HOUSE_OVERSIGHT_021050.jpg

On a Net Worth Basis, USA Inc. Also Sits in Middle of Pack vs. Western European Peer Governments Illustrative Estimates* of Government Net Worth, 2009 o. 400% -------------.-.--.-...-___....._._.. .- Gi ra} Better Than USA Worse Than USA i) > 0% i] T T T T T T T T T 1 & = S a Cost of Ageing = 400% -------- i -- ---i-- i---o-- ae a =a = ¢ 800% -..-..---------------- i i 5 - _ @ Structural Deficit = (i) c o > ° OG 41200% js atnitial Debt Level a % = a LU -1600% +--------=-----._---....___.__.._. _ . . . - Pa) Pa) CS = = > S 2 ° a 7 2 & a LL e = Oo Note: *Estimates of government net worth depends heavily on underlying assumptions such as projections for GDP, demographics, policy changes, etc. Net worth estimates may differ from U.S. Dept. of Treasury’s data (used in earlier slides). For more details on underlying assumptions, please refer to Morgan Stanley Research’s Global Outlook piece “Sovereign Subjects: Ask Not Whether Governments Wilf Default, But How,” 8/25/10. KP Source: Arnaud Mares, Morgan Stanley Research. www.kpcb.com USA Inc. | Consequences of Inaction 417 Combined With US Dollar's Reserve Currency Status, Investors Still Prefer USA Inc.’s Debt, For Now Global Aggregate Foreign Exchange Reserves by Currency, 1999 — 2010* (am Other Currencies mas Euros $5,000 ---- MMMIUS Dollars ree mes im tt ee es im = te mB gS ct -- ——US Dollars’ Share of Total 75% - 50% 25% Global Foreign Exchange Reserves (US$B) wn wn wn = N (a eo ‘eo r=) oO oO oO Oo oO oO US Dollars’ Share of Total 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* KP Note: 2010 data are preliminary and as of CQ3. Source: IMF. www.kpcb.com USA Inc. | Consequences of Inaction 418 HOUSE_OVERSIGHT_021050