Thursday, 01 May 2014

How Much Is $1 Trillion — Besides Half the Federal Regulatory Cost?

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The Competitive Enterprise Institute’s Wayne Crews has a problem. For years now he has been updating the CEI’s “Ten Thousand Commandments,” the organization's "Annual Snapshot of the Federal Regulatory State,” but the numbers, despite his best efforts, are simply beyond human comprehension.

But he continues to try, nevertheless. He says that the regulatory state takes another $2 trillion out of the economy, partly due to the costs associated with regulating everything from corn syrup to potted plants and partly due to the cost of making sure everyone is following the rules. That means, in the grand scale, the real cost of the federal government isn’t $3.7 trillion — the budget — but it’s more like $5.5 trillion, or about a third of the entire country’s output.

Crews is a clever guy. Not only a VP at CEI, he writes widely elsewhere, including for Forbes. He speaks, he writes books, and he’s the father of four. He’s had his articles published all over, including the Wall Street Journal, the Chicago Tribune, the Washington Post, and Investors’ Business Daily.

He’s also able to do a handstand on his skateboard.

When it comes to measuring the cost of the federal regulatory state, however, he’ll have to do more than a handstand. He measures the cost of the regulatory state, for example, by the number of pages it takes in the Federal Register — 79,311 in just one year — to list them. He says that the average family, with an average income of $65,596, will “pay” $15,000 in regulatory costs, or about 30 percent of the family’s income, buried in the price of that corn syrup and potted plant.

He says that if the regulatory state were a separate country, it would be in the top 10 of all countries in the world, bigger even than Canada or Australia. This doesn’t count the regulatory costs levied on small businesses, either. Companies with fewer than 20 employees pay more than $10,000 a year, per employee, to pay for the regulations, while larger firms pay less per employee but much more in total.

The trouble is, most people can’t imagine a trillion dollars, let alone $2 trillion. Most people can’t even imagine a million dollars. So, next year Crews should talk to the young people behind the Youth Film Festival (YFF) who have successfully stretched the brain to begin to fathom just how much a trillion dollars is, and, as a result, just how large the federal regulatory state really is.

YFF measures a trillion in time:

How long ago is a trillion seconds?

If you count backward, 1 million seconds is 12 days ago.

1 billion seconds is 31 years ago.

A trillion seconds? 30,000 B.C.

They measure a trillion in height:

How high is a trillion in $1,000 bills?

1 million dollars is 4 inches high.

1 billion dollars is 364 feet high.

1 trillion dollars is ... are you ready? ... 63 miles high!

These are stacks, not end-to-end. And these are $1,000 bills!

They measure a trillion in money:

With about 300 million people and about 100 million households in the US:

1 million dollars is 3 cents per household.

1 billion dollars is $3.28 per person and $9 per household.

1 trillion dollars is $3,280 per person and $9,000 per household.

They measure a trillion in annual salary:

If a person’s salary is $40,000 a year:

It would take him 25 years to earn $1 million.

It would take him 25,000 years to earn $1 billion.

And ... it would take him 25 million years to earn $1 trillion.

Finally, when it comes to saving:

If a person lived to age 80,

To have $1 million in savings by then he would have to save $34 every day.

To have $1 billion in savings by then he would have to save $34,000 every day.

And to have $1 trillion in savings by then he would have to save … ready? … $34 million every day of his life!

The one thing Crews doesn’t estimate is how to cut the government down to a conceivable size. One answer is to look to the people who created the massive government spending and regulatory bodies in the first place: the politicians. Given sufficient incentive, a politician can be persuaded to vote to cut government, or else find other work. Since most politicians are holding the best job — the highest-paying job — they’ve ever imagined, the thought of losing that job and having to find work in the real world is a strong incentive to keep his supporters happy. If they want him to cut spending, he will too.

Just ask the folks at the Youth Film Festival how those numbers might work out.

 

A graduate of Cornell University and a former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at www.LightFromTheRight.com, primarily on economics and politics. He can be reached at

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