trivialized by shortening it to a word that has only one more letter than its much more benign cousins, “million” or “billion.”

So let’s ban the word “trillion.” It’s a unit of measurement neither understood nor appreciated. If we must use the number, we should give it its proper due. Write it out with all its zeros—all 12 of them. So $15.8 trillion would be $15,800,000,000,000.

Or, from now on, if you want to say “trillion,” say “one thousand billion” or “one million million,” or “one thousand thousand thousand thousand.” Our national debt, then, would go from $15.8 trillion to $15,800 billion. Doing this would show, among other things, that even cutting $100 billion from our debt would bring us down only to $15,700 billion.

Still, “billions” doesn’t quite cut it. One billion dollars used to be a lot of money. Today no self-respecting dictator siphons less than that amount into his or her Swiss bank account. It simply wouldn’t look good among peer dictators.

So what about expressing a trillion as “a million million”? By that standard, our deficit is now $15.8 million millions.

We can’t keep piling more debt onto our children or our children’s children or our children’s children’s children. Otherwise, the million million millions in debt will make their future worthless, worthless, worthless.

Mr. Tisch, a co-chairman of Loews Corporation, is a co-founder of the No-Labels Coalition.