Foreword by prominent economists and businessmen urging fiscal reform

Foreword George P. Shultz, Paul Volcker, Michael Bloomberg, Richard Ravitch and John Doerr February 2011 Our country is in deep financial trouble. Federal, state and local governments are deep in debt yet continue to spend beyond their means, seemingly unable to stop. Our current path is simply unsustainable. What to do? A lot of people have offered suggestions and proposed solutions. Few follow the four key guideposts to success that we see for setting our country back on the right path: 1) create a deep and widely held perception of the reality of the problem and the stakes involved; 2) reassure citizens that there are practical solutions; 3) develop support in key constituencies; and 4) determine the right timing to deliver the solutions. USA Inc. uses each of these guideposts, and more; it is full of ideas that can help us build a better future for our children and our country. First, Mary Meeker and her co-contributors describe America’s problems in an imaginative way that should allow anyone to grasp them both intellectually and emotionally. By imagining the federal government as a company, they provide a simple framework for understanding our current situation. They show how deficits are piling up on our income statement as spending outstrips income and how our liabilities far exceed nominal assets on our balance sheet. USA Inc. also considers additional assets — hard to value physical assets and our intangible wealth — our creativity and energy and our tradition of an open, competitive society. Additionally, the report considers important trends, pointing specifically to an intolerable failure to educate many in the K-12 grades, despite our knowledge of how to do so. And all these important emotional arguments help drive a gut reaction to add to data provided to reinforce the intellectual reasons we already have. Second, USA Inc. provides a productive way to think about solving our challenges. Once we have created an emotional and intellectual connection to the problem, we want people to act and drive the solution, not to throw up their hands in frustration. The authors’ ingenious indirect approach is to ask what a turnaround expert would do and what questions he or she would ask. The report describes how we first stumbled into this mess, by failing to predict the magnitude of program costs, by creating perverse incentives for excessive behavior, and by missing important trends. By pointing to the impact of individual responsibility, USA /nc. gives us reason to believe that a practical solution exists and can be realized. CB www.kpcb.com USA Inc. © iii HOUSE_OVERSIGHT_020826