I.O.U.S.A. how much?! The new documentary film I.O.U.S.A. sounds the alarm about our worsening debt crisis but is short on solutions

New American, The, Sept 15, 2008 by Brian Farmer

"Wake up America! We're on the verge of a financial meltdown," screams the website promoting I.O.U.S.A., a documentary that examines the rapidly growing national debt and the resulting consequences for the U.S. government and its citizens. For example, as the Baby Boomer generation reaches retirement age, will there even be any Social Security and Medicare benefits left to collect? Burdened with an ever-expanding government and military, increased international competition, overextended entitlement programs, and debts to foreign countries that will become increasingly difficult to honor, I.O.U.S.A. makes the case that America must mend its spendthrift ways or face an economic disaster of epic proportions. This is because the U.S. government has been unable to contain its spending only to what has been raised through taxation, and un-funded future liabilities total more than $50 trillion.

I.O.U.S.A. is director Patrick Creadon's second documentary and had its World Premiere at the 2008 Sundance Film Festival in the American Documentary Competition. Creadon's directorial debut, Wordplay, is a documentary film about the New York Tittles crossword editor and National Public Radio personality Will Shortz. Wordplay became only the fourth documentary ever to be awarded the "Golden Tomato" from Rottentomatoes.com for "Best Reviewed Documentary of the Year." Previous winners of this award were Spellbound, Supersize Me, and March of the Penguins.

So, we know that Creadon is capable of making an entertaining film, as well as an informative one. After its Sundance Film Festival screening, Reuters reported that I.O.U.S.A. "may be to the U.S. economy what An Inconvenient Truth was to the environment." However, while Al Gore's film relied on deceptive charts, misleading arguments about cause and effect, and computer models that have been shown to be notoriously unreliable, I.O.U.S.A. relies on data that can't be massaged to give any result we might want. The Baby Boomers are real, and they are not going to die en masse before retirement. If anything, history shows that future projections of government spending have habitually underestimated the ultimate costs of federal entitlement programs.

The inspiration for I.O.U.S.A. is a book published in 2006 entitled Empire of Debt: The Rise of an Epic Financial Crisis, by Bill Bonnet and Addison Wiggin, which warned about the state of the American Empire. Their review of history, going back thousands of years, shows that running an empire is a disastrously expensive business. Since President Woodrow Wilson pledged to make the world "safe for democracy," U.S. government policy has gradually shifted to pursue an imperial role. We have abandoned the virtues of personal liberty, economic freedom, and fiscal restraint, while the federal government has gained control of public life and the economy. The result has been excessive consumption, unrestrained deficit spending, and reckless military adventurism, causing the nation to slip towards financial ruin.

It is perhaps ironic that director Creadon has gone from Wordplay to a movie full of numbers, but I.O.U.S.A. does a superb job of explaining the various aspects of the nation's deficit, and how and why the issue is so important. It does so by following former-Comptroller General David Walker and activist Robert Bixby (executive director of the Concord Coalition) on a cross-country "Fiscal Wake-Up Tour" to talk to the American people about the country's debt problem. We watch them as they reveal the alarming message about America's four major deficits:

Federal Budget Deficit: At present, the public debt, including unfunded future liabilities, stands at a staggering $53 trillion, which breaks down as follows:

* $11 trillion: Treasury debt (e.g., bonds) of which 44% is held by foreigners.

* $7 trillion: Social Security obligations.

* $34 trillion: Medicare obligations (including $8 trillion for the new prescription drug plan, which we originally were told was going to save money!).

* $1 trillion: Miscellaneous.

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Savings Deficit: Americans now spend more than their income, fueling their consumption binge by taking on ever more credit card debt. The last time Americans had a negative savings rate was during the early years of the Great Depression.

Trade Deficit: Warren Buffett narrates an animation of two island nations, "Thriftville" and "Squanderville," to demonstrate how a nation that consumes more than it produces eventually runs out of assets to sell to support its spending habits. Our biggest trade deficits are with China, Japan, oil-producing countries, Canada, and Mexico. (It's interesting to note that the North American Free Trade Agreement was sold to Americans as a pact that would improve our trade balances with our two neighbors!)

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Leadership Deficit: Our leaders and representatives lack the political will to enact long-term solutions, because they are not rewarded

for making the required tough choices. As Warren Buffett puts it, "This is what happens when the policy cycle is longer than the electoral cycle." Politicians will say and do whatever is necessary to get elected, and voters are gullible enough to accept the unrealistic claims that they can simultaneously have lower taxes and more benefits.