Mega-Number Confusion

. . . and now back to our regularly-scheduled coverage of depressing news from the current economic crisis. The latest development is the Congressional Budget Office’s report, released yesterday, maintaining that the US Government actually faces budget deficits and total indebtedness amounting to even higher unbelievably-large numbers than the unbelievably-large numbers presented under President Obama’s budget proposals.

The respected German daily Die Welt promptly picked up on this news to come out with its own article: Congress expects highest deficit of all time. What we should look at first here is the German word for “deficit” itself, used in that headline: Fehlbetrag, derived from the verb fehlen, “to err, sin, blunder” – so a “blunder-amount,” if you will. That pretty much sets the tone, right there; even before the reader’s eye gets to the inserted photo of an earnest President Obama – i.e. while it is still reading the lede – it gets assaulted not only by enormous numbers ($1.8 trillion/€1.3 trillion deficit for 2009, $9.3 trillion debt by 2019) but also by the accompanying loaded descriptions (“record total,” “without precedent,” “a debt-mountain”). Then the remainder of the relatively short piece fills in the remaining horrific details, like that such deficits would amount to over 4% of US GDP – “a value that experts term untenable.” US Budget Director Peter Orszag is quoted as conceding that a 5% deficit (getting close!) would truly be unbearable, even as he also maintains that the CBO’s estimates are unduly more pessimistic than the administration’s proposals.

Now, if any of you have already bothered to click on on that Die Welt article link – maybe because you do read German and/or you like viewing pictures of an earnest Obama – you might be wondering at this point “What has this guy been smoking? All I see here are numbers like ‘1.8 billion dollars/1.3 billion euros’ and the like.” Ah yes, but you see, in most places outside the USA – certainly throughout Europe – “billion” means what Americans would ordinarily call “trillion”! So, if you think we all don’t have enough problems already, it seems that the world has now started to discuss routinely large numbers (usually involving monetary amounts) of such a magnitude that we have entered that rarified zone where even what these numbers are called diverges between either side of the Atlantic. And that is the theme addressed by Julia Löhr of the Frankfurter Allgemeine Zeitung in her article Surrounded by zeroes.

It used to be the case, in the good ol’ days, that the realm of unimaginably-large numbers was somewhere mostly ventured into by cartoon characters, so that any sort of precision was beside the point. Löhr begins her piece by citing Scrooge McDuck, of Duckburg USA (although in German that’s Dagobert Duck, and he lives in Entenhausen – that’s “Duckhouses” – Germany): he himself could never keep track precisely of the extent of his wealth. Was it 13 trillion, 567 billion, or even 9 fantastillion? – he never was sure, and the amount varied all the time anyway.

But now the world has reached the stage where it needs to deal with such unbelievably-huge amounts as no sort of laughing matter. So it’s pretty annoying to discover that, while Americans speak of “millions” and then “billions” and then “trillions” (and then “quadrillions,” etc. etc.), Europeans speak instead of “millions” then “milliards” then “billions” then “billiards” (by which point you know you’re really racking up the money!) then “trillions,” and so on. Quite apart from necessitating not only the words but also the numbers to be translated in order to understand properly foreign (especially financial) articles, the potential should be evident for grave strategic errors among financial negotiators at top international conferences (often pressure-packed events lasting well into the night – like the upcoming G20 heads-of-state summit London might turn out to be, for example). One solution might be to adopt the practice of that other cohort that long has had to deal routinely with such huge numbers, namely scientists, who use exponents: billion/milliard = 10 to the 9th power, for example. Except that both the linguist and the neuro-economist (Neuroökonom – whatever that is) whom Löhr has rounded up to pontificate for her article agree that it would take about a generation’s time for people to get such a new numbering-system straight in their heads, by which time the crisis – and thereby the need to discuss such numbers any more – will surely have long passed. (Yes? Hopefully?)

A “Trillion” – What’s That, Anyway?

In any event, in her view the real problem here goes even beyond the cross-Atlantic inconsistency in number nomenclature – it’s that we simply can’t imagine any more what these numbers are about, we can’t grasp their true meaning. Actually, that has already been a problem to some extent, at least ever since “billion” (or “milliard”) has come into common use within the media. That expert linguist Löhr recruted is one Harald Haarmann, author of the book World History of Numbers (it’s only in German, but costs a mere €7.90 plus shipping – now there’s a down-to-earth, manageable number I can support!), and he declares that “A billion, that’s for most people nothing more than a metaphor for huge.” Now that the numbers in play have ballooned even beyond that, the problem is only worse. What does “trillion” (Eur. “billion”) really mean in real-life terms, anyway? Republicans on the House floor sometimes try to enlighten us on this score with metaphors of one-dollar bills stacked on top of each other, reaching to the moon or some outer-space-place like that, but I doubt that such sideshow-type concepts really achieve any traction in people’s minds. And that’s a tragedy, because of course these numbers do have enormous consequences. Whether $100 billion or $101 billion is spent on something – let’s say, just to pick randomly, on no-bid, no-supervision contracts to politically-connected American firms operating in Iraq – probably makes little difference to the electorate, except that that $1 billion difference could (say) build a tremendous number of schools, pay many more teachers, etc.

Ultimately, then, the problem with these enormous, incomprehensible numbers is an important one of political perception, or rather how that might simply be slipping away. And that is something that none of the numbering-solutions Löhr tosses into the final part of her piece – like simply calling €1 billion a “crisis unit,” or calling €50 billion a “stimulus package” (because that was the size of the latest German stimulus package – hyuk hyuk) – can really solve.

(Let me add by way of epilogue that this meme of “German shock at enormous monetary totals” has a full political context behind it. From the meeting of G20 finance ministers last week, it looks like the key trans-Atlantic policy difference over the econonic crisis is shaping up to be an American insistence that other countries in the world follow their example by passing massive stimulus bills, versus a German-led European view of “No, we’ve committed ourselves to spend quite enough money already, thank you very much. Let’s just wait and see a bit how things go.” I gathered up some German and Danish articles that go into that European position in detail, and justify it, but am unsure whether I will have the time to post an entry to discuss them.)

UPDATE: Here’s some assistance for those of us still staggered by the meaning of these large numbers, from an Oxford mathematics professor writing in the Guardian – and therefore, handily, in English. He also brings up what I hadn’t realized, namely that the British use the American system for large numbers (e.g. where “billion” follows as the next order-of-magnitude from “million”), and have done so since 1974.

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