Our government is broke

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

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Our government is broke

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

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