30 November 2012
Dear President Obama, Speaker Boehner, and Majority Leader Reid:
Thank you for working together to solve our impending "Fiscal Cliff" problem. A new day of cooperation has dawned across America, and our nation is grateful for your collaborative service.
However, I should also point out that averting the Fiscal Cliff might not be the big issue that everyone is making it out to be. For example, even if you were unable to reach agreement (a most improbable scenario in our estimation) and the country were to go off the Cliff, a total P&L impact of +$600 billion vs. current annual deficits of -$1.1 trillion still leaves us with really horrific deficits going forward.
But the real problem - I'm loathe to mention again - is this: +$600 billion compared to the present value of our unfunded liabilities of -$20.5 trillion and -$40.8 trillion, for Social Security and Medicare respectively, is paltry. To be totally frank, those numbers make the total U.S. debt of -$16.0 trillion look insignificant.
Your decision to engage my consulting firm was very wise and also timely. As you know well, we are the industry leaders in statistical research. Our quantitative methods are quite complex, requiring hours of deliberative interpretation. I believe that our grueling work has paid off and we have, fortunately, determined the answer to your fiscal quandary. In fulfillment of our consulting agreement dated 7 November 2012, I want to now share with you the findings of our research:
However, I should also point out that averting the Fiscal Cliff might not be the big issue that everyone is making it out to be. For example, even if you were unable to reach agreement (a most improbable scenario in our estimation) and the country were to go off the Cliff, a total P&L impact of +$600 billion vs. current annual deficits of -$1.1 trillion still leaves us with really horrific deficits going forward.
But the real problem - I'm loathe to mention again - is this: +$600 billion compared to the present value of our unfunded liabilities of -$20.5 trillion and -$40.8 trillion, for Social Security and Medicare respectively, is paltry. To be totally frank, those numbers make the total U.S. debt of -$16.0 trillion look insignificant.
Your decision to engage my consulting firm was very wise and also timely. As you know well, we are the industry leaders in statistical research. Our quantitative methods are quite complex, requiring hours of deliberative interpretation. I believe that our grueling work has paid off and we have, fortunately, determined the answer to your fiscal quandary. In fulfillment of our consulting agreement dated 7 November 2012, I want to now share with you the findings of our research:
- When President Roosevelt signed the Social Security Act on 14 August 1935, the average life expectancy of the U.S. population was 61 years.
- In 1935, the age at which U.S. citizens could begin receiving full Social Security benefits was 65 years.
- When President Johnson signed the Medicare amendment to the Social Security Act on 30 July 1965, the average life expectancy of the U.S. population was 70 years.
- The current average life expectancy of the U.S. population is 80 years.
- The current age at which people born after 1960 may receive full Social Security & Medicare benefits is 67 years.
- Our proprietary forecasting software projects that life expectancies will continue to rise.
Thank you for entrusting our firm with this important civic task. It has truly been a deep honor for us to help. In all candor, being given the chance to respond to our nation's call in this fashion has been, in itself, more than enough compensation for our work.
Still, a deal is a deal: an invoice for my consulting fee of $80,000 has been sent under separate cover.
In Enduring Admiration,
Sebastien P. Chicane
Chief Everything Officer
Chicane, Bullsauce, and Hawtere, LLCChief Everything Officer
P.S. Please ask Secretary Geithner to kindly remit payment for services rendered by 31 December 2012.
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