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The biggest take-away for me is that we are changing the way we do... pretty much everything.

Two things I noticed:

1. There is a big shift towards convenience and broader participation.

2. An increasing proportion of our activities are conducted through smart phones and tablets instead of going somewhere or using a device specifically designed for a given purpose. Many activities are becoming "just another app" and losing their traditional context.

Finally, there's a cautionary message about US debt. The disturbing chart of US entitlement and interest spending vs. revenue. At the current rate, in 2025, the government will be spending more on entitlements and interest alone (NOT taking into account government spending on defense, education, etc.) than they have revenue.

> At the current rate, in 2025...

If something can't go on forever, it won't. The US will solve the budget problem at the very last second before financial self-destruction, but not one minute earlier.

Can you provide any base for this assertion?

That's not working well in Greece, Spain, Italy, Ireland, etc.

The flipside of this is: how much Internet in our lives is a good amount? To get a look at internet usage "from the outside", Paul Miller (on of The Verge's top editors) has quit the internet and will write about his observations for one year. The articles he's written so far are fascinating, and he's just getting started. http://www.theverge.com/label/offline I recommend reading them in chronological order, from the bottom.

At the current rate, in 2025, the government will be spending more on entitlements and interest alone (NOT taking into account government spending on defense, education, etc.) than they have revenue.

According to the pessimistic "Alternative Fiscal Scenario" in the 2011 CBO budget forecast estimate, this won't be true until after 2035 (the last year they estimate for). Ms. Meeker decided to use an older 2010 CBO estimates to make her point.

Also the CBO makes it clear that it is healthcare spending, not social security, that is causing the vast majority of the trouble. Alas, 64% of the increase is apparently due to baby boomers. If the US government would stop passing the "doc fix", the Extended-Baseline Scenario of the CBO estimates would kick in and we'd be looking at nearly no spending growth past 2014.

The "cautionary" message appears to be more political than anything else. The extrapolated line for "entitlements and interest" is almost identical to that of Paul Ryan's budget and groups things like Social Security-- which those receiving it PAID for-- as "entitlements".

It is, basically. The "entitlement" framing is a republican trope at this point; it's designed to make it sound like we're handing out cash to people who don't deserve it. If you relabel it "Medicare" and "Social Security" (concepts that are more familiar to the reader and thus make the graph easier to interpret) people tend to view it as worthwhile spending.

Likewise the revenue numbers look a little spun. They appear not to be including the near term bump due to the expiration of the 2001 tax cuts.

"those receiving it paid for"? I don't think you understand how Social Security works. Look up "Ponzi scheme" for more information.

A ponzi scheme requires intentional fraud. You have to believe you are investing in something real, not simply paying back someone else.

Social security is very clear what is going on. It also has mandatory new participants which keeps it from collapsing as well as well understood economic increases. The same thing happens with corporate pension plans, interest on treasury bills and any number of other systems that require future growth in order to pay back debt.

It is clearly not a ponzi scheme.

It's a partial ponzi scheme, but it has nothing to do with the system itself, it has to do with what the Fed is doing to our currency. The people paying in are not going to get all of their money back out of it.

The fact that you're going to get a massively debased dollar back for each dollar you put in alone means it's a fraudulent process as it stands today (again due to our government's fiscal irresponsibility). The calculations used for inflation adjustments are about as bunk as you can get for govt numbers. The Fed has managed a catastrophic devaluing of the dollar over the last 50 years, and that's only likely to accelerate given their need to massively monetize our deficits and debts.

I'm sorry, but claiming inflation is fraud is complete nonsense. Inflation is a sign of a growing economy. It is neither good nor bad. It is however inevitable.

It is not related to fiscal irresponsibility. Sometimes it is due too too much demand and not enough supply driving the cost of goods up (prices are sticky) and other times it is due to underlying company costs going up and raising the prices to keep their profit margin even.

In neither case is it the government's "fault." Most governments around the world try to maintain an inflation rate of 2-3%. This is well understood. Don't keep your wealth in currency. No one sane has for over a hundred years even when we were on the broken gold standard (if you think inflation is bad, you should see what rapid deflation caused by a spike in gold demand followed by a rapid drop in demand does to an economy on the gold standard).

A partial ponzi scheme is the same as being half pregnant. I do agree though we have to start being more critical of currency manipulations across the board. We're dangerously close to a pile of monopoly money here. When that facade breaks we're in really huge trouble. (a new dark ages type of huge trouble)

Attempts to store wealth through currency or other assets are attempts to claim a future share of societies output. Since by definition you are asserting a claim into a scenario in which you might not even be present, there is an inherent tendency for such a claim to be weaker than one based in the present. That's just how it is.

While I agree that it's hard to have a real discussion about SS or Medicare without people sensationalizing one side or the other, the math is very real and the consequences are already here.

SS is bleeding out right now with a negative annual run, and will get worse every year for at least the next 20 years. There is no SS trust that we can tap into. It's all going to come from Fed monetization.

By the time this decade is out, SS will be running a negative $100+ billion per year cash flow. We were supposed to have eight more years of surplus than what we did, that didn't happen.


It's also worth pointing out that we're taking on over $5 trillion per year in new liabilities that we don't have the cash flow to pay for, when you count debt + entitlements that have to eventually be paid for.


The Social Security trust fund is $2.7 Trillion http://www.ssa.gov/oact/progdata/assets.html

Changes to the program-- much smaller than the 1983 reform-- can insure solvency for a long, long time to come.

The problem is that other government programs have borrowed from the trust fund as if it was a piggy bank. Social Security would have been perfectly solvent had both sides not treated the trust fund as a slush fund. This is not social security's fault.

In fact, if you eliminate social security, you will almost certainly have to raise taxes to create a new piggy bank for all the programs that are currently run off the social security one.

Those are "assets" in an accounting sense but they do not represent capital held by the government. Those assets can only be redeemed by taxing citizens.

Social Security is only "solvent" in a conventional sense if those assets can be redeemed without taxation. Since Social Security is a pay-as-you-go system, the cash-flow definition of "solvency" is appropriate.

That's the case for all government securities, marketable or non-marketable.

That trust fund doesn't exist, there is no actual money in it, as noted by the other comments.

The Federal Reserve ultimately will lend the US Government that money (the Fed is now buying 95% of all long term US govt debt), now with interest on the debt, instead of there being an actual trust there earning interest.

So any math that relies on that trust existing, is Enron accounting.

Wow. Hurry-- you'd better tell that to "the Chinese" and anyone else who's been buying our debt. And also, that must mean that we can all stop worrying about that $15T govt debt, since it's all "Enron accounting". Whew! Problem solved!

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