Perspective Matters

2011/04/12

Now that the circus has died down (mostly) regarding whether or not Fedgov will shut down operations (they didn’t), I thought it might be interesting to take a look at the scope of the financial problems facing our Republic. Being an architect, I’m much more visually-minded than anything else, and I do find it difficult to wrap my brain around numbers that are much larger than 100, so I thought that a visual diagram might help illustrate the scope of the problem. Easier said that done, as I found out the hard way.

2011US_BudgetProblems01s

2011US_BudgetProblems02s

Very likely, you’ll need to check out the linked image for the second graphic to see the enlarged version, as I’m sure it’ll be difficult to see everything in the smaller image I’ve posted here.

Anyways, here’s a little background information regarding how I generated these graphics. For my first job, I started out making approximately 25,000 USD per year – not spectacular, of course, but a bit above minimum wage for the time (which was 6.25 / hour, or roughly 13,000 USD per year). According to the U.S. Census Bureau, the median household income for 2009 was roughly 50,000 USD per year (at the time I started working in 2003, it was roughly 43,000 USD per year). [1][2] I decided to use 25,000 USD as the basic unit for the rest of the numbers I included in the graphics. Thus, for example, the median household income for 2009 is 2x the base unit (50,000 = 25,000 x 2), while someone making minimum wage in 2003 was earning a salary of just over 0.5x the base unit (13,000 / 25,000 = 0.52).

For comparison, our esteemed congressmembers are paid the following compensation levels for their services to our Republic:

  • Rank-and-file members: 174,000 USD per year, or just under 7x the base unit (174,000 / 25,000 = 6.96)
  • Senate & House Majority & Minority Leaders: 193,400 USD per year, or a little under 8x the base unit (193,400 / 25,000 = 7.736)
  • House Speaker: 225,000 USD per year, or 9x the base unit (225,000 / 25,0o0 = 9)

Additionally, the President of the United States earns a salary of 400,000 USD per year, or 16x the base unit (400,000 / 25,000 = 16). [3]

On the upper end of the scale, here are some of the net worth figures for some of the richest folks in America (represented by the green bars):

  • Donald Trump’s Net Worth: 2.7 Billion USD, or 108,000x the base unit (2,700,000,000 / 25,000 = 108,000)
  • Charles & David Koch’s Net Worth (combined): 43 Billion USD, or 1,720,0o0x the base unit (43,000,000,000 / 25,000 = 1,720,000
  • Bill Gates’ Net Worth: 54 Billion USD, or 2,160,000x the base unit (54,000,000,000 / 25,000 = 2,160,000)

Or, but into simple terms, Donald Trump’s net worth is fifty thousand times the median annual income of a typical American household, while the combined net worth of the (evil) Charles & David Koch is five hundred thousand times that amount, and the richest man in America, Bill Gates, has a personal net worth that is a little over one million times the median 50,000 USD annual household income. One thing to remember is that one billion is 1,000 times one million, while one million is 1,000 one thousand. As you can see from the second graphic, these numbers, large as they are, just barely register compared to the larger values shown below: the 2011 U.S. budget, and the budget deficit.

The projected Federal budget for Fiscal Year 2011 is expected to be roughly 3.8 Trillion USD; since total revenues for F.Y. 2011 are projected to be roughly 2.2 Trillion USD, the projected deficit for the year will be somewhere in the neighborhood of 1.6 Trillion USD. The total budget, represented by the blue bars, is 152,000,000x (152 million times) the base unit, or 76 million times the median annual household income (3,800,000,000,000 / 25,000 = 152,000,000). Meanwhile, the deficit (1.6 Trillion USD), represented (naturally) by the red bars, is 64,000,000x (64 million times) the base unit, or 32 million times the median annual household income (1,600,000,000,000 / 25,000 = 64,000,000). Finally, while the numbers fluctuated wildly, at the time I made these graphics, the amount of cuts to the budget at issue between the two parties was somewhere in the neighborhood of 60 Billion USD (in the event, the compromise yielded a little over half this amount in cuts).

I think the graphics are fairly self-explanatory. As previously mentioned, one million is one thousand times one thousand, while one billion is one thousand times one million, and one trillion is one thousand times one billion; as such, one trillion is one million times one million, or one billion times one thousand. One million USD is 40x the base unit (1,000,000 / 25,000 = 40), which is represented by the rectangular grey bars, which are the same size as 40 of the smaller blue squares used to represent the base unit. Meanwhile, 1,000 of these grey bars is the same size as one of the large green squares used to represent one billion USD. Finally, each of the rectangles representing one trillion USD are the same size as one thousand of the green squares representing one billion USD. At their actual scale, the graphics shown in the first image above cannot even be seen compared to the far larger numbers towards the bottom of the second image. Even compared to the richest men in America, the scale of the yearly budget is overwhelming – and these images do not even illustrate the scale of our debt, which is roughly 14 Trillion USD (or 3.7x the yearly budget, or 560,000,000x the base unit – yes, that’s right, 540 million times). Meanwhile, the “painful” cuts to the budget incorporated into the compromise package amount to less than 1% of the annual budget – 0.8%, in fact (30,000,000,000 / 3,800,000,000,000 = 0.00789).

Or, to borrow an analogy from a popular movie I recently rewatched, if one represents the base unit using a Twinkie (which is approximately 3 inches long and 1 ½” in diameter), then the projected annual Federal budget deficit for F.Y. 2011 would be a Twinkie 3,030 miles long…or about as wide as the continental United States. [5]

Does anyone else see a problem here?

I have other comments regarding these matters, but for now, I’ll let you bask in the horror. I know it scares me.

Notes:

[1]: Income statistics for 2009 per U.S. Census Bureau; report available here (PDF warning).

[2]: Income statistics for 2003 per U.S. Census Bureau; report available here (PDF warning).

[3]: Congressional salary statistics from About.com available here.

[4]: Forbes list of the Richest People in America for 2010 available here.

[5]: Ghostbusters, in case you didn’t catch that reference.

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One Response to “Perspective Matters”


  1. […] ruminating a bit more on some of what I wrote yesterday, I decided to prepare another graphic to help illustrate my point from yesterday. Specifically, I […]


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