I read about “IOUSA” a few weeks ago in Money Magazine, but it’s not yet on DVD. Then I happened to see that CNN would be airing it January 10 and 11. On went my DVR. A few hours later, I sat down to watch it. Up went my heart rate. If you want to watch a truly scary movie, this is the film for you.
IOUSA Summary and Premise
IOUSA is a documentary about America’s love affair with debt. Although it does reference individual debt as one of the problems of our overall economy, the primary focus is on our national debt and the national deficit. The deficit is the difference between what we spend and what we collect in revenue. The debt is the amount we’ve borrowed to pay for spending not covered by the revenue. The projected deficit for 2009 is $438 billion.
The current national debt is almost $11 trillion. The movie explains the history of our debt and the policies that led to this giant number. It also lays out the problems that will arise if we continue our current spending habits, both as individuals and a nation.
The movie IOUSA also bounces between clips from policy hearings and briefings, enlightening graphics, and discussions from economic experts like former Treasury Secretary Paul O’Neill, Warren Buffett, and members of the Concord Coalition. Finally, there are the man-on-the-street interviews that make the average American look uninformed. I’m not a big fan of those gotcha moments, but the rest is excellent.
The Scary Numbers
One fact particularly galled me: our debt has only been at 122% of GDP one time – during World War II. At that time, the debt was owed to Americans who had purchased savings bonds. The debts were also quickly paid down to below 33% of GDP. Now our debt is near 70% of GDP. More than 50% of that is owed to foreign entities.
Another scary fact: George W. Bush has doubled the national debt in just 6 years.
A third scary fact: Although Clinton bragged about achieving surpluses, those surpluses were partially a result of borrowing against the Social Security trust. If you exclude that borrowing, we’ve only had a surplus for one year out of the last forty (during Clinton’s era.)
The almost scariest fact of all: If we were to add up our current debt, our Social Security obligations, and our Medicare obligations, we would need to invest $53 trillion dollars today to cover them. We have $0.
The truly scariest fact from the movie: If we continue spending at our current levels, our national debt will total 245% of GDP by 2040. There’s simply no way we could ever repay that debt, or even continue to service the debt via interest payments.
So who’s going to get stuck with all of these bills? It’s not George Bush. It’s not any of the people who chose to spend so recklessly. It’s our grandchildren and their grandchildren. We have saddled future generations with monstrous debt.
The only solution is to start paying it down now. We have to control America’s spending, break this habit of consumerism, and encourage everyone to save money for the future. People keep saying that we need to solve the climate issues now to protect the earth for future generations. I agree, we do. But we also need to tackle this debt crisis now, otherwise our children will be begging for food and clothes on a gorgeous green earth.
Visit the movie website to find showtimes and events near you, or watch the 30-minute version on Youtube. You’ll also find bonus clips from the full version on the IOUSA website. It’s scary, but this is a movie you need to see. There’s also a companion book if you want to get deeper into the numbers. Prepare to be very, very scared and very, very angry.
As a final note: this movie was released in August 2008, before the financial collapse and subsequent bail-out, so the situation is even worse than it was when the movie was made.