On Thursday night, I saw the movie, “I.O.U.S.A.,” which focuses on the national deficit. It has been hailed as “An Inconvenient Truth,” without a celebrity-type lead like Al Gore, but I found it equally interesting. While it’s not a “sexy” topic (as one man in the film kept reminding everyone), unlike global warming, it’s something we can all agree on: Our nation is in debt up to its ears and way past that.
The film explains how we got into so much debt by dividing the problem up into four categories: budget deficits, savings deficits, trade deficits and leadership deficits. What’s the total figure for all of these deficits? According to the filmmakers, it’s somewhere in the neighborhood of $53 trillion as of the end of last year, with about $11 trillion coming from publicly traded government debt, the amount the federal government owes to employee pensions and the cost of environmental cleanup of federal land. The rest comes from projected shortfalls in Medicare and Social Security, which are only expected to get worse as Baby Boomers begin to hit the retirement age.
The film was nonpartisan, but clearly was meant to be a wake up call not only to regular citizens, but also to elected officials in Washington, D.C., and perhaps most importantly, to the next president. I think both candidates should watch this film because I think we are all in desperate need of a fiscal wake up call before it’s too late. And the candidates would do well to listen to the solutions offered in the film.
Solutions to the Deficit
One solution was to put the federal budget on a diet by raising taxes or cutting spending, or both. One of the films’ backers, Peter G. Peterson (co-founder of the Blackstone Group and former commerce secretary under Richard Nixon) advised raising the retirement age for Social Security to at least 70 and having a Medicare income test where people with more money would pay more of their health care costs. Other solutions were to decrease the cost of health care, reduce the trade deficit, use more alternative energy and end America’s addiction to oil.
Mostly the people interviewed in the film said they hoped that the Republican and Democratic candidates for president would acknowledge the enormous amount of debt and pledge to have a bipartisan coalition work on solutions. It’s clear that they think a rainy day is looming.
At the end of the movie we found out that $85 million was added to the federal deficit while the film was playing. By January of 2009, it is projected that the national deficit will be about $10 trillion.
Wake Up Call
I think the film could be huge wake up call to people who don’t know much about the national debt. Whether it will make people take action is less certain. As one of the people in the film said, Americans don’t act until there is a crisis. What the film did is show that we’re either at the crisis point or that it’s coming soon.
If you didn’t get to see the “I.O.U.S.A.” on Thursday, look for it. It’s going on a 12-city theatrical run. It’s very entertaining, with excellent graphics and some humor to spice it up. But most of all, it explains the national debt in terms that are easy to understand and get behind, making it just as “sexy” as global warming.
I’d love to hear what you think about the national deficit, hear possible solutions to get our country out of debt and any feedback if you’ve also seen “I.O.U.S.A.” so leave your comments here.
There are several things that come to mind. The first would cut federal legislaters salaries AND the biggest is their retirement. The figures are astounding, next make income a straight percentage, say 10 percent or 15. Then if our congress spends more than it takes in it comes out of there salaries. Then the department heads, including the presedents so on and so forth. The pentagon would have to take responsabilityfor their actions also, 5 stars first to have there pay hit. This would make for more critical thinking on their part. 4th, we would quit being the welfare state for ALL other countries. period. Nobody appreciates it anyway. So with this savings we should be able to take the deficit down in 5 to 7 years, and from there have money in the bank.
Change all politicans in the House by not voting for any incumbent. This is where all spending bills originate. Make it clear that if they continue in two years they will be turned out. This hits them where it really hurts because they don’t care about us only that they get relected.
I did not get to see I.O.U.U.S.A. but will look for it. Your article is very timely…however, the debt is closer to 99.2 trillion according to Dr. Richard W. Fisher President and CEO of the Federal Reserve Bank of Dallas. Pleae check him out on http://www.economicedge@americanvision.org
It is without a doubt the most scary speech I have ever read….
Hello,
Great Movie,! about Warren Buffett I thought he put a damper on the whole meeting process, but like one person said when you have that much money everything is wonderful even if you loose more than half.
I’m over 50 and took two men in their early 30′s and they were fascinated and thank me several times that I was persistent in asking them to go. We all agreed on the fact that this should be shown in all high school’s and college’s. Education on this is an important key, both for today and tomorrow.
The working til they are 70 didn’t get me or them excited. My Dad died at 73 what kind of retirement would he have had if he worked that long, and we all said that today’s work environment pretty much say’s you are washed up after 45.
Thanks go out to those for putting out a great movie, and hope this will be a start of new wave of accountability for all with the resources that we have in the U.S.A.
Most of our national debt problems would go away if we had term limits of ONE TERM ONLY for all politicians. You mentioned T. Boone’s speaking to a group from the Senate. He was no doubt genuine with his remarks. And while he stands to gain, you can bet those who listened were thinking, “what’s in it for me”. All our congress knows how to do is spend our money. And the President is no exception. We have waged a hollow war in Iraq. Yet we did not keep the spoils of war. We gave back the oil we won. To the victor go the spoils, not oh here , you can have the oil, we don’t mind paying you $130.00 per barrel for the oil we siezed.
What is wrong with our politicians? They’re not thinking of what they can do for the country, they are thinking of what they can do for themselves. Get rid of them. Hire new ones every four or six years, and keep them honest.
First, there is NO global warming!
Second, our debt is mostly due to extreme excess spending by Congress (both House and Senate). We have had 7 years of a great economy with our representatives in a spending frenzy. For the strong economy to continue, there must be a extreme reduction of spending — including elimination of “pet projects” of representatives, restrain environmentalists and reduction of welfare programs.
It is empty headed to blame everything on Pres. Bush and the war.
I have not seen the film yet but do intend to see it. The first fix we need to make is add a mandatory class on Finance/Economics to all High Schools in the country. As others have suggested this film should be shown in all the Schools. Politicians do not participate in Social Security. They have a separate retirement package which is much more beneficial than we have. There is no doubt in my mind that these deficits make it much harder for the FED to get us out of the debacle caused by housing as so much of our debt is owned by other countries and the Dollar’s value is negatively affected leading to higher prices of oil and other commodities.
1. Keep tax cuts…and, better still, let’s look at Steve Forbes flat tax plan again.
2. NO MORE deficit spending.
3. Term limits: Reps serve 3 yrs, Senators 5 years, President 6 years.
4. Get rid of bureaucracy…at all levels. If real people got elected instead of career politicians, and they determined to take a blue pen to our nation’s budget and staffing, I think we could stamp out bloat…mebbe not all, but a lot of it!
5. Subsidize trains, not highways. Duh.
6. Let’s stop spending billions on keeping Central Americans OUT–let ‘em in LEGITIMATELY…four years service in the armed forces, pass your bckgrnd ck, and, baby, welcome to the USA.
The federal government needs to lead by cutting spending, however they should set an example by reducing salaries instead of laying people off. Laying people off will exacerbate economic problems and make a few bear the problems disproportionately. We have all contributed to this problem. I work for a government contractor and yes my pay should be reduced also, rather than seeing my neighbors laid off. Hopefully if the government leads many in private industry will follow suit.
[...] written her before about the “I.O.U.S.A.” phenomenon of both many Americans and the U.S. government’s enormous amount of debt. This was even [...]
[...] of buzz about the film “I.O.U.S.A.” and I wrote about it for Cabot Wealth Advisory. (Click here to read the full post.) At the time, the U.S. national debt looked pretty bad, but this was before we had failed banks, a [...]
Cut all legislative salaries by 40% and make their retirement directly related to Social Security. Either put them on the same health plan they seek to force on us or put all of us on their plan. People who are elected to represent us ( a temp job at best) should not be allowed more then two terms in their office. A constant refreshing of those who we elect ( a republic at best) should bring everyday ideas from the ordinary lives most of us live to help the majority of Americans that are NOT served by the lawyers currently elected. Put America back in the hands of Americans, not those with politically motivated interests! It is not about the DNC or the RNC but about Americans who work for a living and try to make their lives meaningful to their families! There is no such thing as politically correct, that is a oxymoron comment! There is simply American correct!