Man Gets $218 Trillion Phone Bill – Yahoo! News

Man Gets $218 Trillion Phone Bill – Yahoo! News

Wow. THIS is an interesting story, and is actually a good lesson in so many areas. Certainly, we can learn much about “common sense” from a company that doesn’t think that a bill of that magnitude is somehow incorrect and out of line. Or perhaps we can learn how automated systems, left to their own devices, without a conscience, can ruin peoples lives.

Yes, we can learn all these things, but let’s look instead at the economics of this. The man is charged 218 TRILLION dollars for his phone bill. For perspective, the national debt, according the the US National Debt Clock, is only 8 Trillion. Additionally, according to the US Bureau of Economic Analysis, the quarterly Gross Domestic Product (GDP = consumption + investment + government spending + (exports − imports)) is $1.57 trillion quarterly (and, with the current Bush Administration, growing quite nicely–see the BEA report.) In this case, the phone company in question is in Malaysia, not the US, so you can imagine the impact such a phonebill must have. Just look at the equstion for GDP. Add that level of consumption to the GDP for a single quarter, and you have quite a blip!

Okay, so then let’s look at this. This one example clearly highlights why there is no connection between cost and price. I cannot imagine the Telco will be able to argue that, if the phone was accidently left on or not, they have incurred a substantial cost. They may have some trivial marginal costs associated with providing the calls, but given that the infrastructure (fixed costs) are already in place, one cannot believe that the TELCO would have incurred such great costs. Instead, we now have laid bare the gap, understandable in economic terms, between what it costs the company to provide the service, and what they are able to charge as a price because, at our traditional rates of use, it is a price we are willing to pay.

So there you have it. One man racks up a phone bill 145 times the US Gross Domestic Product, and will perhaps go to jail if he can’t pay.

So yes, the old Science Fiction story seems to be correct. The phone company will own everything and everyone.

HOMEWORK: anyone want to compute the “Earth Domestic Product” and determine if he could even come close to paying off his debt.