The Problem of “illions”

September 2, 2011

When we hear discussion of the federal budget and any plans for cuts or new revenue, the numbers that we hear (millions, billions, trillions) are so abstract that we sometimes don’t have a concept of their relative value. Take a look at the two questions below and see if you immediately know the answer. (Don’t use a calculator – that takes the fun out of it!)

Question One

1. On the following line – representing amounts from 0 to 1 trillion – which mark most accurately represents where 1 billion falls on this line?

Infographic - How Many Billions In a Trillion?

Question Two

How many millions are in 1 trillion?

A. 1,000

B. 10,000

C. 100,000

D. 1 million

Distorting Our Perception

Since most of us don’t deal with these kinds of figures in our daily lives, the proportions of these numbers (millions, billions, trillions) often doesn’t immediately register. Unfortunately, this is sometimes taken advantage of by public figures or some in the media. While they may be reporting factual amounts, it is very easy to use wording and tone to create a desired impression that doesn’t line up with the actual facts.

For example, some have noted that raising taxes on the top income bracket would *only* bring in about $700 billion in additional revenue over the next decade. Only?!? Since there are 1,000 billions in 1 trillion, that figure represents about 5% of the national debt. Clearly it doesn’t solve the whole problem, but it would be a start. However, the comment is geared to invite the listener to discount or dismiss the value of this amount of revenue.

During the debt ceiling debate, I remember hearing a Republican congressman saying he was opposed to a proposal by Democrats that would “gut” the defense budget by cutting $100 million. Sounds like a lot of money on the surface, but let’s take a closer look. Our current defense budget is almost $900 billion. So, a $100 million dollar cut would be cutting 0.01% of the current defense budget. This would be the same as saying you were “gutting” your budget to buy a used car if you could only spend $9,999 instead of $10,000 ($1 is 0.01% of $10,000). Either the congressman who made this remark didn’t understand the figures himself or he was trying to pull the wool over our eyes by misleading us about the size of the cut. Neither of these is acceptable.


By the way, the correct answers to the questions above are:

Infographic - How Many Billions In a Trillion

  1. A – the red line that is almost on 0 (as there are 1,000 billions in 1 trillion)
  2. D – there are 1 million millions in a trillion

Watch Out!

When we hear numbers that end in “illion”, sometimes their relative value doesn’t immediately register. We all need to keep this information in mind so that we can prevent politicians and those in the media from misleading us when they talk about these very large amounts in ways that don’t fairly represent their value. Be on the lookout because it happens all the time!