Ignored Crisis: A Looming Wave of Debt
                         160
                                                      ...
Widening Gap Between Spending and Revenue
              28.0

              26.0

              24.0
                     ...
Washington “Budgeting”
• In 2008, average TN household earned $43,000

• Using Washington logic, they would spend $74,000
...
1970 Spending
            Interest                                               Mandatory Spending 
           Payments: ...
2010 Spending 
          Interest                                                 Mandatory Spending 
        Payments:   ...
2035 Spending
       Interest                                                                Mandatory Spending 
      Pay...
Debt Isn’t Free:
                Putting 2009 Costs Into Perspective 
                200
                       187
     ...
Debt Isn’t Free:
                Putting 2020 Costs Into Perspective  
                1000
                           916...
Who Owned America’s Debt in 1960?
       Total Publicly Held Debt: $236.8 Billion

 Foreign 
 Holders: 
$13 Billion
  (5%)...
Who Owns America’s Debt in 2010?
  Total Publicly Held Debt: $8.8 Trillion




                                           ...
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




       ...
What is Right Amount of
       Spending?

21% of GDP: Erskine Bowles

20.3% of GDP: 50-year Average

18% of GDP: Balanced ...
Getting Spending Back to a Balanced Budget: 
     $6.7 Trillion Reduction in Spending Over Ten Years

            28.0

  ...
$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

  1. 1. 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
  2. 2. 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
  3. 3. 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
  4. 4. 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
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 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
  11. 11. Plenty of blame to go around. 8
  12. 12. Historical Context Spending: 20.3% of GDP over the last 50 years Revenue: 18.0% of GDP over the last 50 years 7
  13. 13. What is Right Amount of Spending? 21% of GDP: Erskine Bowles 20.3% of GDP: 50-year Average 18% of GDP: Balanced Budget 6
  14. 14. 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
  15. 15. $670 billion a year is about what we spend on ... 4
  16. 16. Fundamentally change the way Washington does business 3
  17. 17. A construct that forces us to cap spending and incentivize growth 2
  18. 18. We should not leave our children and grandchildren with this crippling debt 1

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