The document discusses the growing fiscal challenges facing the U.S. government as seen through selected charts on debt levels:
1) The U.S. public debt as a percentage of GDP has exceeded 60% only during WWII, but is projected to rise substantially to 110% by 2020 and over 300% by 2040 under current policies.
2) In 2005, total U.S. government debt was comparable to other advanced economies, but is projected to be over 40% higher than the median for advanced economies by 2015 if reforms are not made.
3) For its first 200 years, the U.S. only accumulated debt during wars or recessions, but debt is now expected to skyrocket
1) Under current policies, the U.S. debt held by the public is projected to exceed GDP by over 1,000% by 2080, compared to around 60% of GDP currently.
2) Total U.S. debt including intragovernmental holdings is around $12.9 trillion or 89% of GDP currently, with 58% held by the public and 31% in intragovernmental debt.
3) Eliminating the Bush tax cuts and ending overseas military deployments would have a small impact on long-term fiscal projections, reducing the fiscal gap by around 1.8% of GDP by 2080.
The document is a collection of charts analyzing the financial condition and fiscal outlook of the U.S. government. Section I focuses on debt and deficits, showing that if current policies remain unchanged, debt held by the public is projected to exceed GDP by over 1,000% by 2080. The total debt includes intragovernmental debt owed to programs like Social Security as well as debt held by the public, both domestic and foreign. Within 10 years, total U.S. public debt including state and local debt is projected to reach the current debt level of Greece as a percentage of GDP.
The document is a collection of charts prepared by a research team at The Foundation analyzing the financial condition and fiscal outlook of the U.S. government. Section I focuses on debt and deficits, showing that if current policies remain unchanged, debt held by the public is projected to exceed GDP by over 1,000% by 2080. It also breaks down total debt into intragovernmental debt and debt held by the public, with the latter currently around $8.4 trillion or 58% of GDP. Within 10 years, total U.S. public debt including state and local debt is projected to reach Greece's current debt level of 120% of GDP.
What happens if the us credit rating is downgraded 7.22.2021 - Kurt S. Altric...Kurt S. Altrichter
1) The US government debt level of nearly $30 trillion poses risks even though low interest rates have kept debt servicing costs low currently. The upcoming expiration of the debt ceiling raises the possibility of a downgrade in the US credit rating or a technical default.
2) A credit downgrade or hitting the debt ceiling without a resolution could negatively impact risk assets, as occurred in 2011. Investors should take a longer term view and pay attention to weakening economic fundamentals rather than just focusing on record high stock markets.
3) The options available to address the growing debt problem like raising taxes or interest rates all carry risks for either the economy, financial markets or the US dollar. The government appears backed into a corner with
This document provides a comparison of independent forecasts for the UK economy in 2010 and 2011. It includes tables summarizing forecasts from 20 financial institutions for key indicators such as GDP growth, inflation, unemployment, and government borrowing. The tables show averages and ranges for each indicator based on forecasts made over the past 3 months, as well as averages specifically for the new forecasts received this month.
The document summarizes a real estate market update seminar presented by Joshua Wilton of Weichert Realtors in Princeton, NJ. It analyzes the Princeton and greater Princeton real estate markets, including inventory levels, absorption rates, and forecasts for 2010. It also discusses strategies for buying and selling properties and provides an overview of the local, state, and national housing markets.
The document provides a quarterly commentary and market observations from Macinv. In the first quarter, skepticism remained among investors but market sell-offs were less dramatic than previous years. Government policies are adjusting to stabilize fiscal situations. US GDP is expected to grow 2-2.5% in 2013. The Fed will continue quantitative easing and low interest rates. Key components of the US economy like home and auto sales showed growth in the first quarter. Macinv's portfolio performed well led by coal, transportation, and healthcare stocks. Natural Resource Partners and Norfolk Southern were top performers while CenturyLink underperformed after cutting its dividend.
COMPLICATED PROBLEMS OF GOVERNANCE IN FRANCE (FRANCE GOVERNANCE STABILITY INDEX)
http://iilss.net/
http://maynter.com
TREND OF FRANCE BUDGET, BUDGET PER CAPITA AND BUDGET SIZE INDEX
THE FRANCE SITUATION IS NOT BAD, THEY HAVE JUST A CHALLENGE
PRISONER OF FREEDOM AND CULTURE (ANALYSIS OF FRANCE GOVERNMENTAL WEIGHT OR GW INDEX)
1) Under current policies, the U.S. debt held by the public is projected to exceed GDP by over 1,000% by 2080, compared to around 60% of GDP currently.
2) Total U.S. debt including intragovernmental holdings is around $12.9 trillion or 89% of GDP currently, with 58% held by the public and 31% in intragovernmental debt.
3) Eliminating the Bush tax cuts and ending overseas military deployments would have a small impact on long-term fiscal projections, reducing the fiscal gap by around 1.8% of GDP by 2080.
The document is a collection of charts analyzing the financial condition and fiscal outlook of the U.S. government. Section I focuses on debt and deficits, showing that if current policies remain unchanged, debt held by the public is projected to exceed GDP by over 1,000% by 2080. The total debt includes intragovernmental debt owed to programs like Social Security as well as debt held by the public, both domestic and foreign. Within 10 years, total U.S. public debt including state and local debt is projected to reach the current debt level of Greece as a percentage of GDP.
The document is a collection of charts prepared by a research team at The Foundation analyzing the financial condition and fiscal outlook of the U.S. government. Section I focuses on debt and deficits, showing that if current policies remain unchanged, debt held by the public is projected to exceed GDP by over 1,000% by 2080. It also breaks down total debt into intragovernmental debt and debt held by the public, with the latter currently around $8.4 trillion or 58% of GDP. Within 10 years, total U.S. public debt including state and local debt is projected to reach Greece's current debt level of 120% of GDP.
What happens if the us credit rating is downgraded 7.22.2021 - Kurt S. Altric...Kurt S. Altrichter
1) The US government debt level of nearly $30 trillion poses risks even though low interest rates have kept debt servicing costs low currently. The upcoming expiration of the debt ceiling raises the possibility of a downgrade in the US credit rating or a technical default.
2) A credit downgrade or hitting the debt ceiling without a resolution could negatively impact risk assets, as occurred in 2011. Investors should take a longer term view and pay attention to weakening economic fundamentals rather than just focusing on record high stock markets.
3) The options available to address the growing debt problem like raising taxes or interest rates all carry risks for either the economy, financial markets or the US dollar. The government appears backed into a corner with
This document provides a comparison of independent forecasts for the UK economy in 2010 and 2011. It includes tables summarizing forecasts from 20 financial institutions for key indicators such as GDP growth, inflation, unemployment, and government borrowing. The tables show averages and ranges for each indicator based on forecasts made over the past 3 months, as well as averages specifically for the new forecasts received this month.
The document summarizes a real estate market update seminar presented by Joshua Wilton of Weichert Realtors in Princeton, NJ. It analyzes the Princeton and greater Princeton real estate markets, including inventory levels, absorption rates, and forecasts for 2010. It also discusses strategies for buying and selling properties and provides an overview of the local, state, and national housing markets.
The document provides a quarterly commentary and market observations from Macinv. In the first quarter, skepticism remained among investors but market sell-offs were less dramatic than previous years. Government policies are adjusting to stabilize fiscal situations. US GDP is expected to grow 2-2.5% in 2013. The Fed will continue quantitative easing and low interest rates. Key components of the US economy like home and auto sales showed growth in the first quarter. Macinv's portfolio performed well led by coal, transportation, and healthcare stocks. Natural Resource Partners and Norfolk Southern were top performers while CenturyLink underperformed after cutting its dividend.
COMPLICATED PROBLEMS OF GOVERNANCE IN FRANCE (FRANCE GOVERNANCE STABILITY INDEX)
http://iilss.net/
http://maynter.com
TREND OF FRANCE BUDGET, BUDGET PER CAPITA AND BUDGET SIZE INDEX
THE FRANCE SITUATION IS NOT BAD, THEY HAVE JUST A CHALLENGE
PRISONER OF FREEDOM AND CULTURE (ANALYSIS OF FRANCE GOVERNMENTAL WEIGHT OR GW INDEX)
Presentation by Christine M. Todd, CEO of NVAR, at the 5th Annual Appraisal Summit on June 16, 2010. This event took place at the NVAR Herndon Service Center
- The document analyzes global economic growth trends and forecasts from 2008-2017. It summarizes The World Bank's forecast of moderate global GDP growth rising to 3.0% in 2015 and averaging 3.3% through 2017.
- The strategist argues The World Bank is overly optimistic given factors like China's economic slowdown and the end of the commodity super cycle. Slow global growth is expected to continue in the near future.
- Key themes discussed include diverging economic policies driving US dollar strength and deflation, China's transition from manufacturing to services, and tailwinds for short-term US growth amid a challenging global environment.
The literature on external default has stressed the existence of the so-called debt-intolerance puzzle: developing nations tend to default at debt-to-GDP ratios well bellow those of developed countries. The underestimation or plain omission of domestic debt may account for a fraction of that puzzle. We calculate fiscal revenues coming from financial repression using different methodologies for the case of Venezuela, and look at their correspondence with comprehensive measures of capital flight. In particular, we add to the standard measure of capital flight the over-invoicing of imports, rife in periods of exchange controls. We find that financial repression accounts for public revenues similar to those of OECD economies, in spite of the latter having much higher domestic debt-to-GDP ratios. We also find that financial repression and capital flight is significantly higher in years of exchange controls and interest rate caps. We interpret this as significant evidence suggesting a link between domestic disequilibrium and a weakening of the net foreign asset position via capital flight.
U.S. apartment rents rose 0.9% in June according to a survey, marking the third straight month of double-digit gains. Rents were up 2.7% in the second quarter and 5.6% year-over-year. The national average rent reached a new high of $1,213. Rent growth has been led by West Coast markets like San Francisco, Sacramento, and Seattle, though some Northeast and Mid-Atlantic markets showed strengthening as well in the latest period. Occupancy remained strong at 96.1% nationally for the third month in a row.
Magna 20 mar - impacts on global advertising - enSebnem Ozdemir
The COVID-19 pandemic will significantly impact the global advertising market in 2020. Most economists now expect a global recession in the first half of the year followed by a recovery. Key industries like travel, restaurants, and retail will see severe decreases in marketing spending due to slower sales and profits. Digital media formats will be impacted the least while linear TV and radio will see milder impacts. Overall, global digital advertising growth is expected to slow to single digits this year compared to 20% growth in recent years. The pandemic is driving changes in media consumption but supply of online impressions is increasing as more people stay home.
C&W Marketbeat - Canadian Industrial Report- Q2-2014 Guy Masse
This document provides a summary of industrial real estate market conditions across Canada in the second quarter of 2014. Key points include:
- The Alberta economy continued to outpace other regions, driven by growth in the oil and gas industry. This fueled record industrial real estate absorption in Calgary.
- Central Canadian markets struggled due to slow economic growth, though momentum was starting to improve in the second quarter.
- Strengthening US economic conditions are expected to increase demand for Canadian goods and services, benefiting industrial markets going forward.
- US stock futures pointed higher ahead of the open as technology stocks attempt to rebound from recent declines.
- Most Asian markets closed cautiously higher after the Bank of Japan kept policy unchanged, while European markets were up as well as investors focused on wider political events.
- Among company headlines, Verizon expects a $500 million charge related to its Yahoo acquisition, while GE's large pension shortfall will be a challenge for its new CEO. Facebook is also starting to finance original video content for its platform.
Building Permits and Construction - Canada - January 2020paul young cpa, cga
The total value of building permits issued in Canada increased 4.0% to $9.2 billion in January 2020. Increases were reported in six provinces led by British Columbia which saw a 52.1% rise to $2.2 billion, largely due to multiple projects in the Vancouver CMA. The residential sector reported strong gains of 12.7% to $5.8 billion, while the non-residential sector decreased 7.8% to $3.5 billion mainly due to a decline in institutional permits following gains in December 2019.
The document provides an update on the fixed income markets in April 2010. It discusses the problems facing Greece and other European countries, and the impact on the euro. Domestically, most economic data was positive and the housing market showed signs of recovery. Treasury yields fell during the month due to concerns around Europe. Spreads tightened further for corporate bonds.
TME players have been facing challenging conditions in recent years as consumer spending on telecom, media, and entertainment has grown more slowly than the overall economy. The document analyzes past trends in TME spending and projects future growth. It finds that while overall TME spending is expected to stagnate, some categories like gaming and PVRs may continue growing moderately. The document recommends strategies for TME players to tap these pockets of growth, such as bundling across devices, content, and delivery, and developing customized offerings for specific consumer segments.
D&B's 2013 mid-year Global Economic Outlook gives an update on regional insights, upgrades and downgrades for countries around the world so far in 2013, as well as a prediction for these economies through 2017.
Venezuela is undergoing one of the worst economic losses ever registered by any country in a three-year period, either by Latin American or world standards. Poverty rates have skyrocketed and stand today beyond 80%. We define two landmarks for recovery, and revise how much would Venezuela need to grow - oil and non-oil sectors - and how likely are those rates from the Venezuela and the world´s experience. We end up by outlining some of the adaptive challenges Venezuela would need to tackle to engine a sustainable recovery.
2018 national and virginia economic forecast (31 january 2018) (final)rmcnab67
The document summarizes economic forecasts for the U.S. and Virginia economies in 2018. It predicts that:
1) The U.S. economy will grow at 3.0% in 2018 due to tax cuts and increased spending, while Virginia will grow faster than 2.0% but lag the national growth rate.
2) Unemployment rates will continue to decline in both the U.S. and Virginia, reaching 3.8% and 3.5% respectively by the end of 2018.
3) The forecasts also express concerns about rising federal deficits, high stock market valuations, and inflation, which could undermine growth by the second half of 2018 if the Federal Reserve rapidly increases interest rates
PRS’ coverage of the Americas in May includes an update on Chile, where the center-left coalition government is encountering political headwinds. President Michelle Bachelet’s approval rating has plummeted amid a spate of corruption scandals, including a charge of influence-peddling against her son, and dissatisfaction among the electorate with the weak performance of the economy, which government critics have blamed on uncertainty created by the New Majority administration’s tax and labor reforms.
The MNI Russia Consumer Indicator rose for the first time in five months in June, up 2.2% from May, though it remained below year-ago levels. Consumer sentiment increased across most regions except the Urals, where it declined to a record low. Confidence rose in lower income groups but fell slightly among high earners. Respondents were more optimistic about business conditions and purchasing durable goods in the near term, but inflation expectations also reached a new high.
Commodity Speculators The Villains Behind The Global Financial CrisisStephen Neill
Commodity speculators drove up prices of key commodities like oil in 2007-2008 through frenzied speculative activity rather than supply and demand factors, creating inflationary pressures. Central banks then raised interest rates to counter inflation without recognizing this was a speculative bubble that would burst. Higher interest rates led to widespread mortgage defaults as borrowers could no longer afford payments, triggering the global financial crisis. The crisis highlights the need for tighter financial regulation and limits on commodity market speculation to prevent such destructive bubbles forming again.
Annie Williams Real Estate Report - September 2020Jon Weaver
Home Sales Continue to Surge, Prices Rise
Sales of single-family, re-sale homes jumped in August, rising 27.4% year-over-year. They were up 1.9% from July. There were 214 homes sold in San Francisco last month. The average since 2000 is 214. Year-to-date, home sales are down 18.8%. Condo sales are down 26%.
This document outlines four main themes for the next decade:
1. The devaluation of money versus real assets such as equities, precious metals, and real estate will continue.
2. Equity markets in countries with low debt-to-GDP ratios will outperform those with high debt levels. Emerging markets like BRIC and Next 11 countries will outperform developed markets.
3. High-yielding, stable stocks from monopolistic industries with inelastic demand will remain attractive given low interest rates.
4. Direct and indirect taxes will need to continue rising to fund increased government expenditures on programs like social security and healthcare.
Prices Reach All-Time Highs, Again - Real Estate Report July/AugustAMSI, San Francisco
The Real Estate Report July/August, local market trends San Francisco: "Prices Reach All-Time Highs, Again" by AMSI's Real Estate Broker Robb Fleischer
Educational workshop presented by WealthTrust-Arizona and world-renowned guest Robert K. Smoldt, Chief Administrative Officer Emeritus at Mayo Clinic and Associate Director of Healthcare Delivery & Policy Programs at Arizona State University. Mr. Smoldt has been involved in health care administration for more than 30 years and is currently pursuing U.S. health reform in close partnership with Mayo Clinic’s Emeritus President and CEO.
The document discusses the growing fiscal challenges facing the United States, including rising budget deficits and national debt levels. It notes that while near-term deficits are largely due to temporary factors like the recession and stimulus measures, long-term structural deficits pose a serious threat if left unaddressed. In particular, rising healthcare costs and spending on entitlement programs like Medicare and Medicaid are projected to account for an unsustainable portion of the federal budget going forward. Urgent action is needed to put the country's fiscal policies on a more sustainable path.
Presentation by Christine M. Todd, CEO of NVAR, at the 5th Annual Appraisal Summit on June 16, 2010. This event took place at the NVAR Herndon Service Center
- The document analyzes global economic growth trends and forecasts from 2008-2017. It summarizes The World Bank's forecast of moderate global GDP growth rising to 3.0% in 2015 and averaging 3.3% through 2017.
- The strategist argues The World Bank is overly optimistic given factors like China's economic slowdown and the end of the commodity super cycle. Slow global growth is expected to continue in the near future.
- Key themes discussed include diverging economic policies driving US dollar strength and deflation, China's transition from manufacturing to services, and tailwinds for short-term US growth amid a challenging global environment.
The literature on external default has stressed the existence of the so-called debt-intolerance puzzle: developing nations tend to default at debt-to-GDP ratios well bellow those of developed countries. The underestimation or plain omission of domestic debt may account for a fraction of that puzzle. We calculate fiscal revenues coming from financial repression using different methodologies for the case of Venezuela, and look at their correspondence with comprehensive measures of capital flight. In particular, we add to the standard measure of capital flight the over-invoicing of imports, rife in periods of exchange controls. We find that financial repression accounts for public revenues similar to those of OECD economies, in spite of the latter having much higher domestic debt-to-GDP ratios. We also find that financial repression and capital flight is significantly higher in years of exchange controls and interest rate caps. We interpret this as significant evidence suggesting a link between domestic disequilibrium and a weakening of the net foreign asset position via capital flight.
U.S. apartment rents rose 0.9% in June according to a survey, marking the third straight month of double-digit gains. Rents were up 2.7% in the second quarter and 5.6% year-over-year. The national average rent reached a new high of $1,213. Rent growth has been led by West Coast markets like San Francisco, Sacramento, and Seattle, though some Northeast and Mid-Atlantic markets showed strengthening as well in the latest period. Occupancy remained strong at 96.1% nationally for the third month in a row.
Magna 20 mar - impacts on global advertising - enSebnem Ozdemir
The COVID-19 pandemic will significantly impact the global advertising market in 2020. Most economists now expect a global recession in the first half of the year followed by a recovery. Key industries like travel, restaurants, and retail will see severe decreases in marketing spending due to slower sales and profits. Digital media formats will be impacted the least while linear TV and radio will see milder impacts. Overall, global digital advertising growth is expected to slow to single digits this year compared to 20% growth in recent years. The pandemic is driving changes in media consumption but supply of online impressions is increasing as more people stay home.
C&W Marketbeat - Canadian Industrial Report- Q2-2014 Guy Masse
This document provides a summary of industrial real estate market conditions across Canada in the second quarter of 2014. Key points include:
- The Alberta economy continued to outpace other regions, driven by growth in the oil and gas industry. This fueled record industrial real estate absorption in Calgary.
- Central Canadian markets struggled due to slow economic growth, though momentum was starting to improve in the second quarter.
- Strengthening US economic conditions are expected to increase demand for Canadian goods and services, benefiting industrial markets going forward.
- US stock futures pointed higher ahead of the open as technology stocks attempt to rebound from recent declines.
- Most Asian markets closed cautiously higher after the Bank of Japan kept policy unchanged, while European markets were up as well as investors focused on wider political events.
- Among company headlines, Verizon expects a $500 million charge related to its Yahoo acquisition, while GE's large pension shortfall will be a challenge for its new CEO. Facebook is also starting to finance original video content for its platform.
Building Permits and Construction - Canada - January 2020paul young cpa, cga
The total value of building permits issued in Canada increased 4.0% to $9.2 billion in January 2020. Increases were reported in six provinces led by British Columbia which saw a 52.1% rise to $2.2 billion, largely due to multiple projects in the Vancouver CMA. The residential sector reported strong gains of 12.7% to $5.8 billion, while the non-residential sector decreased 7.8% to $3.5 billion mainly due to a decline in institutional permits following gains in December 2019.
The document provides an update on the fixed income markets in April 2010. It discusses the problems facing Greece and other European countries, and the impact on the euro. Domestically, most economic data was positive and the housing market showed signs of recovery. Treasury yields fell during the month due to concerns around Europe. Spreads tightened further for corporate bonds.
TME players have been facing challenging conditions in recent years as consumer spending on telecom, media, and entertainment has grown more slowly than the overall economy. The document analyzes past trends in TME spending and projects future growth. It finds that while overall TME spending is expected to stagnate, some categories like gaming and PVRs may continue growing moderately. The document recommends strategies for TME players to tap these pockets of growth, such as bundling across devices, content, and delivery, and developing customized offerings for specific consumer segments.
D&B's 2013 mid-year Global Economic Outlook gives an update on regional insights, upgrades and downgrades for countries around the world so far in 2013, as well as a prediction for these economies through 2017.
Venezuela is undergoing one of the worst economic losses ever registered by any country in a three-year period, either by Latin American or world standards. Poverty rates have skyrocketed and stand today beyond 80%. We define two landmarks for recovery, and revise how much would Venezuela need to grow - oil and non-oil sectors - and how likely are those rates from the Venezuela and the world´s experience. We end up by outlining some of the adaptive challenges Venezuela would need to tackle to engine a sustainable recovery.
2018 national and virginia economic forecast (31 january 2018) (final)rmcnab67
The document summarizes economic forecasts for the U.S. and Virginia economies in 2018. It predicts that:
1) The U.S. economy will grow at 3.0% in 2018 due to tax cuts and increased spending, while Virginia will grow faster than 2.0% but lag the national growth rate.
2) Unemployment rates will continue to decline in both the U.S. and Virginia, reaching 3.8% and 3.5% respectively by the end of 2018.
3) The forecasts also express concerns about rising federal deficits, high stock market valuations, and inflation, which could undermine growth by the second half of 2018 if the Federal Reserve rapidly increases interest rates
PRS’ coverage of the Americas in May includes an update on Chile, where the center-left coalition government is encountering political headwinds. President Michelle Bachelet’s approval rating has plummeted amid a spate of corruption scandals, including a charge of influence-peddling against her son, and dissatisfaction among the electorate with the weak performance of the economy, which government critics have blamed on uncertainty created by the New Majority administration’s tax and labor reforms.
The MNI Russia Consumer Indicator rose for the first time in five months in June, up 2.2% from May, though it remained below year-ago levels. Consumer sentiment increased across most regions except the Urals, where it declined to a record low. Confidence rose in lower income groups but fell slightly among high earners. Respondents were more optimistic about business conditions and purchasing durable goods in the near term, but inflation expectations also reached a new high.
Commodity Speculators The Villains Behind The Global Financial CrisisStephen Neill
Commodity speculators drove up prices of key commodities like oil in 2007-2008 through frenzied speculative activity rather than supply and demand factors, creating inflationary pressures. Central banks then raised interest rates to counter inflation without recognizing this was a speculative bubble that would burst. Higher interest rates led to widespread mortgage defaults as borrowers could no longer afford payments, triggering the global financial crisis. The crisis highlights the need for tighter financial regulation and limits on commodity market speculation to prevent such destructive bubbles forming again.
Annie Williams Real Estate Report - September 2020Jon Weaver
Home Sales Continue to Surge, Prices Rise
Sales of single-family, re-sale homes jumped in August, rising 27.4% year-over-year. They were up 1.9% from July. There were 214 homes sold in San Francisco last month. The average since 2000 is 214. Year-to-date, home sales are down 18.8%. Condo sales are down 26%.
This document outlines four main themes for the next decade:
1. The devaluation of money versus real assets such as equities, precious metals, and real estate will continue.
2. Equity markets in countries with low debt-to-GDP ratios will outperform those with high debt levels. Emerging markets like BRIC and Next 11 countries will outperform developed markets.
3. High-yielding, stable stocks from monopolistic industries with inelastic demand will remain attractive given low interest rates.
4. Direct and indirect taxes will need to continue rising to fund increased government expenditures on programs like social security and healthcare.
Prices Reach All-Time Highs, Again - Real Estate Report July/AugustAMSI, San Francisco
The Real Estate Report July/August, local market trends San Francisco: "Prices Reach All-Time Highs, Again" by AMSI's Real Estate Broker Robb Fleischer
Educational workshop presented by WealthTrust-Arizona and world-renowned guest Robert K. Smoldt, Chief Administrative Officer Emeritus at Mayo Clinic and Associate Director of Healthcare Delivery & Policy Programs at Arizona State University. Mr. Smoldt has been involved in health care administration for more than 30 years and is currently pursuing U.S. health reform in close partnership with Mayo Clinic’s Emeritus President and CEO.
The document discusses the growing fiscal challenges facing the United States, including rising budget deficits and national debt levels. It notes that while near-term deficits are largely due to temporary factors like the recession and stimulus measures, long-term structural deficits pose a serious threat if left unaddressed. In particular, rising healthcare costs and spending on entitlement programs like Medicare and Medicaid are projected to account for an unsustainable portion of the federal budget going forward. Urgent action is needed to put the country's fiscal policies on a more sustainable path.
Get the Highlights of the Heritage Plan in our quick, easy-to-read overview. Saving the American Dream comes to life in a simple, condensed, graphics-rich format, simply presenting how The Heritage Foundation proposes to reform Medicare, Social Security, Medicaid, taxes, health insurance, and government spending. Published 2011.
Government spending has been steadily increasing over the past 40 years, even when adjusted for inflation and population growth. This rising government spending has caused economic growth and standards of living to slow down, with each successive decade seeing smaller gains. If current trends continue, future government spending will dramatically outpace GDP growth and cause the national debt to reach unsustainable levels, potentially limiting prosperity for future generations. Cutting government spending is necessary to increase economic growth and standards of living going forward.
The Peter G. Peterson's State of the Union's Finances: A Citizen's Guide provides a comprehensive look at America's finances. The guide is broken out in the three sections 1.) Executive Summary 2.) Our Growing Fiscal Challenge 3.) Solutions
09 federal deficits and the national debtNepDevWiki
The national debt is the total amount owed by the federal government to holders of government securities. It has more than tripled since 1980 as a result of accumulating budget deficits. Approximately 17% of the debt is held by foreign entities, representing a burden as it transfers purchasing power overseas. Crowding out occurs when government borrowing to finance deficits causes interest rates to rise, reducing private sector consumption and investment.
The document discusses the growing fiscal challenges facing the United States government at the federal, state, and local levels. It notes that mandatory spending programs like Social Security, Medicare, and Medicaid are taking up an increasing share of the federal budget. It also highlights that total government debt in the US is higher than some financially troubled European countries. The document concludes by outlining steps that could be taken to address these fiscal issues, including entitlement and tax reforms, reducing healthcare costs, and reforming state and local pension systems.
The document summarizes recent trends in the US bond and stock markets, and discusses their implications. It notes the large and growing US budget deficits and debt levels, which are projected to exceed 100% of GDP. It also discusses concerns around failed government bond auctions, China reducing its Treasury holdings, and potential problems in the US housing market that could lead to another taxpayer bailout.
Published: 1/2014
Any recollection of the performance of the Latin American economies during the so-called "Lost Decade" of the 1980s should suffice to convince us how much the region has progressed over the last two decades. Particularly during the last ten years the region has enjoyed, for the most part, financial and price stability, reasonable economic growth, a substantial reduction in poverty rates, and improvements in income distribution.
As this report makes clear, however, it would be a terrible mistake for Latin American governments and societies to be complacent about the challenges in front of them. The report provides an excellent description of the challenges that will have to be overcome, but also rightly identifies the significant strengths that the Latin American economies already have.
- Download Latin America: The Long Road (PDF): http://bit.ly/1j8jdcL
- Order the print version of GLatin America: The Long Road: http://bit.ly/1e2QSxR
Visit the Credit Suisse Research Institute website: http://bit.ly/18Cxa0p
Agcapita is Canada's only RRSP and TFSA eligible farmland fund and is part of a family of funds with almost $100 million in assets under management. Agcapita believes farmland is a safe investment, that supply is shrinking and that unprecedented demand for "food, feed and fuel" will continue to move crop prices higher over the long-term. Agcapita created the Farmland Investment Partnership to allow investors to add professionally managed farmland to their portfolios. Agcapita publishes a monthly agriculture briefing.
The document summarizes trends in government spending and GDP growth in the United States over the past 60 years. It finds that while GDP per capita has steadily increased, the rate of growth has declined each decade. In contrast, government spending per capita has steadily risen over the past 40 years, even after adjusting for inflation and population growth. The document argues that rising government spending is slowing economic growth and that spending needs to be cut in order to increase prosperity and ensure future generations are wealthier.
Minsky held that government spending and deficits were important tools for achieving full employment and price stability. However, in later writings he expressed concern that Reagan-era policies had undermined the tax base, led to large budget deficits focused on non-productive spending, and increased foreign holdings of U.S. debt. This made the economy dependent on continued deficit spending and vulnerable to a loss of confidence in the dollar or high inflation if deficits continued unchecked. Minsky still saw deficits as useful for stabilization, but argued the tax and spending regime needed reform to balance the budget under reasonable economic conditions.
This document provides an update from an investment firm. It discusses ongoing global monetary inflation efforts and zero interest rate policies. It emphasizes the importance of value investing using Austrian economic principles. It warns that current government spending and monetary policies are unsustainable and will lead to inflation. It also highlights several troubling trends, including high government debt levels, commercial and residential real estate problems, and the large shadow inventory of homes that may be foreclosed.
The document discusses trends in the global economy and financial markets from an Austrian economic perspective. It argues that unsustainable government spending and monetary policies will lead to inflation and future crises. Charts show rising government spending compared to median income, projections of future oil supply and demand, and the growing purchasing power of emerging economies. The author believes investors should focus on capital preservation in this uncertain environment.
HPS The Path Forward - Political SolutonsHPSInsight
This document discusses the political challenges facing efforts to address the US economy and long-term deficits. It finds that Democrats will not support major entitlement reforms without tax increases on the rich. Republicans view higher taxes as a slippery slope that will undermine the economy. The document proposes that successful negotiations must start by agreeing on a long-term tax revenue goal, separate from how that revenue is raised and spent, to address each party's concerns and narrow policy choices on entitlements.
The document provides a macroeconomic update and discusses several topics:
1) Demographics are an important factor in economic growth, and western countries face challenges from aging populations while emerging economies like China have younger populations.
2) Up to 40% of US corporate profits come from the finance sector, disproportionately benefiting from monetary policies.
3) US policies have the effect of exporting inflation to trading partners through currency devaluations.
4) Government deficits and debt are growing much faster than tax receipts in many developed nations, risking unsustainable trajectories.
The document provides an update from Agcapita on various economic issues in April 2010. It discusses the large fiscal deficits governments have incurred to deal with the financial crisis and how this has made governments insolvent. It argues that to finance deficits, governments will likely resort to inflation. It also notes Americans are underestimating how much they need saved for retirement and that demographic trends may make it difficult for governments to fund programs like social security and Medicare. Overall the update discusses rising government debt levels, the risk of higher inflation, and challenges with funding entitlement programs.
WORLD TOWARDS A NEW IRREVERSIBLE GLOBAL ECONOMIC AND FINANCIAL CRISIS AND BRA...Faga1939
This article aims to demonstrate that the global economic and financial crisis tends to get worse with: 1) the escalation of the global debt that threatens to put the world capitalist system in check in the face of the possibility of the explosion of the public debt bubble in the United States and the China; 2) the drastic downturn of the economy in the United States, China and the European Union, which could enter into recession in 2023; and, 3) the possibility of two giant global banks, Credit Suisse and Deutsche Bank, going bankrupt because they are on the verge of collapse triggering a new global economic and financial crisis similar to the Great Recession of 2008 and the Depression of 1929. This article raises, also, the need for President Lula's government to adopt an economic policy that makes Brazil less dependent on foreign markets in terms of export markets, international capital and foreign technology and that, consequently, prioritizes the development of the internal market.
Federal budget slide show civic club versionAlex Cardenas
This document discusses myths and realities about the US federal budget and deficits. It contends that tax policies rather than spending have mainly driven deficits since 1981. While spending cuts could help, the largest expenditure - wars and the military - is often treated as untouchable. It also argues that solving budget problems requires addressing growing inequality in wealth and political power between the richest 10% and everyone else. Specific myths debunked include claims that Social Security and Medicare contribute to deficits, and that tax cuts for the wealthy encourage job creation. Charts show how spending has changed under Democratic and Republican presidents.
The document discusses the need to make tough choices today to address defense spending and the growing fiscal gap facing the United States. It presents data from organizations like the Government Accountability Office and Congressional Budget Office showing that delaying action will require deeper spending cuts or higher tax increases in the future to close budget shortfalls. Charts show projections of growing public debt levels exceeding those of World War I and the Great Depression if no reforms are made.
The document summarizes the key points of consensus from experts and officials at the 2010 Fiscal Summit on America's fiscal challenges and potential solutions. There was general agreement that the US faces unsustainable long-term structural deficits, driven largely by rising healthcare costs, and that immediate action is needed to address the issues. Participants also agreed that reforming the healthcare system and tax code could help address the problems. While solutions will require bipartisan efforts, participants found the issues predictable and solvable if political will exists.
There is broad bipartisan consensus among former top US economic leaders that the country is on an unsustainable long-term fiscal path and faces another economic crisis without quick action. Both Democrats and Republicans agree that the government must address long-term structural deficits through both spending cuts and tax increases within the next 1-2 years. Failure to act will likely result in issues such as rising interest rates and a decline in the standard of living within 10 years.
The document discusses the growing fiscal challenges facing the U.S. government based on selected charts from the Peter G. Peterson Foundation. It finds that absent reforms:
1) The U.S. public debt is projected to exceed 100% of GDP by 2020 and 300% by 2040, far surpassing levels seen since World War II.
2) U.S. debt levels will be over 40% higher than other advanced economies by 2015.
3) Federal budget deficits are projected to more than double between 2030-2040 even after the economy recovers.
4) Withdrawing troops from wars and eliminating Bush tax cuts would only address 15% of the long-term fiscal gap
This document outlines the agenda for an April 28, 2010 conference at the Ronald Reagan Building in Washington DC focused on fiscal challenges and solutions. The all-day event included opening remarks, panels on fiscal issues moderated by journalists, a keynote interview with former President Bill Clinton, and luncheon programs on health care reform and the views of federal reserve chairmen. The conference provided a forum for government officials and policy experts to discuss the country's budget problems and potential reforms.
The document lists the participants of the 2010 Fiscal Summit in order of participation. It includes prominent politicians, economists, journalists, and leaders of organizations focused on fiscal policy, budget, and economics. The summit aimed to discuss the growing national debt and federal budget challenges facing the United States government.
The Peter G. Peterson Foundation convened a bipartisan Fiscal Summit of leaders and experts to discuss the US's rising deficits and debt. Top speakers included President Bill Clinton, the co-chairs of the National Commission on Fiscal Responsibility and Reform, and former Federal Reserve chairs. The Summit highlighted the urgent need to address the long-term structural deficit through bipartisan solutions that balance spending cuts and tax increases to protect social programs and economic stability.
A survey of over 50 top economic officials from the past 8 presidential administrations and Congress found broad bipartisan agreement that:
1) The US is on an unsustainable long-term fiscal path and failure to address structural deficits will likely lead to another economic crisis within 10 years.
2) Both spending cuts and tax increases are needed to solve the country's long-term deficit challenges.
3) The government should begin taking action within the next 1-2 years to address long-term fiscal issues through entitlement reform, overall spending cuts, and tax increases.
The document is a survey conducted between April 5-26, 2010 with 58 interviews that asked questions about fiscal issues in the United States. The survey found that:
1) Most Democrats (59%) and Republicans (85%) felt things in the country were headed on the wrong track.
2) Both Democrats (100%) and Republicans (100%) agreed the federal government was on an unsustainable long-term fiscal path.
3) Large majorities of both Democrats (82%) and Republicans (85%) were concerned about America's dependence on foreign lenders, and both parties were almost unanimously concerned about ensuring the solvency of programs like Medicare and Social Security.
The document summarizes Peter Peterson's opening remarks at the 2010 Fiscal Summit. He outlines three goals for the summit: reaching consensus on the magnitude of the fiscal challenge, potential solutions, and how to educate citizens. Peterson expresses concern over unsustainable long-term deficits and stresses the need to address the issue before a crisis occurs to preserve important social programs and America's leadership role in the world.
Pete Peterson welcomed attendees to the 2010 Fiscal Summit and emphasized the urgent need to address America's unsustainable fiscal policies and long-term structural deficits. He highlighted three main goals of the summit: 1) defining the fiscal challenge, 2) outlining solutions, and 3) educating the public. Peterson argued that without reform, interest costs and entitlement programs will consume all revenue within 12 years. He called for a bipartisan approach including both spending cuts and tax increases, and reforms to healthcare, Social Security, and the tax code. Peterson expressed hope that America could overcome this challenge through courage and commitment, as it had overcome greater deficits after World War II.
The speaker thanks participants in the fiscal summit and announces that several foundations will partner to conduct an unprecedented citizen engagement exercise on June 26th in 20 cities to discuss the federal fiscal challenge. Citizens will be provided information on reform options and asked to propose reform packages to achieve long-term fiscal objectives. The results will be valuable to policymakers and others. The speaker emphasizes that bridging partisan divides will be critical to turning ideas into bipartisan policy actions.
The document provides a summary of media coverage from various sources about the 2010 Fiscal Summit which aimed to address the growing US budget deficit and national debt. Articles discuss efforts to find a bipartisan agreement to both cut spending and raise taxes, as well as the need for action on the serious budget issues. Links are also included to video and radio coverage of the summit event.
The survey found:
1) There was unanimous bipartisan agreement among economic leaders that the current US fiscal path is unsustainable and long-term structural deficits threaten economic stability.
2) Majorities from both parties believe the government needs to take action within the next 1-2 years to address fiscal challenges or risk another major economic crisis.
3) Failure to enact deficit reforms could likely lead to rapid spending growth, higher interest rates, and a declining standard of living according to bipartisan majorities.
4) Both Republicans and Democrats agree solutions require both spending cuts and tax increases, with zero believing problems can be solved without spending reductions.
Town Hall Meeting, hosted by Congressman Jim Moran, Alexandria, VA July 28, 2008
Presented by:
David M. Walker, President and CEO, The Peter G. Peterson Foundation and Former Comptroller General of the United States
3. Preamble
June 2010
To the Reader:
This group of charts has been prepared by the research staff of the Peter G. Peterson Foundation in order to
promote public understanding of the nature and magnitude of the fiscal challenges facing the United States
government. The information presented has been compiled from a range of official government and other
reliable sources. The charts present historical, current, and projected information for the U.S. as well as
comparative statistics for other industrialized nations.
We believe that the country’s structural deficits and longer-term fiscal challenges will not be addressed until the
American people understand the problem. In our view, these slides make a clear and compelling case that the
United States government is on an imprudent and unsustainable longer-term fiscal path. Tough decisions are
required involving a re-prioritization of defense and other spending, social insurance program reforms, tax
reform that will raise more revenues, and statutory budget controls to impose fiscal restraint. The sooner we
make these choices the better. With continued delay the magnitude of the changes needed to put our federal
financial house in order will grow and the risk of a serious crisis of confidence among our foreign lenders will
increase. Such a crisis of confidence would have serious adverse consequences both in the United States and
around the world.
We hope that these charts will help the reader better understand the challenges that we face along with
the urgent need for timely action. The Foundation’s research team—Tim Roeper, Kristin Francoz, Purnima
Anand, under the direction of Ann Futrell and supervision of Susan Tanaka, prepared this chart package.
Alexandra Voss also contributed to the effort.
Please join us in our efforts to find sensible and sustainable solutions that will help keep America strong and the
American Dream alive for future generations.
Sincerely,
Peter G. Peterson David M. Walker
Chairman President and CEO
1
4. Chart 1:
Debt held by the public:1800-2010 (percentage of GDP)
For the first 200 years of its history, the United States ran large budget deficits
and accumulated debt burdens only during times of war or economic recession.
During this period, the U.S. also took steps to be fiscally disciplined and to grow
its economy in order to minimize the level of debt held by the public as a
percentage of the overall economy, also known as the ratio of public debt-to-
GDP.
The only time the U.S. has experienced a public debt-to-GDP ratio of over 60
percent was during World War II. The federal government’s public debt-to-GDP
ratio is about 60 percent now, and it is expected to rise substantially in the
future absent meaningful policy reforms. The 1992 Maastricht Treaty on
European Union stipulated that member states maintain a central government
debt level below 60 percent of GDP; for this reason, 60 percent is an
internationally accepted fiscal standard.
2
5. Since 1800, U.S. debt held by the public has exceeded 60 percent of
GDP (the maximum debt ceiling used by the European Monetary
Union) only during World War II
120
WWII
100
Percentage of GDP
80
TARP
Recession
60
Great
Depression
40 Civil War WWI
20
0
1800 1830 1860 1890 1920 1950 1980 2010
SOURCES: Data from the Congressional Budget Office, Long‐Term Budget Outlook (June 2009); the Government Accountability Office, The
Federal Government’s Long‐Term Fiscal Outlook: January 2010 Update, alternaOve simulaOon using Congressional Budget Office
assumpOons. Compiled by PGPF.
NOTE: Debt held by the public refers to all federal debt held by individuals, corporaOons, state or local governments, and foreign enOOes.
Chart 1 3
6. Chart 2:
Debt held by the public: projections through 2080 under current
policies (percentage of GDP)
Debt held by the public, measured as a percentage of GDP, is expected to
skyrocket in the future based on the government's current policy path. Absent
any changes to this path, the public debt-to-GDP ratio is projected to rise to 110
percent in 2020 (well above the European Union standard of 60 percent), and to
303 percent in 2040.
4
7. Future U.S. debt held by the public is projected to soar if current
policies remain unchanged
1,400 1,197%
Actual Projected
1,200
Percentage of GDP
1,000 896%
800 652%
600
457%
60 %
400 of GDP 303%
187%
200 110%
0
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
SOURCES: Data from the Congressional Budget Office, Long‐Term Budget Outlook (June 2009); the Government Accountability Office, The
Federal Government’s Long‐Term Fiscal Outlook: January 2010 Update, alternaOve simulaOon using Congressional Budget Office
assumpOons. Compiled by PGPF.
NOTE: Debt held by the public refers to all federal debt held by individuals, corporaOons, state or local governments, and foreign enOOes.
Chart 2 5
8. Chart 3:
International comparison of total government debt: 2005, 2010,
and 2015 (percentage of GDP)
Five years ago, the United States had a total government debt (which consists
of federal, state, and local debt held by the public) that was 11 percentage
points above the median of all advanced economies. Absent policy reforms, the
United States’ total government debt level is projected to be about 34
percentage points above that median (more than 40 percent higher) within the
next five years.
6
9. Once comparable to that of other advanced economies, the total
government debt of the U.S. is now projected to be more than 40
percent higher than the median for advanced economies in 2015
2005 2010 2015
120 110%
Percentage of GDP
100 85%
76%
80 67%
62%
60 51%
39% 39%
40
18% 18%
20
0
Emerging India China Advanced United States
Economies Economies
SOURCE: Data from the InternaOonal Monetary Fund, IMF Fiscal Monitor Series: NavigaGng the Fiscal Challenges Ahead (May 14, 2010). Compiled by PGPF.
NOTES: Economists such as Victor Shih from Northwestern University have argued that the accounOng of debt by internaOonal agencies such as IMF understates the
Chinese debt numbers because they fail to include the undocumented local government borrowing In addiOon to a low level of debt, China also has an astonishingly
high net naOonal savings rate. In 2008 it was 43.8 percent of gross naOonal income (GNI); for U.S. in that year, it was ‐1.4 percent of GNI.
Total government debt (also referred to as general government gross debt) measures all liabiliOes that require payment or payments of interest and/or principal by
the debtor to the creditor at a date in the future. This includes central, state, and local government debt. All country group averages are medians.
Chart 3 7
10. Chart 4:
U.S. comparison to European countries of total government
debt: 2010 and 2015 (percentage of GDP)
The ratio of total government debt-to-GDP is higher in the United States than in
many financially troubled countries in Europe. Absent a change in course, the
United States is expected to approach Italy’s current level of total government
debt-to-GDP within five years.
8
11. Total government debt in the U.S is higher than some of the most
financially troubled countries in Europe
2010 2015
160
140
Percentage of GDP
120
100
80
60
40
20
0
Greece Italy Portugal Ireland Spain United United
Kingdom States
SOURCE: Data from the InternaOonal Monetary Fund, IMF Fiscal Monitor Series: NavigaGng the Fiscal Challenges Ahead (May 14, 2010). Compiled by
PGPF.
NOTE: Both 2010 and 2015 figures are esOmates. Total government debt (also referred to as general government gross debt) measures all liabiliOes
that require payment or payments of interest and/or principal by the debtor to the creditor at a date in the future. This includes central, state, and
local government debt.
Chart 4 9
12. Chart 5:
Historical and projected deficits: 1990-2080 (percentage of
GDP)
Based on the federal government's current policy path, deficits are projected to
more than double as a percentage of the economy between 2030 and 2040.
While short-term deficits are very high due to revenue declines and spending
increases, the true threat to our nation's fiscal future can be found in the longer-
term structural deficits. These are driven largely by growing health care costs
and an aging population characterized by a declining number of workers relative
to the number of retirees.
The structural deficits are the ones that will persist—the deficits that will remain
even after the economy recovers, unemployment levels improve, the Iraq and
Afghanistan wars are over, and long after the housing and financial crises have
passed.
10
13. Under current policies, federal deficits are projected to more than
double as a percentage of GDP, even after the economy recovers
80
Deficits (+) and Surpluses (‐)
Actual Projected
70 57%
as a Percentage of GDP
60 44%
50
33%
40
24% 74%
30
16%
20 10%
10
0
‐10
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
SOURCES: Data the Office of Management and Budget, A New Era of Responsibility: The 2011 Budget, Historical Tables (February 2010);
and the Government Accountability Office, The Federal Government’s Long‐Term Fiscal Outlook: January 2010 Update, alternaOve
simulaOon using Congressional Budget Office assumpOons. Compiled by PGPF.
NOTE: The current policy esOmates from GAO assume extension of the 2001 and 2003 tax cuts, alternaOve minimum tax (AMT)
exempOon amount is indexed to inflaOon, Medicare physician payments are not reduced, and discreOonary spending grows with GDP.
Chart 5 11
14. Chart 6:
Budgetary impact from policy options (percentage of GDP)
Despite public perceptions to the contrary, eliminating all of the tax cuts that
were enacted in 2001 and 2003 during the Bush administration, on top of
withdrawing all of our troops from Iraq and Afghanistan, would eliminate only 15
percent of our projected fiscal imbalance in 2080. There is currently a bipartisan
consensus to extend many of the Bush tax cuts for middle-income families;
extending the cuts would make the policy remedies on both the spending and
tax sides of the federal ledger even more difficult.
12
15. Addressing the projected fiscal gap will require a review of all
government spending programs and revenue; withdrawal of troops
from Iraq and Afghanistan and eliminating the Bush tax cuts would
only have a minimal impact on the long-term fiscal gap
40 Primary Spending
Historical Projected (excluding net interest)
0.7% GDP
35 Difference
in 2080
30
Percentage of GDP
25
20 1.8% GDP
Difference
15 Revenues in 2080
10 Primary Spending
Primary spending, assuming withdrawal of troops from Iraq and Afghanistan
5 Revenues
Revenues, assuming 2001 and 2003 tax cuts expire on schedule
0
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
SOURCE: Data from the Office of Management and Budget, A New Era of Responsibility: The 2011 Budget, Historical Tables (February
2010); the Government Accountability Office, The Federal Government’s Long‐Term Fiscal Outlook: January 2010 Update, alternaOve
simulaOon based on Congressional Budget Office assumpOons; and the Congressional Budget Office, Budget Outlook (January 2010).
Compiled by PGPF.
Chart 6 13
16. Chart 7:
The projected widening gap between spending and revenues
(percentage of GDP)
Under current policies, projected spending will substantially exceed revenues,
which have historically averaged about 18 percent of GDP. Borrowing the
difference would in turn result in rapid escalation of federal interest costs. In
fact, under this scenario, interest would represent by far the fastest growing cost
in the budget.
Current projections assume future interest rates will be close to the average
historical level of 5 percent, but, realistically, the federal government will not be
able to borrow the amounts projected without interest rates rising even more.
Higher interest rates would only serve to worsen our structural deficit problem.
14
17. The cumulative deficits would cause a significant interest burden: net interest
is projected to cause more than three-fourths of the budget gap in 2080
(even assuming a baseline interest rate of only 5.0 percent)
100
Historical Projected
90
Total Spending
80
Percentage of GDP
70 57% of
GDP
60 74% of
GDP
50 Net Interest
40
30 Primary Spending
(excluding net interest)
20
Revenues
10
0
1960 1980 2000 2020 2040 2060 2080
SOURCES: Data from the Office of Management and Budget, A New Era of Responsibility: The 2011 Budget, Historical Tables (February
2010); and the Government Accountability Office, The Federal Government’s Long‐Term Fiscal Outlook: January 2010 Update, alternaOve
simulaOon based on Congressional Budget Office assumpOons. Compiled by PGPF.
Chart 7 15
18. Chart 8:
Waiting to stabilize the national debt by using spending cuts or
tax increases alone would lead to more and more difficult
choices in the future
Delaying needed spending cuts and revenue increases will increase the size of
the adjustments that are projected to be necessary over time. For example, the
fiscal gap today could be closed with either a 36 percent cut in spending or a 50
percent increase in revenues in 2010. Waiting to act until 2030 would require
either a 48 percent spending cut or a 64 percent increase in revenues.
Therefore, acting sooner rather than later would help to avoid a fiscal crisis and
reduce the magnitude of changes needed. From a practical standpoint, closing
the fiscal gap will require a combination of spending cuts and revenue
increases.
16
19. If we wait to stabilize our national debt by using spending cuts or
revenue increases alone, we would face more and more difficult
choices in the future
40 Percent revenue increases required
to stabilize the debt level
Percent spending cuts required
35 to stabilize the debt level 64%
30
Percentage of GDP
48% 50%
25 36 %
20
15
10
5
0
2010 2030 2010 2030
SOURCE: Data from the Congressional Budget Office, Long‐Term Budget Outlook (June 2009). Compiled by PGPF.
NOTE: Spending refers to non‐interest spending. The amounts shown are the non‐interest spending cuts or revenue increases from the
projected levels required to close the projected fiscal gap by using only one or the other, not both. The fiscal gap is a term that refers to
the reducOon in spending or increase in revenues required to keep debt‐to‐GDP no higher than the 2010 level in 2085. By waiOng unOl
2030 to close the fiscal gap, then, spending would have to go from 24.8 to 13 percent of GDP, or revenue would have to rise from 19 to
31.2 percent of GDP.
Chart 8 17
20. Chart 9:
Projected growth in spending by category compared with
projected revenues through 2046 (percentage of GDP)
Assuming historical levels of federal revenues, no reforms to Social Security,
Medicare, or Medicaid, and no reduction in the relative size of other federal
spending, federal deficits are projected to escalate dramatically in the future.
The fastest growing item in the federal budget would be interest on the debt
followed by Medicare and Medicaid.
18
21. Without reforms, by 2022, future revenues will only cover Social
Security, Medicare, Medicaid, and interest on the debt. By 2046,
revenues won’t even cover interest costs.
50
DiscreJonary
45 Spending
9%
40
Revenue 2% Other Mandatory
Percentage of GDP
35
30 9% Medicare
Medicaid
25 9%
20 6%
9% 2% Social Security
15 7%
4% Net Interest
10 5% 5% 9%
5 5% 1% 6%
0
2010 2022 2046
SOURCE: Data from the Government Accountability Office The Federal Government’s Long‐Term Fiscal Outlook: January 2010 Update,
alternaOve simulaOon using Congressional Budget Office assumpOons. Compiled by PGPF.
NOTE: Baseline interest rate is assumed to be 5.0 percent.
Chart 9 19
22. Chart 10:
Growth in U.S. dependency on foreign lenders to finance the
public debt
During the past 40 years, the U.S. has gone from being the world's greatest
creditor nation to the world's largest debtor nation. In addition, due to low
domestic savings rates, the U.S. has become increasingly reliant on foreign
lenders to finance our nation's debt. The share of foreign-held debt has gone
from close to 0 percent at the end of World War II and only 5 percent in 1970, to
almost 50 percent today. This reliance on foreign lenders undermines our
national sovereignty, and is not in our nation's long-term economic, foreign
policy, or national security interests.
20
23. U.S. dependency on foreign lenders to finance the public debt has
risen sharply
1970 1990 2010 est.
Total Debt: $283 Billion Total Debt: $2,412 Billion Total Debt: $8,387 Billion
Foreign Holdings: Foreign Holdings:
Foreign Holdings: 19% 47%
5%
SOURCES: Data for 1970 and 1990 from the Office of Management and Budget, A New Era of Responsibility: The 2011 Budget, AnalyOcal
PerspecOves (February 2010). Data for 2010 from Department of Treasury, Daily Treasury Statement (February 26, 2010) and Treasury
InternaOonal Capital ReporOng System, April 15, 2010 release. Compiled by PGPF.
NOTE: 2010 data reflects debt levels through February 2010.
Chart 10 21
24. Chart 11:
Historical and projected net amount of U.S. debt owed to
foreign lenders (percentage of GDP)
The Peterson Institute for International Economics (PIIE) projects that the U.S.
international payment imbalances and aggregate foreign debt are unsustainable
under the baseline projections of the nonpartisan Congressional Budget Office.
The projected imbalances are even worse based on more realistic assumptions.
PIIE also suggests that the projected path is so unsustainable and dangerous
that a crisis is virtually certain absent meaningful reforms.
22
25. If current trends continue, the net amount of debt owed by
Americans to foreign lenders would be staggering
160
Actual Projected
140 133%
120 “The projected path is so
Percentage of GDP
Base ProjecOon* unsustainable and
100 dangerous that a crisis
Fiscal Erosion Scenario*
80 64% would virtually be certain to
60 Historical Data occur long before the U.S.
reached such a painful
40 point of reckoning.”
20
William Cline,
0
Peterson Institute for
‐20 International Economics
‐40
1980 1990 2000 2010 2020 2030
*Scenarios developed by William Cline of the Peterson InsOtute for InternaOonal Economics.
SOURCE: Bureau of Economic Analysis and William Cline, “Long‐term Fiscal Imbalances, U.S.
External LiabiliOes, and Future Living Standards,” in C. Fred Bergsten, ed., The Long‐term
InternaGonal Economic PosiGon of the United States, Peterson InsOtute for InternaOonal
Economics (2009). Compiled by PGPF.
NOTE: Net external debt is U.S. private and public liabiliOes held by foreigners net of foreign assets
held by the U.S. A posiOve number means external liabiliOes are greater than external assets.
Chart 11 23
26. Chart 12:
Long-term international comparison of total government debt:
1990-2040 (percentage of GDP)
Current interest rates are low because global savings are sufficient to meet
global lending requirements. However, the projected growth in total government
debt is not unique to the United States. Total government debt as a percentage
of GDP is projected to rise to unprecedented levels in many advanced
economies. The implied future drain on resources would put serious pressure
on global capital markets, could cause interest rates to rise dramatically, and
impose severe adverse economic effects around the world.
24
27. In the longer term, rising total government debt will be a global
problem
600
Historical ProjecOon United Kingdom
500
United States
Percentage of GDP
Greece
400
France
300 Ireland
Germany
200 Portugal
Italy
100
0
1990 2000 2010 2020 2030 2040
SOURCE: Data from Stephen G. Cecchel, M S Mohanty and Fabrizio Zampolli, Bank for InternaOonal Seolements, Working Papers No
300, “The Future of Public Debt: Prospects and ImplicaOons” (March 26, 2010). Compiled by PGPF.
NOTE: Total government debt (also referred to as general government gross debt)measures all liabiliOes that require payment or
payments of interest and/or principal by the debtor to the creditor at a date in the future. This includes central, state, and local
government debt.
Chart 12 25
28. Chart 13:
The U.S. government’s explicit liabilities, commitments, and unfunded
social insurance promises
The total liabilities, unfunded Social Security and Medicare promises, and
commitments and contingencies of the federal government more than tripled
between 2000 and 2009. They added up to about $62 trillion as of September
30, 2009, which is over $200,000 per American and over $500,000 per
household. Medicare alone accounts for over $38 trillion of the unfunded
promises. These totals exclude the unfunded liabilities of Fannie Mae and
Freddie Mac.
26
29. The following table illustrates the U.S. government’s explicit liabilities,
commitments, and unfunded social insurance promises
In Trillions of Dollars
2000 2009
Explicit liabilities $6.9 $14.1
Publicly held debt 3.4 7.6
Military civilian pensions retiree health 2.8 5.3
Other Major Fiscal Exposures 0.7 1.3
Commitments contingencies 0.5 2.0
E.g., Pension Benefit Guaranty Corporation, undelivered orders
Social insurance promises 13.0 45.8
Future Social Security benefits 3.8 7.7
Future Medicare benefits 9.2 38.2
Future Medicare Part A benefits 2.7 13.8
Future Medicare Part B benefits 6.5 17.2
Future Medicare Part D benefits -- 7.2
Total $20.4 $61.9
SOURCE: Data from the Department of Treasury, 2009 Financial Report of the United States Government. Compiled by PGPF.
NOTE: Numbers may not add due to rounding. Estimates for Medicare and Social Security benefits are from the Social Security and Medicare Trustees
reports, which are as of January 1, 2009 and show social insurance promises for the next 75 years. Future liabilities are discounted to present value
based on a real interest rate of 2.9 percent and CPI growth of 2.8 percent. The totals do not include liabilities on the balance sheets of Fannie Mae,
Freddie Mac, and the Federal Reserve. Assets of the U.S. government not included. Does not include civil service and military retirement funds,
unemployment insurance, and debt held by other government accounts outside of Social Security and Medicare.
Chart 13 27
30. Chart 14:
Federal spending: 1900-2080 (percentage of GDP)
Absent policy reforms, total federal spending is projected to soar, growing from
its historical average of about 20 percent of the overall economy to 42 percent
in 2040. This spending and the resulting deficit path it implies are clearly
imprudent and unsustainable, particularly given that revenues are projected to
be about 18 percent of GDP.
28
31. Federal spending is projected to soar far above its 50-year average of 20.5
percent of GDP if current policies remain unchanged
100
Historical Projected
90
80
Percentage of GDP
70 62%
60
50 42% 2080
40 92% of
28 % GDP
30
20
10
0
1900 1920 1940 1960 1980 2000 2020 2040 2060 2080
SOURCES: Data from the Historical StaGsGcs of the United States, Millennial EdiOon Online (Cambridge University Press, 2006), the
Office of Management and Budget, A New Era of Responsibility: The 2011 Budget, Historical Tables (February 2010), and the
Government Accountability Office, The Federal Government’s Long‐Term Fiscal Outlook, January 2010 Update, alternaOve simulaOon
using Congressional Budget Office assumpOons. Compiled by PGPF.
Chart 14 29
32. Chart 15:
Composition of federal spending: 1970, 2010 (est.), and 2040 (est.)
Total federal spending net of inflation has grown almost 300 percent since 1970.
It is expected to grow by another 250 percent between now and 2040. At the
same time, annually appropriated programs such as education, transportation
and law enforcement (discretionary spending), which includes all of the
expressly enumerated responsibilities accorded to the federal government
under the Constitution, has shrunk from 62 percent of the federal budget in
1970 to 38 percent today, and is projected to decline further yet, to 18 percent in
2040. Mandatory programs, such as Medicare and Social Security,
automatically grow each year and do not require annual legislative action for
funding.
30
33. Mandatory programs and interest costs are taking over more and
more of the federal budget, crowding out important discretionary
programs
Total Total Total
Mandatory Mandatory Mandatory
Net Interest Net Interest
38% 62% 5%
82%
7%
DiscreJonary
18%
Mandatory Net Interest
Programs DiscreJonary
Mandatory 35%
31% DiscreJonary 38%
62% Programs
Mandatory
57%
Programs
47%
Total Spending 1970: Total Spending 2010: Total Spending 2040:
$900 Billion $3.5 Trillion (est.) $12.3 Trillion (est.)
SOURCES: Data derived from the Office of Management and Budget, A New Era of Responsibility: The 2011 Budget, Historical Tables (February 2010);
and the Government Accountability Office, The Federal Government’s Long‐Term Fiscal Outlook: January 2010 Update, alternaOve simulaOon using
Congressional Budget Office assumpOons. Calculated by PGPF.
Notes: Data are in constant 2009 dollars. Mandatory programs include Social Security, Medicare, Medicaid, and other enOtlement programs.
Chart 15
31
34. Chart 16:
International comparison of countries with highest military
expenditures in 2008
The United States spent more on defense in 2008 than did the countries with
the next 14 highest defense budgets combined. This is due in large part to the
U.S. assuming a greater role in global security while many other major nations
have cut their defense budgets. Whether or not the U.S. can or should afford to
continue to bear a disproportionate responsibility for global security is a major
policy issue.
32
35. The U.S. spent more on defense in 2008 than did the countries with
the next 14 highest defense budgets combined
700
$581 Billion Australia $607 Billion
600
Spain
Canada
500
In Billions of Dollars
Brazil
India
Saudi Arabia South Korea
400 Italy United
Japan States
300 Germany
Russia
200 United Kingdom
France
100
China
0
SOURCE: Data from Stockholm InternaOonal Peace Research InsOtute, 15 Major Spender Countries in 2008. Compiled by PGPF.
Chart 16 33
36. Chart 17:
Historical spending growth by major category: 1950-2010
(percentage of GDP)
Since 1950, the federal budget has changed from being dominated by defense
spending to being dominated by social insurance program spending (e.g.,
Medicare, Medicaid, and Social Security). During the past 45 years, the relative
decline in defense spending as a percentage of the economy has been more
than offset by a rise in spending on social insurance programs.
34
37. Growth in Social Security, Medicare, and Medicaid have more than
offset declines in defense since the late 1960s
30
25
Percentage of GDP
20 Net Interest
15 All Other Programs
10 Medicare Medicaid
Social Security
5
Defense
0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
SOURCE: Data from the Office of Management and Budget, A New Era of Responsibility: The 2011 Budget, Historical Tables (February
2010). Compiled by PGPF.
Chart 17
35
38. Chart 18:
Projected growth in Medicare, Medicaid, and Social Security:
2010-2080 (percentage of GDP)
Absent reforms, Social Security, Medicare, and Medicaid are projected to more
than double as a percentage of the U.S. economy within the next 50 years.
Medicare and Medicaid alone are expected to triple, rising from 5 percent of
GDP in 2010 to about 15 percent by 2060, whereas Social Security is only
expected to rise from about 5 percent to 6 percent of GDP during the same
period. The growth in the Medicare and Medicaid programs therefore
represents the dominant challenge to the federal government’s fiscal future.
36
39. Social Security, Medicare, and Medicaid, the three largest entitlement
programs, are projected to more than double as a percentage of
GDP under current policies
30%
25%
4 %
Percentage of GDP
of GDP
20%
Medicaid
15% 14% 24 %
2% of GDP of GDP
Medicare of
10% GDP
3% of GDP
5% 6%
Social Security of GDP
5% of GDP
0%
2010 2020 2030 2040 2050 2060 2070 2080
Fiscal Year
SOURCE: Data from the Government Accountability Office, The Federal Government’s Long‐Term Fiscal Outlook: January 2010 Update,
alternaOve simulaOon using Congressional Budget Office AssumpOons. Compiled by PGPF.
Chart 18
37
40. Chart 19:
Contributing factors in projected growth for Medicare, Medicaid, and
Social Security: 2010-2080 (percentage of GDP)
The aging of the U.S. population dominates the growth in projected social
insurance program spending (i.e., Medicare, Medicaid, and Social Security) until
around 2050. After that point, the growth in health care costs will take over as
the single largest driver of social insurance program spending.
38
41. Aging drives most of the projected cost growth in Social Security, Medicare,
and Medicaid until 2054. After that year, health care costs takes over as the
leading driver of spending growth.
25
Social Security, Medicare and Medicaid
2054
20 8 %
Effect of Excess
of GDP
as Percentage of GDP
Health Care Cost
4.8% Growth
15
6%
Effect of Aging 4.8% of GDP
10
In the Absence of
5 Aging and Excess
9%
Health Care Cost 8.9%
Growth of GDP
0
2010 2020 2030 2040 2050 2060 2070 2080
Fiscal Year
SOURCE: Data from the Congressional Budget Office, The Long‐Term Budget Outlook (June 2009). Compiled by PGPF.
NOTE: “Excess health care cost growth” is the amount growth in age‐adjusted health care costs per person exceeds the growth in per
capita GDP.
Chart 19
39
42. Chart 20:
Projected Social Security trust fund cash flows: 1970-2080
(percentage of GDP)
The Social Security program ran annual cash surpluses from 1984 through
2009. These surpluses reduced the deficits and public financing needs of the
federal government. They were spent on other government operations in all but
the year 2000 and replaced with non-marketable federal government bonds.
A March 2010 report from the Congressional Budget Office projected that the
Social Security program would run cash flow deficits through 2013. In less than
10 years, Social Security is projected to run permanent and growing cash
deficits—growing to $342 billion in constant 2009 dollars by 2040, and even
more beyond. These cash flow deficits will only add to the federal government's
fiscal challenge.
40
43. In the future, persistent cash deficits are projected for Social Security
2000 Social Security Surplus
1.5
0.9 % of GDP ($114 Billion*)
Social Security Surpluses /Deficits In Percent of GDP
1 2040 Social Security Deficit
1.3 % of GDP ($342 Billion*)
Total Cash Deficit
0.5 2010‐2080: 1.05% of
GDP
0
2080 Deficit
‐0.5 1.4% of
GDP
($700
‐1 Billion*)
‐1.5
Actual Projected
‐2
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
SOURCE: Data from the Social Security AdministraOon, Provisions AffecGng Payroll Tax Rates (2009). Compiled by PGPF.
NOTE: CBO projecOons show negaOve cash deficits in 2010 and 2011. Excludes interest earnings.
* In 2009 Dollars.
Chart 20 41
44. Chart 21:
Composition of revenues: 2010
The federal government raises revenues in several different ways. Individual
income and payroll taxes combined are expected to provide about 83 percent of
total federal government revenues in 2010. Corporate income taxes are
expected to provide about 7 percent, and the other 9 percent will come from a
variety of other sources.
42
45. Individual income and payroll taxes comprise most of federal receipts
2010: Total Revenues
$2,177 Billion
Corporate Income
Taxes Excise
7% 3%
Payroll Taxes 40%
Estate and Gic 1%
Other Customs DuJes 1%
9%
Miscellaneous
Individual Income 4%
Taxes
43%
SOURCE: Data from the Congressional Budget Office, Preliminary Analysis of the President’s Budget (March 2010). Compiled by PGPF.
Chart 21 43
46. Chart 22:
Top 5 largest tax expenditures
Tax preferences are referred to as “tax expenditures”. They are not subject to a
budget, periodic review, nor reevaluation. This gives them a clear advantage
when policymakers set budget priorities. The five largest individual tax
expenditures (e.g., deductions, exemptions, credits, and exclusions) are
expected to result in about $573 billion foregone federal revenues in 2010. Total
“tax expenditures” are estimated to be over $1 trillion.
The largest individual tax expenditure is the exclusion of employer-provided
health insurance from individual income and payroll taxes. This tax expenditure
is expected to result in $262 billion in revenue losses. The second and third
largest tax expenditures were for the exclusion of pension contributions and
earnings ($122 billion) and the deduction of mortgage interest in owner-
occupied homes ($92 billion).
44
47. “Tax expenditures,” (deductions, credits, and other special provisions) total
an estimated $1 trillion annually and provide substantial benefits that are not
reflected in the budget
EsJmated Tax
Top 5 Tax Expenditures Revenue Foregone
(FY 2010)
1. Exclusion of employer provided health insurance from taxable
$262 billion
income*
2. Exclusion of pension contribuOons and earnings** $122 billion
3. DeducOon of mortgage interest on a primary residence $92 billion
4. DeducOon of non‐business state and local taxes (includes income,
$53 billion
property, and sales taxes)
5. Capital gains (except agriculture, Omber, iron ore, and coal)*** $45 billion
Total of Top 5 $573 billion
SOURCE: Data from the Office of Management and Budget, A New Era of Responsibility: The 2011 Budget, AnalyOc PerspecOves (February
2010). Compiled by PGPF.
NOTE: Numbers may not add due to rounding.
* Includes the exclusion from payroll taxes and income taxes.
** Includes employer pension plans, employee and employer contribuOons to 401k plans, IRAs, and Keough plans.
*** In addiOon, the biodiesel producer tax credit results in a $200 million reducOon in excise tax receipts in 2010.
Chart 22 45
48. Chart 23:
Relative size of the top 5 tax expenditures to large spending areas
The estimated revenue to be foregone in 2010 that will be attributable to the five
largest individual tax preferences exceeds the amount of federal money that will
be spent on Medicare, and is nearly as large as the amount of federal money
that will be spent on either Social Security or national defense.
46
49. The value of the five largest tax expenditures is sizeable relative to
major spending programs in 2010
800
700
Billions of Dollars
600
500
$700 Billion $690 Billion
400 $528 Billion
300 $573 Billion
200
100
0
Top 5 Tax Medicare Social Security Defense
Expenditures
SOURCE: Data from the Office of Management and Budget, A New Era of Responsibility: The 2011 Budget, AnalyOc PerspecOves (February
2010).
NOTE: Health insurance, reOrement saving, mortgage interest, and state and local taxes are categories of spending that reduce taxable
income.
Chart 23 47
50. Chart 24:
International comparison of statutory corporate tax rates and
corporate revenue (percentage of GDP)
Although the top corporate income tax rate as set in U.S. tax laws is one of the
highest among other advanced economies, the U.S. collects the lowest amount
among them in corporate tax revenue as a percentage of GDP. This is likely
due to a high number of exemptions and corporate tax expenditures available to
multinationals with substantial operations in the United States. In addition, to
avoid high U.S. tax rates, companies may move operations abroad to take
advantage of lower rates. Simplifying the corporate tax system in the future may
increase revenues and improve efficiency.
48
51. Despite its high corporate tax rates, the U.S. raises the least amount
of corporate tax revenue as compared to other advanced countries
Top Statutory Corporate Tax Rate Corporate Tax Revenue as a Percentage of GDP
45 6
Tax Revenue as a Percentage of GDP
Top Statutory Corporate Tax Rate
40
5
35
30 4
25
3
20
15 2
10
1
5
0 0
SOURCE: Data from the Congressional Budget Office Corporate Income Tax Rates: InternaGonal Comparisons (November 2005).
Compiled by PGPF.
Chart 24 49
52. Chart 25:
Share of pre-tax income and total federal taxes by quintile
The top 20 percent of households earn 55 percent of all income, and pay about
69 percent of all federal taxes (income and payroll taxes, estate taxes, excise
taxes, etc.). The top one-half of 1 percent of taxpayers earn 15 percent of total
income and pay about 23 percent of all federal taxes, whereas the bottom 60
percent of taxpayers earn 25 percent of total income while paying only about 14
percent of all federal taxes.
These figures demonstrate the progressive nature of the federal tax system,
since higher income households pay a much greater share of their incomes in
taxes than do lower-income ones. In addition, after tax refunds, over 40 percent
of current individual income tax filers do not pay any income taxes and 13
percent have zero tax liability from income and payroll taxes combined due to
tax credits and exemptions.
50
53. High-income households earn a disproportionate share of pre-tax income
and pay a disproportionate share of total federal taxes
100 Top 0.5%
Top 0.5%
90 (15% )
(23% )
80
55%
70 Top QuinOle
69% $67,400+
60
Percent
Fourth QuinOle
50 $45,200‐$67,399
40
20% Middle QuinOle
30 $30,500‐$45,199
20 13%
17% Second QuinOle
$17,900‐$30,499
10 8% 9% 4%
1% Lowest QuinOle
0 4% Less than $17,900
Share of Total Pre‐Tax Share of Total Federal
Income Taxes
SOURCE: Congressional Budget Office, Historical EffecGve Tax Rates: 1979‐ 2005: AddiGonal Data on Sources of Income and High‐Income
Households (December 2008). Compiled by PGPF.
NOTE: Data for 2005 in 2005 dollars.
Chart 25 51
54. Chart 26:
International comparison of tax burdens
Contrary to popular opinion, total (i.e., federal, state, and local) tax burdens in
the United States are considerably lower than in many other major industrialized
nations. The average total tax burden in the U.S. is 28 percent versus an
average of 36 percent for the 30 member nations of the Organization of
Economic Cooperation and Development (OECD), of which the U.S. is a
member.
52
55. Total tax burdens are lower in the U.S. than many other industrial
countries
60
50
as a Percentage of GDP
Total Tax Revenue
48%
40 43%
36%
30 33%
28%
20
18%
10
0
Sweden France OECD ‐ Total Canada Mexico United
States
SOURCE: Data from OECD StaOsOcs Extract. Compiled by PGPF.
NOTE: Data for each country is as of 2007. OECD is the OrganizaOon of Economic CooperaOon and Development. Total tax revenue
includes federal, state, and local.
Chart 26 53
56. Chart 27:
Federal health expenditures: 1960-2040 (as percentage of GDP)
Health care expenditures in the U.S. have risen rapidly, and, absent meaningful
cost-related reforms, they are expected to double as a percentage of the overall
economy by 2040. Increased health care expenditures crowd out federal
investments in other important areas, including children’s health and education,
basic research, and critical infrastructure. They also serve to limit the ability of
employers who offer health plans to provide additional compensation, such as
wage increases, pension contributions, or other employee benefits.
54
57. Total U.S. health expenditures (both public and private) are projected
to soar to more than one-third of the economy by 2040
40
Actual Projected
35 34 %
30 29 %
Percentage of GDP
25 22 %
20 17 %
15 13 %
12 %
10 8 %
7 %
5 %
5
0
1960 1970 1980 1990 2000 2010 2020 2030 2040
SOURCE: Data from the Congressional Budget Office, The Long‐Term Budget Outlook (June 2009). Compiled by PGPF.
Chart 27 55
58. Chart 28:
International comparison of health care costs per capita (U.S. dollars)
Per person costs of health care in the U.S. are more than double those of many
other major industrialized nations. These higher costs are due to a variety of
factors, including: physician compensation levels, excess hospital capacity,
proliferation of medical technology, variances in procedure approaches, and fee
for service reimbursement approaches.
56
59. Currently, Americans spend about twice as much per capita on
health care than other OECD countries with no appreciable
difference in health outcomes
8,000 $7,290
Per Capita Health Care Costs
7,000
6,000
U.S. Dollars
5,000 $4,417
$3,895
4,000 $3,357 $3,588 $3,601
$3,323
United
$2,992
3,000 $2,581 $2,686
United
2,000
1,000
0
Sweden
Australia
Italy
Switzerland
France
Japan*
Kingdom
Canada
Germany
States
SOURCE: Data from OECD, Health Data 2009 (November 2009). Compiled by PGPF.
NOTE: Per capita health expenditures in 2007, unless otherwise noted. Comparison uses Purchasing Power Parity, which adjusts exchange
rates to assume idenOcal price of goods in different countries.
*Japan data from 2006.
Chart 28 57
60. Chart 29:
Selected U.S. health outcomes ranked against other nations
While the United States spends about twice what other industrialized nations
spend per person on health care, we lag behind in a number of key outcome-
based measures. This is an indication that we are not getting good societal
value for the amount of money spent. It also suggests that our current health
care system is broken and in need of fundamental reform.
58
61. Generally, while the U.S. spends more on health care than other
countries, its health outcomes are no better
Outcome Rank
15% (out of countries reporOng)
29%
Heart Ahacks 34%
64% 9th out of 23
• U.S. = 4 deaths per 100 people in 2005
Life Expectancy at 65
• U.S. = 17.4 years for men (2006) 19th out of 30, men
20.3 years for women (2006) 15th out of 30, women
Infant Mortality
• U.S. = 0.7% deaths per live birth in 2006 28th out of 30
Obesity
• U.S. = 34% over age 15 in 2006 14th out of 14
SOURCE: Data from OECD, Health Data 2009 (November 2009). Compiled by PGPF.
Chart 29 59
62. Chart 30:
Comparison across U.S. states of Medicare costs per person
Medicare spending per beneficiary varies considerably in different regions of the
country. This is due to a combination of several factors: the fee-for-service
payment system that pays for procedures rather than outcomes, the variances
in prevailing medical practices in different parts of the country, and the lack of a
fixed budget for the program as a whole.
60
63. Medicare spending per beneficiary varies substantially across states
14,000
Medicare Spending per Enrollee
$11,697 $11,883 $11,849
12,000 $11,594
$10,002
10,000
8,000 $7,531 $7,754 $7,493
6,000
4,000
2,000
0
Florida Hawaii Iowa Louisiana New New Texas United
Jersey Mexico States
Avg.
SOURCE: Data derived from the Center for Medicare and Medicaid Services, NaGonal Health Expenditures (2008). Calculated by PGPF.
NOTE: Data esOmated for 2009, the most recent available, uses average annual growth rates from 1991‐2004.
Chart 30 61
64. Chart 31:
Portion of Medicare spending that goes toward services in the last
year of life
Almost 30 percent of annual Medicare spending goes toward people in their last
year of life. Some of this spending does not necessarily promote better health
outcomes.
62
65. Almost 3 out of every 10 Medicare dollars is spent for people who
are in the last year of life
Medicare Spending
in the Last Year of
Life*
29%
Other Medicare
Spending**
71%
SOURCE: Data from the Center for Medicare Medicaid Services, Office of the Actuary, Last Year of Life Study. Compiled by PGPF.
NOTE: Data esOmated for 2009, the most recent available. *Decedents. **Survivors.
Chart 31 63
66. Chart 32:
Ratio of covered workers to beneficiaries: 1950-2070
The ratio of workers to Social Security beneficiaries has declined dramatically
since 1950, and it is expected to decline further in the future. There were over
16 workers covered under Social Security for each beneficiary in 1950. That
ratio is now 3 to 1, and it is expected to decline further to roughly 2 to 1 by 2030.
64
67. As the population ages, there will be many fewer covered workers
for each Social Security beneficiary
18 16.5
16
Workers per Beneficiairy
14
12
10
8
6
3.7 3.4
4 3.0
2.2 2.1 2.0
2
0
1950 1970 1990 2010 2030 2050 2070
SOURCE: Data from the Social Security AdministraOon, Trustees Report (2009). Compiled by PGPF.
Chart 32 65
68. Chart 33:
Population 65 and older as a percentage of total population:
1950-2050
Within a decade, the overall U.S. population is projected to resemble the current
demographic profile of Florida. In other words, nearly 1 out of every 5 people
will be age 65 or older, just as Florida is today.
66
69. As the baby boomers retire, the result will be a nation of Floridas. (Currently
almost 1 out of every 5 Florida residents is age 65 or above.)
25
PopulaJon 65 and Over as a Percent of the
21 %
20 % 20 %
20
16 %
Total PopulaJon
15
13 % 12 % 13 %
11 %
10 9 % 10 %
8 %
5
0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
SOURCE: Data from the OECD, Factbook 2009. Compiled by PGPF.
Chart 33 67
70. Chart 34:
Historical and projected longevity of those 65 and older: 1940-2080
Americans are living longer than they used to, and this trend is only expected to
continue into the future. Compared with 65-year-olds in 1940, today’s 65-year
olds live 50 percent longer and people who will be 65 in 2085 are expected to
live 80 percent longer.
68
71. At age 65, people today are expected to live (and collect benefits) an
additional 5.6 years longer than they did in 1940. By 2080, they are
projected to live an additional 10 years longer than in 1940.
Historical Projected
22 years
25
Remaining Years of Life at Age 65
18 years
20
15
10
5
0
1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
SOURCE: Data from the Social Security AdministraOon, Trustees Report (2009). Compiled by PGPF.
Chart 34 69
72. Chart 35:
Variations in life expectancy at birth by socio-economic status
Life expectancy has continued to increase since the last major Social Security
reform was enacted into law in 1983. There has, however, been a difference in
the amount of increase by socio-economic status (which includes different
factors such as education, wealth, occupation, and income)—that is, the life
expectancy of those with a higher socio-economic status has grown faster than
the life expectancy of those with a lower one. This disparity should be
considered in connection with any social insurance reform initiatives.
70
73. Over the last 2 decades, improvements in life expectancy at birth
have been greater for those with higher socio-economic status
79.2
80.0 (+ 3.4 years)
Low Socio‐economic Status
High Socio‐economic Status
78.0
Life Expectancy at Birth
75.8 74.7
76.0
(+1.7 years)
74.0
73.0
72.0
70.0
1980‐82 1998‐2000
SOURCE: Data from Gopal K. Singh and Mohammad Siahpush, Widening Socioeconomic Inequalities in U.S. Life
Expectancy, 1980–2000, International Journal of Epidemiology, vol. 35, no. 4 (2006), pp. 969–979. Compiled by PGPF.
NOTE: The deprivation index considers 11 different factors, among them education, wealth, occupation, and income.
Chart 35 71
74. Chart 36:
Poverty levels by age groups: 1970-2008 (percentage of age group)
Since 1970, poverty rates among Americans aged 65 years or older have
declined as a result of benefits received from Social Security. While Medicare is
not included in the calculation of poverty rates, the benefits provided from the
program have reduced the amount of resources that seniors might have
otherwise had to contribute to health care. During this 40-year period, seniors
moved from having the highest poverty rate to the lowest. Children now
represent the group with the highest poverty rate, while the poverty levels of
those under 65 have steadily increased.
72
75. Poverty levels for the young population have remained higher than
other age groups and have been on the rise, while the poverty levels
for the elderly have declined
25
Under 18 Years
20
Percent in Poverty
15 65 Years and Older
10
18‐64 Years
5
0
1970 1975 1980 1985 1990 1995 2000 2005 2008
SOURCE: Data from the U.S. Census Bureau, poverty staOsOcs. Compiled by PGPF.
Chart 36 73
76. Chart 37:
International comparison of households savings (percentage of
disposable income)
Over the last decade, the United States has had one of the lowest average
household savings rates of the major industrialized countries. It is only one-
tenth of China's and a third of Italy’s. If domestic savings are insufficient, the
country must rely on foreign lenders and investors for its borrowing needs, and
the returns on those investments will flow abroad instead of staying here at
home.
74