One minute read
A billion – in Australia – is $1,000,000,000.
You see this amount written everywhere these days.
You cannot escape it.
It was brought home to me a few weeks back, whilst driving through New South Wales.
Road work signs proudly announced $2.3 billion worth of construction here, another $1.7 billion there.
Governments love to announce new projects.
The bigger the dollar signs, the better.
High Speed Rail, no problems, that’s just $114 billion (based on latest estimates); oh, and the NBN…well, that is just another $50 billion, give or take $5 billion.
What’s a few billion dollars between us Aussies?
Everything will be okay, mate!
All new government projects involve debt.
On average, studies suggest that over 90% of such funds needed are borrowed.
You, I, our children, our grandchildren and very likely great grandchildren will be paying off this debt.
So what does a billion dollars really look like?
If you were paid $1 for every step you took, to earn a billion Australian dollars, you have to walk around the centre of earth some 31 times.
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Now, if you were a really fit bugger and walked eight hours non-stop, every weekday, it would take you some 60-odd years to walk that distance.
But that is somewhat silly, so let's look at something more reasonable.
The most quoted walking target is 10,000 steps per day.
So, that's 70,000 steps per week, or 3.64 million steps per annum.
If you keep this up every week, it would take about 274 years or - if you were lucky enough to live to the average age of an Aussie (currently 82 years) - almost three and a half lifetimes to walk far enough to earn $1A billion.
Which ever way you cut it, a billion is a bloody massive amount.
Some may say that borrowing money to pay for things used over a millennium is worthwhile.
Others will chirp in and talk about the ‘multiplier effect’; you know – stuff like economic stimulus, job creation, investment confidence, debt to GDP ratios and similar economic weasel words.
In the decades immediately after the Second World War, a dollar of debt produced a dollar of economic output; so, worthwhile one might think.
But these days, it takes more than $4 of debt to produce $1 of economic output.
Like any Ponzi scheme, this driver of artificial growth must have its limits.
Then go here and watch it for a while.
Even Usain Bolt couldn’t keep up!