I.O.U.S.A. the Movie - A Review One Year Later
I.O.U.S.A. is a documentary film released in late 2008 by the Peter G. Peterson Foundation that focuses on the national debt of the United States. I finally watched it this weekend and I am glad that I did. Although this review is one year late, I think the topics addressed in I.O.U.S.A. are even more important now for the Americans who despise debt.
The two main characters in the film are David Walker of the Peter G. Peterson Foundation and Bob Bixby of the Concord Coalition. David Walker served as the Comptroller General of the United States and head of the Government Accountability Office (GAO) for ten years. The GAO is a part of the legislative branch of the government responsible for auditing the vast federal budget of the United States for waste and inefficiency so Walker is extremely qualified to speak about government spending. In the film he partnered up with Bob Bixby and a couple other foundations to run Financial Wakeup Tours around the country that educated people about the national debt and deficit spending. These two men are obviously passionate about their cause, but what I found a bit sad was that they were almost like modern Cassandras because it seemed that very few people were listening. For example, Bixby was interviewed by a local news station at a Financial Wakeup Tour, but that story did not make the news at all.
The film gave a quick history of how the United States racked up so much debt, and also gave a summary of the four major deficits America is facing now. The four deficits were named as the federal budget deficit, the savings deficit, the trade deficit, and leadership deficit. These were all explained in an easily understandable manner.
The federal budget deficit is caused by the government spending beyond its means. This year the federal budget deficit is an astronomical $1.6 trillion.
The savings deficit is caused by American households living beyond their means. This has been very obvious in the past couple years as easy credit drove savings rates to negative territory. However, savings rates seem to be heading back up this year so perhaps people are starting to see the problem with debt.
The trade deficit was explained by Warren Buffet in the movie and he talked about "Squanderville" and "Thriftville." The basic gist is that America imports much more goods than it exports, and although this could last a while it cannot last forever.
Finally, the leadership deficit seems to be the worst problem of all. Most politicians get elected on platforms of tax cuts and public spending, and that just pushes the deficits higher and higher.
Some of the film's content was a little prophetic. One man said that it would take a crisis for Americans to change their ways, and perhaps that is happening now. At the time of the filming the national debt was up to around $9 trillion. The end of the film stated that the national debt would be $10 trillion in 2009, and I am sure that sounded a bit alarmist then. However the fact is that the national debt is now 11.8 trillion and increasing at the rate of $100 million a month. According to the Treasury, the current debt ceiling of $12.1 trillion may be reached in mid October and Congress would have to raise the ceiling again soon. I think it is amazing and frightening how much the national debt has grown in just one single year.
I liked this film very much because it was very educational and strictly non-partisan. The national debt is something every American resident should care about because it does affect each individual's financial health. The United States will need to start to live within its means by cutting spending and/or increasing revenue and it does not seem like that is happening because everyone wants more public spending and less taxes. The final point of the film is that people need to vote with the national debt in mind, because it is immoral to spend the money of future generations.