And — You Guessed It — Here’s the Punch Line

And — You Guessed It — Here’s the Punch Line... By USA Inc.'s Own Forecast... CB www.kpcb.com USA Inc. | Income Statement Drilldown 173 Entitlement Spending + Interest Payments Alone Should Exceed USA Inc. Total Revenue by 2025E! Entitlement Spending + Interest Payments vs. Revenue as % of GDP, 1980 — 2050E —— Revenue 30% - ~c—Entitlement Spending + Net Interest Payments Total Revenue & Entitlement + Net Interest Payments as % of GDP NO o s 0% . T T T T T T T T T T T T T 1980 1990 2000 2010E 2020E 2030E 2040E 2050E Source: Congressional Budget Office (CBO) Long-Term Budget Outlook (6/10). Note that entitlement spending includes federal government expenditures on Social Security, Medicare and Medicaid. Data in our chart is based on CBO’s ‘alternative fiscal scenario’ forecast, which assumes a continuation of today’s underlying fiscal policy. Note that CBO also maintains an ‘extended-baseline’ scenario, which adheres closely to current law. The alternative fiscal scenario deviates from CBO’s baseline because it incorporates some policy changes that are widely expected to occur (such as extending the 2001-2003 tax cuts rather than letting them expire as scheduled by current law and adjusting physician payment rates to be in line with the Medicare economic index rather than at lower scheduled rates) and KP that policymakers have regularly made in the past. (@E) www.kpcb.com USA Inc. | Income Statement Drilldown 174 HOUSE_OVERSIGHT_020928