Public to Private--Opportunities in the New U.S. Fiscal Environment

MSF Enterprises, LLC www.msfenterprises.com Copyright © 2013

From Public to Private:

Opportunities in the New U.S. Fiscal Environment

Introduction

Given all of the moving pieces in the fiscal cliff saga, the full implications for the U.S.

business environment may not be clear to investors. While a great deal of the discussion

focuses on the negative impacts tax and budget adjustments will have on growth and

consumer spending, little attention has been given to the opportunities that will emerge as

a result of the new fiscal environment. We seek to explore this topic, providing investors

with a road map to help navigate the U.S. fiscal landscape and take advantage of the most

attractive investment opportunities available.

“The ladder of success is best climbed by stepping on the rungs of opportunity.”

—Ayn Rand

“Every action has an opposite and equal reaction unless acted upon by an outside

force.”

—Isaac Newton’s 3rd

Law of Thermo Dynamics

Exhibit 1: U.S. Federal Government Revenue, Spending and Debt (% of GDP)

Source: Office of Management and Budget, Congressional Budget Office, The Economist

“As you make your bed, so you must lie in it.”

—Daniel Boorstin

MSF Enterprises, LLC

INSIDE STORY:

Tax Implications p.1

Business Investment p.2

Manufacturing p.3

Energy p.4

Spending p.4

Defense p.5

Healthcare p.7

Agriculture p.9

Conclusion p.10

February 2013

Denver ● New York

February 2013 Spotlight From Public to Private: Opportunities in the New U.S. Fiscal Environment


Tax Implications

In an effort to avert a free fall off the proverbial fiscal cliff, U.S. lawmakers reached a last

minute accord through the American Taxpayer Relief Act to prevent the full array of Bush-

era tax cuts from expiring. While across-the-board tax increases were avoided, the

combined expiration of the payroll tax holiday and tax rate increases for top earners

should have noticeable effects on the U.S. economy and business climate.

Exhibit 2: Individual Income Tax Rates for 2013

Source: Department of the Treasury, IRS

The decision not to extend the payroll tax cut will have arguably the greatest impact on

economic growth, as it will effectively raise taxes for all U.S. workers. With the

expiration of the payroll tax holiday, the majority of U.S. households will be faced with

the highest tax burden since 20081. According to JP Morgan, the move should generate

an additional $125 billion in tax revenue and may lead to a $100 billion reduction in

overall consumer spending2. This could create opportunities for discount retailers and

value stores, which may experience heightened demand as consumers seek to stretch a

tighter budget as far as possible. With the government no longer augmenting

discretionary income levels through reduced payroll taxes, some consumers may have to

turn to private lenders in the specialty finance space to make up the difference. As a

result, alternative lenders such as payday loan providers could see greater demand in the

new fiscal environment. (For more information on this topic, see the MSF Enterprises

December 2012 Spotlight piece titled “Filling the Gap: Opportunities in Specialty

Finance” at http://www.msfenterprises.com/pdf/MSF_Q4_Spotlight-

Specialty_Finance.pdf)

The top 5% of wealthy Americans own over 80% of individually-held stocks3, so

increased tax rates on capital gains and dividends could have major consequences in

regard to market positioning and the expected performance of various investment

vehicles. With higher tax rates, investors will place a greater emphasis on after-tax returns

for both growth and income strategies. Increased taxes may also drive investors toward

tax-deferred investment vehicles (i.e. retirement accounts and annuities) which allow

investors to defer taxes until withdrawals are made, with the assumption that tax rates will

be lower in the future. Other investments that have an extended holding period and do not

make distributions, such as non-dividend paying growth stocks or real assets, could receive

“The good news is that,

according to the

Obama administration,

the rich will pay for

everything. The bad

news is that, according

to the Obama

administration, you’re

rich.”

—P.J. O’Rourke

1

“Politics is the art of

choosing between the

disastrous and the

unpalatable.”

—John Kenneth

Galbraith

http://www.msfenterprises.com/pdf/MSF_Q4_Spotlight-Specialty_Finance.pdf

http://www.msfenterprises.com/pdf/MSF_Q4_Spotlight-Specialty_Finance.pdf



greater attention from high net worth investors. Similarly, alternative investments that

focus on long-term growth and carry a lock-up period, such as private equity funds,

could also see higher levels of capital inflows.

Exhibit 3: Estimated Effect of Tax Increases on Annualized Consumption Growth

Source: Goldman Sachs Global Research, Zero Hedge

With taxes reducing consumer budgets, businesses will continue to adjust investment

levels and operating costs in order to compensate for lower expected demand. At the

same time, firms may look to take advantage of certain aspects of the current economic

environment (i.e. low interest rates) and better position themselves for the future

through capital investments. Even though the average age of manufacturing plants and

equipment in the U.S. is already at multi-decade highs4, capex levels have struggled to

rebound since the recession. While a great deal of fiscal uncertainty remains, companies

will likely seek to increase efficiency in any way possible and will have to make

investments in order to do so. The availability of low-cost debt should be a supporting

factor for greater business investment, as firms will continue to lock-in cheap capital

before interest rates rise. With U.S. companies already maintaining cash reserves near

all-time highs, there should be a greater push from shareholders for firms to start

deploying excess capital previously parked on the sidelines. Revenue and earnings

weakness in recent quarters should further push companies to utilize their dormant cash,

as consumer sentiment is unlikely to offer much in terms of organic growth. As a result,

an uptick in M&A activity can be expected in some industries once valuations decline to

more reasonable levels. New purchases of PP&E could also pick up, as firms look to

replace outdated equipment with more efficient systems while debt is relatively

inexpensive. Tax incentives provide further support for the purchase or lease of software

and equipment, as the renewal of Section 179 of the tax code will enable firms to offset a

portion of their tax liability with investment in the business5. The Research and

Development tax credit was also extended with the fiscal cliff deal, which may encourage

higher levels of R&D as firms continue to receive a credit for up to 14% of related

expenditures6.

Business efforts to maximize efficiency could ultimately benefit firms in the technology

sector, which provide tools firms use to shape their businesses into leaner operating

machines. Capital investments in technology can be expected across industries, as

many firms will look to boost performance through greater efficiency in terms of cost,

2

“An investment in

knowledge pays the

best interest.”

—Benjamin Franklin



connectivity and data collaboration. Furthermore, there will likely be a paradigm shift

where firms look to replace labor with technology, systems integration and outsourcing.

The changing environment should be a positive driving force for business-to-business

technology firms, which can be critical in corporate efforts to trim fat from operations.

Corporate efforts to improve efficiency may also lead firms to examine the location of

their operations and reevaluate the optimal structure of their distribution channels.

Companies will continue looking to move to areas where there is a balance between

achieving a low cost of operations and being within close proximity to customers and

distributors. Over the past several years, the U.S. has slowly become more appealing as

a production hub relative to other countries like China. The U.S. once produced nearly

40% of the world’s goods following WWII, yet the mass exodus of manufacturing jobs

to China has reduced that number to only 18%7. However, a number of recent

developments in the global economy may reverse the trend by encouraging firms to

bring manufacturing jobs back to the U.S., as well as Mexico. Wages and benefits

were once substantially lower overseas, but they have remained stagnant over the past

few years in the U.S. while rising 15-20% annually in China8. The cost of industrial

land has also become more relevant, as the average cost in China is $10.22 per square

foot and can be as high as $21 in cities like Shenzhen; meanwhile, industrial land in

areas like Tennessee and North Carolina ranges from $1.30 to $4.65 per square foot9.

With the combination of these factors, the total cost of production in the U.S. should be

within 10-15% of Chinese coastal cities in the next five years10

. The situation is further

compounded by the rising value of the yuan against the dollar, as well as the cost of

transporting finished goods from China back to the U.S. As a result, companies may

look to move a greater portion of manufacturing production to the U.S., with the Boston

Consulting Group estimating that 2.5 to 5 million manufacturing positions will be

added in the country by 202011

.

Exhibit 4: U.S. Manufacturers Showing Signs of Relative Strength

Source: ISI

Within the U.S., the battle between individual states and municipalities to attract large

companies may accelerate due to expectations of job losses. Tax incentives and

subsidies could be used to an even greater extent at the bargaining table, as local

politicians seek to appeal to voters by creating more job opportunities. States, counties

and cities already pay more than $80 billion in incentives each year to companies that

agree to place a facility within their boundaries12

. With new rounds of job losses likely

on the way due to spending cuts and tax increases, the bidding war between states to

3

“Not only the wealth,

but the independence

and security of a

Country, appear to be

materially connected

with the prosperity of

manufactures.”

—Alexander Hamilton



attract large employers will continue to heat up. As firms look to cut costs and boost

earnings by any means possible, a number of companies could begin evaluating domestic

options for relocation. The top recipients of location incentives are in the manufacturing

sector, followed by agriculture, oil and gas, mining, films and technology13

. Firms in

these industries that are looking to relocate headquarters and production facilities could

receive an economic boost if they are able to score lucrative deals with local

governments.

Firms that provide job training and employee placement services could begin to receive

greater attention in the new fiscal environment, with companies widely expected to cut

jobs and reduce hiring levels. This concept could also play a key role as entitlement

spending is addressed, as welfare-to-work programs could see increased interest with the

government looking to rein in its finances. Government programs that support small

business could also become a greater focus if a more conservative approach to fiscal

policy is adopted. Disruption in one segment of the economy can lead to innovation in

another, so job losses in some industries could encourage more individuals to start new

businesses. If a greater entrepreneurial spirit emerges from the new fiscal

environment, there may be increased opportunities for investing in SBIC funds and

SBA specialists.

The U.S. energy sector could also be critical in reshaping the employment landscape by

absorbing job losses from other industries heavily affected by tax adjustments and

spending cuts. Many analysts project energy production to be one of the primary drivers

of growth for the U.S. over the next several decades, as the country is expected to

become energy self-sufficient by 2020 and a net exporter by 202514

. In order for this to

occur, a number of jobs must be added to the energy sector to build out infrastructure

and operate production facilities, with up to 1 million positions expected to be added by

201415

. With 2.8 million federal government employees16

and several million others in

industries that rely on government funding, growth sectors like energy could provide

some of the necessary support to maintain U.S. employment levels. Job losses in other

segments of the economy may actually provide the catalyst to push energy production

in the U.S. to its full potential.

Exhibit 5: Energy Production and Imports in the U.S.

Source: ISI

Government Spending

The U.S. government has run a fiscal deficit of over $1 trillion for each of the past four

years and the national debt is now well over $16 trillion. As debt and deficit levels have

become increasingly scrutinized, American politicians have found themselves forced, in

“At no point in history

have so many non-risk

takers, that is, those

with no personal

exposure, exerted so

much control.”

—Nassim Nicholas

Taleb

4

“If you put the

federal government in

charge of the Sahara

Desert, in five years

there’d be a shortage

of sand.”

—Milton Friedman

“We have all the

resources we need right

here in this country to

establish energy

independence…”

—Herman Cain



some ways, to address the country’s massive spending issues. While efforts made up to

this point have found little success, the threat of automatic sequestration looms if

Congress is unable to reach a formal budget agreement by March. Sequestration would

effectively reduce spending authority by about $1.2 trillion over the next nine years.

Under the sequester, spending cuts would occur equally across-the-board for

discretionary programs in the first year, preventing Congress from appropriating

funds in the way it sees most fitting. For 2014 and beyond, lawmakers would be able to

take a more flexible approach to budget cuts by reducing spending in some areas and

leaving others untouched. Therefore, sequestration would likely be more disruptive in

2013 than in subsequent years because the lack of flexibility would prevent lawmakers

from prioritizing some programs over others.

Exhibit 6: U.S. Government Spending as % of GDP

Source: Office of Management and Budget, The Economist

Defense

Defense is one area in particular that would experience a sizable impact on spending

allocation with the sequester, as the Department of Defense (DoD) is set to have

spending authority reduced by about 9%. Although defense spending is going to be cut

either way, triggering the sequester would cause all programs and projects to be cut by

an equal amount. Sequestration would likely necessitate furloughing civilian defense

employees, cutting healthcare programs and reducing employee benefits, which are all

steps the DoD would prefer to avoid. Aside from potential sequestration, the Budget

Control Act requires a reduction in defense spending by approximately $487B over the

next decade, with $259B over the next five years17

.

“Restoring

responsibility and

accountability is

essential to the

economic and fiscal

health of our nation.”

—Carl Levin

“If we can’t find cuts

in the defense budget,

we’re not looking

carefully enough.”

—Jon Huntsman, Jr.

“You cannot spend

your way out of

recession or borrow

your way out of

debt.”

–Daniel Hannan

5



Exhibit 7: National Defense Budget Authority (in FY 2013 dollars)

Source: Center for Strategic and Budgetary Assessments

Given that there will be a reduction in defense spending regardless of whether

sequestration takes place, the DoD has started laying out its budget priorities while

beginning to make spending cuts. One objective is to decrease the size of the active

U.S. force by reducing military presence in certain regions. The DoD has already

announced plans to lay off thousands of temporary workers, which could put as many as

43,000 short-term employees out of a job18

. The DoD will further seek to reduce the

nation’s maritime and airlift fleets by taking steps to accelerate retirement of military

vehicles, slow the pace of new construction and divest of assets when appropriate19

.

Despite program reductions, the DoD has maintained that it will protect allocations to

science and technology programs, while limiting cuts to compensation and benefits as

much as possible. Military personnel costs have nearly doubled since 2001, during a

period in which the number of full-time personnel only increased by 8%20

. Although

compensation and benefits make up almost one-third of total defense spending, only

one-ninth of targeted DoD spending cuts will relate to personnel costs21

. While the

Defense Department would prefer to maintain the employment status of its active

personnel, this may be unsustainable in the long-run as further reductions to the size of

the force are imminent. As the government looks to shift a portion of the employment

burden to the private sector, it will likely provide support for former military by

offering subsidized student loans. In such a scenario, for-profit education could

receive a boost from the inflow of ex-military looking to acquire skills to enter new

industries.

While it is difficult to quantify the economic ripple effects of reductions to defense

spending, there are certain sectors and geographic regions where negative impacts can

be expected. For example, the $396B that the Defense Department plans to spend on

2,443 F-35 fighter jets through the late 2030’s22

may become an easy target for budget

cuts. If purchase levels for the F-35 are reduced, there would be major negative effects

not only for maker Lockheed-Martin, but also the Dallas-Fort Worth area where the jets

are largely produced23

. In local areas where military spending is one of the largest

contributions to the economy, job losses are almost certain to occur as defense programs

are scaled back. In some states, job cuts in defense-related industries may result in a

transfer of labor to private sectors where there is growth to support higher levels of

“We will bankrupt

ourselves in the vain

search for absolute

security.”

—Dwight D.

Eisenhower

“Any defense force

worth its salt has to be

able to deal with

uncertainty, has to be

able to deal with

events that we may not

have planned for.”

—Leon Panetta

6



employment. Manufacturing job losses in oil and gas producing areas, for example,

could balance out if there is excess capacity for laid off workers to be hired at local

production wells.

Exhibit 8: U.S. Military Spending by State

Source: Bloomberg Government

Considering the expected reductions to the U.S. military force, greater emphasis will

be placed on other areas of defense such as cyber operations. Cyber defense spending

is one of the few categories where the DoD actually projects an increased level of

investment, both in terms of defensive and offensive capabilities24

. This could lead to

opportunities for companies focused on cyber security and other preemptive forms of

defense, as cuts will likely be felt more in reactive segments like weapons production.

Firms with new, innovative forms of preventative security technologies should excel

under such a scenario, as the government may look to shift research and development

expenses to the private sector. U.S. initiatives to reduce its military presence in other

regions of the world could lead to further opportunities for certain types of Security

and Defense firms. The U.S. is expected to ease back from its role as a global

peacekeeper, which may force other countries to increase spending on defense-

related technologies. Therefore, companies with international ties that are able to

produce modern, scalable cyber systems may be in one of the best positions to

outperform peers in the defense industry.

Healthcare

While Medicaid is a mandatory spending item exempt from sequestration, some areas

of Medicare are currently set to experience a 2% drop in funding over the next eight

years with the sequester25

. Payments to professionals that provide Medicare services

“Strengthening U.S.

cyber security is

common sense, like

locking your door at

night.”

—Douglas Birch

7



will be reduced, along with funding for a number of health programs including

research at the National Institutes of Health. According to a report by research firm

Tripp Umbach, the sequester will contain between $10.7B and $16.4B in annual cuts

to the Medicare budget, which could lead to the elimination of as many as 496,000

jobs in 2013 and a total of 766,000 jobs by 202126

.

Exhibit 9: Healthcare Entitlement Spending v. Discretionary

Source: Congressional Budget Office

Prior to the passage of the American Taxpayer Relief Act, 2013 Medicare payments to

physicians were scheduled to decline 26.5% as part of the sustainable growth rate

(SGR) formula. Congress approved a SGR patch to ensure physician’s claims in 2013

will be paid at 2012 levels, but an agreeable structure for future payments is yet to be

determined27

. In fact, Congress passed legislation to temporarily delay scheduled pay

reductions every year since the SGR was created in 200328

. While this has effectively

frozen Medicare payments to physicians for the past decade, the cost of providing

patient care has increased over 20% during the same period29

. The SGR patch

agreement reached at the beginning of 2013 provides yet another temporary fix, as

Medicare reimbursements for billed services are once again scheduled to decline

26.5% at the end of the year. Due to this, the healthcare industry is faced with a high

degree of uncertainty regarding the future of the Medicare program. Many hospitals

and physicians have been preparing for this uncertainty through hiring freezes,

layoffs, programs to achieve greater cost efficiencies and delayed capital

expenditures. A stressed healthcare system may create opportunities for companies

offering products and services that enable greater efficiency for providers, such as

electronic health records management and cost containment platforms. In general,

technologies that allow medical service providers to reduce expenses and replace

physical labor should be in high demand.

Reduced government support for healthcare-related research, along with recent trends

in which medical facilities have been postponing capital expenditures, may effectively

slow the pace of technological advancement in the industry. Medical equipment

makers could suffer as a result of delayed spending plans, but this could provide a

boost to equipment servicers and refurbishers. In addition, a portion of research and

development costs could be shifted to the private sector, which may create

“America’s

healthcare system is

neither healthy,

caring, nor a system.”

–Walter Cronkite

“The real cure for

what ails our

healthcare system

today is less

government and more

freedom.”

–Steve Forbes

8



opportunities in the royalty bond space. Royalty bonds enable pharmaceutical firms

and other research-intensive companies to securitize intellectual property and future

revenue streams in order to provide additional capital for new product development.

The industry already has a complicated payment structure, as healthcare providers

typically wait 90-120 days to receive reimbursement following treatment. Since

providers can get into a cash crunch when payments are delayed, the likely 2% cut

from government funding may only exacerbate cash flow issues within the industry.

The combination of these factors may provide greater opportunities in healthcare

receivables factoring. Without the same level of government payments and subsidies,

firms may be forced to explore alternative means of funding.

Agriculture

Independent of the sequester, the September deadline to address the Farm Bill could

have major implications for the outlook of the U.S. agriculture industry. The Farm Bill

is a piece of legislation that sets U.S. food and agriculture policy and must be passed

every five years. Important aspects of the bill include farmer subsidies and crop

insurance, which have considerable influence on the price of commodities. The bill

determines the prices that the government pays to farmers to produce items such as

milk and wheat; failure to renew legislation would drop government payments back to

1949 levels and force farmers to raise prices in order to make up the difference30

. The

value of agricultural land could also be at risk without a new Farm Bill in place, as

subsidies, crop insurance and low interest rates currently provide support for land

prices. As real farmland prices have been rising for the past 17 years, there has been

speculation that a bubble may be forming similar to the 1970’s and early 1980’s31

.

Land price stability is important because it is closely connected to the price stability of

crops produced on the land. Investors that are concerned about risks surrounding the

passage of a new Farm Bill and the effects on commodities and land prices may look to

hedge with agricultural and interest rate futures. Farm Bill risk can further be

avoided by investing in foreign crop-producing entities, which are sheltered from

U.S. political risk but are able to benefit from higher commodities prices.

Exhibit 10: Inflation-Adjusted Farmland Price (1960-2012)

Source: American Enterprise Institute, USDA, Economic Research Service

“Farmers and ranchers

have never faced as

many problems as they

do today with drought,

range fires, high gas

prices and an ever

tightening budget on

agricultural subsidies.”

—Michael McCaul

9



Conclusion

At this point, it is difficult to quantify the impact of U.S. government tax and spending

decisions for 2013. Some of the current solutions are only temporary and will likely

be adjusted with further legislation, while other questions surrounding the fiscal

environment remain to be addressed. The budget sequester will not likely be resolved

until the March deadline approaches (or is extended), and even after that point a deal

can be reached retroactively for a period of time until any noticeable consequences

will be experienced. If sequestration is avoided through a comprehensive budget

agreement, it may have to come at the expense of other line items such as entitlement

spending or infrastructure investments, which are both priorities of the Obama

administration. These areas could present investment opportunities as the burden is

gradually shifted from the public sector to private industry. In addition to the

uncertainty surrounding the sequester, government spending authority must be

extended by late March to avoid a partial government shut-down. A couple months

later in May, the U.S. borrowing limit will go back into effect and an agreement will

need to be reached to raise the debt ceiling once again. This is not an uncommon

occurrence, as the debt limit has been raised or adjusted a total of 79 times since

196032

. Later in the year, issues regarding the U.S. agriculture industry will have to be

addressed through the Farm Bill by late September.

Although 2013 U.S. tax and budget decisions will likely have negative implications

for various industries, a closer look at the details reveals a number of opportunities

resulting from the changing fiscal environment. While higher taxes may come at the

expense of consumer confidence and discretionary spending, discount retailers and

specialty lenders may be able to benefit from tighter household budgets. Higher tax

rates on investment income for top earners could alter the appeal of various asset types

and investment vehicles, but the impacts on general market performance should be

minimal. On the business side, the current environment of low-cost debt and stagnant

earnings could push companies to deploy capital toward R&D, PP&E and

acquisitions, as generating real top line growth will otherwise be difficult. In terms of

spending cuts, areas of the defense industry such as weapons and military vehicle

production are likely to take a hit. Private defense firms will be forced to become

leaner and more efficient to compensate for reduced funding, while specific segments

like cyber operations are likely to outperform as the DoD shifts its strategy toward a

greater focus on preventative technologies. In the healthcare space, budget cuts could

affect several components of the industry as lower reimbursement payments will

affect hospitals and physicians, as well as medical equipment makers that market to

primary care providers. However, lower reimbursement rates for Medicare physicians

could lead to a cash crunch in some segments of the industry that would increase the

appeal of alternative funding sources like healthcare receivables. Reduced

government expenditures for research in the medical field may raise interest in another

form of alternative funding with royalty bonds, which enable securitization of future

revenue streams to provide current funding.

With the coverage given to the fiscal cliff by mainstream media outlets, it may be easy

for one to form the opinion that the situation is only marked by negative

characteristics. However, there is no shortage of investment opportunities available in

the new fiscal setting. If investors are diligent enough to gather information and

understand the complete picture, they will realize that any market environment can be

profitable with the right positioning. So, while the U.S. fiscal situation may have

“The secret to getting

things done is to act!”

—Dante Alighieri

“An idea not coupled

with action will never

get any bigger than

the brain cell it

occupied.”

—Arnold Glasow

“Opportunities

multiply as they are

seized.”

—Sun Tzu

10



negative implications for growth, there should continue to be a range of attractive

investment opportunities available.

Michael Fields

Managing Partner

MSF Enterprises, LLC

717 17th

St., Suite 2160

Denver, CO 80202

[email protected]

303.847.4649

Disclaimer

This document is provided for informational purposes only, is subject to change and

is not binding. MSF Enterprises, LLC makes no guarantees regarding the

information contained herein and any statements represent the opinions of the firm.

MSF Enterprises, LLC is not responsible for any information stated to be

obtained from third party sources. Any companies, asset types or investment

opportunities mentioned in the document are for illustrative purposes only and

are not intended as recommendations. MSF Enterprises, LLC is not responsible

for the use made of this document other than the purpose for which it is intended,

except to the extent this would be prohibited by law. Obtain independent

professional advice before investing.

11

mailto:[email protected]



Endnotes

1. Reddy, Sudeep. “Payroll Tax Cut Expires; How Much More Will You Pay?” The Wall Street Journal. 1 Jan 2013.

2. Feroli, Michael. “The US fiscal cliff: an update and a downgrade.” J.P. Morgan. 18 Oct 2012.

3. Frank, Robert. “Does Quantitative Easing Mainly Help the Rich?” CNBC. 14 Sep 2012.

4. Tan, Kopin. “The Next Boom.” Barron’s. 26 Jan 2013.

5. Harrison, J.D. “How the ‘fiscal cliff’ deal affects entrepreneurs and small businesses.” The Washington Post. 2 Jan 2013.

6. Ibid.

7. Tan, Kopin. “The Next Boom.” Barron’s. 26 Jan 2013.

8. Ibid.

9. Ibid.

10. Ibid.

11. Ibid.

12. Story, Louise. “As Companies Seek Tax Deals, Governments Pay High Price.” The New York Times. 1 Dec 2012.

13. Ibid.

14. Tan, Kopin. “The Next Boom.” Barron’s. 26 Jan 2013. 15. “Energy for Economic Growth: Energy Vision Update 2012.” World Economic Forum. 2012.

16. Epstein, Gene. “In Praise of a Slimmer Uncle Sam.” Barron’s. 26 Jan 2013.

17. “Defense Budget Priorities and Choices.” U.S. Department of Defense. January 2012.

18. Nissenbaum, Dion. “Pentagon Laying Off Thousands of Temps.” The Wall Street Journal. 25 Jan 2013.

19. “Defense Budget Priorities and Choices.” U.S. Department of Defense. January 2012.

20. Ibid.

21. Ibid.

22. Austen, Ian and Christopher Drew. “Canada Reviews Plans to Buy F-35 Fighter Jets.” The New York Times. 12 Dec 2012.

23. Murray, Lance. “F-35 could be target of federal budget cutters, report says.” Dallas Business Journal. 8 Jan 2013. 24. “Defense Budget Priorities and Choices.” U.S. Department of Defense. January 2012.

25. Fiegl, Charles. “Massive job losses expected under Medicare sequester.” American Medical News. 24 Sep 2012.

26. Ibid.

27. Glendinning, David. “Medicare pay reprieve in place; next threat is 2% cut in March.” American Medical News. 7 Jan 2013. 28. Kurlander, Stuart; Greig, Eric; Scherb, Esther and Jeremy Alexander. “Client Alert: Congress Delays Medicare Physician Pay Cut With American Taxpayer

Relief Act of 2012, but Reduces Payments to Other Medicare Providers.” Latham & Watkins. 16 Jan 2013.

29. Fiegl, Charles. “Massive job losses expected under Medicare sequester.” American Medical News. 24 Sep 2012. 30. Doering, Christopher. “Agriculture leaders reach deal on farm bill extension.” USA Today. 30 Dec 2012.

31. Pollock, Alex. “A bubble to remember—and anticipate?” American Enterprise Institute. 15 Nov 2012.

32. Tiron, Roxana and James Rowley. “House Votes to Temporarily Suspend U.S. Debt Ceiling.” Bloomberg. 23 Jan 2013.

Bibliography

“A Guide to the American Taxpayer Relief Act of 2012.” Morgan Stanley. 3 Jan 2013. Austen, Ian and Christopher Drew. “Canada Reviews Plans to Buy F-35 Fighter Jets.” The New York Times. 12 Dec 2012.

“Defense Budget Priorities and Choices.” U.S. Department of Defense. January 2012.

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Documents

Public to Private--Opportunities in the New U.S. Fiscal Environment