On Aug. 21 at various movie theaters around the country will play a documentary titled “I.O.U.S.A.” to teach Americans about the dangers of debt, just as “An Inconvenient Truth” preached about global warning. Perhaps the real draw? Three financial big shots taking to the stage to give Americans a good talking-to about the country’s sloppy debt habits: Warren Buffett, Blackstone Group Vice Chairman Pete Peterson and former Comptroller General Dave Walker, among other panelists. The film’s inspiration comes from the 2006 book, “Empire of Debt: The Rise of an Epic Financial Crisis,” by William Bonner and Addison Wiggin. Walker was called on when the publisher wanted to make a documentary about the nation’s government-debt crisis (Wiggin is the film’s director). Walker himself had in 2005 embarked on his own Fiscal Wakeup Tour to warn America about the debt “crisis.” (Buffett signed up later, while Peterson helped finance the film through his foundation, of which Walker is chairman.) Here are excerpts from Deal Journal’s conversation with Walker: Deal Journal: so, with the tour and the movie, are you aiming to create Debtheads instead of Deadheads? David Walker: It’s funny, I’ve been called “the modern-day Paul Revere” by Paul Volcker and others. It’s not about where we are today–it’s about where we’re headed, and Washington isn’t aware. We have a macro problem, meaning Washington doesn’t know how to handle its finances, and Americans don’t know how to handle their own finances either. We’ve now become addicted to debt, and for all Americans, it’s increasingly owed to foreign lenders. It’s a whole new world of implications. Since personal savings are basically at zero, we’re in a situation where we have to rely more and more on foreign lenders to finance our deficits. That means those payments go overseas, and they have more leverage on us and we have less on them, and that’s true as well whether it has to do with foreign relations or national security. Deal Journal: I heard that “An Inconvenient Truth” was the inspiration. Walker: We hope ours will make a difference on economic issues as “An Inconvenient Truth” did on the environment. There are differences, though. In the case of “An Inconvenient Truth,” that was a commercial effort. We’re not in this to make money. We’re not putting as much into advertising and promotion as “An Inconvenient Truth” did. Ours is also not just about one person, as “An Inconvenient Truth” was about Al Gore. It’s about a symphony of players invoking experts and people on the street, in understandable form. We even have a little bit of humor, with clips from Saturday Night Live and Jon Stewart’s interview with Alan Greenspan. We have something that is staunchly nonpartisan and nonideological. It’s the right time for it. Deal Journal: This year the presidential election is the big news, and the two candidates have yet to offer much detail on their economic plans. Do you expect this film to influence the election, and how? Walker: Our hope would be that presidential candidates would acknowledge the seriousness of the financial and fiscal challenge, and commit to making it a priority. We have a $53 trillion financial hole. We’re headed in the wrong direction fast. Deal Journal: A lot of the warnings play into the theme of American’s self-loathing as we worry about our international competitiveness and allegedly declining power in the world. It’s pretty depressing. Is that a hard to sell to the electorate? Walker: The honest truth is that we have too many people in Washington living for today rather than saving for tomorrow. The baby boom is the first generation is the first to leave this country worse off than how it found it. We can turn things around with leadership and effort. We’ve always risen to the challenge. That can be the case here, too. Deal Journal: So part of your argument is to warn Boomers that they’re going to look worse than previous generations? I’m not a Boomer, so I have to ask: Why is it always about the Boomers? Walker: It’s not just about the boomers, but the facts are clear and compelling. This country has a longstanding track record of each generation leaving the country better off and better positioned for the future. You have to move beyond numbers. You have to talk about values. One of the values I talk about is stewardship, leaving things better positioned to the future. Right now it’s about what are we doing to them rather than for them. We’re mortgaging our future. In many cases, the people who have to pay the bill can’t vote. It’s the ultimate taxation without representation. It’s not fiscally irresponsible, but also morally reprehensible. Deal Journal: Should Washington be blamed? Isn’t the whole idea of democracy based on individual responsibility. Walker: Some people don’t know the facts or the truth. If deficits don’t matter, why are we paying $200 billion a year on interest? You’re right that this country is supposed to be to a certain extent about personal responsibility and opportunity, but they can’t do anything about it if they don’t know. The American people are a lot smarter than people give them credit for. If you state the facts to them, they get it. The do-nothing plan will make America look like a Third World country. People now say they understand what do they need to do. They’re looking for solutions, and they don’t trust Washington. Washington is doing bailouts that don’t make a darn bit of sense. They’re expanding entitlement benefits for veterans and others. They’re talking about increasing spending. wsj
I'm really excited about this movie. I've got my tickets, and I'm doing volunteer promotions for it. They're going to do a really cool thing for its national opening. It will open on August 21 at the same time (7 PM CST) all across the country. Immediately after the showing, all of the theaters will broadcast a live discussion with Warren Buffet, Pete Peterson, and David Walker about the same material. I really hope that it gets the kind of popular awareness of our country's financial shape that they are predicting it does. Because compared to that, nothing else matters.
http://www.iousathemovie.com/press/iousacnn/ If you haven't seen this movie yet like you should have, it will be on CNN this weekend. Saturday, January 10 at 1:00 p.m. CST Sunday, January 11 at 2:00 p.m. CST
The movie is quite biased. Brought to you by folks who want to eliminate the social security system **** Every few years there is a book or movie that stands out for its incredibly bad timing. As the Internet bubble exploded in 2000, the book Dow 36,000 quickly went from a work of inspired genius to intense derision. More recently, the 2005 book, Why the Real Estate Boom Will not Bust and How You Can Profit From It, has become one of the great jokes of the housing crash. As the country and the world attempts to recover from the wreckage caused by these bubbles, the new documentary, IOUSA, seems destined to join these two earlier classics of bad timing. The basic story of IOUSA is that the United States suffers from a massive deficit problem. The film constantly comes back to the deficit using a variety of measures that are intended to scare viewers into action. After seeing the film we are all supposed to run to our phones and computers and demand that our representatives in Congress shut down Social Security and Medicare and double our taxes. Hopefully, the film will not have this effect, because there is nothing that the economy needs more right now than very large deficits. The collapse of the housing bubble has destroyed more than $5 trillion in wealth. The fallout from this collapse has led to an even larger decline in stock market wealth. This massive loss in wealth in turn is leading to a plunge in consumption that is driving the economy into the most serious downturn since the Great Depression. Economists from across the political spectrum agree that the only way to counteract this loss of consumption demand is through large increases in government spending. If IOUSA viewers manage to persuade their representatives in Congress to balance the budget then they will be guaranteeing the country another Great Depression. Ironically, the heroes of IOUSA include many of the leading villains of the current economic crisis. The story prominently features Peter Peterson, whose foundation is helping to circulate the film. Mr. Peterson made a fortune running a Wall Street private equity fund, much of which he was able to shelter from normal taxation through the "fund managers' tax break." Mr. Peterson is fond of telling audiences that he doesn't need his Social Security. Of course, no one would need their Social Security if they received tens of millions of dollars in tax breaks like Mr. Peterson. The extensive media coverage that Mr. Peterson has received for his anti-Social Security and Medicare diatribes also helped to distract attention from those trying to call warn of the dangers looming from the housing bubble. While Peterson and his followers could count on extensive coverage from National Public Radio, the Washington Post, and other highly respected media outlets, those warning of the imminent crisis were almost completely ignored. The film also interviews Robert Rubin. As Treasury secretary Robert Rubin promoted an over-valued dollar. The over-valued dollar made our goods uncompetitive internationally by raising the price of U.S. exports to foreigners and lowering the price of foreign made goods to people living in the United States. As a result, our trade deficit exploded, peaking at almost 6 percent of GDP ($800 billion) in 2006. Rubin also pushed the one-sided financial deregulation that fueled the irresponsible lending practices of the housing bubble years. These were practices that he personally profited from as a top executive at Citigroup. Finally, the film gives a starring role to former Federal Reserve Board Chairman Alan Greenspan. Greenspan will go down in infamy as the man who looked the other way as the housing bubble soared to ever more dangerous levels. He also claimed to be oblivious to the explosion of subprime and other high-risk loans during his tenure as Fed chair. More than any other individual, Alan Greenspan bears responsibility for the economic catastrophe facing the country. Audiences may find his lectures on the need to increase saving less than compelling at this point. There is a grain of truth to the IOUSA scare story. The country has a badly broken health care system. If we don't fix the health care system then it will cause serious damage to the economy and lead to large budget problems in future decades since the government picks up roughly half of the tab for health care through programs like Medicare and Medicaid. Unfortunately, the film never clearly mentions the need for health care reform, focusing only on the budget and not the underlying problem with the private health care system. The moral of the IOUSA story - the need to reduce the budget deficit - is so radically out of sync with the economic imperatives facing the country that it is likely to quickly fall from sight, perhaps to be resurrected in film festivals showing red scare films from the fifties. This would be a positive development for the country, since it would be an enormous tragedy if this film helped to dissuade the public from supporting the sort of stimulus package needed to prevent a long and extremely painful recession. The director of the film, Patrick Creadon, is highly talented and clearly well meaning. Obviously he just fell in with a bad crowd when he decided to make IUOSA. Maybe for his next two films he should interview the authors of Dow 36,000 and Why the Real Estate Boom Will not Bust and How You Can Profit From It. This could be marketed as the "people who really got it wrong" series. . http://www.huffingtonpost.com/dean-baker/iousa-failed-scare-flick_b_147650.html
I remember seeing the movie way back then. I didn't get the impression that we should all double our taxes and eliminate Social Security and Health Care. What I do remember is the movie explaining that the current system is messed up (which is true) and that things can't continue down this same path or we'll all be screwed (which is true). Howard Dean talks about the "Wellness" model health care system and how we will all save money and it takes time to change. I hope it's true. I'm just not so sure I have that much faith in the American people. We're all so damn irresponsible when it comes to our own health, even when our lives are threatened. An increase in education and options and availability, and a decrease in costs...I still don't think it's going to be enough of a force for our society to collectively change enough to make it work. There are many people who do the right thing, and want to do it, but selfishness without regard for others has been too far ingrained into our culture that the type of change that is truly needed (collective daily lifestyle and value changes) won't happen. Voting for Obama means very little in the long run. Changes won't last unless we all sacrifice and sustain. It's about what you do every single day and I don't think we have it in us to save ourselves. Call me a pessimist. Wow, I really went off on a rant there.
A lot of what it said is very true (the trade deficit part), but other parts seemed very one-sided and idiotic. (SS won't be an issue because if this keeps up those baby-boomers AREN'T going to be retiring en masse as they're going to have to work till the day they die) The problem with the economy goes back a lot farther than 2000 and the economy is a lot more than just the government's budget. The government's problem now is it ran out of interest rates to cut. From the looks of things we're gonna find out seemingly definitively if Keynesian economics is true or not.
