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Take the Kids to I.O.U.S.A.
It isn't a horror flick, but this film on America's "Inconvenient Debt" will scare you stiff.
By Elizabeth Ody, Associate Editor, Kiplinger's Personal Finance
August 22, 2008
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.
Reader Comments (16)
Posted by: Ann at 08/22/2008 04:25:04 PM
Improved technology in energy and medical care can probably lower our costs if we forget about the investments that are sunk in oil wells and coal mining - pretend that a tsunami wiped tham off the face of the earth,and we have to reinvest our resources into solar, wind, wave, thermal and nuclear energy.
Posted by: david welch at 08/22/2008 06:14:24 PM
i saw the film last nite and highly recommend it. the producers did a good job presenting what would be normally dry subject matter (current acct deficit, trade deficit, lack of leadership etc). it was a shame there were only about 20 some people in the theatre for the showing and most of them were aging baby boomers. younger people need to be made aware of the profligate spending by our federal government since they someday will be left paying for these huge (53 trillion dollars) liabilities. but how do you get them into the theatre without promises of exploding helicopters, blazing weapons and vacuous so-called stars? i wish the film's distributor had put more money into advertising. although i did hear that the film might be shown on national tv some time next february. if it is, i hope it's not up against american idol in the same time slot. no question which program would draw the most viewers. but i reiterate, try to see the film and take several friends. then write your congressmen about balancing the federal budget and the other steps recommended in the film. the coming fiscal disaster will effect all who make or spend money so do not think you are exempt.
Posted by: Cole Bene\' at 08/22/2008 06:47:56 PM
Best book I've given my daughter, wish dad gave me one, "Rich Daddy, Poor Daddy"
Posted by: Ben Fergeson at 08/22/2008 07:08:36 PM
Al Gore is a flim flam man...on a grand scale. Why doesn't he practice what he preaches, check out his utility usage on his "castle". He refuses to debate or discuss intelligently with those who oppose his "snake oil environmental schemes". Al, pleeze go away!
Posted by: Tim2040 at 08/22/2008 10:19:46 PM
The consequences of government overspending will impact Baby Boomers in retirement in ways unimaginable. Resolving the current mortgage crisis in the manner we are now will make the problems even worse. Your best bet is secure tax sheltered investments, like life insurance and annuities. That's what Greenspan and Bernanke invest in. We can solve the problem by supporting difficult choices, by frugality and taking care of ourselves without looking to the government for help.Choose wisely this election and every election for the next 40 years.
Posted by: Bill at 08/23/2008 08:37:12 AM
It's unfortunate that Corporate America's drive for profits and bi-partisan politicians have positioned China to rule the world without firing a single shot! Mao must be smiling from his seat in Hell! Hopefully our children will wake up to this threat for the sake of our grandchildren. It's time for the developed nations to assume some fiscal responsibility and for people to stop overspending on imported luxuries.
Posted by: garyatk at 08/23/2008 08:42:04 AM
Thanks for your input Tim2040! If being careful how you vote means electing a third party, I'm with you all the way. The Remocrats and Depublicans have gotten us into this mess, and they won't get us out of it! It is time to throw the bums out! All of them! As for me,I'm voting Libertarian! Vote Bob Barr for president 2008!
Posted by: topper981 at 08/23/2008 10:56:29 AM
I.O.U.S.A. was a disappointment. I went into the advanced showing expecting Ron Paul type truth. But instead left with the same feelings of frustration that I always feel when I'm being lied to by the MSM. The movie points out the obvious " this country is in a financial state of emergency ". Yet the main cause of the problem ( the Federal Reserve Bank ) was deceptively glossed over.The gist was that the American people, especially the baby boomer generation, are to blame for the current state of affaires because of spending beyond our means.That is the grain of truth so popular with the propagandists...Get the next generation to blame us and force us to work till the day we die all the while dictating how we save our money. Then the next generation will come of age.The movies solution is new leadership that will address our overspending and get this, we need forced saving accounts and the baby boomers need to work longer even into our 70's. OK lets put more money into savings accounts so bankers can loan even more...
Posted by: Ray at 08/23/2008 11:14:52 AM
...The Federal government without blinking an eye continues to spend, spend and spend. The Federal or NY has no idea of saving for tomorrow!
Posted by: Robert at 08/23/2008 06:25:37 PM
I would be more inclined to watch this film had the author not stated that "the parallels with an Inconvenient Truth run deep." There was a great deal of incovenience in Gore's film, but very little truth...I hope this film doesn't suffer from the same SERIOUS shortcomings.
Posted by: Denny at 08/24/2008 08:52:51 AM
I found the film to be informative and I was entertained, but I wouldn't call it balanced. I'm not an economist, but am informed and recognized that the film presented one point of view without presenting alternative views. The film also demonstrated some political bias, sometimes subtle, but unmistakable and perhaps unintentional. One particular point caught my attention in this regard. The 1980s were presented as the “Reagan Era” and was blamed for vast increases in our national debt, followed by the Clinton Administration, which was successful in presenting a balanced budget and decreasing our debt. This was a central theme in the film (political bias?), but the film forgot to mention that the defense spending of the 1980s very likely prompted the end of the Cold War and allowed for vast decreases in defense spending in the 1990s, not to mention that the lower taxes of the 1980s might possibly have set the stage for increased investment and a boom in business and that might have fueled the economic conditions that made a balanced budget feasible in the 1990s. Similarly, the film glossed over the impact of war and defense spending in the post WW II era, as if it was irrelevant. This is nonsense. Spending vast amounts of our budget on defense, homeland security and an ever growing federal bureaucracy in Washington have a significant impact on our economy and our quality of life. These massive amounts of money could be spent on improving our nation’s infrastructure, encouraging research and on education to make our country more competitive in the world’s changing marketplace. Lastly, the film said a leadership deficit was a major factor for our nation’s fiscal crisis. I heartily agree, but the spotlight needs to be opened, expanded into a flood light that illuminates more than just our current President. It needs to shine on a large majority of our elected leadership as well as the vast numbers of bureaucrats that sit in their plush offices in Washington, authorize themselves annual pay raises, and remain isolated from the fiscal reality that challenges the citizenry that they profess to be serving. Go see the film, take mental notes, but keep an open mind.
Posted by: John at 08/24/2008 05:50:05 PM
Topper nailed it. Until we get back to our Constitution and the government takes back the right to print money nothing is going to change. The Federal Reserve is a corporation with no legal right under the Constitution to do what it's doing...The answer to this dilemma isn't saving more.. it's demanding that our "leaders", who were originally intended by the founding fathers to serve us, get back to doing so. Special interests (corporations) run this country, not us, and that needs to change or we're headed for even bigger trouble than we now have. We, as Americans, have a responsibility to participate and to pay attention to what's happening. That's the ONLY way the Democratic process will work. It doesn't run on autopilot like most people seem to think it does.We have to understand that we are losing our way because we haven't been paying attention, and we need to start....
Posted by: Michael at 08/25/2008 02:08:19 PM
My take also is that this film has laid blame on one party and left the other party fairly unscathed. All laws start in the legislative branch, not the executive or judicial. There is plenty of blame to go around on both sides of the aisle, but we don't have a revenue problem in this country, we have a spending problem - we have few statesmen any more, only politicians trying to line their own pockets or those of their friends, family, or special interests - just follow the money as they say. I also don't disagree that our corporate world has not had their share of detractors as well....paying exhorbitant salaries regardless of performance and then gaining crazy golden parachutes when "asked" to leave. If anyone in Washington needs impeached it's Congress as a group, with the exception of just a few who are trying to make a real difference. Until the American public gets out of the habit of thinking it's everyone else's politicians, not mine, then we are destined to failure in this country. If we don't pay attention and change the direction of our country soon we, our children and certainly our grandchildren are in for some serious changes down the road - and they will not be pretty.
Posted by: Dhun at 08/25/2008 02:27:38 PM
I have one slight disagreement with Warren Buffet's statement that this is the best country to be born in. The best country to be born in is where parents can provide their gifted children a dynamite education for peanuts, whether they are rich or poor, and then for the child to emigrate to the U.S. and live here. Believe me, such countries do exist. You can identify them by looking at the parents of your kids' class mates.I thought Warren was overly optimistic. I like to believe he was playing devil's advocate and giving the others an opportunity to discuss critical issues that would not be brought up by audience questions.The graphics and charts were good, especially the use of the penny. My eye kept going to the "in God we trust", very appropriate of our politicans and the general population they pamper.
Posted by: Kevin at 08/25/2008 04:33:15 PM
I think it is our fault as a people, not the government's fault that we face such a crisis. In essence, they depend upon consumer spending to make their decisions. They can't be anymore proactive than they've already been. I agree there is a weakening of human capital.
Posted by: Helen at 09/19/2008 08:53:54 AM
WHERE can I see this movie? I live in Leesburg, VA and based on the Washington Post movie guide it is not being shown anywhere in the nation's capital. I've been looking weekly since Aug. 22.