1. 1 The story of The Fed Family

2. 2 Joe Judy Johnny Sally and Max!

3. 3 Joe has a good job and plans to retire in 5 years. THE SITUATION Judy stays home with the children. Grandma had a stroke last year and is in a coma. Johnny and Sally attend private school.

4. 4 Joe has a nice income of $129,000 per year. However, the Fed Family is living beyond their means. They have no cash and had to add over $12,000 to their credit card debt 2010 Gross Domestic Product The Fed Family share of the 2010 deficit

5. 5 They have $79,473 in credit card debt In order to make ends meet, Joe borrowed all the money from Grandma’s trust account: $40,149 Fed Family share of publicly held debt Fed Family share of amount “borrowed” from Social Security trust fund

6. 6 Grandma’s estimated care at the Park Avenue Nursing Home over the next several years is: $200,000 But Joe doesn’t think he’s signed a contract, so he isn’t worried…. Fed Family share of obligation to Social Security and Medicare Some say this estimated obligation is not a liability…

7. 7... so the Fed Family got together and had a family meeting …

8. 8 Why do we have to pay for Grandma? The latest plan to privatize Medicare. Or is it?

9. 9 Let’s not visit Aunt Frieda this Saturday! Great idea! But that will only save $263! The value of $30 billion in cuts toward deficit reduction

10. 10 I know, I’ll go to the bank and extend our credit card limits! Unfortunately Joe’s bank is now a subsidiary of the Bank of China and won’t extend more credit until the Fed Family gets its act together! As of May 2011, China holds 36 percent of all foreign-owned Treasury Securities (16 percent of total public debt)

11. 11 No, we all need to chip in to get out of the mess your father got us into!

12. 12 Joe ― resigns himself to working 5 more years Johnny and Sally ― go to public school Max ― gets dry dog food Grandma ― moves to a more suitable nursing home Judy ― takes a part-time job Bank extends credit after approving a payment plan that begins to reduce the outstanding balance THE PLAN

13. 13 Historical & Current Policy Projections for the Composition of Non-interest Spending

14. 14 Analysis of Federal Liabilities, Intragovernmental Debt and Social Insurance Obligations (in trillions)20102009 FEDERAL LIABILITIES Publicly held debt 9,060 7,583 Federal employee and VA benefits 5,720 5,284 Other 1,576 1,257 Intragovernmental debt (owed to trust funds) 4,577 4,391 FEDERAL SOCIAL SERVICES OBLIGATIONS Social security 7,949 7,677 Medicare (Parts A,B & D) 22,813 38,107 Other 97 94 Total liabilities, intragovernmental obligations and Social Insurance 51,792 64,393 Current dollar GDP (3rd quarter 2010 and 4th quarter 2009) 14,750 14,119 Publicly-held debt as a percentage of GDP6154 Liabilities and obligations as a percentage of GDP351456

15. Components of the Solution

16. Communication & Education

17. Sustainability

18. Transparency

19. Ideas for Consideration Sustainability Transparency Stewardship

20. Resources www.vscpa.com/FiscalResponsibility www.aicpa.org/WhatsAtStake http://tinyurl.com/2011CitizensGuide (PDF)http://tinyurl.com/2011CitizensGuide http://www.fms.treas.gov/fr/index.html http://datapoint.apa.virginia.gov/