A couple of years ago, venture capitalist and former Wall Street superstar Mary Meeker published an analysis of the US government’s finances: USA, Inc..Meeker assessed the government as if it were a company.
Her conclusion was simple:
The US government’s spending growth had become completely detached from its revenue growth. If it did not quickly move to fix this problem, the country was screwed.
Two years later, Meeker has updated her analysis (see attached slides). And her assessment is no less dire.
Although our debt levels have not yet hit the “bang” point that will lead to skyrocketing interest rates and an immediate crisis, our spending vs. revenue trends are still completely unsustainable.
As at any company, the only way to fix this train wreck-in-the-making is for management–in this case, Congress and the President–to get together and make a lot of hard decisions.
If management makes those decisions, we’ll be fine.
If it doesn’t, we’re screwed.
So, now that the election is out of the way, it’s time for the management of USA, Inc. to get its act together and start fixing this problem. And as almost every non-partisan economist has noted, the only viable solution will involve both raising taxes AND cutting spending growth.
Get cracking, government!
Mary Meeker is a partner at Kleiner Perkins, one of Silicon Valley's most legendary venture capital firms. She gave this presentation at the Excellence In Investing Conference
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