Corker debt presentation_slideshow

Ignored Crisis: A Looming Wave of Debt 160 2030: 146% 140 120 Debt as a % of GDP 100 80 Today: 62% 60 40 20 0 1960 1970 1980 1990 2000 2010 2020 2030 Sources: Office of Management and Budget Historical Tables, Congressional Budget Office Alternative Fiscal Scenario 18

Widening Gap Between Spending and Revenue 28.0 26.0 24.0 2020 Gap: 22.0 $1.25 % of GDP 20.0 Trillion 18.0 16.0 14.0 Revenue 12.0 Spending 1960 1970 1980 1990 2000 2010 2020 Sources: OMB Historical Tables (1940‐2009), Congressional Budget Office's Long‐Term Budget Outlook Alternative Fiscal Scenario 17

Washington “Budgeting” • In 2008, average TN household earned $43,000 • Using Washington logic, they would spend $74,000 • That’s $31,000 more than they earn • Must borrow 40 cents for every dollar they spend 16

1970 Spending Interest Mandatory Spending Payments: (Medicare, Medicaid, $63 billion Social Security): 7% $279 billion 31% 62% Discretionary Spending (Defense, Highways, Education): $558 billion In Current Dollars Source: Congressional Budget Office 15

2010 Spending Interest Mandatory Spending Payments: (Medicare, Medicaid, $209 Billion Social Security): 6% $2.03 Trillion 42% 52% Discretionary Spending (Defense, Highways, Education): $1.38 Trillion Source: Congressional Budget Office 14

2035 Spending Interest Mandatory Spending Payments: (Medicare, Medicaid, $2.27 Trillion Social Security): $4.46 Trillion 25% 49% 26% Discretionary Spending (Defense, Highways, Education): $2.43 Trillion In Current Dollars Source: Congressional Budget Office, Alternative Fiscal Scenario 13

Debt Isn’t Free: Putting 2009 Costs Into Perspective 200 187 180 160 Billions of $ 140 120 100 80 69 60 49 45 44 40 30 20 12 0 Net Interest Dept of Dept of Dept of Dept of TN State Dept of Labor Transportation Homeland Education Housing Budget Security Sources: President’s FY’11 Budget, CBO, TN 2010‐11 Budget 12

Debt Isn’t Free: Putting 2020 Costs Into Perspective 1000 916 900 800 Billions of $ 700 600 500 400 300 200 83 59 54 52 100 35 14 0 Net Interest Dept of Dept of Dept of Dept of Housing TN State Budget Dept of Labor Transportation Homeland Education Sources: President’s FY’11 Budget, CBO, TN 2010‐11 Budget Security Sources: President’s FY’11 Budget, CBO, TN 2010‐11 Budget 11

Who Owned America’s Debt in 1960? Total Publicly Held Debt: $236.8 Billion Foreign Holders: $13 Billion (5%) Domestic Holders: $223.8 billion (95%) Source: OMB and Department of the Treasury 10

Who Owns America’s Debt in 2010? Total Publicly Held Debt: $8.8 Trillion Foreign Domestic Holders: Holders: $4.7 Trillion $3.9Trillion (54%) China Owns: (46%) $876 Billion (10%) Source: Department of the Treasury, Federal Reserve Board 9

Plenty of blame to go around. 8

Historical Context Spending: 20.3% of GDP over the last 50 years Revenue: 18.0% of GDP over the last 50 years 7

What is Right Amount of Spending? 21% of GDP: Erskine Bowles 20.3% of GDP: 50-year Average 18% of GDP: Balanced Budget 6

Getting Spending Back to a Balanced Budget: $6.7 Trillion Reduction in Spending Over Ten Years 28.0 26.0 24.0 Tough % of GDP 22.0 Medicine: 20.0 $6.7 18.0 Trillion 16.0 Revenues as % of GDP 14.0 Outlays as % of GDP 12.0 1960 1970 1980 1990 2000 2010 2020 Getting to 21% of GDP would be $3.4 Trillion Getting to 20.3% of GDP would be $4.5 Trillion 5

$670 billion a year is about what we spend on ... 4

Fundamentally change the way Washington does business 3

A construct that forces us to cap spending and incentivize growth 2

We should not leave our children and grandchildren with this crippling debt 1

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Corker debt presentation_slideshow

by Greater Memphis Chamber on Aug 16, 2010

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