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Thursday, February 24, 2011

Mary Meeker: How to Fix U.S.A. Inc.

Mary Meeker: How to fix USA Inc.
Internet Queen, Mary Meeker, offers a plan for "U.S.A. Inc" to get out of its financial hole. It makes a lot sense. Will any political leaders emerge to help turn around USA Inc.?

Mary Meeker / Business Week:
USA Inc: Red, White, and Very Blue --
Mary Meeker says that if the U.S. were a corporation, it would be sick—but fixable. Ideas for solving the U.S.'s long-term fiscal mess...

the idea of the U.S. as a corporation is more than a thought-experiment. It's a way to reposition our approach to long-term problems. What would USA Inc. be worth? Who would want to buy its shares? And what would a turnaround expert recommend for a company that lost more than $2 trillion ("net operating cost") in 2010?...

I'm the lady whom Barron's called the Queen of the Net in 1998. Over the past quarter-century I've covered tech companies that have created more than 200,000 jobs worldwide, including Apple, Microsoft, Dell, Amazon.com, Google, and eBay. I worked for Morgan Stanley from 1991 until November 2010, when I became a partner at the venture capital firm Kleiner Perkins Caufield & Byers...
Shareholder Alert: The State of the Business Is Not Good

The bottom line on USA Inc.? Cash flow and net worth are negative, profits are rare, and off-balance-sheet liabilities are enormous. The "company" has underinvested in productive capital, education, and technology—the very tools needed to compete in the global marketplace. Lenders have been patient so far, but the sky-high rates on the sovereign debt of Greece, Ireland, and Portugal suggest what might lie ahead for USA Inc. shareholders and our children.

By our rough estimate, USA Inc. has a net worth of negative $44 trillion. That comes to $143,000 per capita. Negative...

Medicare and Medicaid are the biggest challenges to USA Inc.'s solvency...

USA Inc. has a spending problem, not a revenue problem...

Perspective - USA Entitlement Spending = India's GDP

USA Inc. - A Basic Summary of America's Financial Statements

discussion:
Nicholas Carlson / SF Gate:
Mary Meeker's Brilliant, Tech-Centered Turnaround Plan For USA Inc -- 
Kleiner Perkins partner Mary Meeker published a gigantic 460 page research report this morning, analyzing the entire USA as if it were a company.

"USA Inc," she calls it.

Meeker's verdict: "By the standards of any public corporation, USA Inc.’s financials are discouraging." ...
Deal Book / NY Times:
Mary Meeker on How to Fix U.S.A. Inc. --
Ms. Meeker, the former Queen of the Internet turned venture capitalist, urges taxpayers to think of themselves as shareholders in U.S.A. Inc. — a debt laden, bloated corporation. That investment, she writes, is at risk unless the government makes some serious changes...
----
Sara Lacy / TechCrunch:
Can America Function More Like a Fiscally Responsible Company? It’s up to Us, the Shareholders --
... in a thorough report issued today, Kleiner Perkins partner Mary Meeker has taken all emotions, politics, spin and manipulation out of the issues, to present a steely-eyed view of just how hosed our financial situation is. Spoiler alert: It’s not pretty. America is gripped by a new red menace and this time, it’s not the commies– it’s a sea of red ink. If politicians reported to voters the way management reports to shareholders, no one would finish out their terms.

If you’re a tax-paying American, you should read the report to see how your money is being spent...
----
update:  
Do we have to kill all the old people to balance the budget?
Euthanizing 70 year-olds seems a little extreme. However, the word Euthanasia is derived from a Greek word meaning "happy or fortunate in death." So wishing 70 year-olds a "happy and fortunate death" isn't so bad. No one is saying the US should adopt a policy of Senicide, but the idea of spending over $100 billion of Medicare dollars per year in order to extend the lives of the terminally ill by a few months is not good public policy.

The following graphic from page 162 of Mary Meeker's report notes that approximately 28% of annual medicare spending is geared toward end-of-life care (given in the last 12 months). That of course is too much. A more humane and economical hospice policy with palliative care is the way to go. Everyone deserves a "happy or fortunate death."

Meeker Report: 28% of annual medicare spending is geared toward end-of-life care (given in the last 12 months)

Yglesisas:
How To Run America Like a Business: Get Rid Of All The Old People --
If you’re trying to look at America from a balance-sheet perspective the problem is very clear. It’s not “entitlements” and it’s not “Social Security” and it’s not “Medicare” and it’s not “health care costs” it’s the existence of old people. Old people, generally speaking, don’t produce anything of economic value. They sit around, retired, consuming goods and services and produce nothing but the occasional turn at babysitting. The optimal economic growth policy isn’t to slash Social Security or Medicare benefits, it’s to euthanize 70 year-olds and harvest their organs for auction...

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