In February, we published a report (nearly 500 slides) that describes how America's spending exceeds our revenues, how and why our debt levels are rising, and how we got here. The report, called “USA, Inc.”, is intended to be fact-based and bipartisan. We do not provide policy recommendations but instead endeavor to provide context about America’s financial trends. Feedback on the report was broad and largely positive. The key request we received was to simplify the report, so we summarized it in 90 slides and provided an audio overlay. Yesterday we posted the new version on the Kleiner Perkins Caufield & Byers website. Click hear to see it. The summary is clear: Our country simply spends more than it brings in; we have lost money in 40 of the past 45 years, and we can't keep boosting our borrowing indefinitely. If we look at America as if it were a publicly traded company that had to manage its finances responsibly, investors should be rousing for a clear plan to steadily and slowly reduce the budget deficit. The numbers imply:
If you work in a business or manage a household you likely think about these types of numbers often. The fact is our leaders clearly need to make some tough decisions. With our presentation, we aim to share the facts in the most effective way we know how and to help anyone who sees it to, perhaps, make more informed though difficult choices. Our reality is that nearly everyone needs to make some sacrifices so we can begin moving our country's finances in the right direction. America's financial challenges are headlined by a negative net worth of $44 trillion (or $371,000 per household) and gross debt as a percent of GDP in excess of 90%. But they can be solved with constraint and reduction in government spending at the top of the list. Entitlement spending is the largest expense by far and has risen to 57% of annual expenses, up from 25% 40 years ago. By the government's own forecast, our annual entitlement spending plus the interest expense on our debt is expected to surpass our revenue within 15 years. We all need to acknowledge the problems and commit to change. Read the report, pass it around and engage in the debate.Mary Meeker is a partner at Kleiner Perkins Caufield & Byers and served as a managing director and research analyst at Morgan Stanley from 1991 to 2010.
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