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 national debt and deficits. It notes that the US national debt was $5.6 trillion in 1999 and $12.8 trillion in 2010. It explains that debt is the accumulation of yearly deficits and surpluses, with deficits added to the debt and surpluses reducing it. The document also discusses "pork barrel" spending projects by Congress and debates around taxation and proportional versus progressive tax systems.
STATEN DIE ECONOMIE ZOUDEN LATEN VALLEN, ASSOCIEERT MICRON GEOPENBAARDEwelford uniacke
Credit card debt is the third largest source of indebtedness in the US: Credit card debt management is the solution
According to the reports of the financial analysts, credit card debt is reportedly been the third largest source of household indebtedness only after the $14 trillion in the mortgage debt market and $1 trillion in the student loan debt market. Studies reveal that the average household owes a huge amount on credit cards but the average debt is gradually falling in the first quarter of 2012. Since the same time in 2010, the amount is down nearly by $2000. Does this show that the Americans are repaying their credit card debts? Or are they just walking away from their debt? Though there are so many professional debt relief options that you can take resort to when you fall in debt, most of them are choosing the debt management plan as it tends to help a person pay back debt and also boost his credit score at the same time.
Charting the Financial Crisis: A Narrative eBookShavondaBrandon
The global financial crisis of 2007-2009 and subsequent Great Recession constituted the worst shocks to the United States economy in generations. Books have been and will be written about the housing bubble and bust, the financial panic that followed, the economic devastation that resulted, and the steps that various arms of the U.S. and foreign governments took to prevent the Great Depression 2.0. But the story can also be told graphically, as these charts aim to do.
What comes quickly into focus is that as the crisis intensified, so did the government’s response. Although the seeds of the harrowing events of 2007-2009 were sown over decades, and the U.S. government was initially slow to act, the combined efforts of the Federal Reserve, Treasury Department, and other agencies were ultimately forceful, flexible, and effective. Federal regulators greatly expanded their crisis management toolkit as the damage unfolded, moving from traditional and domestic measures to actions that were innovative and sometimes even international in reach. As panic spread, so too did their efforts broaden to quell it. In the end, the government was able to stabilize the system, re-start key financial markets, and limit the extent of the harm to the economy.
No collection of charts, even as extensive as this, can convey all the complexities and details of the crisis and the government’s interventions. But these figures capture the essential features of one of the worst episodes in American economic history and the ultimately successful, even if politically unpopular, government response.
The National Debt History, Trends And ImpactRoniSue Player
The document discusses the national debt of the United States, including its current size of over $9 trillion as of 2007, who it is owed to, historical trends, and potential impacts. It notes that total debt obligations including programs like Social Security and Medicare exceed $53 trillion. Much of the debt is held by the public and foreign governments, with foreign holdings increasing in recent years. Rising costs of programs and an aging population threaten to increase the debt to unsustainable levels if not addressed.
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 Great Recession document summarizes the causes and effects of the late-2000s financial crisis and recession in the United States. It discusses how a housing bubble fueled by subprime lending burst, triggering a credit crunch and widespread economic impacts. The recession resulted in job losses, rising unemployment, and high foreclosure rates. Government responses included stimulus packages under Presidents Bush and Obama, as well as financial bailouts. The recovery was predicted to be slow due to persistent effects of financial crises on economic growth.
The document summarizes the key external economic drivers that will influence Florida's economy from 2011-2012. It finds that the national and global economies will experience below potential growth during this period. Specifically, it notes modest US growth, stability but fragility in financial markets, and expanding trade opportunities in emerging markets like Asia and Latin America. Overall, the economic outlook is positive for Florida's recovery from recession, but a return to strong growth is unlikely in the next two years.
Professor Alejandro Diaz Bautista Mexico's Economic and Political Outlook 2012Economist
The document discusses the economic outlook for the US-Mexico border region in 2012 in light of the debt crises in Europe and the US. It notes that while Mexico and the border region are in better shape than in 2008, there are still concerns about a potential double-dip recession in the US impacting the area. The Mexican economy could see over 3.5% growth in 2012 if the US grows, but a US recession in early 2012 would significantly impact Mexico and the northern border region due to their economic ties. Devaluation of the Mexican peso and lower foreign direct investment in Mexico are also concerns discussed in the document.
The document discusses national debt and deficits. It notes that the US national debt was $5.6 trillion in 1999 and $12.8 trillion in 2010. It explains that debt is the accumulation of yearly deficits and surpluses, with deficits added to the debt and surpluses reducing it. The document also discusses "pork barrel" spending projects by Congress and debates around taxation and proportional versus progressive tax systems.
STATEN DIE ECONOMIE ZOUDEN LATEN VALLEN, ASSOCIEERT MICRON GEOPENBAARDEwelford uniacke
Credit card debt is the third largest source of indebtedness in the US: Credit card debt management is the solution
According to the reports of the financial analysts, credit card debt is reportedly been the third largest source of household indebtedness only after the $14 trillion in the mortgage debt market and $1 trillion in the student loan debt market. Studies reveal that the average household owes a huge amount on credit cards but the average debt is gradually falling in the first quarter of 2012. Since the same time in 2010, the amount is down nearly by $2000. Does this show that the Americans are repaying their credit card debts? Or are they just walking away from their debt? Though there are so many professional debt relief options that you can take resort to when you fall in debt, most of them are choosing the debt management plan as it tends to help a person pay back debt and also boost his credit score at the same time.
Charting the Financial Crisis: A Narrative eBookShavondaBrandon
The global financial crisis of 2007-2009 and subsequent Great Recession constituted the worst shocks to the United States economy in generations. Books have been and will be written about the housing bubble and bust, the financial panic that followed, the economic devastation that resulted, and the steps that various arms of the U.S. and foreign governments took to prevent the Great Depression 2.0. But the story can also be told graphically, as these charts aim to do.
What comes quickly into focus is that as the crisis intensified, so did the government’s response. Although the seeds of the harrowing events of 2007-2009 were sown over decades, and the U.S. government was initially slow to act, the combined efforts of the Federal Reserve, Treasury Department, and other agencies were ultimately forceful, flexible, and effective. Federal regulators greatly expanded their crisis management toolkit as the damage unfolded, moving from traditional and domestic measures to actions that were innovative and sometimes even international in reach. As panic spread, so too did their efforts broaden to quell it. In the end, the government was able to stabilize the system, re-start key financial markets, and limit the extent of the harm to the economy.
No collection of charts, even as extensive as this, can convey all the complexities and details of the crisis and the government’s interventions. But these figures capture the essential features of one of the worst episodes in American economic history and the ultimately successful, even if politically unpopular, government response.
The National Debt History, Trends And ImpactRoniSue Player
The document discusses the national debt of the United States, including its current size of over $9 trillion as of 2007, who it is owed to, historical trends, and potential impacts. It notes that total debt obligations including programs like Social Security and Medicare exceed $53 trillion. Much of the debt is held by the public and foreign governments, with foreign holdings increasing in recent years. Rising costs of programs and an aging population threaten to increase the debt to unsustainable levels if not addressed.
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 Great Recession document summarizes the causes and effects of the late-2000s financial crisis and recession in the United States. It discusses how a housing bubble fueled by subprime lending burst, triggering a credit crunch and widespread economic impacts. The recession resulted in job losses, rising unemployment, and high foreclosure rates. Government responses included stimulus packages under Presidents Bush and Obama, as well as financial bailouts. The recovery was predicted to be slow due to persistent effects of financial crises on economic growth.
The document summarizes the key external economic drivers that will influence Florida's economy from 2011-2012. It finds that the national and global economies will experience below potential growth during this period. Specifically, it notes modest US growth, stability but fragility in financial markets, and expanding trade opportunities in emerging markets like Asia and Latin America. Overall, the economic outlook is positive for Florida's recovery from recession, but a return to strong growth is unlikely in the next two years.
Professor Alejandro Diaz Bautista Mexico's Economic and Political Outlook 2012Economist
The document discusses the economic outlook for the US-Mexico border region in 2012 in light of the debt crises in Europe and the US. It notes that while Mexico and the border region are in better shape than in 2008, there are still concerns about a potential double-dip recession in the US impacting the area. The Mexican economy could see over 3.5% growth in 2012 if the US grows, but a US recession in early 2012 would significantly impact Mexico and the northern border region due to their economic ties. Devaluation of the Mexican peso and lower foreign direct investment in Mexico are also concerns discussed in the document.
The US debt crisis stems from political disagreements over raising the debt ceiling to continue paying bills. While Democrats sought to raise taxes on the wealthy and protect entitlement programs, Republicans demanded deep spending cuts without tax increases. After bitter negotiations, Congress passed a last-minute deal to raise the debt ceiling in exchange for $917 billion in spending cuts over 10 years and a joint committee tasked with finding $1.5 trillion more in cuts. However, Standard & Poor's downgraded US credit for the first time, citing political dysfunction and rising debt. The crisis increased uncertainty and weakened the dollar.
Today’s Economic Landscape and What’s on the Other Side February 2010Savannah Whaley
The document provides an overview of the current economic landscape and recovery following the recent recession. It summarizes key economic indicators such as GDP, industrial production, unemployment, housing and financial markets. It outlines the government's economic response through fiscal stimulus and monetary policy. It also discusses future opportunities for economic growth and concludes that while recovery is underway, the US economy still faces pressures from high unemployment, consumer and government debt that will likely result in slower long-term growth compared to emerging economies such as China.
The document discusses the public debt crisis in the United States. It notes that there have been five major debt crises since 1790 where federal debt sharply increased. The Great Recession caused the second largest debt spike and it is unique in that primary deficits have persisted for over 6 years after the recession and are expected to continue through 2026. The document also argues against the view that more debt is desirable, noting empirical evidence that fiscal multipliers are negative at high debt levels and debt sustainability becomes an issue. It analyzes factors like demand for U.S. debt from globalization and risk of domestic default.
FRB-Richmond_ unsustainable fiscal policy_ implications for monetary policyFred Kautz
Economic research suggests that high debt levels ultimately could overwhelm a central bank’s efforts to keep prices stable. This essay will argue that these outcomes should be avoided in the United States by putting fiscal policy on a sustainable path.
Jonathan Rodden - Representation and Redistribution in Federations: Lessons f...ADEMU_Project
Professor Jonathan Rodden, Stanford University, describes how he has applied his on work on numerous federations in the United States and extracted lessons and principles that could be theoretically applied to the European Monetary Union.
The global financial crisis of 2007-2009 and subsequent Great Recession constituted the worst shocks to the United States economy in generations. Books have been and will be written about the housing bubble and bust, the financial panic that followed, the economic devastation that resulted, and the steps that various arms of the U.S. and foreign governments took to prevent the Great Depression 2.0. But the story can also be told graphically, as these charts aim to do.
What comes quickly into focus is that as the crisis intensified, so did the government’s response. Although the seeds of the harrowing events of 2007-2009 were sown over decades, and the U.S. government was initially slow to act, the combined efforts of the Federal Reserve, Treasury Department, and other agencies were ultimately forceful, flexible, and effective. Federal regulators greatly expanded their crisis management toolkit as the damage unfolded, moving from traditional and domestic measures to actions that were innovative and sometimes even international in reach. As panic spread, so too did their efforts broaden to quell it. In the end, the government was able to stabilize the system, re-start key financial markets, and limit the extent of the harm to the economy.
No collection of charts, even as extensive as this, can convey all the complexities and details of the crisis and the government’s interventions. But these figures capture the essential features of one of the worst episodes in American economic history and the ultimately successful, even if politically unpopular, government response.
The document discusses the global financial crisis that began in 2008. It provides background on the crisis, including the collapse of major investment banks in the US. It then explains some of the root causes of the crisis, such as the rise of speculative investment and growing household debt. The crisis has had widespread impacts, including bank bailouts, rising unemployment, and falling economic growth in both developed and developing countries like the Philippines. The response from the US government has largely been to bail out financial institutions while ordinary citizens bear the burden. The document criticizes the Arroyo government in the Philippines for implementing neoliberal policies that exacerbate the crisis and calls for united action from workers around the world.
The Washington Post's Coverage of the Financial Crisisagrand905
The document summarizes The Washington Post's coverage of the financial crisis from 2004-2008. It discusses how the Post provided early warnings of the housing bubble and recession. It also covers the Post's analysis of the crisis's impact on Wall Street, Main Street, government policy responses, and key events like the use of TARP funds to bail out automakers. The document examines the Post's balanced and fact-based approach to explaining the complex financial issues facing the economy.
Profiting without Producing: Confronting Financialisation: Costas Lapavistas ...usilive
Financialization refers to the increasing role of financial motives, markets, actors and institutions in the operation of the domestic and international economies. It has led to the growth of financial profits and new sources of profit for banks and corporations. Financialization has transformed relations among enterprises, banks and workers through greater involvement of corporations with the financial system. It has also increased household borrowing for mortgages and consumer credit through financialization in developing countries driven by the role of the dollar and capital flows. Confronting financialization requires changes to public policy regarding investment, enterprises, public ownership of banks, and public provision of services.
The document summarizes the Post's coverage of the financial crisis from its early signs in 2004 through the present day recovery. It highlights how the Post explained issues in layman's terms, focused on data that mattered to citizens, and provided both national and local perspectives. During the crisis, it placed blame, discussed effects on markets and the global economy, and critically analyzed actions by the government and Federal Reserve. In the post-crisis period, it examined the uneven recovery and implications for workers. Throughout, the Post collaborated with other major publications to provide in-depth financial reporting.
1) Moody's downgraded the US credit rating from triple-A for the first time, putting its debt on review. Ireland also had its credit rating cut below investment grade as its debt is expected to rise to 118% of GDP, indicating continued economic struggles.
2) Eurozone industrial production data showed growth slowed sharply in Q2, with weak data across peripheral countries. The recovery in the wider eurozone economy may grind to a halt.
3) China's trade surplus widened more than expected in June due to slowing import growth, adding to cash flooding the economy and complicating efforts to curb inflation. However, China's GDP and other indicators exceeded estimates, showing continued strong growth.
Ricardo V Lago Business Forum University Of Miami 15 Jan 2009neiracar
The panel discussed the global economic crisis and its causes. [1] They debated the role of subprime loans and overconfidence in continued home price increases in causing the crisis. [2] While government agencies aimed to help people buy homes, mortgages became commoditized and high-risk loans were made to unqualified borrowers. [3] The economists compared the current situation to past economic downturns but said the effects so far have not been as severe as the Great Depression.
The document discusses the national debt of the United States, which currently stands at over $18 trillion. It explores the history of rising US debt levels and the economic effects of increasing versus consolidating the debt. Increasing debt leads to higher interest rates, less investment, and reduced GDP growth. Consolidating debt has short-term negative effects but long-term benefits like lower interest rates and more funding for programs. The document also examines threats of sovereign default and financial crises based on examples from other countries.
Argentina is considering whether to devalue its peso currency or dollarize. Devaluing the peso could improve export competitiveness but would increase domestic inflation and the cost of Argentina's dollar-denominated debt. Dollarization may increase credibility but would reduce monetary policy flexibility and government revenues. Regardless of the exchange rate policy, Argentina needs to stimulate economic growth by utilizing resources to increase exports, decreasing budget deficits and external debt ratios, controlling inflation, and encouraging foreign investment.
The document summarizes an economics group presentation on the United States market situation following the 2008 financial crisis. It discusses the recession, impact on unemployment and homelessness. It then covers the subprime mortgage crisis and resulting property market downturn, as well as issues faced by the automotive and financial industries that required government intervention.
recent world trade crisis eurozone-debt-crisis Shashank Singh
The document provides an overview of the Eurozone debt crisis, including its causes, key events, and affected countries. In 3 sentences:
The Eurozone debt crisis began in 2008 with Greece facing unsustainable debt levels due to overspending and borrowing despite insufficient income growth. It spread to other European nations like Portugal, Ireland, Italy and Spain as their debt levels rose. The crisis involved emergency bailouts for affected countries by stronger EU nations and international organizations as well as austerity measures to reduce debt and deficits.
The Argentina currency crisis of 2001-2002 was caused by a combination of factors:
1) The peso was fixed to the US dollar in 1991, but the dollar appreciated which made Argentine exports more expensive.
2) A recession in Brazil, Argentina's largest trading partner, reduced exports and increased the current account deficit.
3) Rising government debt and an inability to raise taxes exacerbated budget deficits.
4) Speculation against the peso increased as expectations rose that Argentina would devalue or float its currency.
Ziad Abdelnour, Lebanese American author, trader and financier is President & CEO of Blackhawk Partners, Inc., a “private family office” that backs talented operating executives in growing their companies both organically and through acquisitions and trades physical commodities.
The document provides an overview of economic indicators for the United States and Cambodia, including GDP, GDP growth rates, unemployment rates, inflation rates, and trade. Line graphs compare several key metrics between the two countries from 2000 to 2011, such as real GDP growth, GDP per capita, GDP purchasing power parity, and industrial production growth. The US generally had higher GDP, GDP growth, and GDP per capita than Cambodia over this period.
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
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
The US debt crisis stems from political disagreements over raising the debt ceiling to continue paying bills. While Democrats sought to raise taxes on the wealthy and protect entitlement programs, Republicans demanded deep spending cuts without tax increases. After bitter negotiations, Congress passed a last-minute deal to raise the debt ceiling in exchange for $917 billion in spending cuts over 10 years and a joint committee tasked with finding $1.5 trillion more in cuts. However, Standard & Poor's downgraded US credit for the first time, citing political dysfunction and rising debt. The crisis increased uncertainty and weakened the dollar.
Today’s Economic Landscape and What’s on the Other Side February 2010Savannah Whaley
The document provides an overview of the current economic landscape and recovery following the recent recession. It summarizes key economic indicators such as GDP, industrial production, unemployment, housing and financial markets. It outlines the government's economic response through fiscal stimulus and monetary policy. It also discusses future opportunities for economic growth and concludes that while recovery is underway, the US economy still faces pressures from high unemployment, consumer and government debt that will likely result in slower long-term growth compared to emerging economies such as China.
The document discusses the public debt crisis in the United States. It notes that there have been five major debt crises since 1790 where federal debt sharply increased. The Great Recession caused the second largest debt spike and it is unique in that primary deficits have persisted for over 6 years after the recession and are expected to continue through 2026. The document also argues against the view that more debt is desirable, noting empirical evidence that fiscal multipliers are negative at high debt levels and debt sustainability becomes an issue. It analyzes factors like demand for U.S. debt from globalization and risk of domestic default.
FRB-Richmond_ unsustainable fiscal policy_ implications for monetary policyFred Kautz
Economic research suggests that high debt levels ultimately could overwhelm a central bank’s efforts to keep prices stable. This essay will argue that these outcomes should be avoided in the United States by putting fiscal policy on a sustainable path.
Jonathan Rodden - Representation and Redistribution in Federations: Lessons f...ADEMU_Project
Professor Jonathan Rodden, Stanford University, describes how he has applied his on work on numerous federations in the United States and extracted lessons and principles that could be theoretically applied to the European Monetary Union.
The global financial crisis of 2007-2009 and subsequent Great Recession constituted the worst shocks to the United States economy in generations. Books have been and will be written about the housing bubble and bust, the financial panic that followed, the economic devastation that resulted, and the steps that various arms of the U.S. and foreign governments took to prevent the Great Depression 2.0. But the story can also be told graphically, as these charts aim to do.
What comes quickly into focus is that as the crisis intensified, so did the government’s response. Although the seeds of the harrowing events of 2007-2009 were sown over decades, and the U.S. government was initially slow to act, the combined efforts of the Federal Reserve, Treasury Department, and other agencies were ultimately forceful, flexible, and effective. Federal regulators greatly expanded their crisis management toolkit as the damage unfolded, moving from traditional and domestic measures to actions that were innovative and sometimes even international in reach. As panic spread, so too did their efforts broaden to quell it. In the end, the government was able to stabilize the system, re-start key financial markets, and limit the extent of the harm to the economy.
No collection of charts, even as extensive as this, can convey all the complexities and details of the crisis and the government’s interventions. But these figures capture the essential features of one of the worst episodes in American economic history and the ultimately successful, even if politically unpopular, government response.
The document discusses the global financial crisis that began in 2008. It provides background on the crisis, including the collapse of major investment banks in the US. It then explains some of the root causes of the crisis, such as the rise of speculative investment and growing household debt. The crisis has had widespread impacts, including bank bailouts, rising unemployment, and falling economic growth in both developed and developing countries like the Philippines. The response from the US government has largely been to bail out financial institutions while ordinary citizens bear the burden. The document criticizes the Arroyo government in the Philippines for implementing neoliberal policies that exacerbate the crisis and calls for united action from workers around the world.
The Washington Post's Coverage of the Financial Crisisagrand905
The document summarizes The Washington Post's coverage of the financial crisis from 2004-2008. It discusses how the Post provided early warnings of the housing bubble and recession. It also covers the Post's analysis of the crisis's impact on Wall Street, Main Street, government policy responses, and key events like the use of TARP funds to bail out automakers. The document examines the Post's balanced and fact-based approach to explaining the complex financial issues facing the economy.
Profiting without Producing: Confronting Financialisation: Costas Lapavistas ...usilive
Financialization refers to the increasing role of financial motives, markets, actors and institutions in the operation of the domestic and international economies. It has led to the growth of financial profits and new sources of profit for banks and corporations. Financialization has transformed relations among enterprises, banks and workers through greater involvement of corporations with the financial system. It has also increased household borrowing for mortgages and consumer credit through financialization in developing countries driven by the role of the dollar and capital flows. Confronting financialization requires changes to public policy regarding investment, enterprises, public ownership of banks, and public provision of services.
The document summarizes the Post's coverage of the financial crisis from its early signs in 2004 through the present day recovery. It highlights how the Post explained issues in layman's terms, focused on data that mattered to citizens, and provided both national and local perspectives. During the crisis, it placed blame, discussed effects on markets and the global economy, and critically analyzed actions by the government and Federal Reserve. In the post-crisis period, it examined the uneven recovery and implications for workers. Throughout, the Post collaborated with other major publications to provide in-depth financial reporting.
1) Moody's downgraded the US credit rating from triple-A for the first time, putting its debt on review. Ireland also had its credit rating cut below investment grade as its debt is expected to rise to 118% of GDP, indicating continued economic struggles.
2) Eurozone industrial production data showed growth slowed sharply in Q2, with weak data across peripheral countries. The recovery in the wider eurozone economy may grind to a halt.
3) China's trade surplus widened more than expected in June due to slowing import growth, adding to cash flooding the economy and complicating efforts to curb inflation. However, China's GDP and other indicators exceeded estimates, showing continued strong growth.
Ricardo V Lago Business Forum University Of Miami 15 Jan 2009neiracar
The panel discussed the global economic crisis and its causes. [1] They debated the role of subprime loans and overconfidence in continued home price increases in causing the crisis. [2] While government agencies aimed to help people buy homes, mortgages became commoditized and high-risk loans were made to unqualified borrowers. [3] The economists compared the current situation to past economic downturns but said the effects so far have not been as severe as the Great Depression.
The document discusses the national debt of the United States, which currently stands at over $18 trillion. It explores the history of rising US debt levels and the economic effects of increasing versus consolidating the debt. Increasing debt leads to higher interest rates, less investment, and reduced GDP growth. Consolidating debt has short-term negative effects but long-term benefits like lower interest rates and more funding for programs. The document also examines threats of sovereign default and financial crises based on examples from other countries.
Argentina is considering whether to devalue its peso currency or dollarize. Devaluing the peso could improve export competitiveness but would increase domestic inflation and the cost of Argentina's dollar-denominated debt. Dollarization may increase credibility but would reduce monetary policy flexibility and government revenues. Regardless of the exchange rate policy, Argentina needs to stimulate economic growth by utilizing resources to increase exports, decreasing budget deficits and external debt ratios, controlling inflation, and encouraging foreign investment.
The document summarizes an economics group presentation on the United States market situation following the 2008 financial crisis. It discusses the recession, impact on unemployment and homelessness. It then covers the subprime mortgage crisis and resulting property market downturn, as well as issues faced by the automotive and financial industries that required government intervention.
recent world trade crisis eurozone-debt-crisis Shashank Singh
The document provides an overview of the Eurozone debt crisis, including its causes, key events, and affected countries. In 3 sentences:
The Eurozone debt crisis began in 2008 with Greece facing unsustainable debt levels due to overspending and borrowing despite insufficient income growth. It spread to other European nations like Portugal, Ireland, Italy and Spain as their debt levels rose. The crisis involved emergency bailouts for affected countries by stronger EU nations and international organizations as well as austerity measures to reduce debt and deficits.
The Argentina currency crisis of 2001-2002 was caused by a combination of factors:
1) The peso was fixed to the US dollar in 1991, but the dollar appreciated which made Argentine exports more expensive.
2) A recession in Brazil, Argentina's largest trading partner, reduced exports and increased the current account deficit.
3) Rising government debt and an inability to raise taxes exacerbated budget deficits.
4) Speculation against the peso increased as expectations rose that Argentina would devalue or float its currency.
Ziad Abdelnour, Lebanese American author, trader and financier is President & CEO of Blackhawk Partners, Inc., a “private family office” that backs talented operating executives in growing their companies both organically and through acquisitions and trades physical commodities.
The document provides an overview of economic indicators for the United States and Cambodia, including GDP, GDP growth rates, unemployment rates, inflation rates, and trade. Line graphs compare several key metrics between the two countries from 2000 to 2011, such as real GDP growth, GDP per capita, GDP purchasing power parity, and industrial production growth. The US generally had higher GDP, GDP growth, and GDP per capita than Cambodia over this period.
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
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
Thirty years of growing income inequality, corporate tax cuts and personal tax breaks for the wealthy have undermined the livelihood of working people and set up a state budget crisis which does not need to
exist. We present alternative tax proposals and issue a warning of the ominous consequences of privatization, layoffs and state service cuts for all New Yorkers.
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 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.
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 discusses the US federal budget deficit and national debt. It notes that the US debt has reached over $15 trillion and the debt-to-GDP ratio is over 60%. It explains the differences between the deficit, debt, outlays, and budget surplus/deficit. Rising mandatory spending on programs like Social Security and Medicare, as well as increased spending after 9/11, have contributed to growing deficits. The large deficit and debt levels can negatively impact the economy and future generations.
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.
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 US national debt originated from government spending exceeding revenue in a given year. This includes response to economic crises like the 2008 financial crisis and wars in Iraq and Afghanistan, which increased debt levels. Mandatory spending like social security makes up over half the budget and is difficult to cut. Without tax increases or strong economic growth, it will be challenging to reduce the deficit and debt. China is currently the largest foreign creditor to the US, holding around $1 trillion of US debt.
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.
Hoag (2016) CSUEB Lecture: US Class StructurePeter Hoag
This document provides an overview of class divisions in the United States. It discusses how the gap between rich and poor has widened since the 1980s. The top 1% of Americans now own around 40% of the country's wealth, while the bottom 50% own just 1% of wealth. It also shows how CEO salaries have risen dramatically compared to typical workers. While the U.S. economy has grown overall, median income and the middle class have shrunk. The goal of the presentation is to present facts about growing inequality in a neutral, non-political manner.
"The Economy under President Obama" tells the story of the 2009-2016 period using a series of economic and budgetary charts. Definitive non-partisan sources such as the Federal Reserve Economic Database (FRED) and Congressional Budget Office (CBO) are used, along with major media sources.
The presentation covers the Great Recession and response, fiscal policies, trends in major economic variables, income inequality and the ACA/Obamacare. Key questions covered include: 1) What did President Obama and Congress do to help or hinder the recovery? 2) What were the important decisions President Obama had to make? 3) How much of the national debt addition was due to the President's policies? 4) What were the trends in the key economic and budget variables? 5) What economic and budgetary legacy did he pass along?
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.
Essay On United States National DeficitAshley Fisher
Based on the information provided, here are the key factors that indicate Morocco has a healthier economy than Libya:
- Population size: Morocco has a much larger population of 34 million compared to Libya's 6.2 million, giving it a larger domestic market and workforce.
- GDP: Morocco has a GDP of $118 billion compared to Libya's GDP of $70 billion, indicating its economy produces more goods and services.
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This document discusses how the US federal budget deficit and national debt affect different individuals and institutions. It states that taxpayers, future Social Security and Medicaid recipients, unemployed individuals, and University of Phoenix students are all impacted by fiscal policy. The effects on these groups in terms of things like income-based student loan repayment options and changes to federal grant programs are briefly outlined. The document also mentions exploring impacts on the US's international financial reputation, exports and imports, and GDP.
3. What measures should the U.K. government take in response t.docxgilbertkpeters11344
3. What measures should the U.K. government take in response to the rising inequality?
Is inequality a weakness? Why, or why not?
The case “The United Kingdom and the Means to Prosperity” by Laura Alfaro, Lakshmi
Iyer, and Hillary White discusses the recent fiscal policy of the United Kingdom. One area
mentioned as a concern was the rising inequality of wealth. As this wealth disparity can create
a weakness for the country, the government should evaluate policies that would help narrow this
income gap.
As stated within the case, income inequality in the UK has grown faster than any other
OECD nation since 1975. By 2012, the top 20% earned an average of 15 times that of the
bottom 20%. Evaluating total wealth, the top 10% held roughly 1050x as the bottom 10%.
Evaluating the top decile’s income proportion to the total over a historical time period shows that
income inequality was trending downwards from the early 1930’s before leveling out in the
1950’s and then rising steadily since the early 1970’s.
Rising inequality is a weakness for the U.K. economy. Internal consumption within the
economy drives growth. The top decile income earners do not consume the same proportion of
their income as those in the lower deciles and the middle and lower classes encompass the vast
majority of the populace and the spending. If lower and middle income earners do not have
enough income available to grow consumption, it hurts the U.K economy. In addition,
decreasing disposable income limits the ability to invest in education, which locks people into
their class or the class of their parents. Finally, stagnant and shrinking wealth for the middle
and lower classes means the government is receiving less taxes. The problem really lies not in
the fact that the upper deciles are gaining wealth, but in the fact that the remaining deciles are
not growing at the same rate.
By evaluating the factors that lead to this inequality, the U.K. government can best draft
measures to address it. One factor that contributes to this wealth gap is the unemployment rate
which was under 2% from 1946 but started rising in the late 60’s to 8% in 2012. In addition, real
wage increases have been small or negative with the total real wage increase between 1990
and 2014 being 1.4%(summing and subtracting the growth for that period). While wages have
been stagnant and unemployment high, there has been growth in the financial services sector
that has exceeded GDP from 1970 through 2008. Many top income earners participate in this
sector. To summarize, increased unemployment plus stagnant real wage increases for the
majority of the population coupled with the increasing income of the financial sector has
exacerbated income inequality.
To combat the problem of growing income inequality, the U.K government needs to create
policies that are designed to address unemployment and support real .
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Key highlights include Microsoft's Digital Transformation Framework, which focuses on driving innovation and efficiency, and McKinsey's Ten Guiding Principles, which provide strategic insights for successful digital transformation. Additionally, Forrester's framework emphasizes enhancing customer experiences and modernizing IT infrastructure, while IDC's MaturityScape helps assess and develop organizational digital maturity. MIT's framework explores cutting-edge strategies for achieving digital success.
These materials are perfect for enhancing your business or classroom presentations, offering visual aids to supplement your insights. Please note that while comprehensive, these slides are intended as supplementary resources and may not be complete for standalone instructional purposes.
Frameworks/Models included:
Microsoft’s Digital Transformation Framework
McKinsey’s Ten Guiding Principles of Digital Transformation
Forrester’s Digital Transformation Framework
IDC’s Digital Transformation MaturityScape
MIT’s Digital Transformation Framework
Gartner’s Digital Transformation Framework
Accenture’s Digital Strategy & Enterprise Frameworks
Deloitte’s Digital Industrial Transformation Framework
Capgemini’s Digital Transformation Framework
PwC’s Digital Transformation Framework
Cisco’s Digital Transformation Framework
Cognizant’s Digital Transformation Framework
DXC Technology’s Digital Transformation Framework
The BCG Strategy Palette
McKinsey’s Digital Transformation Framework
Digital Transformation Compass
Four Levels of Digital Maturity
Design Thinking Framework
Business Model Canvas
Customer Journey Map
2. Bob Smoldt
• Associate Director, ASU Healthcare
Delivery and Policy Program
• Emeritus CAO, Mayo Clinic
3. Smoldt poll
• Question 1: Do you believe the federal
budget deficit is a very serious problem?
–U.S. = 68%
Source: Blendon and Benson, “The Public‟s View About Medicare and Budget Deficits,” NEJM 10.1056.
4. Smoldt poll
• Question 2: Do you believe it is possible to
balance the budget without cutting
Medicare spending in one way or the
other?
–U.S. = 54%
Source: Blendon and Benson, “The Public‟s View About Medicare and Budget Deficits,” NEJM 10.1056.
5. Smoldt poll
• Question 3: Do you agree with the
following methods of reducing the deficit?
A. Reduce military commitments
U.S. = 46%
B. Raise taxes on people with an annual income >$250K
U.S. = 69%
C. Limit tax deductions for corporations
U.S. = 62%
D. Reduce Medicare spending in some way
U.S. = 22%
Source: Blendon and Benson, “The Public‟s View About Medicare and Budget Deficits,” NEJM 10.1056.
6. Today:
• Will analyze the Medicare issue in
depth
• But need to understand the broader
U.S. deficit and debt problem
7. Growth of government
Total Federal Spending
(as percentage of U.S. Economy)
Total federal spending
Source: Walker, D. “Comeback America: The Nation‟s Fiscal Challenge and the Way Forward”, January 20, 2011
9. Growth of government
Total Federal Spending
(as percentage of U.S. Economy)
Total federal spending
Source: Walker, D. “Comeback America: The Nation‟s Fiscal Challenge and the Way Forward”, January 20, 2011
10. Federal government spending has increased
dramatically since the 1930s
Federal government outlays as % of GDP (1791-2010)
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
1791 1811 1831 1851 1871 1891 1911 1931 1951 1971 1991 2011
Source: http://www.whitehouse.gov/omb/budget/Historicals; http://www.measuringworth.com/usgdp/; Federal
spending 1791-1900 based on “Historical Statistics of the United States, Colonial Times to 1970, Part II”; data
not adjusted for inflation
11. Changes in spending
Composition of Federal Spending
(as percentage of Total Spending)
Source: Walker, D. “Comeback America: The Nation‟s Fiscal Challenge and the Way Forward”, January 20, 2011
12. The cost of debt may have been held artificially
low
US net debt outstanding vs. effective interest rates (1980-2010)
$10,000 10.0%
Net debt outstanding
Effective interest rate
$8,000 8.0%
Net debt ($ billions)
Interest rates (%)
$6,000 6.0%
$4,000 4.0%
$2,000 2.0%
$- 0.0%
1980 1985 1990 1995 2000 2005 2010
Source: http://www.whitehouse.gov/omb/budget/Historicals
13. • As US federal spending has grown, so has
the federal deficit as a percent of GDP
• European Monetary Union’s“Stability and
Growth Pact” guidelines
• Annual deficit as a % of GDP should be equal to or
less than 3%
• EU 27 average = 2.3% in 2009
Source: The Reform of the Stability and Growth Pact; speech by Jose Manuel Gonzalez-Paramo; European Central
Bank; October 13, 2005. www.ecb.int/press/key/date/2005/html/sp051013.en.html.
16. Three measures of Federal debt/
financial obligations
1. Debt held by the public
2. Total debt = debt held by the public + debt
held by government agencies, e.g., Social
Security Trust Fund, etc.
3. Total liabilities = Total debt + future
pension, Social Security, payments, and
healthcare payments that are promised
under current legislation (the unfunded
liabilities)
Source: “A Short Primer on the National Debt”, WSJ, 8/29/11
17. Are there economic guidelines for the
maximum debt a country should tolerate?
• European Monetary Union’s “Stability &
Growth Pact: 60% of GDP *
• Reinhart and Rogoff: 90% **
* The European Monetary Union states guideline for EU countries. It came from recommendations contained
in a report entitled “The Critical Mission of the European Stability and Growth Pact”, Occasional Paper No. 70
by the Group of Thirty in 2004. The Group of Thirty is a group of thirty of the most prominent economists in
world. It included such U.S. economists as Paul Volker, Martin Feldstein, and Paul Krugman.
** Authors of a study titled “Growth in a Time of Debt.”
18. Economic growth can be impacted by a
country’s debt
• “(Debt) burdens above 90% are associated with 1
percent lower median growth. Our results are
based on a data set covering 44 countries for up
to 200 years…. (and) incorporates more than
3,700 observations.”
• “Our 90 % threshold is largely based on earlier
periods when old-age pensions and healthcare
costs hadn’t grown to anything near the size they
are today. Surely this makes the burden of debt
greater.”
Source: Op-Ed Bloomberg News, July 14, 2011 by Dr. Carmen Reinhart, senior fellow at the Peterson Institute
for International Economics and Dr. Kenneth Rogoff, Professor of Economics at Harvard University
19. Historical debt burden – Debt
held by public
Since 1800, US Debt Held by the Public has exceeded 60% of GDP
(the maximum
debt ceiling used by the European Monetary Union) only during
WWII
Source: Walker, D. “Comeback America: The Nation‟s Fiscal Challenge and the Way Forward”, January 20, 2011
20. Historical debt burden – Gross
Federal debt
US gross Federal debt (FY1900-2010)% GDP
140
WW II
120 Total Federal Debt =
100% GDP in 2011
100
90%
80 TARP and
Recession
60 60%
Great
40 Depression
WW I
20
0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Source: http://www.usgovernmentspending.com/ accessed September 8, 2011;
http://www.politifact.com/ohio/statements/2011/aug/18/rob-portman/sen-rob-portman-
says-us-debt-now-matches-size-gros/
21. Comparative debt burdens
Total government debt in the U.S. is higher than some
of the most financially troubled countries in Europe
Source: Walker, D. “Comeback America: The Nation‟s Fiscal Challenge and the Way Forward”, January 20, 2011
22. August 8th, 2011
“Sign of the Apocalypse:
The struggling Spanish banking group
Bankia is seeking a loan from the European
Central Bank and has put the two (Real
Madrid soccer players) up as collateral.”
23. “Sovereign fiscal responsibility
index”
• Measures:
A. Debt
B. Projection of future debt
C. Fiscal rules, transparency and enforceability
• Country rank:
1. Australia
5. China
12. India
23. France
27. Italy
28. United States
34. Greece
Source: True State of Our Federal Finances, Comeback America Initiative, www.tcaii.org and
David Walker, former Comptroller General of the U.S. 1988-2008
24. Future debt burdens
Future U.S. Debt Held by the Public is projected to
soar if current policies remain unchanged
Source: Walker, D. “Comeback America: The Nation‟s Fiscal Challenge and the Way Forward”, January 20, 2011
25. Our fiscal future
Without reforms, by 2055, revenues will just cover
interest costs
Source: Walker, D. “Comeback America: The Nation‟s Fiscal Challenge and the Way Forward”, January 20, 2011
27. The wishful thinking U.S.
debt solutions
• Increase taxes on well-to-do Americans: Would raise top 2 tax
brackets to 86% and 91% (from 33% and 35%)1
• Raise taxes for all: Would double marginal tax for individuals and
corporations (some middle income Americans would be at 66%)2
• Grow the economy: “To stabilize debt at 60% GDP, economy would
need to grow at 6% for at least the next 10 years – the economy has
never growth by more that 4.4% in any decade since WWII.”1
1. Bipartisan Policy Center presentation to PG Peterson Foundation fiscal summit at www.pgpf.org
2. Heritage Foundation presentation to PG Peterson Foundation fiscal summit at www.pgpf.org
28. Before deciding on solutions we should
look at underlying factors causing the
increase in debt…
29. Entitlements are a major contributor to
the rise in federal debt
Federal expenses vs. GDP, adjusted for inflation (1965-
2010)
1200%
GDP
Total outlays
1000% Defense
Entitlements*
800%
600%
400%
200%
0%
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
-200%
*Entitlements = ”Payments for individuals” (includes Social Security, Medicare, Medicaid, VA payments, etc.)
Source: http://www.whitehouse.gov/omb/budget/Historicals
30. In addition to the Federal debt, the
US also has unfunded liabilities…
31. Federal financial hole
$70.0
Total: $61.9T
$60.0
$USD trillions
$50.0
$40.0 $45.8 Unfunded social insurance
promises
$30.0
$20.0
$2.0 Commitments and
$10.0 contingencies
$13.6 $14.1 Explicit liabilities including
$0.0 debt
Total U.S. debt Total liabilities
Explicit liabilities include such items as military and civilian pensions and retiree health; unfunded social insurance promises are
future Medicare and Social Security benefits for the next 75 yrs (estimates as of January 1, 2009; discounted to present value);
Total US debt as of September 30, 2010
Source: Walker, D. “Comeback America: The Nation‟s Fiscal Challenge and the Way Forward”, January 20, 2011
33. Federal financial obligations per U.S.
household as of June 30, 2011
• Total Federal Debt as of June 30, 2011:
– $125,500
• Federal Financial Hole as of Sept. 30, 2011:
– $536,300
34. “…the entitlement programs are not self-
funded. They are unfunded liabilities to a
significant extent at this point. They are the
biggest component of spending going
forward.” – Ben Bernanke1
“In an uncertain world, our currency and
credit are well established. But there are
serious questions, most immediately
about the sustainability of our
commitment to growing entitlement
programs” – Paul A. Volcker2
1. “State of Economy: View from the Federal Reserve”, testimony before the House Budget Committee, June 9, 2010
2. Volcker PA, remarks at the Stanford Institute for Economic Policy Research, May 18, 2010
35. Federal financial hole – Social
insurance programs
Unfunded social insurance promises (2009)$ trillions
Medicaid: Paid from general tax revenue each year and does not have a trust fund
Unfunded social insurance promises are future Medicare and Social Security benefits for the next 75 yrs (estimates as of January
1, 2009; discounted to present value)
Source: Walker, D. “Comeback America: The Nation‟s Fiscal Challenge and the Way Forward”, January 20, 2011
36. Medicare – Why an issue?
• Health costs growing faster than the
economy
• Aging population
37. The growth in healthcare costs has
generally outpaced GDP growth
Growth in healthcare expenditures vs. GDP in the United States
(1990-2009) Healthcare
expenditures per
capita (PPP$)
GDP per capita
(nominal)
Change in growth
Source: OECD, 2011
38. U.S. is not unique in having healthcare
expenditures outpace GDP growth
Growth in healthcare expenditures vs. GDP (1990-2009)
GDP per capita
(nominal)
Healthcare
expenditures per
capita (PPP$)
CAGR* (%)
*CAGR = Compound Annual Growth Rate
Source: OECD, 2011
39. Historical and projected number of
Medicare beneficiaries
Number of Beneficiaries (1966-2030) Millions
Source: 2010 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary
Medical Insurance Trust Funds
40. Workers paying Medicare tax per
Medicare beneficiary
Number of workers per beneficiary (1970-2030)
Source: Public Agenda, "Fewer Workers Projected Per HI Beneficiary," Retrieved Sept 19, 2011; 2010 Annual Report of the Boards of Trustees of
the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds
41. But haven’t we paid Medicare taxes
over our lives to earn this benefit?
“Two married 66 year olds with roughly average
earnings over their lifetimes will end up paying
about $110,000 in dedicated Medicare taxes
through the (Medicare) payroll tax, including the
portion their employers pay. They can expect to
receive about $340,000 in benefits. Two average
earning 56 year olds will pay about $140,000 and
get back about $430,000 in benefits.”
Source: David Leonhardt, “Generational Divide Colors Debate Over Medicare‟s Future,” New York
Times, April 5, 2011.
42. Will the Congressional debt deal
solve the problem?
The Economist, August 6th, 2011:
• “But the thoughtlessness of the debt deal –
notably its failure to tackle any of the real sources
of America’s fiscal problems, such as entitlement
spending, raises a bigger worry.”
• Simpson/Bowles “savings” over ten years - $4T
• Bipartisan Policy Center “savings” over ten years -
$5.8T
• Super Committee target - $1.5T
43. Will the health reform bill of
2010 help?
• Half of the health reform bill was "paid for" with across the board
reductions in what Medicare will pay for medical services.
• These reductions will lead down the road to providers getting 50%
less than presently (according to the Medicare actuary).
• Providers already lose money on average with Medicare patients.
• As the Medicare actuary has said (and as CBO implied), these
reductions will lead to less access to providers for Medicare
beneficiaries or reduced quality -- or both.
• Should heed the initial advice of Dr. Henry Aaron.
44. Henry Aaron
Brookings Institution:
“The costs of extending coverage are certain…
The savings from delivery system reform are speculative and
slow.”
“…not even the worthy goals of health reform justify
increasing already perilous budget deficits.”
“Reform must therefore be paid for…”
Source: NEJM, Perspective, September 3, 2009
45. A 1967 estimate understated eventual
Medicare spending by a factor of 10
Medicare spending, actual vs.
estimated $billions
Source: Senate Joint Economic Committee Report, 2009
46. Can the health reform bill’s Independent
Payment Advisory Board (IPAB) help?
• If Medicare spending above a target level after 2014, IPAB
issues a plan to get to target.
• HHS must implement the plan unless Congress
intervenes
• BUT: “The Board is not allowed to …ration care, raise
premiums, increase cost sharing, restrict benefits, or
modify eligibility; leaving (further) reductions in
payments to providers..”
Source: CBO report: www.cbo.org.gov/ftpdocs/doc2085/03-10-Reducingthe Deficit.pdf
47. To solve the Medicare problem, can we learn
from what these two did to prop up Social
Security in the 1980’s?
48. What to do: Social Security as an
example?
• Annual income greater than expense till 1975-1981
• Reforms enacted
– Cut benefits by 5%
– Raised tax rates by 2.3%
– Increased full retirement age 3% (to age 67)
• Restored stability for 25 years
• But demographics impacting again
– “Social Security expenditures exceeded the program’s income in
2011 for the first time since 1983.” *
Source: A Summary of the 2011 Annual Report by the Social Security and Medicare Boards of Trustees on
www.ssa.gov
49. The first step to solving Medicare
issue:
“Denial is not a
policy.”
50. What are the options for
Medicare?
If Medicare in its present form will not be
affordable for
U.S. taxpayers, there are some basic options
for
correcting:
a. Raise eligibility age
52. Questionable Trust Fund
projections for life expectancy
• 2005 Trust Fund projection of life
expectancy at 65 in 2025
• 17.5 male and 20.0 female
• 2007 actual life expectancy at 65
• 17.2 male and 19.9 female
Source: http://aging.senate.gov/crs/aging1.pdf
Source: http://www.cdc.gov/nchs/data/hus/hus10.pdf#022
53. Some pertinent questions:
• Is medicine allowing us to live too long?
• Are we retiring too early?
• Or both?
54. Rising life expectancy and lower retirement age result
in higher need for social support – Can we afford it?
Life Average
expectancy retirement
Year at birth age*
1950 68.2 68.3
2005 77.8 62.6
Gain/loss +9.6 -5.7
15.3 year spread
*Weighted average of “by gender” Social Security data for 1950-1955 and 2000-2005 based on labor force
composition – rounded Sources: OECD; National Center for Health Statistics; Bureau of Labor Statistics, Monthly
Labor Review (2002, 2008)
55. Working longer – Good for
Boomers; Good for economy
• McKinsey Global Institute:
• Boomers not financially prepared for retirement
• Boomer options:
– Reduce personal spending
– Work longer
• Economic impact of Boomers retiring 2 years later
(at 64.1)
• U.S. GDP difference over 2007-2035:
– Reduce personal spending: ($5.4) T
– Work 2 years longer: $12.9 T
Source: McKinsey Global Institute, “Talkin‟ „Bout My Generation: The Economic Impact of Aging US Baby
Boomers,” June 2008
56. What are the options for
Medicare?
If Medicare in its present form will not be
affordable for
U.S. taxpayers, there are some basic options for
correcting:
a. Raise eligibility age
b. Increase beneficiary share of costs
57. Medicare Part B (physician/outpatient services)
beneficiary premium as percent of total actual cost
Individual adjusted gross income Premium % total cost
Up to $85K 25%
$85 - $107 35%
$107 - $160 50%
$160 - $214 65%
$214+ 80%
• Increase percentage of cost
• Don‟t index up the salary cut-offs
Source: Medicare Premiums: Rules for Higher Income Beneficiaries: Social Security Administration Publication
#05-10161.
58. What are the options for Medicare?
If Medicare in its present form will not be
affordable for
U.S. taxpayers, there are some basic options for
correcting:
a. Raise eligibility age
b. Increase beneficiary share of costs
c. Limit benefits or move coverage to more of a
catastrophic insurance model
59. Limit benefits
• To control Medicare costs would require reducing
average Medicare benefits by 53% to $5,558 per
year
• More limited adjustments are
possible, e.g., increase deductibles, co-pays, etc.
• Changes either from program overall, or for
selected components like home health, skilled
nursing, drugs, etc.
Source: http://www.forbes.com/sites/robertlenzner/2011/07/31/our-country-is-in-deep-financial-
trouble/
60. Joint Select Committee on deficit reduction
possible considerations on reducing benefits
Action Ten year savings
• Prohibit Medigap paying 1st $550 $53B
• Subject lab tests to deductible $24B
• Require new home health co-pay $40B
• Increase skilled nursing cost sharing $21B
61. What are the options for
Medicare?
If Medicare in its present form will not be affordable for
U.S. taxpayers, there are some basic options for
correcting:
a. Raise eligibility age
b. Increase beneficiary share of costs
c. Limit benefits or move coverage to more of a catastrophic
insurance model
d. Increase Medicare taxes
62. Increase Medicare taxes
• To correct the underfunding of Medicare
would require increasing the Medicare tax
by 3.9% to 6.8%
• A self employed person making $100,000
would have Medicare tax move from $2,900
to $6,900 – all in addition to federal income
taxes
Source: http://www.forbes.com/sites/robertlenzner/2011/07/31/our-country-is-in-deep-
financial-trouble/
63. What are the options for
Medicare?
If Medicare in its present form will not be affordable for
U.S. taxpayers, there are some basic options for
correcting:
a. Raise eligibility age
b. Increase beneficiary share of costs
c. Limit benefits or move coverage to more of a catastrophic
insurance model
d. Increase Medicare taxes
e. Change Medicare policies and payment approaches to
encourage greater cost efficiency
64. CMS can realize ~12-18% annual cost savings if clinical
practice style aligns with top decile Hospital Referral
Regions (HRR)
Medicare FFS spending and estimated savings, HRR
data (2008) Average
standardized risk-
adjusted per capita Potential CMS
HRR costs ($USD) savings (% total)*
Decile 1 6,194 17.6
Decile 2 6,613 12.5
National average** 7,500 --
Decile 9 8,301 --
Decile 10 8,849 --
*Total = National average standardized risk adjusted per capita cost x total Medicare beneficiaries in sample; Total Medicare beneficiaries n =
25,832,920; Standardization of Spending: To standardize payment rates, examined Medicare‟s various FFS payment systems and identified the factors
that lead to different payment rates for the same service (e.g., local wages, input prices, DSH, GME); Estimated what Medicare would have paid for
each claim without those adjustments; Risk-Adjustment of Spending: Used total Hierarchical Condition Category (HCC) risk scores to risk-adjust
spending data; Calculated standardized risk-adjusted costs by taking the standardized costs for each beneficiary in a region and dividing them by his/her
actual individual risk score **Includes VI, PR, DC and unassigned data Source: “New Data on Geographic Variation”, Institute of Medicine, 2011
65. Gaining Medicare efficiencies
• Start by addressing patients with most
expensive conditions
• Financially reward providers who get better
patient outcomes while using fewer
resources – e.g. Pay for Value.
• Value = Patient Outcomes
Cost per patient over time
66. • Change existing financial incentives and start paying for
value
• If we accomplish this correctly, providers will self-
organize into systems that produce high value care
• Present Medicare pay for value approach will not reward
better outcomes at lower cost.
67. What are the options for Medicare?
– Raise eligibility age
– Increase beneficiary share of costs
– Limit benefits or move coverage to more of a
catastrophic insurance model
– Increase Medicare taxes
– Change Medicare policies and payment approaches to
encourage greater cost efficiency
– Move Medicare to a premium support model with
private insurers
68. Move Medicare to a premium
support model
• Medicare would no longer be a government insurance
company
• Instead would function like FEHBP – coordinate private
insurance options and provide a set dollar amount to each
beneficiary to purchase from the insurance options
• Approach recommended by the Clinton Medicare
Bipartisan Commission in 1995 and by the Bipartisan
Policy Committee Task Force in 2010
69. Washington Post editorial, May 8, 2011
• “Democrats have effectively scared seniors as a political tactic for
many years. Republicans returned the tables in 2010… Now Rep. Paul
Ryan (R-Wis.) has given President Obama and his party a chance to
reclaim the low ground and they haven’t hesitated. [premium support
proposal]
• “But it’s [Ryan’s proposal] honest enough to acknowledge that simply
preserving Medicare as we know it is not an option…
• “…the concept is hardly beyond pale – as past support for it, in some
form, from Democrats such as budget expert Alice Rivlin and former
Senator John Breaux suggests. [In addition] the principle undergirds
how Medicare pays for drugs, and resembles how the Obama health
plan would subsidize insurance on market exchanges for some non-
senior adults.”
70. What are the options for
Medicare?
If Medicare in its present form was not be affordable for U.S. taxpayers;
what would you do?
a. Raise eligibility age
b. Increase beneficiary share of costs
c. Limit benefits or move coverage to more of a catastrophic insurance
model
d. Increase Medicare taxes
e. Change Medicare policies and payment approaches to encourage
greater cost efficiency
f. Move Medicare to a premium support model with private insurers
g. Some combination
71. What would you do about Medicare?
If Medicare in its present form was not be affordable for U.S. taxpayers;
what would you do?
a. Raise eligibility age
b. Increase beneficiary share of costs
c. Limit benefits or move coverage to more of a catastrophic insurance
model
d. Increase Medicare taxes
e. Change Medicare policies and payment approaches to encourage
greater cost efficiency
f. Move Medicare to a premium support model with private insurers
g. Some combination
72. “Yes, We Can”
“Yes, we can do what it takes to create a better
future, but we all must do out part, and we need to
start now.”
-Hon. David M. Walker, Former Comptroller General
of the United States (1988-2008)