Our government is broke

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Power Point presentation for the book Our Government is Broke by Steve hess

Power Point presentation for the book Our Government is Broke by Steve hess

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  • 1. Steve Hess • Degree in Business Administration • CPA – Arthur Andersen & Co. • 25 years in corporate finance - CFO • Silicon Valley startups
  • 2. PRIVATE SECTOR FEDERAL RESERVEFEDERAL GOVERNMENT
  • 3. OUR GOVERNMENT IS BROKE • The problem • The cause • How it affects you • The fix • Take action
  • 4. THE PROBLEM Taxes $ 2.5 trillion Spending $(3.8) trillion Deficit $ (1.3) trillion Out-of-control spending!!!
  • 5. THE PROBLEM National debt $ 16.7 trillion Promised entitlements $ 70.3 trillion Total liabilities $ 87.0 trillion
  • 6. THE PROBLEM (in $ billions) 2013 2018 NATIONALDEBT 17,000$ 20,000$ INTERESTPAYMENTS 223$ 800$ INTERESTRATE 1.31% 4.00%
  • 7. THE PROBLEM $(1,600,000) $(1,400,000) $(1,200,000) $(1,000,000) $(800,000) $(600,000) $(400,000) $(200,000) $- $200,000 $400,000 $Billions Surplus&(Deficits)1990 to2012 $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 1965 1975 1985 1995 2005 2012 Historical US Debt - $ billions
  • 8. THE CASE OF THE MISSING MONEY “A PONZI SCHEME”…..Paul Krugman I.O.U. $2.7 TRILLION PAYABLE TO: THE SOCIAL SECURITY TRUST FUND
  • 9. THE CAUSE Congress & The White House No courage
  • 10. SINCE SENATOR OBAMA MADE THAT SPEECH IN MARCH 2006, THE FEDERAL DEBT HAS DOUBLED TO $16.7 TRILLION. “.... raising America’s debt limit is a sign of leadership failure. It is a sign that the US government can’t pay its own bills. Over the past five years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from China, Japan, and American taxpayers.”
  • 11. THE CAUSE We simply cannot afford the government we now have in place 2001 2012 INCOME TAXES 1,991$ 2,469$ 24% ENTITLEMENTS 461 829 80% DEFENSE 385 878 128% EDUCATION 36 99 176% AGRICULTURE 68 151 122% STATE DEPT 19 56 190% ENERGY 16 41 149% LABOR 40 127 219% ALL OTHER DEPTS. 838 1,616 93% TOTAL 1,863 3,796 104% SURPLUS / (DEFICIT) 128$ (1,327)$
  • 12. THE CAUSE • $ 170 million for Myanmar • $ 300 million for Syrian Rebels • $ 1.3 billion for Egypt • $ 32 billion / year in foreign aid • $ 10 million for Elephants and Rhinos • $ 3.7 trillion for war We simply cannot afford the government we now have in place
  • 13. HOW IT AFFECTS YOU • Germany – WWI and WWII • France – 8 times (1500 - 1800) • Great Britain – WWII • U.S.S.R. -- 1991 • Greece – 2009 • Detroit - 2013 • Portugal – 2013 ? • United States – 2018 ??
  • 14. HOW IT AFFECTS YOU • Your kids will pay the debt • Inflation • Savings may get hurt • Taxes will go up • Unemployment will get worse • Government assistance may go away • Social Security & Medicare in jeopardy
  • 15. STATE OF THE ECONOMY 1.2% GDP growth 8% Unemployment 47 Million on food stamps +
  • 16. TRADE DEFICITS $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 $Billions Red= Importsfrom China / Blue = US exports toChinga Tradewith China 2005 to 2012 $- $500.0 $1,000.0 $1,500.0 $2,000.0 $2,500.0 $Billions Red = Imports/ Blue = US exports Trade with the World - 2005 to 2012
  • 17. The “Our Government is Broke Index” HEALTHY Goal Today 4% GDP GROWTH 2% 5% UNEMPLOYMENT 8% 2% INFLATION 2% 0% DEFICIT to GDP 9% 75% DEBT to GDP 108%
  • 18. THE GET WELL PLAN
  • 19. US TREASURY SECURITY (IOU) AT ISSUANCE FACE AMOUNT $ 1,000 ANUUAL INTERST $ 40 INTEREST RATE 4 % TRADING IN OPEN MARKET $1,300 $ 40 3 %
  • 20. THE FED GET WELL PLAN 2008 -- $ 1.4 trillion 2012 --- $ 2.6 trillion
  • 21. GET WELL PLAN • Downsize US Government $3.8T $3.0T • Return power to the States • Unleash capitalism • Balanced budget by 2018 • Start paying down the debt
  • 22. TAKE ACTION • Read the book • Stay informed: ourgovernmentisbroke.com • Spread the word / share your knowledge • Meet with your representatives
  • 23. SUMMARY • Current fiscal policy is a disaster • No easy solution – Bold moves are needed • Public engagement is vital • This is not about politics – It’s a moral issue • The Good News = Private Sector
  • 24. PRIVATE SECTOR FEDERAL GOVERNMENT FEDERAL RESERVE
  • 25. GRASS ROOTS ORGANIZATIONS • The Concord Coalition • American’s For Prosperity • The Heritage Foundation • The Come Back America Foundation • The Tea Party • The Cato Institute • YouCut America
  • 26. Q & A
  • 27. SICK CARE • 16% of GDP in U.S. • $ 1.8 trillion • 8% in other countries
  • 28. OBAMACARE • 2,700 Pages • $ 500 Million for IRS agents • 20 New taxes • Disincentive to hire • Pushed back one year • Hated by all