Tuesday, March 24, 2009

The size of the financial crisis

The scale of the Global Financial Crisis is difficult for the average person to comprehend. Where once a million dollars seemed a vast amount of money, now a billion dollars seems like chicken feed. Bail outs by the US and other Governments are now measured in trillions of dollars. Here in Australia, in 2008 the government gave over ten billion dollars as an economic stimulus package to pensioners and families. The sums of money involved are staggering and almost beyond comprehension. This was followed by a forty two billion dollar stimulus package in 2009.

Numbers of this magnitude mean very little to the average person, except that it is a lot of money. A trillion dollars is equivalent to one million people earning $50,000 per annum for a period of 20 years. We understand the concept of one hundred dollars, but we find it difficult to meaningfully relate to a trillion dollars.

No comments:

Post a Comment