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

1. Steve Hess
• Degree in Business Administration
• CPA – Arthur Andersen & Co.
• 25 years in corporate finance - CFO
• Silicon Valley startups

2. PRIVATE SECTOR
FEDERAL RESERVEFEDERAL GOVERNMENT

3. OUR GOVERNMENT IS BROKE
• The problem
• The cause
• How it affects you
• The fix
• Take action

4. THE PROBLEM
Taxes $ 2.5 trillion
Spending $(3.8) trillion
Deficit $ (1.3) trillion
Out-of-control spending!!!

5. THE PROBLEM
National debt $ 16.7 trillion
Promised entitlements $ 70.3 trillion
Total liabilities $ 87.0 trillion

6. THE PROBLEM
(in $ billions)
2013 2018
NATIONALDEBT 17,000$ 20,000$
INTERESTPAYMENTS 223$ 800$
INTERESTRATE 1.31% 4.00%

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. 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. THE CAUSE
Congress & The White House
No courage

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. 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. 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. 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. 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. STATE OF THE ECONOMY
1.2% GDP growth
8% Unemployment
47 Million on food stamps
+

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. 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. THE GET WELL PLAN

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. THE FED GET WELL PLAN
2008 -- $ 1.4 trillion
2012 --- $ 2.6 trillion

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. TAKE ACTION
• Read the book
• Stay informed:
ourgovernmentisbroke.com
• Spread the word / share your
knowledge
• Meet with your representatives

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. PRIVATE SECTOR
FEDERAL GOVERNMENT FEDERAL RESERVE

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. Q & A

27. SICK CARE
• 16% of GDP in U.S.
• $ 1.8 trillion
• 8% in other countries

28. OBAMACARE
• 2,700 Pages
• $ 500 Million for IRS agents
• 20 New taxes
• Disincentive to hire
• Pushed back one year
• Hated by all