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How much is a trillion dollars? February 6, 2009

Posted by Bob in Finance, Politics.
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With the economic stimulus package estimated to cost around one trillion dollars, there have been numerous (and some humorous) ways to put that number in perspective. Here’s one that I particularly liked.

First – the math:

  • 1 (one)
  • 10 (ten)
  • 100 (one hundred)
  • 1,000 (one thousand)
  • 10,000 (ten thousand)
  • 100,000 (hundred thousand)
  • 1,000,000 (one million)
  • 10,000,000 (ten million)
  • 100,000,000 (hundred million)
  • 1,000,000,000 (one billion)
  • 10,000,000,000 (ten billion)
  • 100,000,000,000 (hundred billion)
  • 1,000,000,000,000 (one trillion)

Now the analogy:

  • If someone spent one million dollars per day each and every day since Jesus was born, it would take another 731 years (beyond today) before one trillion dollars was spent.
  • $1,000,000,000,000 / $1,000,000 per day = one million days
  • one million days / 365 = 2740 years
  • 2740 – 2009 = 731 (years remaining)

Mr. President – I Want a New Financial Planner!! February 6, 2009

Posted by Bob in Finance, Politics.
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According to an article in today’s Minneapolis Star Tribune:

  • The federal government overpaid by about $78 billion for stock and other troubled assets when it bailed out big banks last year as part of its Wall Street rescue program, and it lacks sufficient internal controls to police and protect taxpayers’ investment in the institutions, government watchdogs said Thursday. 

This isn’t a good start for the hope and change that was promised by the Obama administration. Put this way – if my financial planner caused me to lose a pile of money because of incompetence or ineptness, I suspect I’d be looking around for someone else to handle my investments. Perhaps we ought to hope for a change in the fiduciary responsibilities of the federal government before we lose more than just the proverbial shirts off our backs.

Buster B. Jones (1959-2009) February 5, 2009

Posted by Bob in Guitar, Music.
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I just learned that Buster B. Jones died on Feb 2nd. What a sad loss for guitar fingerpickers everywhere. Buster was a fabulous entertainer and the sound of a guitar in his hands was nothing short of astounding. He played with amazing virtuosity and yet it all sounded so simple. It wasn’t. I will never forget the time at the 1999 Chet Atkins Appreciation Convention where I was sitting at a vendor’s booth noodling around on a guitar. Buster walks by, listens for a moment, compliments my playing, grabs a nearby guitar and together we began to jam. Before long, I’m totally lost and at the same time totally absorbed by the moment of sitting next to one of the world’s greatest fingerpickers. We shook hands and then he autographed my program card which I still have hanging on the wall in my office.

Rest in peace, my friend.

Thom Bresh said this about Buster http://breshman.com/news/ : “Those who got to know him will never forget him. Those who heard him play knew they had just witnessed a master at what he did. Those who play the guitar would understand their limitations. For the past 25 years, he and I traveled all over the United States and Europe playing our guitars and soaking up life. Taking the stage with him was like some sort of magical ride that only we understood. Time will heal the hurt of losing a friend, but playing the guitar will never be the same again.”

Economic Stimulus Package Analogy February 4, 2009

Posted by Bob in Finance, Politics.
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2 comments

Here’s an analogy which helps me understand the implications of the economic stimulus package presently before the US Congress.

Consider:

  • A family’s combined income is $48,000/year.
  • Their mortgage payment on a house is $1,000/month.
  • Their total monthly expenditures are $4,000/month ($2,500/month non-discretionary, $1,500/month discretionary).
  • They have $96,000 of equity in the house.
  • He loses his $24,000/year job so their combined income drops to $24,000/year.
  • They immediately pull the equity out of their house, which doubles their house payment to $2,000/month.
  • They continue to live the same life style and draw from the house equity at $24,000/year to make up for the lost income.

The end-result is that within four years they’ve burned through all the equity in their house in addition to finding themselves:

  • Living on half the income – $24,000
  • Having a higher ratio of non-discretionary spending ($3,500/month non-discretionary, $1,500/month discretionary
  • Having doubled their mortgage payments from $1,000/month to $2,000/month
  • Extending the payback time of their increased debt

Instead of immediately borrowing to maintain the current economic status, wouldn’t it be wise to first eliminate discretionary spending and try to figure out ways to reduce non-discretionary expenditures? Wouldn’t this be a prudent thing for our government to do? Yet, I don’t see our federal, state, or municipal governments actively cutting expenditures. Perhaps that will come. Right now, however, our government’s main emphasis appears to be “borrowing” additional money in order to keep things as they are.

 

Show’n-off the Grand Kid February 2, 2009

Posted by Bob in Life.
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Please allow me to introduce Jedidiah John Martin – born 2/1/09

A proud momma and her newborn son