,..44MONEY MORNING

,..44MONEY MORNING April 29,2013 Myths and Realities About the U.S. Economy By BEN GERSTEN When it comes to the U.S. economy, myths and misleading statistics abound. Are taxes the highest they've ever been? Is the country's spending at record levels? Are the majority of products U.S. consumers buy produced by low-wage workers overseas? The answer often depends on the spin. But this Bureau of Economic Analysis presentation on myths and misperceptions about the U.S. economy gives investors a sense of what's real and what's the twisted truth. 7 Myths About the U.S. Economy Are Federal Taxes at a Record High? 25% 20% 15% 10% 5% Total federal taxes as a share of GDP* A : 12.1% Personal income taxes as a share of Personal Income <9 es es es es es es <9 es is 1st_ 1-est, tia, ett" <4. ttt al> di> ti tt tIS -St -94' arii 441 co> ‘As f, 'Major components include personal payroll and income taxes, and corporate taxes 2 PSVA. Even though Americans paid a record $2.7 trillion in federal taxes in 2012, as a percentage of the economy, that amounted to 16%, below the long-term average. Page I I of 4 EFTA_R1_01956122 EFTA02674582 Is Federal Debt at a Record High? Pone% el OOP 1w cro ao 60 Federal Debt Held by Public/Total U.S. Assets (2011): S. 2% 0 1340 1%1 11,411 1952 11% 1%0 1%4 1%3 19,1 114 19(10 1M 1%2 19% 1100 1COS 2001 2013 142 BEA 16,cr ILOtot fio.• 4 The amount of overall debt in our country continues to reach new highs every week - but it's not at its highest level in relation to GDP. As of April 2, debt held by the public was roughly $11.96 trillion, or 75% of GDP. But federal debt held by the public as a percentage of GDP was higher in the 1940s. Is Federal Spending at a Record High? Share of GDP 30% 25% 20% 15% 10% 5% Total federal spending, including transfer payment? ‘r...••••••••6. —/6e."'-Federal defense & nondefense spending Defense Nondefense 0% 4f 4P 40. 4P 4, 4P 4f 44. 4f 4P ." 4IP 40 4r 401 49 or 4, 4r 4, • FoCiadoo <tome. OW is t.% expee4Mutel. van*, pryw4nt to penontaM fint of *COW, ram to tint cal goanweali, wive, 116%66%. 66.1 WOOPONYI 1O,te le • Pa BEA While non-defense and defense spending are in a downward trend over the past 40 years, total federal spending as a percentage of GDP is just off its 2010 peak. Page 12 of 4 EFTA_R1_01956123 EFTA02674583 lin International dollies] sw.aio $S0.000 S40.O i( $1d.«, 5I0JKn $10.“ $0 Is the U.S. Still the World's Leading Economy? • Untied an.1114 united Parton turn Area ( hula Stain temed.)..1 PPP-Adjusted GDP Per Capita, 2011 Ver.:ON VOetlev ..."S•0,11.10 .cen AVMS lesina ash's. It pisvA Yes. Americans contribute an average of almost 550,000 to the country's GDP. That's higher than the average contribution to GDP of any other nation. Do Foreigners Own America? Tr iOnt of So I VI n Gorey-amid assets in the U S. a:... N. U.S •0wneti assets abroad s ft x or u.S. Net worth ■ Net assets owned by all foreigners % of U.S. Net Worth Chinese...0wned U.S -anted Net assets assets In the assets In China owned by U.S. China 11 Not as much as some would think. In fact no country, not even China owns more than 2.5% of U.S. assets. Page I 3 of 4 EFTA_R1_01956124 EFTA02674584 Have U.S. Companies Offshored Their Production to Low-Wage Countries? Location of production of goods and services by U.S. Multinational Companies Worldwide ■ United States 8% 21% 4 ■ High wage• foreign countries ■ Medium wage• foreign countries ■ Low wage• foreign countries e Wage levels are based on World Sank categories of per capita income. BIBEA 9 The idea that the majority of products U.S. consumers buy are made by poorly paid workers is simply false. In fact, only 1% of the goods produced and services offered by U.S. multinational companies come from low-wage countries. Rising or Stagnant Wages? Aver .4K COW t h 'Ate 40 3.5 3.0 2.5 20 101.5 0.5 00 29 2000-2007 2007.2009 200920/1 ■ Real compensation per worker • Real wages per worker • Real supplements per worker 6 1.1 BEA Wages are growing, but barely. Since the recession, wages have grown at half the rate they did from 2000-2007. Page I 4 of 4 EFTA_R1_01956125 EFTA02674585 Page i S of 4 EFTA_R1_01956126 EFTA02674586