2012.1.18 probity advisors winter luncheon presentation

Macroeconomic Policy & The Financial Markets

Welcome

Probity Advisors, Inc. 2012 Winter Luncheon

1

% of Population of Work Force Age (20-64)

Morefavorable to

economic growth

Lessfavorable to

economic growth

1950

% o

f P

op

ula

tio

n o

f R

etir

emen

t A

ge

(65+

)

2050

Worldwide Demographic Shifts1950 - 2050

2

5

10

15

20

25

30

35

5

10

15

20

25

30

35

5250 565442 44 46 4840 6658 60 6462

AfricaAsia

EU CountriesNorth America

EuropeOceania

Russian FederationSouth America

EuropeChina

India

Japan

Brazil

United States

Greece Italy

% of Population of Work Force Age (20-64)

Morefavorable to

economic growth

Lessfavorable to

economic growth

1950

% o

f P

op

ula

tio

n o

f R

etir

emen

t A

ge

(65+

)

2050

Worldwide Demographic Shifts1950 - 2050

3

5

10

15

20

25

30

35

5

10

15

20

25

30

35

5250 565442 44 46 4840 6658 60 6462

AfricaAsia

EU CountriesNorth America

EuropeOceania

Russian FederationSouth America

EuropeChina

India

Japan

Brazil

United States

Greece Italy

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5

10

20

25

30

35

Europe

China

India

Japan

BrazilUnited States

Greece

Italy

Worldwide Demographic Shifts1950 - 2050

% o

f P

op

ula

tio

n o

f R

etir

emen

t A

ge

(65+

)

% of Population of Work Force Age (20-64)

5250 565442 44 46 4840 6658 60 6462

5

10

15

20

25

30

35

2050 1950

4AfricaAsia

EU CountriesNorth America

EuropeOceania

Russian FederationSouth America

Allocation of Federal Spending 1950 to 2015

5

19501952

19541956

19581960

19621964

19661968

19701972

19741976

19781980

19821984

19861988

19901992

19941996

19982000

20022004

20062008

20102012

2014

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

General GovernmentTransportationProtectionDefenseEducationInterestHealth CarePensionsWelfare

Macroeconomic Policy & The Financial Markets

Ideas Changing the World

Sources: 2009 and 2010 Social Security and Medicare Trustees’ Reports.

Source: Courtney Collins and Andrew J. Rettenmaier, “How Health Reform Affects Current and Future Retirees,” NCPA Policy Report No. 333, May 11, 2011.

National Center for Policy Analysis

Private Enterprise Research Center Texas A&M University

General Revenue Transfers toSocial Security and Medicare

(as a % of income taxes)

Source: 2009 Social Security and Medicare Trustees Reports and author’s estimates. Federal income taxes are estimated to be 10.67% of GDP which is the 50 year (1959-2008) average.

13.8 13.3

27.3

49.2

61.267.1

74.3

82.1

89.3

Ideas Changing the World