Wednesday, April 13, 2011

Understanding big numbers

This last week there was a lot of news coverage about the budget and government shutdown. Once you get into numbers like million/billion/trillion, it is hard to actually understand what those numbers mean.

I found a blog that uses a simple way to understand these huge numbers: divide everything by 100,000,000.

If you divide everything by 100,000,000 then you get the following:
We have a family that is spending $38,200 per year. The family’s income is $21,700 per year. The family adds $16,500 in credit card debt every year in order to pay its bills. After a long and difficult debate among family members, keeping in mind that it was not going to be possible to borrow $16,500 every year forever, the parents and children agreed that a $380/year premium cable subscription could be terminated. So now the family will have to borrow only $16,120 per year.
 Here's the whole post.

Keynes vs. Hayek

I just finished my last economics class yesterday, and my professor showed us this video as a sort of treat. It's pretty funny.  I can't remember ever listening to a rap that was so informative. And the amazing thing is that I could kind of follow what they were saying.