Yes it is.

I’ve wondered to what degree perception of the scale of the problem is exacerbating our reaction to it. A trillion doesn’t buy what it used to, and I’m suspicious of people who pronounce huge numbers in tones of impending doom without trying to put it into context. We need to update good old Everett Dirksen by three orders of magnitude since the ’60s: “A trillion here, a trillion there, pretty soon you’re talkin’ real money!”.

Notice, too, that the severity of the reaction seems to scale linearly with age. Our idea of the value of a dollar got set in stone a long time ago, and a lot of us haven’t kept up with inflation mentally. I find things like house prices to be a real strain on my brain when it comes to really getting what they mean.

Dealing in percentages tends to preserve perspective, I think. I recently did a back of the envelope calculation of a fundamental measure of financial health, the debt-to-equity ratio, and for the US I came up with around 30%. Interestingly enough, the traditional advice from financial planners given to individuals and business has been that 30% is a healthy d/e ration, albeit at the upper limit. Run government like a business or balance its budget like your checkbook, it’s worth asking whether the crisis is real, or least inflated.

Hype in Washington? Why, the very idea!