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Welcome to the Financial Reality (& Negative Trend) of USA Inc. F2010 Cash Flow = -$1.3 Trillion; Net Worth = -$44 Trillion USA Inc. Annual Cash Flow & Year-End Net Worth, F1996 — F2010 BAGS 6 m2 cm me ee — mm ae ow me mn = a wn — a HS $15,000 $0 oe = < 8 s z Al it -$15,000 < FS = 2 ° ue = = ‘ _ S Q 2 Se oe . eaideniaaataetaitaataniaaiaeeten $30,000 F 3 7 2 =m One-Time Expenses* ul < s"] 4 " ‘ a A “$1,200 mmm Cash Flow (leftaxis) = / A -$45,000 >= Net Worth (right axis) ' $1,600 oo -$60,000 F1996 F1998 F2000 F2002 F2004 F2006 F2008 F2010 Note: USA federal fiscal year ends in September; Cash flow = total revenue — total spending on a cash basis; net worth includes unfunded future liabilities from Social Security and Medicare on an accrual basis over the next 75 years. *One-time expenses in F2008 include $14B payments to Freddie Mac; F2009 includes $279B net TARP payouts, $97B payment to Fannie Mae & Freddie Mac and $40B stimulus spending on discretionary items; F2010 includes $26B net TARP income, $137B stimulus spending and $41B payment to Fannie Mae & Freddie Mac. F2010 net worth improved dramatically owing to revised actuarial estimates for Medicare program resulted from the Healthcare reform legislation. For more definitions, see next slide. Source: cash flow per White House Office KP of Management and Budget; net worth per Dept. of Treasury, “2010 Financial Report of the U.S. Government.” www.kpcb.com USA Inc. | High Level Thoughts 27 Think About That... The previous chart is in TRILLIONS of dollars. Just because million, billion and trillion rhyme, doesn't mean that they are even close to the same quantity. KP a USA Inc. | High Level Thoughts 28 HOUSE_OVERSIGHT_020855