HOW TO SPEND 208 BILLION DOLLARS


The U. S population will be 300 million people in 2007. 1

A billion is one thousand times more than a million.

The Master Settlement Agreement is for the amount of 208 billion dollars paid out over 25 years .2 ( These estimates assume that amount of money is paid out at once. If you like, break it out over 25 years. State governments borrow so significantly against the collateral of their MSA payments, and government spending is wasteful in so many areas, that this fact isn’t likely to matter very much when considering the following.)

Considering these facts, consider the following (Not taking administrative and other costs into account):

If one were so inclined, for 208 Billion dollars:

A check could be mailed to every man, woman and child in the United States in the amount $693.33. 3

$2,733.33 could be given to every single child in the United States. Assuming that every child is 12 years old, at 7 percent interest, if invested, every child would have $98,635.28 at age 65. Assuming age 10, it would be $112,927.53. Assuming age 5, it would be $158,386.71. 4

Approximately 2.5% of the 8 trillion dollar national debt could be paid off. 5

The state budget for New York and California combined, or a combination of three or more other states, could be paid in full for 2006. 6

$5730.02 could be given to every person over the age of 65 in the United States. 7

Assuming that 20% of the population, or one fifth of 240 million adults in the United States smoke, and there are 192 million adult non-smokers, a check could be a mailed to every non-smoking adult in the United States for $1083.33. $4952.00 could be sent to every smoking adult.

For the 180,000 lung cancer cases this year, there would be $1,155,555.55. For the smoking attributed lung cancer cases, there would be $1,283,950.62. 8

The entire cost of Hurricane Katrina could be paid. 9

A $1000 home computer and $1000 in computer training could be given to every single child in America with enough money left over to give $8000 in tuition money to every one of the approximately 16 million college students in the U.S. 10

$12455.08 could be given to every college student in America. In other words, every current college student in America could attend a public college free of charge for one year. 11

$5745.86 could be given to every single person in the U.S. who classifies his or herself as “black”. 12

$18.9 million would be available for every illiterate adult in the U.S. 13

$18909.09 could be given to each of the eleven million children living in poverty in the United States. 14

The cost of the War in Iraq up to the first quarter of 2006 could be paid in full. 15

Okay, there’s enough to chew on there. Come up with your own if you like.

Here are my sources. A quick note.

If anyone would like to challenge the numbers, get out your calculator. I simply took the numbers available at the sources below and divided them by 208,000,000,000. I did not show my work and I'm sure my eighth grade math teacher would shake a finger at me. If any of my calculations are off, I'm sure they aren't off enough that the point is lost. Anyway, my apologies.


I tried to grab the first reasonable sources I could find on the internet. I did not spend hours in a library researching these numbers. None of these sources, with the exception of the American Cancer Society, to my knowledge, have any interest in the smoking issue. You'll notice in the one instance that I cited the American Cancer Society, I gave those who would have a vested interest in an anti-smoking viewpoint an actual advantage. The cost of Hurricane Katrina and The War in Iraq wil differ, I'm sure, depending on the politics of your source.

I've noted other considerations. If someone has done this sort of analysis on the MSA money, I am not aware of it.

If any of my calculations are off, I'm sure they aren't off enough that the point is lost. Anyway, my apologies.



1,3,4 https://www.cia.gov/cia/publications/factbook/index.html. (Of course this number will decrease as the population increases.)

2 http://www.lawpublish.com/settle.html

5 http://www.brillig.com/debt_clock/ (Of course, not accounting for any interest gained on MSA payments the percentage will decrease assuming the debt continues to increase)

6 http://www.google.com/search?hs=ASp&hl=en&lr=&safe=off&...budgets+&btnG=Search


7 http://seniorliving.about.com/od/lawpolitics/a/senior_pop_demo.htm

8 http://www.lungusa.org/site/pp.asp?c=dvLUK9O0E&b=669263. (I rounded the number of lung cancer case upward slightly to 180,000 from 170,000 plus and assumed a ten percent prevalence among non-smokers. In other words, I actually lowered the amount that would be paid to each, skewing the numbers slightly against my own point.)

9 http://www.msnbc.msn.com/id/9281409/

10, 11 http://www.census.gov/Press-Release/www/releases/archiv...editions/005225.html

12 http://72.14.203.104/search?q=cache:mfXbo4wo1iEJ:www.ce...n&gl=us&ct=clnk&cd=3


13 http://nces.ed.gov/naal/ (I found many estimates that placed the adult illiterate population number at 90 million. I rejected this estimate because it clearly seems to be a politically motivated number, placed so high that it defies common sense.)


14 http://www.nccp.org/pub_cpf04.html
15 http://nationalpriorities.org/index.php?option=com_wrapper&Itemid=182

BRAVO!
I have copied, with your screen name and link of course, to a doc to take with me to Bristol TN next week-as added ammo for the racetrack officials there and their proposed additional smokerban in the seats for nascar race.
Thanks for the number crunching! I love the "what if's" of all this!

quote:

Originally posted by WinstonSmith:
( These estimates assume that amount of money is paid out at once. If you like, break it out over 25 years.)

Around $60 billion (5% return).

WOW....just WOW.

Thanks for the positive words, gang.

Regarding the 208 billion being spread out over 25 years, it comes out to 8.32 billion a year, if you make no considerations whatsoever. Of course, what is not considered here is the amount of taxes that are paid by consumers of cigarettes, which is not directly accounted for by the MSA (though it probably does have provisions regarding taxation. Sorry, not in the mood, to read the whole thing right now). I don't have statistics on these numbers but I'm sure they're readily available out there. States borrow heavily against their future payments. Okay, as they say, smoking is the #1 cause of statistics, so anyone can endlessly quibble on this to ensure covering their butt for any argument.

Also, be careful when using the MSA as a debating tool. I've seen some writing out there that the tobacco companies are happy proponents of the current situation facing consumers of cigarettes, despite how counter-intuitive this may seem. These discussions usually start with pointing out the fact that tobacco stocks increased in value upon the announcement of the MSA.

quote:

Originally posted by WinstonSmith:
Regarding the 208 billion being spread out over 25 years, it comes out to 8.32 billion a year, if you make no considerations whatsoever.

I should have mentioned that my $60 billion figure is the present value of $208 billion over 25 years @ 5% interest.

No one mentions that the CDC is threatening states with audits on how they have used the MSA money if smoking bans are not passed.

Originally the CDC decided what percentage of the funds should be spent in antismoking agencies at the state level. Most states did as directed originally but reduced their allocations as other programs needed money and as a way to balance their budgets.

The EPA started this mess, but the CDC is carrying it out.

Thank You, Squeezer, for the clarification.

Would I be correct in saying then that anyone could take these numbers and divide by approximately 3.5? If so, they are still massive.

quote:

Originally posted by WinstonSmith:
Thank You, Squeezer, for the clarification.

Would I be correct in saying then that anyone could take these numbers and divide by approximately 3.5? If so, they are still massive.

Now that I look at my number I should have clarified even further. I was answering to a one time lump sum payment. Figuring $208 billion spread over 25 yearly payments would result in a different number.

In a sort of answer to your 3.5 question, a higher expected return (say 10%) would result in an even larger number than $60 billion.

quote:

Also, be careful when using the MSA as a debating tool. I've seen some writing out there that the tobacco companies are happy proponents of the current situation facing consumers of cigarettes, despite how counter-intuitive this may seem. These discussions usually start with pointing out the fact that tobacco stocks increased in value upon the announcement of the MSA.

Of course the cigarette companies are happy proponents of the situation.....most especially Philip Morris. PM is actually sitting by quietly and allowing tobacco tax increases ot be passed all over the country in exchange for states forcing small manufacturers, some of who did not even exist in 1998, to pay into the MSA.

There are no "direct" provisions in the MSA regarding taxation - HOWEVER - the MSA does specifically give the companies the greenlight to pass the cost (~45cents/pack) directly onto the consumer. This is exactly the reason PM is pushing states to include ALL manufacturers in the payment scheme. Numerous small companies emerged AFTER the MSA, they are call non-participating, and they started hurting PM's market share.

Any smoker that continues to use PM tobacco products has no one to blame but themselves for tax increases and smoking bans....PM does nothing to fight either and will endorse both if it means getting their way about MSA payments.

Thanks for the educating remarks, Gabz. Now I know.

Anytime Winston, anytime.

I pretty hot under the collar when it comes to discussions of the MSA.