This morning the Royal Bank of Scotland (RBS), which was bailed out by the taxpayer last year, announced a loss for 2008 of £24.1 billion. Even as I write this the Chairman of RBS is on the phone to the editor of Guinness World Records to claim their rightful place.

It seems that over the past year we have been bombarded by BIG NUMBERS. I don’t know about you but I have to admit that even as an economist they don’t mean that much to me. We learn to understand pounds when we are little kids. When we get to negotiate our wages at work we start to makes sense of tens of thousands of pounds (did I use a plural there?); and, if we are really lucky, we might even get a house that stretches into the hundreds of thousands of pounds. But what the heck are billions? How big a mattress would you need to get them under?

In the US they talk about trillions!!?  But I read today that it would take a military jet flying at the speed of sound, reeling out a roll of dollar bills behind it, 14 years before it reeled out one trillion dollar bills.

There is a sensible point to all this. I believe that we have to be very careful not to become desensitised when we read about these colossal numbers. We can get to the point when we see another huge number and just shrug our shoulders. But as economists we need to be able to hold governments and other organisations to account. We need to understand what is happening and so we must try to engineer some sort of measuring device to be able to work out the implications of what is happening during this recession and what will be stored up for us in the aftermath. Don’t let them bamboozle us! (According to an online dictionary:”Bamboozle – conceal one’s true motives, especially by elaborately feigning good intentions so as to gain an end.”) Does that sound like a politician to you?

Anyway, back in what is claimed to be the real world RBS has said that it is going to put £325bn of so-called toxic assets into the government’s Asset Protection Scheme which offers insurance against future losses. Now you need to sit down for this one. To enter this scheme RBS will have to pay £6.5bn to the Treasury. But, in order for RBS to raise this money the Treasury will subscribe for £13bn of RBS ‘B’ shares. Believe me, you couldn’t make this stuff up.

And, according to the BBC, the former chief executive of RBS, Sir Fred Goodwin, who oversaw this whole debacle is now being rewarded at the age of 50 with a £650,000 annual pension. I’m sure the 20,000 RBS employees who, it is rumoured, are about to lose their jobs, will be very gratified to know that their loss will not be in vain.