The State of The Economy in I.O.U.S.A.

I caught this review of another movie (and book by the same name) that's not likely to be in Triangle theaters but might be worth watching:

I.O.U.S.A.




"For 85 minutes, I.O.U.S.A. zips through 200 years of American history to explain how the richest country in the world is currently $9.5 trillion in debt.

"The federal debt seems too incredible a sum to even fully grasp; an easier way to understand such an enormous figure is that if the debt was equally divided among the country's population, each American would owe over $30,000.

"A deficit is nothing new for the United States. The federal government has almost always spent more than it earned in taxes. The film's tour through history actually makes the current debt slightly less distressing; in 1946 World War II spending contributed to the national debt peaking at 120% of the country's Gross Domestic Product (GDP). Politicians, regardless of political affiliation, don't want to make the tough decision of cutting spending and raising taxes, especially when it means not being reelected. But (the director) Creadon argues -- without actually being partisan -- that the only way to decrease the national debt is to enact a more responsible fiscal policy that does just that.

"A significant portion of I.O.U.S.A. follows former U.S. Comptroller General David Walker and The Concord Coalition Executive Director Robert Bixby as they tour the country speaking in town hall meetings as part of their Fiscal Wake-Up Tour. Since 2005, Walker and Bixby have made it their mission to educate the public on the reality that the future of the country depends on making difficult financial decisions.

"According to Bixby, the current budget -- with over $700 billion annually allocated for military spending and a yearly budget deficit of over $230 billion -- is "unsustainable" over the long term; future generations are going to inherit an enormous debt while simultaneously shouldering the rising costs of Social Security and Medicare as the country ages. The Iraq war alone is costing approximately $275 million a day.

"Between 1980 and 1990 the national debt more than tripled. After being elected in 1992, President Bill Clinton broke his campaign promise to lower taxes, deciding instead to balance the budget and eliminate the debt by 2012. But we haven't continued to pay down our debt; the rising budget deficit, and what that means for the country's future, is why Walker and Bixby started their Fiscal Wake-Up Tour.

"Aside from voting for more responsible politicians, there is little the average American can do about the budget deficit. But there is something we can all do about an equally serious economic problem: the trade deficit, specifically the amount of Chinese-made goods Americans buy. Warren Buffet famously wrote about the problem in his 2003 Forbes magazine article titled "Squanderville versus Thriftville". During an on-screen interview, Buffet says that he is more concerned with the trade deficit than the budget deficit.

"While true trade between countries is good, the film asserts that the United States is too reliant on foreign countries to produce necessary goods. This situation has created low cost goods and services for American consumers, while destroying the county's manufacturing industry. Workers at a Chinese light bulb factory featured in the film only make $10 a day. So instead of Americans being able to make their own light bulbs at domestic factories that pay a living wage, they buy cheaper light bulbs from China without really considering the long-term financial and ethical ramifications.

"Americans need to start thinking about the consequences of buying foreign goods that could be easily produced in their own country -- even if that means accepting a slightly higher price tag. The current economic relationship is contributing to China's growing prowess and the United States' growing trade deficit.

"To its credit, I.O.U.S.A. does not take political sides; regardless of which party is in office -- politicians on both sides of the aisle are responsible for the current situation -- the United States needs a balanced budget and more equitable international trade relationships.

"For those who think that this sobering issue exists solely at a federal level, the film points out that individual Americans have the same negative savings rate as the country. It's individuals who are buying all of those cheap tchotchkes from China, therefore contributing to the country's trade deficit.

"While it may be easier to simply ignore the complexities of the country's finances, Americans actually have a chance to reevaluate their fiscal policies with the upcoming presidential elections..."