Imaginary Numbers, Revisited

Almost ten years ago (October 16, 2013, to be precise) I wrote a post in which I expressed my limited understanding of the concept of imaginary numbers, but recognized its applicability to economics. 

Fast forward to earlier this month, when my friend Bob sent me this video about imaginary numbers. I watched it with great interest, although I still don't fully understand the concept ... you can watch the video yourself and see if it makes sense to you. And here's a cool diagram that shows how imaginary numbers relate to numbers in general:

Imaginary numbers are said to be a key to many other modern concepts in mathematics, physics, astronomy, engineering, and other scientific areas. That may be so. But the field that - now as back in 2013 - most depends on imaginary numbers is economics.

As far as I can see, all numbers in modern economic theory and the operation of government are imaginary. Here's what I mean ...

The national debt as of today is estimated* to be something in the neighborhood of 33 trillion dollars. That number, as large as it is, is not all the debt that's out there. According to a press release from the New York Fed last month, as of the second quarter of Fiscal Year 2023: 

"Total Household Debt" was around 17 trillion dollars, consisting of:

Credit Card debt, about $1.3 trillion; 

Mortgage debt, about $12 trillion;

Home equity lines of credit, about $34 billion;

Student loan balances were about $1.6 trillion;

Auto debt, about 1.58 trillion; and,

"Other" debt, about $53 billion.

If we add a national debt of $33 trillion to a household debt of $17 trillion, we get a grand total debt of $50 trillion. And this doesn't count money flowing through the web of PACs, Super PACs, and cash-stuffed briefcases that purchase our elections. Or the money socked away in bundles of cash and gold bars in politicians' homes or freezers, or the foreign accounts of the 1%.

As I see it, numbers this enormous are arbitrary and ... well ... imaginary. That is, they are, quite literally, beyond the imagination of the average individual. And there are other imaginary numbers that underlie economic theories, too, such as the $7.25/hour minimum wage**, which imagines someone earning it can support a family ... or even themselves alone.

We may not understand imaginary numbers, but they understand us. And they don't care.

Have a good day, if you can afford it. More thoughts coming.

Bilbo

* Nobody knows for sure, which is why every number is expressed in billions and trillions to, at most, two decimal places.

** Which has been the legal minimum wage in the US since July, 2009, although some localities have mandated higher minimums up to $15/hour.

P.S. - There are also "irrational numbers," of which "45" is the most irrational. Change my mind.

B.