by J Scott Christianson, Columbia Daily Tribune Columnist
It is probably best for Tribune columnists to stick to the subjects they are assigned, but please indulge me for a moment as I attempt to channel Tribune movie reviewer Scott May and tell you about the latest must-see film. It’s not a tale of love and romance or the latest summer action movie. It’s about one of the unsexiest of topics: economics.
Although this film scores low on the titillation and adrenaline scales, you might find your blood is boiling by the time you are done watching “I.O.U.S.A.”
“I.O.U.S.A.” could have just as well been named “An Inconvenient Debt” because, in the style of Al Gore’s movie about global warming, this film shines a powerful light on the enormous deficits facing our economy and our country. And like “An Inconvenient Truth,” “I.O.U.S.A.” also has its origins in a PowerPoint presentation, in this case one given by the nonpartisan Concord Coalition as part of its “Fiscal Wake-Up Tour.”
The film neatly breaks down the economic threats facing our country into the four national deficits: budget, savings, trade and leadership.
Budget deficit: It probably comes as no surprise that our government spends more than it takes in. The national debt has climbed to nearly $10 trillion. However, most Americans are not aware the annual budget deficit (now at $482 billion) and the national debt would be much greater if not for the fact that the federal government has been funding the budget by stealing from the Social Security Trust Fund, which has more money coming into it right now than it needs to pay those currently receiving Social Security. Of course, as more baby boomers start to draw Social Security benefits, the trust fund will be paying out more than it takes in, and budget deficits will start growing at a much faster rate.
And as those baby boomers have more health problems, Medicare and Medicaid expenses will also grow rapidly. When these future obligations are taken into account, our national debt is really more like $58 trillion. Our national debt represents the biggest case of taxation without representation that our country has ever seen. Our representatives are spending money that future generations will have to pay back with their taxes. The next generation can’t avoid these taxes – the debt will have to be paid sometime. Don’t be surprised if in 25 years, someone writes a best-selling book about the baby boomers titled “The Greediest Generation.”
Savings deficit: The average savings rate in America has been hovering around 1 percent for several years. In other words, the average American spends 99 percent of what he or she earns, saving only 1 percent for future purchases, retirement or a rainy day. Saving money first and then purchasing items, the way our parents used to do, is simply no longer the norm.
And the creditors who make huge sums from charging fees and interest on consumer debt are constantly encouraging us to spend first and ask questions later. There is one particularly obnoxious credit card ad that sums up the situation. Set to lyrics proclaiming “I want it all, and I want it now,” a 30-something shopper uses his cell phone to find out exactly how much credit he has left on his card so he can purchase the biggest flat-screen TV possible. The ability to easily max out your credit is touted as a great new service. So much for the layaway plan.
This lack of personal savings has repercussions elsewhere in the economy, as there is less and less “real money” in the system that can be used to invest in new businesses and research emerging technologies.
Trade deficits: Our trade deficits have been leading not only to the loss of jobs in the United States but also to the devaluation of the dollar. This devaluation has contributed heavily to increased prices for gasoline, food and everything else. Since the dollar is worth less in the global economy, countries that sell us “stuff” want more dollars for said stuff. Unless we have a way to increase our exports, commodity inflation will continue to be an issue.
Leadership deficit: Right now, few political leaders are willing to address these long-term economic issues. They are at the ready with short-term fixes – such as the recent stimulus checks – that often make problems worse in the long run. Unfortunately, we, the American voters, often reward short-term thinking and punish those leaders who attempt serious reform. The candidate who says we need to cut benefits or raise taxes is handing the election to his opponent. But some combination of those two will have to happen at some point.
If you care about the environment, affordable college tuition, heath care, human rights or any other of the current front-page concerns, you need to be concerned about our country’s economic future. We simply will not have the resources to confront these other problems if we don’t have a healthy economy. Like global warming, this is not an insurmountable problem, but it is one that will only get worse the longer we fail to act. There are solutions that Democrats and Republicans can agree to if our leaders are able to look beyond the politics of the next election. We voters need to start rewarding those who are willing to confront our large-scale economic deficits.
“I.O.U.S.A.” is already playing in limited release around the country, and hopefully it will be playing in Columbia soon. In the meantime, you can find information about the movie, as well as several clips from the movie and information about the companion book, at www.iousathemovie.com. “I.O.U.S.A.”: Christianson, five stars.