How Much Would Real GDP Need to Grow to Drive USA Inc. to Break-Even Without Policy Changes? 6-7% in F2012E-F2014E & 4-5% in F2015-
F2020E...Well Above 40-Year Average of 3%
CBO’s Baseline Real GDP Growth vs. Required Real GDP Growth for a Balanced Budget Between F2011E and F2020E
= = 2 £ oO = > a Q o 5 1 ac 200 2011E 2013E 2015E 2017E 2019E Uff ce = ee we cos ome ees ores ew 9 ame ee Ome = os er Ne Ss ES ee Se Gs es Se = Real GDP Annual Growth (CBO Baseline Forecast) Real GDP Annual Growth Needed to Eliminate Fiscal Deficit =— = 1970-2009 Average Real GDP Growth PAYff co = ows ee we es ome ees oes ew ae Oe = on ee Mee ce SE cE = ee GS Gs ee = K P Source: CBO, “The Budget and Economic Outlook: Fiscal Years 2010 to 2020,” 8/10. www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 359
It’s Highly Unlikely That Annual Real GDP Can Grow Faster Than 6%...
It Happened Only 8 Times in Past 60 Years and Was Always Linked to a Cyclical Bounce Back
CBO’s Baseline Real Annual GDP Growth vs. Required Real Annual GDP Growth for a Balanced Budget Between F2011E and F2020E in Historical Context (1950-2020E)
Real GDP Y/Y Growth (%)
1950 1960 1970 1980 1990 2000 2010E 2020E
Real GDP Annual Growth (Historical) Real GDP Annual Growth (CBO's Baseline Forecast) = =Real GDP Annual Growth Needed to Eliminate Fiscal Deficit
Source: CBO, “The Budget and Economic Outlook: Fiscal Years 2010 to 2020,” 8/10. P (@E) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 360
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