Update- What is a Billion? Quoted by Ross Greenwood of Money News. How many zeros in a billion? The next time you hear a politician use the word 'billion' in a casual manner, think about whether you want the 'politicians' spending YOUR tax money. A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of it's releases. - A billion seconds ago it was 1959.
- A billion minutes ago Jesus was alive.
- A billion hours ago our ancestors were living in the Stone Age.
- A billion days ago no-one walked on the earth on two feet.
- A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.
Right now the Federal Government is at pains to tell everyone - including us the mug-punters and the International Monetary Fund, that it will not exceed its own, self-imposed, borrowing limits. How much? $200 billion. And here's a worry. If you work in a bank's money market operation, or if you are a politician, the millions turn into billions and it rolls off the tip of the tongue a bit too easily. But every dollar that is borrowed, some time, has to be repaid by you, by me and by the rest of the country. Just after 5 o'clock tonight I did a bit of math for Jason Morrison. But it's so staggering its worth repeating now. First though; here's what Ex- P.M. Kevin Rudd has been saying about what he calls these temporary borrowings. Remember those Words: Temporary Deficit. The total Government debt could end up around $200 billion. So here's a very basic calculation. I used a home loan calculator to work it out. It's that simple. The current 10 year Government bond rate is 4.67 per cent. I worked the loan out over a period of 20 years. Now here's where it gets scary - really scary. The repayments on $200 billion, come to more than one and a quarter billion dollars - every month - for 20 years. It works out we, as taxpayers, will be repaying $15.4 billion in interest and principal every year. That is $733 per year, every year, for every man woman and child. The total interest bill over the 20 years is - get this - $108 billion. Remember, this is a Government, that just 18 months ago, had no debt! In fact it had enough money to create the Future Fund, to pay the future liabilities of public servants' superannuation.... and it had enough to stick $20 billion into the Building Australia Fund last year. At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me via ‘Contact Us’ at www.newealth.com.au or to call me on +61 2 9267 2322.
17th-June-2011 | 
