Aug
21
I’ve just come back from I.O.U.S.A. the movie, which has been called the “Inconvenient Truth” for the economy. It was quite good, and was followed by a “Town Hall” meeting held in Nebraska that was simulcast to the theatre after the movie.
The movie itself definitely took a page from “An Inconvenient Truth”, all the way down to having a graph that skyrockets upward out of control. It’s unfortunate that they could do that - the numbers behind the graph were quite real, and the projections are also accurate and based on official government numbers. (That means that they’re likely actually worse than what we’re shown!) Read more for the full review.
After explaining some history of the national debt, the movie explains why this particular debt is different this time. Previously, most national debt was “owed to ourselves” - citizens bought bonds to pay for things like World War II; now we’re borrowing from foreign countries to pay for the regular operation of the country. The deficits in the budgets are made up for with foreign borrowing, and if those foreign countries decide that they no longer want to buy our debt, or want the interest rates raised, things are going to get much worse.
The movie outlines four areas of “deficit” - our budget deficit, our savings deficit, our trade deficit, and our leadership deficit. It explains how government has been spending more than it takes in, to the tune of almost half a trillion dollars this year alone. It also shows the projections for the government’s currently unfunded liabilities - Social Security, and Medicare (with Medicare consuming a significant amount of money, four times that of Social Security) and how that will change over time as a ratio of debt to GDP. That’s where the skyrocketing graph comes in - Medicare alone will significantly increase in cost as things get more expensive and people live longer, and national debt as a percentage of GDP will grow significantly.
It follows that by showing how Americans’ lack of savings is not only detrimental to themselves and their families, but it’s also detrimental to the country - overall, savings eventually represent investments that go towards improving the economy. Since the savings aren’t there, those improvements aren’t being created.
Our trade deficit is tackled next, showing how our country is importing more than we export - essentially consuming more than we produce. While this isn’t always a bad thing, when combined with the other factors it tends to exacerbate debt problems. This is nicely contrasted with working Chinese people, who on $10 a day are doing exactly what we should be doing - saving more than half their income and investing!
The final topic covered of the four is the leadership deficit. They point out that it took 40 presidents and 200 years to bring the deficit to a trillion dollars; successive presidents have brought it to over 9 trillion dollars, with the current president doubling it to that from the 4 trillion it was at when he started. However, the focus is not on the president alone - they talk about how Congress is as much at fault. But without resting it solely on the shoulders of the people inside the Beltway - they mention that fault ultimately lies with the people of the country! As this is a democracy, “We the People” need to call our government to task and make sure that they make the difficult and necessary choices today so that things don’t get out of hand.
I had sent the trailer to people via email, and one of my co-workers remarked how well done the trailer was - that the producers were able to take a topic that most would consider mundane and make it exciting. The movie was much the same way. The production value was excellent, and the movie held one’s attention and made the topics easy to follow without insulting one’s intelligence. It’s a movie more people will need to see so that they can become informed and start taking responsibility for holding our elected officials to task.
The Town Hall that followed was hosted by Becky Quick of CNBC fame, and featured panelists Warren Buffett, CEO of Berkshire Hathaway; William Niskanen, chairman of the CATO Institute; Bill Novelli, CEO of AARP; Pete Peterson, senior chairman of The Blackstone Group and chairman of the Peter G. Peterson Foundation; and Dave Walker, president & CEO of the Peter G. Peterson Foundation and former U.S. Comptroller General. Overall, it was interesting, though I was surprised at some of the comments that Buffet made. Thankfully, Dave Walker was brave enough to disagree with Mr. Buffet when necessary.
I don’t know if this is a movie that will be released in a more mainstream setting, or whether it might go straight to DVD. Either way, I would hope that more people would get to see it, and that it will follow in the footsteps of “An Inconvenient Truth” and get people to at least really start thinking about and becoming active about finding ways to reign in government spendingto make sure that we have a vibrant economy and a strong nation for a long time to come.
[...] Original post by Tom [...]
I.O.U.S.A.
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