Mary Meeker, Trump, Clinton & Kotlikoff

Who the hell is Laurence Kotlikoff you ask? I'l get to him in a minute.

First, Mary Meeker's annual State of the Internet address happens this week at Re/Code's Code Conference. I can't wait to see the ~200 page slide deck. It's an annual gem that I rank up there with the Berkshire Hathaway annual letter, the video archives of Steve Jobs presentations, the mother of all demos by Doug Englebart and many others. If you have a must read/watch paper, book or presentation then please post in the comments.

Meeker's Internet Trends gem is best consumed annually so you can really see the trends year over year (much like annual pilgrimages to the Consumer Electronic Show). As I mentioned in my answer to this question, “If I gave you $40,000 to start a business, what would you start?”, I would start with Mary Meeker's research on product/market trends. It's good. I'm looking forward to see updates around:

  1. Tech impact on security, education, healthcare, financial & government over the last year. More.
  2. Can daily usage of digital media go even higher from 5.6 hours per day per adult? Likely.
  3. Will there be a change in top 10 mobile apps used? 6 of them are message apps. Doubtful.
  4. Faceback and Twitter down again amongst young users? Probably for Twitter.
  5. New things: more drones, VR/AR, Unicorn valuation, Uber and regulatory tensions, wearables, enterprise, cohort analysis, freelancers, new mobile apps/services I haven't used, China, India,  ... 

As much as I enjoy the annual tech updates, four years ago Meeker turned her data hounds to the state of the country in a memorable presentation called USA, Inc. You can also find the original 2011 full report here. It made a lasting impression on me and included many painful to read points including:

  1. Tax dollars go to: 56% Entitlements, 20% Defense, 18% Other, 6% Interest
  2. Expenses greater than revenue in all but 5 of the last 47 years
  3. Social Security, Medicare and Medicate make up 74% of the entitlement number
  4. Entitlements are biggest long term liabilities ($36 trillion and off the books of public debt held)
  5. American healthcare cost larger than all other OCED countries combined
  6. Only 49% of American households pay federal income tax
  7. ... AND 46% of American households receive some sort of government payment
  8. Entitlement and interest expenses will exceed revenue by 2025

I'm reminded of the USA, Inc. paper and presentation while listening to the dribble of the current presidential front runners. Funny, but they don't seem to be addressing any of the big issues (BTW did you see last weeks SpaceX video? Talk about BHAG!). Is this really the best that we can do? No significant discussion of the fiscal gap, improving educational ranking, investment in infrastructure and R&D, fixing taxes, fixing entitlements, fixing healthcare, improving social issues and more. 

I ran across this paper for 2016 presidential write in hopeful, Laurence Kotlikoff. I got the reference from Scott Burns in his weekly finance column. It is well worth the hour or two to read through it. A few of the highlights from the first third.

  1. Savings rate is horrible
  2. Middle class is shrinking
  3. Federal Reserve printed $813B from 1913 to 2007. Since then? $3 trillion. Wow.
  4. $13 trillion in debt. Other obligations are off the books. Adding only social security brings total to $39 trillion.
  5. We're told we owe $18 trillion, but the fiscal gap is really closer to $200 trillion. In either case, imagine if you ran your household finances this way. You would be dead broke.
  6. Quote from the paper. "Our employers are not our friends, they are not our parents, and they are not our government. They should not be deciding what healthcare we receive, how much we can save on a tax-sheltered basis, how and with whom we invest our savings and, thanks to these decisions, what we pay in taxes."

I'll stop there because I think I have more than enough bulleted lists in this post. Check out the various links if you are interested in reading more. An exercise for those that are highly motivated. Assume that you have an income of $100,000. What would be your credit card debt if you operated at the same fiscal gap as the USA? And no ... you can't print more coin to pay it off.

Make America Great Again ... For the Kids!

And don't miss Mary Meeker's annual report this week.