Presentation Transcript

1. State of Education
2. Urban vs. Suburban Graduation Rates 2005
3. Worst High School Graduation Rates of 50 Largest Cities Omaha, NE 55.1% Houston 54.6 Portland, OR 53.6 Las Vegas 53.1 San Antonio 51.9 Chicago 51.5 Tulsa 50.6 Jacksonville 50.2 Philadelphia 49.6 Miami 49.0 Oklahoma City 47.5 Denver 46.3 Milwaukee 46.1% Atlanta 46.1 Kansas City, MO 45.7 Oakland, CA 45.6 Los Angeles 45.3 New York 45.2 Dallas 44.4 Minneapolis, MN 43.7 Columbus 40.9 Baltimore 34.6 Cleveland 34.1 Indianapolis 30.5 GRAND PRIZE – Detroit 24.9% America’s Promise Alliance 2008
4. K-12 Education Cost vs. Achievement of 17-year-olds since 1970
5. Public School Enrollment vs. Public School Employment Since 1970
6. Tracking Graduation Rates http://apps.arcwebservices.com/edweekv3/default.jsp
7. Education Shapes Economics
8. U.S. Education Attainment25 Years and Over, 1940-2010 High School Diploma Percent of Population Bachelor’s Degree or Higher Data Source: U.S. Census Bureau, 2011
9. Unemployment by Education Level Unemployment Rate Data Source: Federal Reserve, 2011

10. The History of Retirement

11. History of Retirement Retirement: a complete and permanent withdrawal from paid labor. Historically, retirement has been solely for the rich, however, since 1880 there has been a steady increase in retirement rates. If the current retirement trend continues, 20 year olds today in the US, UK, France and Germany can expect to live 1/3 of their lives in retirement.
12. Union Pensions Union army veterans retired at a higher rate at all ages than the general public. Union pensions reflect a pure income effect on labor supply. In 1900, a 1% increase in pension benefits increased retirement rates by .73%.
13. % of Population Aged65 and Older Source: Evolution of Retirement, Costa.
14. Who We Support Today with Entitlement Spending Population currently over 65 Thousands
15. Population over 65 by 2025

    Who We Will Support in the Future

    Population currently over 65 Thousands
16. Why 65? “Age 65 is generally set as the threshold of old age since it is at this period of life that the rates for sickness and death begin to show a marked increase over those of the earlier years” -Issac Rubinow, 1916 “It is a commonplace fact that physical ability, mental alertness and cooperativeness tend to fail after a man is 65” -Federal Government before the Supreme Court, 1936
17. Age Discrimination Retirement rates increased from age discrimination at the beginning of the 20th century resulting from: Shorter workdays Scientific Management
18. Importance of Social Security Benefits to Those Aged 65+ 34% 35% 90% to 100% of Income Less than 50% of Income 50% to 90% of Income 31% Source: SSA 2005

19. Unfunded Entitlement Obligations In $trillions

    Includes Social Security and Medicare $46 trillion Addition of Medicare Part D Source: The White House, US Treasury
20. Rats off the Pension Ship Companies cannot afford to offer pensions, so shift burden to individuals If companies, with consultants and resources, cannot figure out how to provide income over a person’s retirement, what makes an individual qualified to do so?
21. Video Can You Afford to Retire?
22. BREAK
23. www.dilbert.com
24. The State of the States
25. State Pension Funding Levels 2008 Source: Pew Center, The Trillion Dollar Gap, February 2010
26. Estimated State Government OPEB Funding Source: Pew Center, The Trillion Dollar Gap, February 2010
27. Scorecard For States
28. Comparing Pension & OPEB Funding and Liabilities
29. State Budget Gaps2008-2013
30. Bargaining With Public Employees After Wagner Act (private unionization), public employees petitioned for same right, they were denied by FDR JFK signed executive order #10988, which allowed collective bargaining by public employees – setting up current failure of system
31. State vs. Private Employee Hourly Compensation Source: “A Hidden Toll as States Shift to Contract Workers,” New York Times. 11/6/2011
32. State and Local Government Revenues Source: Internal Revenue Service
33. Income and Sales Tax Dropped, but Almost Back Source: Rockefeller Institute, State Revenue Report; February, 2011
34. State Budget Gaps Source: CBO & Pew Center
35. Property Tax Revenue Still Falling Source: Rockefeller Institute, State Revenue Report; July, 2011
36. The “State” of California www.lao.ca.gov
37. State and Local Revenue Adjusted for Inflation, estimated through 2011 Data Source: Rockefeller Institute, 2011
38. Tax Receipts Fell Most taxes come from levies on three things: Income (personal and corporate) Consumption (sales, vehicle, fuel, etc.) Assets (property, inventory, etc.) All three main areas fell, but property taxes are greatest worry Article #31, DOT
39. So States Are Raising Rates Revenue Increases Have Helped to Lessen Cuts to Services Several states facing large budget shortfalls have averted deep cuts in vital services by enacting temporary or permanent revenue increases. In late 2007 and 2008, some ten states enacted tax increases, closed loopholes, restricted tax credits, or implemented other revenue-raising measures. Major packages were enacted in Maryland, Michigan, and New York. Since the recession began, over 30 states have raised taxes, sometimes quite significantly. Increases have been enacted or are under consideration in personal income, business, sales, and excise taxes. Major state revenue packages have been enacted in California, Colorado, Connecticut, Delaware, Hawaii, Nevada, New York, North Carolina, Washington and Wisconsin, among other states. Center on Budget Policy & Priorities, 8/4/10
40. Taxes Rose in 49 StatesYear over Year Changes, 2010-2011
41. Taxes Rose in 49 StatesYear over Year Changes, 2010-2011
42. Money Flows, But at What Cost? Source: Rockefeller Institute, State Revenue Report; July, 2011
43. The Federal Government
44. Government Revenue as Percent of GDP Data Source: St. Louis Federal Reserve
45. Distribution of Federal Spending Data Source: Office of Management and Budget, 2011
46. “Other” Spending Explained Other Discretionary Spending Represent all Federal Agencies Other Mandatory Spending is allocated to rebates and Federal assistance programs such as the Earned Income tax credit, Veteran’s Benefits, Unemployment Insurance, Federal Employee Retirement and Disability, Supplemental SS and Food Stamps Data Source: Office of Management and Budget, 2011
47. Federal Government Expenditures and Receipts In billions of USD Data Source: St. Louis Federal Reserve, 2011
48. Effective Federal Tax Rates, All Payers Data Source: Congressional Budget Office
49. Taxes and the Rich Source: IRS, Statistics of Income, 2008
50. 2010 Federal Tax Schedule 33% 35% 28% 25% 15% 10% $8,375 S $16,750 M $34,000 S $68,000 M $82,400 S $137,300 M $171,850 S $209,250 M $373,650 S $373,650 M Source: IRS
51. Top Federal Individual Income Tax Rates 1913 - 2010 Percentage Source: IRS
52. Federal Tax Schedule: 1980 vs. 2010Marginal Rates for Single Taxpayer(1980 Tax Brackets adjusted for inflation) 1980 2010 $8,375 S $16,750 M $34,000 S $68,000 M $82,400 S $137,300 M $171,850 S $209,250 M $373,650 S $373,650 M Source: IRS
53. What the Future Holds
54. Total United States Debt- 2008 Government $14Trn Financial $17Trn Corporate $11Trn Consumer $14Trn Total: $56 Trn ! Source: Federal Reserve Flow of Funds Report
55. Total U.S. Debt - 2010 Government $16.6Trn Financial $14.1Trn Corporate $10.8Trn Consumer $13.3Trn Total: $54.8 Trn ! Data Source: Federal Reserve Flow of Funds Report, 2011
56. Household Debt as % of Disposable Income, 1946-2010 Data Source: Federal Reserve Z1 Report; Bureau of Economic Analysis, 2011
57. Consumer Credit1978-2011 Source: Federal Reserve; Calculated Risk Blog
58. Change in Debt Outstanding 2000 - 2010 Source: Federal Reserve Flow of Funds Report (FRB Z1)
59. U.S. Retail Sales & Ex-Gasoline January 1992 – August 2011 Source: Calculated Risk Blog
60. Inflation Adjusted Total Retail Spending January 1992 - August 2011 Adjusted for Inflation Retail Sales Data Source: US Census Bureau, 2011
61. Change in Real Total Retail Spending October 2007 - August 2011 Index 100= Oct. 2007, Inflation Adjusted Data Source: US Census Bureau, 2011
62. Capacity UtilizationJanuary 1967 – September 2011 % of Capacity Data Source: Federal Reserve, 2011
63. % Capacity Utilization2005 – September 2011 Data Source: Federal Reserve, 2011
64. Industrial Capacity, Industrial Production, And Capacity Utilization Rate, 1967 – September 2011 Data Source: Federal Reserve, 2011
65. Industrial Capacity, Industrial Production, And Capacity Utilization Rate, 2005 – September 2011 Data Source: Federal Reserve, 2011
66. Unemployment Rate January 1948 – August 2011 Unemployment Rate Data Source: US Census Bureau, 2011
67. Number of Americans in Workforce 2000 - 2011 Data Source: Bureau of Labor Statistics, 2011
68. Employed and Unemployed in US, Jan 2000 – September 2011 Where are These People? Unemployed Trend Line of Labor Force Growth In Thousands Employed Data Source: Bureau of Labor Statistics, 2011
69. Employed and Unemployed in US, Jan 2000 – August 2011 Data Source: Bureau of Labor Statistics, 2011
70. Unemployed Longer than 6 MonthsJan 1948 - Feb 2011 Data Source: Bureau of Labor Statistics, 2011
71. U3 vs. U6Unemployment Rate Seasonally Adj. % Unemployment by Month Source: Bureau of Labor Statistics
72. Unemployment After Recessions Source: Rockefeller Institute, State Revenue Report; July, 2011
73. Unemployment vs. Wage Growth, 1985-2011 Year over Year Percent Change Data Source: Bureau of Labor Statistics, 2011
74. Median Household Income 1975 – 2010 (2010 Dollars) Data Source: US Census Bureau, 2011
75. Fall in Real Median Household Income Since 2000 Inflation Adjusted Percent Change Since 2000 Data Source: U.S. Census Bureau, 2011
76. Irving Fisher "Stock prices have reached what looks like a permanently high plateau." 1929 1932 Booms and Depressions 1933 "The debt-deflation theory of great depressions"
77. Debt Deflation Theory of Depressions Debt liquidation and distress selling. Contraction of the money supply as bank loans are paid off. (unless outside forces at work) A fall in the level of asset prices. A still greater fall in the net worth of businesses, precipitating bankruptcies. A fall in profits. A reduction in output, in trade and in employment. Pessimism and loss of confidence. Hoarding of money. A fall in nominal interest rates and a rise in deflation adjusted interest rates.
78. The Spending WaveBirths Lagged for Peak Spending Dow Adjusted for Inflation Immigration-adjusted Births Lagged for Peak Spending Data Source: HS Dent Research, U.S. Census Bureau, Bloomberg, 2011
79. Why the Bailout Has Failed Attempted forced lending – what about when there are no borrowers? Corporate & Personal There cannot be a governmental multiplier to monies spent ($1 in govt spending generates more than $1 in economic activity) This is not a temporary setback that can be adjusted to reach equilibrium, this is a true reduction in consumption to which we must adjust
80. Both Sides Are Wrong Keynesian economics do not work. They did not work in the 1930s, they did not work in Japan in the 1990s through now, and they will not work today in the US. Tax cuts do not work. We raised taxes in the 1990s and had a boom.
81. The Blunt Instruments of Government US Government deficit spending, targeted stimulus Federal Reserve interest rates, bond purchases, printing dollars
82. Outcomes – Desired vs. Actual Wanted – inflation expectations, increased borrowing and spending, falling unemployment, higher wages, asset inflation (re-inflation) Got – split prices – deflation in services and real estate, inflation in commodities – local vs. global
83. Dollars Spent on Essential and Non-Essentials vs. Inflation (2000- August 2011) on Those Items Inflation Impact Average Expenditures Data Source: Bureau of Labor Statistics, 2011
84. Inflation since 2000Through August 2011 Core CPI Categories CPI Data Source: Bureau of Labor Statistics, HS Dent, 2011
85. All Printed Dollars Find Their Way to the US Government
86. All Printed Dollars Find Their Way to the US Government Fed owns trillions of bonds, now what?
87. All Printed Dollars Find Their Way to the US Government All profits earned by Fed, through interest received, principal payments, and activities, are given to US Treasury at year end In 2009, Fed gave US Treasury over $40 billion What if $1 trillion of US bonds mature on the books of the Fed?
88. Depression Economics for the 2010’s Less liquidity – employment, credit, assets Less mobility – cannot sell homes, get jobs More multi-generational homes (kids don’t leave) Less Choice – Best Buy & Circuit City, financed inventories
89. This, Too, Shall Pass Our demographic-driven downturn will last until the next generation pushes up its own spending in earnest – 7 to 10 years We have large cohorts of 20 year olds and younger Much more favorable position than other developed countries
90. Conclusion of Demographic School