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Kleiner Perkins, a well know venture capital firm in Silicon Valley, has put together an incredible report on the state of the budget and our finances in general. You can read the .pdf here:
The total document is like a book consisting of Power Point slides. You just have to see it all to comprehend the work that went into it. Some data tidbits:
*If you take out the underfunded entitlement spending, the US would have run a budget surplus 9 out of the last 15 years
*For the Reagan haters:
Revenue as a % of GDP in 1980: 19%
Revenue as a % of GDP in 1900: 18% <— flat to down.
Outlays as a % of GDP in 1980: 22%
Outlays as a % of GDP in 1990: 22% <— flat
*Current tax rates, counting social taxes + individual income taxes, are at 12% of GDP, or at about 1970-era levels. At the start of the Bush43 Presidency, 2000, they were at 17%, a historical record. <— Take further note.
*Corporate income taxes are about the same as the 1980s, when you account for the relatively crappy economic conditions
*Defense speding as a % of GDP is at 1950 levels. Its all time high was in 1960. <— take note, abusers of the Eisenhower quote.
*Entitlement spending, both Social Security and Healthcare, are at all-time historical highs.
*Overhead is 40% of defense spending, and the report notes that the Deficit Commission found some $300B in cuts (over time) that could be made there. No private firm would act this way.
*The SS trust fund is merely a pile of T-bonds. So in other words, we owe ourselves interest on all that money. That bill comes due in ~2017, at which time we’ll be hammered with interest payments.
*Entitlement spending is up 169% over the last 15 years, while dedicated funding for it is only up 70%
*Social Security and unimployment insurance have more or less broken even until about now.
*Medicaid has ALWAYS operated in the red, averaging about $160B or so
*Medicare has ALWAYS operated in the red, averaging about $123B or so
This bullet point really tells the story:
Dedicated funding for SS and Medicare/caid in 2010: $0.87T
Dedicated outlays for SS and Medicare/caid in 2010: $1.98T
That’s just amazing.
*In 1962, SS provided 32% of a retiree’s income. Now it’s 37%.
*When Medicaid was created in 1965, 1 in 50 Americans received coverage. Now it’s 1 in 6.
*Total government spending on health care (federal + state + local) is up 7x since 1960, from 1.2% of GDP to 8.2% today
*Consumer out of pocket total spending decreased from 47% in 1960 to 12% today
*Our healthcare spending is 3X other OECD nations, yet we’re near the bottom in many health indicator categories
*Medicare Part D actually cost LESS than expected – projection was for $111 billion annually, so far only $61B/year. Two reasons: 25% less uptake by seniors and partial outsourcing to private industry, who found ways to cut costs. (Looks like the savings is split fairly evenly between both)
I think this report should be required reading for anyone who wants to have a conversation about the budget. This stuff is just too important not to be armed with the right data.