Visualizing One Billion Dollars.

The Death and Taxes poster contains a lot of information and is great for putting federal spending in context.  However, the de-facto unit of measure is one billion dollars.  I realized that people often have a hard time grasping just what one billion dollars is.  So to provide further context to the poster, I am putting one billion dollars into perspective.

There have been other attempts around the web to imagine what a billion dollars might be, but they tend to obfuscate the problem further.  You can go here and learn that one billion credit cards weighs as much as 78 brachiosauruses or that one billion dollars in pennies would cover 14 square miles, but does that all really mean anything?

Let’s investigate what one billion dollars is and how it relates to us and our world.

Now most people will never see $1 billion themselves.  If you live in the United States, there is a 1 in 800,000 chance that you’re a billionaire, which are about the same odds as winning half a million dollars playing Powerball.  So ingenuity, hard work, and inheritance will net you a better rate of return than the lottery, but for those of us without such gifts, one billion dollars is only attainable when working in groups.

If you have a PH.D. then you already have a leg up on everyone else.  Just gather together 278 of your doctorate friends and add up all the money all of you make during the 40 or so years of your career and presto!, One billion dollars.

Of course if you don’t have a PH.D and consider yourself just an ‘average’ guy, you will have to work a little harder, a little longer, or instead, just round up an additional 312 of your ‘average’ guy friends.

If you’re female you will need another 178 doses of girl power to reach one billion dollars over the course of your collective lifetimes.

If you consider yourself black or African-American you will need almost twice the man/woman power to reach a billion.  An additional 656 lifetime contributions will do the trick.

Of course if you are in the unfortunate position of living below the poverty line, it will take an entire regiment of your unfortunate brethren to come up with one billion dollars in a lifetime.

In reality, the federal budget is an annual process, so understanding a billion dollars in terms of lifetime incomes is only of moderate use.  To bring it down to the annual level, you are going to need a lot of friends.  This is assuming you and your friends represent the mean American.  That’s mathematical mean.  I’d imagine an unearthly level of charm is required to achieve this number of friends.

When relating to federal spending, we ultimately have to relate to taxes.  So here is the amount of people required to support one billion dollars in federal spending.    To put it another way, the taxes paid by everyone living in New York City is almost half of the annual cost of the war in Iraq.  You would have to tax everyone in L.A., Chicago, Houston, Philadelphia, and Detroit to come up with the rest.  Again, this is assuming everyone in New York is an ‘average’ American, which is certainly not the case considering 40 of the aforementioned billionaires live there.  But you get the idea.

Before we get too far along on a socioeconomic tangent, lets switch gears.  If you happen to be so lucky as to win the Powerball lottery jackpot, odds being 1 in 146 million, then you are well on your way to being a billionaire.  Now all you have to do is win the jackpot every time for the whole year.  Impossible?  Surely not, why the odds are only 1 in 8 septendecillion.  That’s 55 digits.  If you are a string theorist, you might find those odds attractive.

Now that you are the luckiest person ever to live, what are you going to do with your winnings?  Blow it on something totally ridiculous of course.  That’s right, with your one billion dollar bank account you could purchase every action figure in sold in the US for a year.  Or all the video games for a few weeks.  I think we know that a year long reign as Lord of the Plastic Figurine to be the awesomer option.

Now forget that pipe dream! We are relating to government spending here and the gov’ment ain’t got time fer toys.  Instead of a nations’ worth of plastic superheros, one billion dollars can buy you half a plane.  Now, if we are talking strict off-the-line unit cost, then you could fly away in a B-2 with $250 million in cash stuffed in the weapons bay.  But you would first have to find someone to foot the R&D costs for you, which isn’t likely.  So $2.2 Billion is the total get-my-money’s-worth price for a B-2.  A bit out of reach for a lowly one billionaire.

The black market is where the action for the warlord on a budget.  Especially in Africa where a slightly used AK-47 will cost you 1/4 the price it would if it were bought in the Middle East; around $200.  One billion dollars could corner the entire black market for firearms.  You would need substantially more if you wanted to do it legally, providing the U.S. alone with $1.2 billion.  We are talking small arms here — machine guns, pistols, rifles, grenades, etc, which is only about 20% of the total international arms trade.  Even still, there is plenty of guns to go around, approximately one for every man, woman, and child in North America.  If you include military small arms, we will have to arm up South America as well.

Edit: I tried for about 45 minutes to think of a clever segue from fire arms to breakfast cereal but failed.  If you think of one let me know and I will credit you.

If you bought up all the stock you would enjoy the benefits of General Mill’s one billion dollars in profits.  That’s a lot of Boo Berry.  Yes, to further put the figure into perspective, this food giant, whose cereal you have grown up, with can put together one billion dollars worth of profit on $11 billion in sales.  This would place them somewhere around 200 on the Fortune 500 and 250 on the global Forbes 2000 lists.

Breakfast peddlers can’t hold a candle to the sheer monetary force of international war-making.  The entire yearly profit of a sprawling Fortune 500 company could be absorbed over a weekend in Iraq.  The war in Iraq is the first war in which we have had to borrow money from foreigners since that Revolutionary one we fought 225 years ago.  Back then the movies cost a nickle and a war was only $15 million.  Even adjusted for inflation and its not more than a week’s worth of Iraq’s expenses.  In fact, as you read this post, it’s costing $6,024 per second to wage war over there.

Two days in Iraq, annual income of 25 thousand people, a years worth of lotto winnings, its all one billion dollars.  I hope the preceding images have put that dollar amount into some perspective and that the information in the Death and Taxes poster is of a bit more use.  The National Cancer Institute receives $5 billion per year; that’s 10 days in Iraq, the cost of two and a half B-2’s, the tax revenue from half a million people,  every lotto jackpot for five years, etc.

To really understand federal spending, we need to put the information in to a larger context.  That is what the poster if for.  To relate federal spending to ourselves, we need to bring this large numbers down to eye level.  Hopefully, the next time you hear that the government spent ABC billion on XYZ you will think, “That’s a lot of action figures!”

Source: People. Guns. Toys. Lotto. Planes. War. Boo Berry.