How to Fix USA Inc.

USA Inc.is a non-partisan report that looks at the U.S. federal government (and its financials) as if it were a business. Mary Meeker, partner at KPCB and former financial analyst at Morgan Stanley, created and compiled the report with the goal of informing the discussion about our financial situation and outlook. USA Inc. examines the country’s income statement and balance sheet, aiming to interpret the underlying data and facts, and illustrate patterns and trends in easy-to-understand ways. The report also analyzes the drivers of federal revenue and the history of expense growth, and discusses basic scenarios for how revenue and expense growth might change to help America move toward positive cash flow.

so valuing the usa, what if america was a publicly traded company?

my next guest dug into the numbers to take a look at what is happening in the usa.

after calculating company dpngss for decades, Mary Meeker recently turned her focus to the U.S. company. in a record called USA, she found America has a negative net worth. the person behind the report right now, Mary Meeker, analyst turned venture capitalist, she is a partner at Kleiner, Perkins, Caufield and Biers.

Let's talk about how we arrived at this position. our audience remembers your great work as a tech analyst for two decades. how and why has spending risen as much as it has and now exceeds the revenue the country takes in.

It's always good to go back in time and go back to the beginning. if we look at the first 150 years of our country, government spending was relatively low, averaged about 3% of our GDP, largely directed toward defense spending.

In the 1930s, after the great depression, in response to the carnage that was caused, our government begin increasing spending to help Americans through tough times, social security, unemployment insurance, both great programs, important programs. our government created medicare and medicaid, and care to the elderly and disabled.

Over the last 50 years, health care costs have risen dramatically, up to 8% of gdp, up from 1% 50 years ago,

And the percent in Americans, medicare and medicaid has risen markedly as well.

That's more than double the level when the programs were created in the mid 1960s. net of it all is the expense and the reach of the programs has gone well beyond the original plans.

All in, and in the previous speaker talk about entitlement spending, 57% of our tax dollars go to entitlement programs. 20% goes to the fed, 50% goes to, while 6% goes to interest expense.

All right, so 57% -- this is important. 57% of tax dollars going to entitlement programs like, this was one of the biggest . first, and it's important to set the table. 20% of gdp one would hope the downgrade, to the elected officials and our citizens. s&p is very clear earlier this year, when they want avoid a potential downgrade,

We came back with a great first-pass plan, a good step at 2.4 trillion, and I think the market and the s&p and the data in my view imply that more needs to be done. so do you believe that the U.S. can fix the financial issues? how long would that take?

What's your take in terms of getting our arms around the entitlements and actually taking that spending, 57% of tax dollars, lower? i think it's totally fixable.

I think it's akin to a corporate turnaround. there are a couple companies in the United States that are near and dear to our hearts that were both either bankrupt or on the cusp of bankruptcy that have effected fab will you turnarounds.

You need great leadership, great courage, you need to put everything on the table it's the obvious stuff.

I think we've talked about it, but we haven't necessarily gone deep enough in discussing how we're going to solve the problems.

I think the report that Alan Simpson a Bowles came up with -- if you had to rate the usa hink, what's your rating? my rating -- i'm an optimist, i always have been, i think these changes are actually not that hard to do. i think the people want them.

I think the people need to speak, and if the leadership pushes in the right direction, we'll look back on this as a moment in time that galvanized us to have more resolve and move forward.

I would be short-term neutral, long-term bullish. Mary, one of to have you on the program. great report.

Go to Kleiner Perkins' website to get the report.

Mary Meeker joining us, author of usa hink. we'll see you soon.

Thanks.