How much is 1 trillion of anything? Let's count McDonald's burgers.
McDonald's sold its 100 billionth burger in 1993 and changed the sign to read "Billions and Billions Sold." The best guess I could find is that McDonald's now sells 4.6 billion burgers per year -- call it 5 billion. Thus, McDonald's has yet to sell 200 billion burgers.
At the current sales rate of 5 billion per year, McDonald's will not sell its 1 trillionth burger until the year 2173. Nobody alive today will witness the event.
If you exchange one McDonald's burger for each dollar of America's $14 trillion debt, then you're looking at a payoff date sometime in 4773 A(fter) D(igestion).
One trillion is such a huge number that the human mind cannot put it into perspective.
The human mind can understand one billion. McDonald's began franchising in 1953 and sold its billionth burger in 1963. McDonald's hit the 5 billion mark in 1969 and the 20 billion mark in 1976. People can understand 1 billion in total or even the rate of 1 billion per year.
Fortunately, we have computers that can count trillions as easily as people count fingers. Computers can easily design and compare an infinite number of plans to pay off the national debt.
Paying off a loan, however, is more than a math problem. A borrower must have that intangible quality -- integrity -- to honor the debt. If the borrower will not honor the debt, that's that.
It is my considered opinion that the American people do not have the integrity to honor the national debt. I cannot prove that Americans are as morally bankrupt as they are financially bankrupt. But I can provide events that draw me to this conclusion.
Fifty years ago, General Motors was the world's leading automaker. GM also excelled at building locomotives and diesel engines. GM was a powerhouse; its stock was as blue as a blue chip could be.
But then, GM rested on its laurels and eventually borrowed and overextended itself until the company had to declare bankruptcy in 2009. Blame it on the Corvair and Ralph Nader if you want, but GM's management forgot how to compete.
In many respects, GM's path to poverty mimics the nation's plight.
GM's Chapter 11 bankruptcy, though big, was not so big that the courts couldn't restructure the company. Bigger companies already had been through the system. But this time, the White House stepped in to override the bankruptcy court and dictate the terms of recovery.
Under bankruptcy law, the secured creditors are paid first. They have first dibs on the assets. In GM's case, the secured creditors were thrown a bone and told to take it or leave it.
The president of the United States all but ordered the nationalization of GM, a publicly owned company, and there was hardly a peep of protest. Forget tradition. Forget the "rule of law" that politicians always crow about. Forget the term "secured debt."
Federal bankruptcy laws were reformed in 1979. The laws were trying to keep up with the times. Bankruptcy was no longer something to be ashamed of. Bankruptcy filings were increasing, and the system needed reforming to speed reorganizations and liquidations.
Bill McLaughlin, former CEO of CB&T bank, explained to me in the mid-1980s that the bankruptcy law had become a "management tool." He was as right as he was succinct.
When the housing bubble popped, people walked away from their mortgages without regret. And the mortgage markets are still a long way off from normalizing.
From the White House to the poor house, Americans have shown they will not honor their debts. Can you expect with any reasonable assurance that Americans will pay off $14 trillion in Treasury Notes?
I could be wrong. We could have a turnaround. Or we could have another Pearl Harbor -- an event that stirs us to greatness. America does have a history of doing the impossible and doing it well.
I personally believe that $14 trillion is so big that it is mathematically impossible to pay it back in a reasonable time period. But I could be as wrong as wrong can be on this, too. I may be a finger-counting relic trying to conceptualize 1 trillion while ignoring the power of computers.
And I could be way off in predicting when McDonald's sells burger No. 1 trillion. You just never know about making burger predictions. What if people in India had a change of attitude about their sacred cows?
