In the past few weeks, members of both political parties have finally introduced plans to save America.

And it's about time.

Because the country's finances are a horrowshow.

Unfortunately, because our leaders are still pretending that we can have it all, Americans haven't yet clued into the fact that the only answer is BOTH higher taxes AND less spending.

In other words, kicking our debt and deficit problem is going to be painful. And everyone's going to pay.

Mary Meeker of Kleiner Perkins recently published an excellent analysis of the financial condition of the United States. The presentation shows how big our problem is, and what we're going to have to do to solve it.

The presentation shows that we spend a lot on Education and Defense, but that isn't the real problem. The real problem is Social Security, Medicare, and Medicaid (especially Medicare and Medicaid).  These programs are wildly more expensive than any other budget items, and they're also growing like weeds.

As Mary's charts show, there's almost no chance that we can "grow our way out of the problem."

To fix this problem, we must cut Medicare, Medicaid, and Social Security spending (or, at the very least, cut spending growth). And, yes, we're also going to have to whack Defense and other spending. And we're going to have to raise taxes.

Don't believe us? See for yourself.

First, the big picture. The pie on the left is "revenue"--the money the government has available to spend. The pie on the right is "expenses"--the money the government actually spends. Note the vast portion of spending that comes from the Entitlement programs.

The prior chart showed just a single year: 2010. Here's what the deficit looks like over time. As Mary Meeker observes, if a company were spilling ink like this, shareholders would freak.

And don't let anyone tell you that the problem is just the "recession." Here, the problem is separated into "structural" (dark blue) versus "cyclical" (light blue). We're now screwed even in good times.

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See Also:

• Don't Mean To Be Rude, But The Economy Sucks
• MAP OF THE DAY: The Worst Tornado Crisis Since 1974
• More People Think The Economy Is In A Depression Than Think The Economy Is Growing

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