Teaching Physics with the Physics Suite

Edward F. Redish

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Counting up the deficit

In an election year and in times of financial crisis, lots of big numbers are thrown at you and it takes some effort to make sense of them. Try it with the following questions. (You might consider some of these questions ambiguous or poorly defined. If you think they need further specification, do it and answer the specific problem you have stated.)

    In 2008 the US Federal Budget was spending more money providing services than they were taking in taxes. Last year, the deficit was approximately $300 Billion ($3.0 x 1011).

  1. Assuming this was divided equally to every man, woman, and child in the country, what would your share of this deficit have been?
  2. If someone (Bill Gates?) decided to pay this shortfall and brought it in $1 bills, how big an area would they cover if they were laid out on the ground -- touching but not overlapping? (Compare your result to something we know - a football field, a city, a state, a country, a planet - whatever seems appropriate.).
  3. Suppose you put these $1 bills in packages of 100 each and gave them away at the rate of 1 package every 10 seconds. If you start now, when will you be finished giving them away?
  4. Are any of these calculations relevant for a discussion which is trying to understand whether the deficit is ridiculously large or appropriate in scale? Explain your reasoning.

    The deficit is the amount we are short each year. The National Debt is the total amount we owe as a result of the accumulation of all previous deficits. This debt is owed to various holders of government bonds and treasury bills. (It's actually a bit more complicated than this. Check out Wikipedia for more detail.) In order to borrow that money, the government has to pay interest to the bond holders. The current (in 2008) National Debt is about $1013 (10 trillion dollars).

  5. Assuming this was divided equally to every man, woman, and child in the country, what would your share of this debt be?
  6. We have to pay interest on this borrowed money just as if it were a mortgage or car debt. Assuming a rate of 5% per year, estimate the total interest the government has to pay each year to maintain this debt.
  7. So how much does it cost each of us to run the federal government? This year's Federal US budget is about $4 x 1012 (4 trillion dollars) including "off-budget expenditures". About half of that goes for various types of entitlement assurance. (Old age assurance = Social Security, Medical assurance = Medicare + Medicaid)

  8. About how much is each person paying for the functioning of the government - supporting the military, regulation of food, support for the transportation infrastructure, scientific research (a very small part!)?

(Here's a web site to explore the US budget numbers!)

Page last modified September 5, 2008: G18