The late Everett Dirksen, a long-serving Minority Leader of the Republicans in the US Senate, is famously quoted as saying a billion here, a billion there, and soon we’re talking real money. That was back in 1969. At the time, a billion dollars was about one-tenth of 1% of GDP.
What about today? During 2020, the federal government provided a total of $3.2tn of covid relief, starting with a mere $8.3bn, then adding $104bn, then adding $2.2tn, and finishing off the year with another $900bn.
We’re now three months into 2021, and the federal government has provided yet another $1.9tn in covid relief; and the Biden administration has just asked for $2tn for infrastructure. To put these amounts into perspective: a trillion dollars is today about 4% of GDP.
Back in 1969, Ol’ Everett was being funny when he referred to a billion dollars. Back then, a billion dollars was already real money. In 1969, the newest nuclear-powered aircraft carrier, the USS Enterprise, cost $451m, not even $1bn. The cost of the Apollo 11 mission to put the first man on the moon was $335m, not even $1bn. Only two companies made more than $1bn in profits (General Motors $1.7bn and Exxon Mobil $1.3bn). A billion dollars, representing one-tenth of 1% of GDP, was a fantastic amount of money. Ol’ Everett’s statement that a billion here and a billion there and soon we’re talking real money was a wild understatement.
And, now, we’ve gone from thinking of spending money at a clip of one-tenth of 1% of GDP to thinking of spending money at a clip of 4% of GDP, as though 4% of GDP isn’t already real money.