If, like me, you are concerned about America's mammoth deficits and the staggering ($44 trillion) national debt, let me recommend the best article I have seen to date: Mary Meeker, "Would you invest in a company that lost $2trillion last year and has a net worth of negative $44trillion?" BLOOMBERG BUSINESS, February 28, 2011. Meeker, a highly successful and experienced financial analyst, also has a book length treatment of the topic out:
Last, but not least, she has made a 460-slide PowerPoint presentation available at www.businessweek.com/go/11/usainc/
Among the important points that Meeker makes in the article:
--- "There is an 82 percent correlation between rising entitlement spending and falling personal savings rates.
--- "If current trends continue, the [Congressional Budget Office] says, entitlement spending and net interest payments combined will equal all of federal revenue by 2025, just 14 years from now."
--- "Combined federal, state, and local spending on health care exceeded spending on education for the first time [around 1990]. That may be one reason American students have fallen out of the lead on international standardized tests. In 2009, American 15-year-olds ranked 17th in science and 25th in math out of 34 [developed] nations. (If it's any consolation, they're at or near the top in self-confidence.)"
--- "Since Social Security's creation in 1938, life expectancy has increased 26 percent to age 78, while the system's normal retirement age has gone up just 3 percent to 67."
Stay tune for more comments on Meeker's work in future postings to this blog.
I was searching online looking at colleges in pa when I came across your article, and I'm happy I did because it was such a interesting read. I'm not sure if I personally could invest in a company that lost 2 trillion dollars but than again I'm not a huge risk taker. Thank you for sharing such a insightful article with us!
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