Take the Kids to I.O.U.S.A.
When leaving the theater after seeing I.O.U.S.A. -- the documentary billed as doing for the national deficit what An Inconvenient Truth did for global warming -- you'll likely be confronted with one of two impulses: You'll want to cut up your credit cards on the spot, lecture your kids on the meaning of frugality and call your representative and senators for a heart-to-heart about federal spending, or you'll feel like throwing in the towel and learning how to say, "Do you want fries with that?" in Chinese.
The parallels with Al Gore's film run deep. Director Patrick Creadon, who glamorized crossword puzzles in Wordplay, follows David Walker, former comptroller general of the United States, and Bob Bixby, executive director of the Concord Coalition, an advocacy group, as they travel the U.S. on their "Fiscal Wake-Up Tour." Like Gore with his slide show, these geeky Cassandras go city-to-city lecturing on the deficit, trying to drum up interest in the cause. Throw in some neat graphics and newsreel montages and you get the idea.
Fiscal policy is tougher to dramatize than drowning polar bears, but Creadon does an admirable job. We get a 20-second lesson on how the Federal Reserve works and pie charts galore. A cartoon about two islands, "Thriftville" and "Squanderville," explains the ramifications of the U.S. trade deficit more straightforwardly than anything I've heard from an economist.
And I.O.U.S.A. delivers the goods with plenty of jaw-dropping figures. In 2007, China had the largest trade surplus of any country in the world, at $262 billion, while the U.S. had the greatest trade deficit of all nations, at $847 billion. At the end of World War II, nearly all federal debt lay in the hands of Americans, but by 2007 foreigners owned 45% of our obligations. As for what's occurring within our own borders, if current trends continue, the total federal debt will skyrocket to 250% of gross domestic product around 2040. The ratio of the nation's outstanding debt to GDP is 63% now.
Creadon nabbed some big names to weigh in on the cause. Former Federal Reserve Chairmen Alan Greenspan and Paul Volcker give interviews, and former Secretary of the Treasury Paul O'Neill offers a disheartening account of his dismissal from office after butting heads with the Bush administration. He recounts Vice President Dick Cheney telling him, "We don't have to worry about deficits."
On August 21, audiences in a few hundred theaters around the country watched a live panel discussion after the movie, with Warren Buffett, the Peterson Foundation's Pete Peterson, AARP chief executive Bill Novelli, Cato Institute chairman William Niskanen and David Walker chiming in on the policy implications of all the weighty numbers.
Buffett warned at the start that he might be the group's token Pollyanna, and he lived up to the disclaimer. He said the U.S. remains the best place on earth to be born in, and that with some good old-fashioned American ingenuity, we can get ourselves out of this mess. He compared his take on the U.S. with his take on investments: "I try to buy businesses that are so good an idiot could run them, because someday, one will."
Niskanen issued two noteworthy forecasts. He said the failure of high school graduates to improve academically since the 1960s suggests a weakening of the nation's "human capital." That could undermine the tradition of American ingenuity that Buffett speaks of so glowingly. And when it comes to entitlements, Niskanen predicted that politicians are more likely to trim benefits for such programs as Social Security and Medicare than to raise taxes to finance them at benefit levels that are promised today.
Asked what one piece of advice they would give viewers, several panelists responded, "Save more." As Greenspan noted in the film, "Human beings cannot survive unless they create a provision for the future." The national savings rate, which is an aggregate of household incomes and expenditures, was negative in 2005 for the first time since 1934.
As An Inconvenient Truth does, I.O.U.S.A. seeks to underscore the gravity of its topic without frightening the audience into apathy. Creadon tries to mobilize his audience with a closing sequence that feels like a pep rally, calling viewers to save money and to hold politicians accountable.
But just as Gore left viewers mystified as to how joining an e-mail list could solve global warming, I.O.U.S.A.'s call to action sounds a bit feeble in the face of unfunded liabilities -- for the national debt, Social Security, Medicare and other programs -- that total a staggering $53 trillion.