That’s an Awful Lot of Briefcases

 

When I was a kid I remember wondering if you could get a million dollars in a suitcase. I found out it was really kind of easy. A hundred hundreds ($10,000) has about the same volume as a deck of cards. You can easily get 100 to 125 decks of cards onto a large briefcase and that would be a million dollars. The movie No Country For Old Men gave visual proof to the proposition as the million in the briefcase was the film’s Macguffin. That leads to another thought experiment. How do you visualize a trillion dollars?

How about this? You’re driving down the Interstate in the westbound lane. Up ahead you notice that the two eastbound lanes are blocked. Blocked by briefcases. There are eight to a row. They are evenly spaced three feet apart across the 24-foot road surface. The second row begins 18 inches behind the first and the rows of eight briefcases continues for as far as you can see. Unknown to you each briefcase contains 10,000 one hundred dollar bills. That’s $1 million a case, $8 million a row.

You continue driving for 10 minutes and the briefcases are still there. After half an hour they are still there. At 70 miles an hour, you are passing 272 briefcases every second ($272 million). You continue to drive for an hour and you finally see the end of the columns of briefcases up about a mile in the distance. It takes 61 minutes at 70 miles an hour to clear the last case.

The problem with the above thought experiment is that unless you are Tony Soprano or a wholesale fruit dealer you probably don’t have a lot of experience walking around with a four-inch roll of hundreds held together by an elastic band. Just about everyone used to walk around with a few twenties in their wallet so let’s use those in the next experiment.

Each briefcase now contains $200,000, 100 bound stacks of 100 twenties. Everything else remains the same. You Begin on Church Street in Manhattan and head for the Holland Tunnel. The briefcases are laid out eight across in the oncoming lanes. You get on I-78 and eventually onto I-95. You drive past Trenton, NJ, and the cases keep coming. You continue past Philadelphia, Baltimore, and Washington and they are still there. You are driving past nearly $55 million each second and will continue to do so until you are on the far side of Richmond, VA.

But that’s only a trillion dollars. To see 4 trillion dollars more you’ve got to get back on the interstate heading west at 70 miles per hour. You will pass Charlottesville (what would Jefferson think), Knoxville, Nashville, Memphis, Little Rock, Texarkana, Dallas, and Waco. You will finally see the end of the cases in Temple, TX. With pit stops you will have been on the road nearly 24 hours since Richmond.

Trillion used to be an astronomic or geologic number. It was used in conjunction with light-years or calculating the volume of Lake Michigan. Now it’s just the cost of a few government programs. By the way, at $200 a briefcase, it would cost $1 billion to buy the New York to Texas briefcases.

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  1. Stad Coolidge
    Stad
    @Stad

    Dave, you need to get out more . . .

    • #1
  2. Ekosj Member
    Ekosj
    @Ekosj

    I’m reminded of the closing on our first house.   In the middle of signing or initialing 100 documents relating to our mortgage my lovely bride leaned over an whispered “I never thought I’d ever see this much money and now I OWE it!!!”

    Thats why the debt ceiling arguments are valuable.  It’s one thing to talk about spending.   It’s something else altogether to realize how much you owe.

    • #2
  3. JoelB Member
    JoelB
    @JoelB

    If you knock over the first row of briefcases and they hit the next row of briefcases and so on down the line how long will it take for the last row in Temple to fall over? 

    • #3
  4. Mark Camp Member
    Mark Camp
    @MarkCamp

    Great post!

    Wow. The physical volume of stacks of 20’s totaling 5 T USD is indeed mind-boggling.

    It makes you realize how much space Americans and their politicians save by using checks and wire transfers instead of 20’s.

    Another interesting way to look at how much 5 T is is to ask

    ‘What would be the real direct economic impact on (a) the average American this year and on (b) the politicians, of 5T USD more government spending per year for 10 years, assuming American residents produce the same value in goods and services?’

    It is interesting because the unlike the first problem (the impact on space used of different ways of representing money) this real impact cannot be changed by even a dollar, by any means.  Not by

    • lowering nor by raising taxes,
    • nor by lowering nor by raising the government deficit,
    • nor by the Treasury being allowed to print or coin money,
    • nor by the Fed creating money faster nor slower,
    • nor by interest rates being higher or lower.

    in spite of what you might think from the news media, the politicians, and the populist economists.

    It also is not affected by the effects of government spending on productivity–those losses are added on to the loss below.

    If my calculations are right:

    • This year politicians would receive an additional 2.3% of the real value of the goods and services (real wealth) that the average resident individual produces, and
    • the resident would keep 2.3 %  less of what he produces.

    = = = = = = = =

    Calculations:

    Average production of wealth per person this year = 64,500 $ (per capita Domestic Product, not counting decline in fixed capital.)

    5T government spending averaged over 10 years = 500 B per year.  (8 years might be closer to the proposal, but this is a very rough calculation).

    Per capita government spending would increase by 500 B$ / 330 M people = 1,500 $ / person, or 1,500 / 64,500 = 2.3% of what he produces.

    This calculation makes significant simplifying assumptions which need to be taken into account in order to get a realistic answer. But assessing the more complete data would involve difficult questions that go beyond accounting.

    • #4
  5. Cow Girl Thatcher
    Cow Girl
    @CowGirl

    I can’t even…Please make an ad and put it on TV. I know, I know…it would take one of the briefcases to buy the ad. But, still…it might get more people thinking. 

    • #5
  6. Henry Racette Contributor
    Henry Racette
    @HenryRacette

    Excellent illustration.

    And, by the way, if you line the briefcases up in side by side pairs and have them march past you, the interest accumulating on them will guarantee that briefcases of debt will march past you forever.

    • #6
  7. John Hanson Thatcher
    John Hanson
    @JohnHanson

    The scariest part of the whole spending of 3.5 Trillion, or 7 Trillion or whatever the true cost turns out to be, (right now we have no clue what it would be, nor does anyone in congress), is that most of these dollars are not buying “infrastructure” where the cost returns some set of physical assets that have a real benefit, and that has an ongoing maintenance cost of about 3%-5% of the original cost each year, no — these costs start-up a raft of new programs impossible to shut-down once running, and will repeat that cost, except increasing each year into the future, so will be repeated every 5-7 years forever.  This monstrosity of a bill changes the baseline budget every year into the future and increases it a lot.  We will be arguing over whether or not to cut a trillion or so, from the projected “requirement to maintain the programs” for ever, that is the “Conservative Program” will become cutting a trillion or so from the increase, and will be heartless monsters if we ever try a real cut, you know, where the total spent next year will decline in actual dollar cost!

    • #7
  8. Mark Camp Member
    Mark Camp
    @MarkCamp

    To me the scariest part of government spending is that 44% of the real goods the average person produced last year were given to government, and only 56% were left the people who produced them to use as they see fit, and no one is paying attention.

    The number of arbitrary monetary units, or the space taken up by them if they are in some arbitrary form, is irrelevant.  The number 5 Trillion dollars means absolutely nothing to me.  If you spend your time producing just enough food to feed your family, and I take 44% of it, then your family will eat 44% less.  Whether my spending is 50 cents, or 5 Trillion per year, your family will be exactly as hungry.  Whether my spending is

    • two quarters which, when laid end to end on the floor, stretch from my big toe to my third toe, or
    • briefcases of 20s that would stretch twice around the world

    your family would be exactly as hungry.

    The introduction of money into society been a blessing and a double curse.

    The blessing is that it has indirectly enabled enormous improvements in the amount and quality of food our families have to eat, and in the quality and quantity of other real goods and services we are able to produce and thereby use for our survival and well-being.

    But it has also made us focus our attention on

    • what is unreal instead of what is real, and
    • on meaningless absolute numbers of monetary units when only relative numbers make any difference.

    These two mass delusions have made us easy game for deceitful and avaricious politicians, even though they depend on our votes to get and keep their power, prestige, and wealth. We are marching voluntarily, in pursuit of two illusions that remain always a few steps away, into slavery.

    The love of money is the root of much evil. Before I learned the basics of theoretical economics, I thought “money” meant “wealth” in that verse.  Now that I understand the deceptiveness of money, and how that deception leads us to much evil, I am not so sure.

    Around 1900, government took 5% of what we what produced in peacetime.  We were very free.  If we undeceive ourselves at some point in the future, we will say to the would-be despots,

    “You may spend 1 dollar or one quadrillion dollars. You may finance it all with taxes and no deficit, or all with deficit and no taxes, or some mixture of the two, or with no deficit and no taxes at all, just money you’ve created.

    “We don’t care.  Just take from us a smaller proportion of what we produce every year until you get back to 5%”.

    • #8
  9. Flicker Coolidge
    Flicker
    @Flicker

    Mark Camp (View Comment):

    To me the scariest part of government spending is that 44% of the real goods the average person produced last year were given to government, and only 56% were left the people who produced them to use as they see fit, and no one is paying attention.

    The number of arbitrary monetary units, or the space taken up by them if they are in some arbitrary form, is irrelevant. The number 5 Trillion dollars means absolutely nothing to me. If you spend your time producing just enough food to feed your family, and I take 44% of it, then your family will eat 44% less. Whether my spending is 50 cents, or 5 Trillion per year, your family will be exactly as hungry. Whether my spending is

    • two quarters which, when laid end to end on the floor, stretch from my big toe to my third toe, or
    • briefcases of 20s that would stretch twice around the world

    your family would be exactly as hungry.

    The introduction of money into society been a blessing and a double curse.

    The blessing is that it has indirectly enabled enormous improvements in the amount and quality of food our families have to eat, and in the quality and quantity of other real goods and services we are able to produce and thereby use for our survival and well-being.

    But it has also made us make us focus our attention on

    • what is unreal instead of what is real, and
    • on meaningless absolute numbers of monetary units when only relative numbers make any difference.

    These two mass delusions have made us easy game for deceitful and avaricious politicians, even though they depend on our votes to get and keep their power, prestige, and wealth. We are marching voluntarily, in pursuit of two illusions that remain always a few steps away, into slavery.

    What are the two illusions?

    • #9
  10. Mark Camp Member
    Mark Camp
    @MarkCamp

    Flicker (View Comment):

    Mark Camp (View Comment):

    To me the scariest part of government spending is that 44% of the real goods the average person produced last year were given to government, and only 56% were left the people who produced them to use as they see fit, and no one is paying attention.

    The number of arbitrary monetary units, or the space taken up by them if they are in some arbitrary form, is irrelevant. The number 5 Trillion dollars means absolutely nothing to me. If you spend your time producing just enough food to feed your family, and I take 44% of it, then your family will eat 44% less. Whether my spending is 50 cents, or 5 Trillion per year, your family will be exactly as hungry. Whether my spending is

    • two quarters which, when laid end to end on the floor, stretch from my big toe to my third toe, or
    • briefcases of 20s that would stretch twice around the world

    your family would be exactly as hungry.

    The introduction of money into society been a blessing and a double curse.

    The blessing is that it has indirectly enabled enormous improvements in the amount and quality of food our families have to eat, and in the quality and quantity of other real goods and services we are able to produce and thereby use for our survival and well-being.

    But it has also made us make us focus our attention on

    • what is unreal instead of what is real, and
    • on meaningless absolute numbers of monetary units when only relative numbers make any difference.

    These two mass delusions have made us easy game for deceitful and avaricious politicians, even though they depend on our votes to get and keep their power, prestige, and wealth. We are marching voluntarily, in pursuit of two illusions that remain always a few steps away, into slavery.

    What are the two illusions?

    That

    1. in negotiating with the politicians about money, we are negotiating with them about wealth.
    2. the absolute number of dollars owned, owed, remitted, or received can ever make any difference.  It is only the relative amount that can ever matter.  

    Absolute amounts only matter in real inputs and real outputs, never in money.

    • #10