CFA Society of Chicago  November 29, 2011
Michael FalkMichael S. Falk 2011
   E(ntitlements)    • Are owed to…    • With costs born by …    • Equal generational narcissism / ignorance / the only w...
 For   infrequent / significant risks When    the cost(s) is/are reasonable Acceptance    without need is… fraud       ...
 Born   in 1935, OAS(D)I LE   + 5 (65) ≈ 72 today SSA   ≥ 50% of income for 64% Theaverage person receives back all of...
 Means-testing   after premium refund HNW phase-out (most expensive)  • Phase-outs are reinstated @ 85  • Give back = ta...
 For   older people Final   year = 25 - 30% of spending Unfunded    Liability $23 - $80 Trillion To fix Medicare… fix ...
 Standardized OOP by age          bracket…   • $5,000 when < 40   • $3,000 when > 41   • $10,000 when FRA+      Fixed EO...
 Periodic   exams required  • Benefits (not the policy) @ risk  • Benchmark health… early detection  • Longitudinal studi...
 Tort   reform – attorney caps No   more pharma patent extensions Expand    access  • Medical “GI” Bill  • Nurse practi...
   Promises are huge incentives   Protect the pool!    • Retirement benefits only for retirees (FRA)    • Monthly benefi...
Retirement AgesMedicare and Social Security                  Tax Rates     Country Growth Rates            Rawley Thomas
Lee Hayes
Mike LindhMichael S. Falk 2011
 Personal  Introduction Scope of talk – Economics, Finance, Public  Finance Key Assumption – Everyone brings their  fai...
 Four   Major Areas of Public Policy Issues  • Private Property  • Environmental Protection and Economic Development  • W...
CFA Society of Chicago  November 29, 2011
CFA Chicago Live Event on 29 Nov 2011: Entitlements austerity taxes and the mortgage crisis
CFA Chicago Live Event on 29 Nov 2011: Entitlements austerity taxes and the mortgage crisis
CFA Chicago Live Event on 29 Nov 2011: Entitlements austerity taxes and the mortgage crisis
CFA Chicago Live Event on 29 Nov 2011: Entitlements austerity taxes and the mortgage crisis
CFA Chicago Live Event on 29 Nov 2011: Entitlements austerity taxes and the mortgage crisis
CFA Chicago Live Event on 29 Nov 2011: Entitlements austerity taxes and the mortgage crisis
CFA Chicago Live Event on 29 Nov 2011: Entitlements austerity taxes and the mortgage crisis
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CFA Chicago Live Event on 29 Nov 2011: Entitlements austerity taxes and the mortgage crisis

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Practical Solutions to Some of the Greatest Challenges Facing the World Economy will be discussed by panelists; Michael S. Falk, CFA, Partnering Consultant, Focus Consulting Group, Inc. & Founder, MSF Asset Consulting; Lee Hayes, CFA, managing partner of Genesee Investments; Michael N. Lindh, CFA, CPA, senior trader at Nuveen Investments; Rawley Thomas, president of LifeCycle Returns, Inc.

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CFA Chicago Live Event on 29 Nov 2011: Entitlements austerity taxes and the mortgage crisis

  1. 1. CFA Society of Chicago November 29, 2011
  2. 2. Michael FalkMichael S. Falk 2011
  3. 3.  E(ntitlements) • Are owed to… • With costs born by … • Equal generational narcissism / ignorance / the only way A(usterity) has • Real limits… • Perceived limits… T(axes) are • Costs for a civilized society • Impactful to growth Retirement is… a loss of productivity Michael S. Falk 2011
  4. 4.  For infrequent / significant risks When the cost(s) is/are reasonable Acceptance without need is… fraud Michael S. Falk 2011
  5. 5.  Born in 1935, OAS(D)I LE + 5 (65) ≈ 72 today SSA ≥ 50% of income for 64% Theaverage person receives back all of their “premiums” paid ≤ 60-months Unfunded liability $8 - $20 Trillion Michael S. Falk 2011
  6. 6.  Means-testing after premium refund HNW phase-out (most expensive) • Phase-outs are reinstated @ 85 • Give back = tax reduction/cap Un-refunded premium = death benefit FRA @ 70/72, no early payments • Employment sensitive: 7/10 @ age 65 Benefits are not taxed + COLA’s remain Michael S. Falk 2011
  7. 7.  For older people Final year = 25 - 30% of spending Unfunded Liability $23 - $80 Trillion To fix Medicare… fix health insurance • One policy, for life • Cat. deductible + HSA • All hospitals / doctors “in network” Michael S. Falk 2011
  8. 8.  Standardized OOP by age bracket… • $5,000 when < 40 • $3,000 when > 41 • $10,000 when FRA+  Fixed EOL benefit @ 75+  Revocable EOL statement Employer role • Only if… • HSA contributions • Wellness programs Michael S. Falk 2011
  9. 9.  Periodic exams required • Benefits (not the policy) @ risk • Benchmark health… early detection • Longitudinal studies Premium discounts (incentives) available • Stable / improving risk factors & behaviors • Guaranteed for two years Unused, EOL benefit is inheritable Michael S. Falk 2011
  10. 10.  Tort reform – attorney caps No more pharma patent extensions Expand access • Medical “GI” Bill • Nurse practitioners in all pharmacies Electronic records Michael S. Falk 2011
  11. 11.  Promises are huge incentives Protect the pool! • Retirement benefits only for retirees (FRA) • Monthly benefits only paid monthly Rationalize • SS + Public Pension ≤ 80% • 10-year averaging required • Funding level restrictions: new accruals, first-time/increased benefits Investments • Pension bonds… no • HF’s only if… Michael S. Falk 2011
  12. 12. Retirement AgesMedicare and Social Security Tax Rates Country Growth Rates Rawley Thomas
  13. 13. Lee Hayes
  14. 14. Mike LindhMichael S. Falk 2011
  15. 15.  Personal Introduction Scope of talk – Economics, Finance, Public Finance Key Assumption – Everyone brings their faith, ethics, and moral values into discussions of appropriate public policies. There is seldom a values-neutral position on significant, controversial issues.
  16. 16.  Four Major Areas of Public Policy Issues • Private Property • Environmental Protection and Economic Development • Wealth Distribution, Re-Distribution, and Taxation • Entitlements, Government Liabilities, and Intergenerational Equity Conclusions
  17. 17. CFA Society of Chicago November 29, 2011

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