Immigration Adjusted Birth Index - HS Dent by panjiahuoa

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									             F2010 USA Inc. Revenues +
               Expenses At A Glance




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
     Unfunded Entitlement (Medicare + Social Security) + Underfunded
     Entitlement Expenditures (Medicaid) = Among Largest Long-Term
                  Liabilities on USA Inc.'s Balance Sheet




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
      Total Government* Healthcare Spending Increases are
      Staggering Up 7x as % of GDP Over Five Decades vs.
                Education Spending Only Up 0.6x




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
        Federal Government Spending Had Risen to 24% of
               GDP in 2010, Up From an Average of
                       3%From1790to1930




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
           Entitlement Spending Increased 11x
        While Real GDP Grew 3x Over Past 45 Years




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
        Entitlement Spending + Interest Payments
       Alone Should Exceed USA Inc. Total Revenue
                   by 2025E, per CBO




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
       America’s Resources Allocated to Housing + Healthcare Nearly
       Doubled as a Percent of GDP Since 1965, While Household and
                  Government Savings Fell Dramatically




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
                        Income Statement –
          F2010 USA Inc. Revenues + Expenses at a Glance




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
              Defense Spending Has Risen,
          Driven by Wars in Afghanistan + Iraq




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
           While USA Inc. Ranks # 1 in Defense
            Spending; Top 25 Countries, 2009




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
       USA Inc. Ranks # 6 in Defense Spending as
       Percent of GDP; Top 25 Countries Percent of
                       GDP, 2009




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
           Entitlement Spending: 76% Is Directed to
                       Social Security +
                     Medicare + Medicaid




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
        Entitlement Spending: Social Security Funding Has Worked,
      So Far While Medicare/Medicaid Are Underfunded by $5.6 Trillion
                          Since Inception in 1965




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
        Entitlement Spending: Social Security Funding Has Worked,
      So Far While Medicare/Medicaid Are Underfunded by $5.6 Trillion
                          Since Inception in 1965




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
         Entitlement Spending: Program Beneficiaries (Now29%*of
       Population vs.13%* in 1966) Have Grown Faster than Population
             Owing to Aging Population + Expanded Eligibility




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
     Entitlement Spending: While Beneficiaries From Aging Population
         Rose 2x From 1966 to 2009, Beneficiaries From Expanded
               Eligibility (Low-Income / Disabled) Rose 10x




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
        Entitlement Spending: Entitlement Program + Government Employee
              Beneficiaries Are Now 36%* of Population vs. 20%* in 1966




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
       Entitlement Spending: Rising Entitlement Income Is
      Highly Correlated (82%) with Falling Personal Savings




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
           Medicaid: Underfunded by $3.7 Trillion
          Over 45 Years, With No Dedicated Funding




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
           USA Healthcare Spending Is Higher Than All Other OECD
                             Countries Combined
          (with 35% of Other OECD Countries’ Combined Population)




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
       USA Per Capita Spending on Healthcare
                = 3x OECD Average




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
          USA Spending on Healthcare as % of
               GDP = 2x OECD Average




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
           USA Spending on Healthcare IS NOT
       Performance-Based and IS NOT Correlated to
                Longer Life Expectancy




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
     If History is a Guide, There is Potential for Estimates to
       Understate Eventual Costs – Medicare Is 10x Higher
                      Than Spending Forecast




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
       Social Security: Each Retiree Was Supported
        by 42 Workers in 1945 & Just 3 Workers in
                           2009




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
      Americans Are Living 26% Longer, But Social Security
      ‘Retirement Age’ Has Increased Only 3% Since Social
                  Security Was Created in 1935




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
       Debt Level: Why It Has Risen? Answer Part 2:
        Revenue (Esp. Corporate Taxes) Fell Below
                      GDP Growth




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
                Debt Level: Why Will It Continue to Rise?
        Answer Part 3: Potential Loss on Guarantees on Fannie Mae /
                   Freddie Mac Originations Could Rise




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
            Debt Level: GSEs’ Expansion Into ‘Non-
               Conventional’ Mortgage Lending
           Business Has Proved to Be Costly So Far




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
       Effective Interest Rates: While USA Debt Has
         Risen, Net Interest Payments Have Fallen




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
     Effective Interest Rates: Hypothetical Exercise – If USA 2009 Cost of Debt
      Was Paid at 30-Year Average Interest Rate Level of 6% vs. Current 2%,
        Annual Interest Cost Would Rise 3x to $566 Billion from $196 Billion




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
          Debt Composition: Foreign Investors &
         Governments Hold ~46% of USA Inc. Public
                          Debt




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
      Debt Composition: Foreign Investors & Governments
      Hold 46% of USA Inc.Public Debt, Up From 4% in 1970
               – How Much Higher Should It Go?




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
       Entitlement Spending + Interest Payments
      Alone Should Exceed USA Inc. Total Revenue
                      by 2025E!




Source: USA, Inc. Summary; www.kpcb.com
     Real Estate Bubble: Root Causes—Government Home Ownership
     Push +Declining Interest & Savings Rates + Aggressive Borrowing
         and Lending Led to 10+ Years of Rising Home Ownership




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
        Real Estate Bubble: Home Prices Rose Dramatically
         (7% Annually) for 10 Years – Up ~2x Over 10-Year
                        Period Ending 2007




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
     Banks & Other Mortgage Originators Helped Fuel Housing Bubble
     as They Originated Lower Quality Mortgages – Alt-A & Subprime
          Origination Volumes Up 374% & 94% in 2006 vs. 2003




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
           Real Estate Bubble: Investors Helped Fuel It, Too, as They
           Reached For Yield Without Questioning AAA Ratings of A
                        Subprime-Backed Investments




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
                         TARP Distribution –
          Equally Distributed Among Financial Institutions /
            Automakers / Insurer / Individuals as of 2/11




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
      Fannie Mae & Freddie Mac: Accounted for Majority of
      Total Residential Mortgage-Backed Securities (RMBS)
                      Issuance Since 1990s




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
     Balance Sheet: USA Inc. Total Liabilities: $47 Trillion in
     F2010 Up 5x From 1996, Driven by Medicare Liabilities




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011
     Bad News: USA Inc.’s Entitlement Programs are Inflation Indexed,
     Thus Potential Inflation – Which Would Reduce General Consumer
       Purchasing Power – Would Not Reduce Entitlement Liabilities




Source: Kleiner, Perkins, Caufield & Byers - www.kpcb.com, USA Inc. February 2011

								
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