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Additional UL: Alternative projection $8.9T $28,076 $62,676 $75,296
Alternative Total Debt $73.3T $231,230 $516,197 $620,135
Statement of Social Insurance• Off-balance sheet liabilities shown on the SOS:
$12.3TSocial Security
$15.7TMedicare Part B - provider (Doctor) coverage
$6.9TMedicare Part D - prescription drug card
$4.8TMedicare Part A - hospital coverage
$39.7TTotal SOS Unfunded Liabilities
$4.8TDebt to Trust Funds
$8.9TAdditional UL based on Alternative Calculation
$53.4TTotal off-balance sheet liabilities for social ins.
Social Security & Medicare Trust Funds
$4.8 trillion
in excess receipts over
disbursements
U.S. Department of Defense
Gross cost: $685 billion
Net cost: $577 billion
Equal to TOTAL of next 9 largest countries
Liquidity and Interest Rate Risks
• $8.1T — borrowed in FY 2013• $7.4T — rolled over • 67 percent — amount of all federal debt
outstanding borrowed in 2013• Implied average maturity: less than 2 years
Current Interest Rates
Federal Funds Rate 0.25 percent
1-month T-Bill 0.04 percent
1-year T-Note 0.11 percent
2-year T-Note 0.36 percent
5-year T-Note 1.40 percent
10-year T-Note 2.19 percent
Fed Interest Rate Expectations
$4.3 trillion — Assets “purchased” as of FYE 2013
The Fed and Qualitative Easing
Still Digging: EG• Medicare Part D — effective 2006
$6.9 trillion unfunded liability = $58,000 per full-time worker
• SOS programs: $53.4 trillion (> $450,000 present-value liability, per full-time worker); (73% of all liabilities). Can’t seem to even change CPI calculation
• 2014: Highway funding approved–“Paid For” – Change in how corporate retirement funding is calculated
• The transfer of significant amounts of financial resources among the three levels of government in the U.S., and
• The direct operating activities of one level of government occurring within the communities of another level of government
Paraphrased from the “Intergovernmental Financial Dependency Risk Prospectus,” presented to the Government Accounting Standards Board by GASB staff, dated March 19, 2007.
Additional Key Dependency MeasuresPrince William County, Virginia
Key Dependency MeasurementCounty
2011Military Facilities- Count 2*
Military Facilities- Present Replacement Value ($Billions)
$6.8*
Military Facilities – Military and Civilian Personnel 321,668**
Federal Leased/Owned Buildings (millions sq/ft) (2012) .2
*Fort Belvoir and MCB Quantico based on proximity to County** Ft. Belvoir-35,330, Quantico-286,338 Note: Quantico may include deployed military. Ref. DOD Base Structure Report FY 2012
1. Assign responsibility to track changes in intergovernmental flows and to understand underlying causes
2. Prepare for impact of changes in intergovernmental flowsa. Quantify impact of changes and update revenue and budget
forecastsb. Modify strategic plans, including service capacity and
performance goals
3. Identify and initiate active communications with those responsible for changes in intergovernmental flows (e.g. Members of the U.S. House and Senate)
Significant Public Admonitions to Address Fiscal Sustainability by Our Governments
“Only an informed public can demand that the political systems, federal, state and local, recognize these problems and take effective action”– State Budget Crisis Task Force Chairmen Richard Ravitch
and Paul Volcker
“There is no easy way out of our debt problem, so everything must be on the table. A sensible, realistic plan requires shared sacrifice…”
- National Commission on Fiscal Responsibility and Reform (Simpson-Bowles),December 2010