We need presidents who are so devoted to doing the right thing with and for the American people, that they’re prepared to lose for their values, and to hang those values out in public for everyone to see them.
— Paul O’Neill
David M. Walker resigned as Comptroller General and head of the GAO on 12 March 2008. He’d served in these positions for 10 years, appointed by Bill Clinton and working through George W. Bush’s administration. On his resignation, his reputation as a forthright and nonpartisan advocate for fiscal sustainability was intact: he was critical of U.S. spending in Iraq and Afghanistan, Social Security, Medicaid, and Medicare. On taking his new position as CEO at the newly formed Peter G. Peterson Foundation, Walker said, “In the final analysis, while I love both my job as comptroller general and the GAO, I love my country more, and I believe that leading this foundation represents a unique opportunity and will be good for my country.”
Freed from his ongoing battles with the administration, Walker, along with Concord Coalition executive director Robert Bixby, continued his Fiscal Wake-up Tour, “going outside the beltway to speak the truth,” as he puts it in I.O.U.S.A. Walker cites the four serious deficits shaping the U.S. economy: budget, savings, the balance of payments, and leadership — all contributing to a national debt of over $9.6 trillion, expanding by an average of $1.86 billion per day since September 2007.
You’d think someone would be worried about this.
Anyone would be if she watched Patrick Creadon’s documentary on American fiscal fecklessness and crisis. As Walker and an impressive array of other experts — including former Fed chairman Paul Volcker, former Treasury Secretaries Robert Rubin and Paul O’Neill, and Warren Buffett — warn, the persistent lack of attention to the predicament, the pathological postponement of any serious effort to get deficit spending under control, and the dependence on financing from other nations (say, China) have left the nation in increasingly dire straits. “The most serious threat to the United States,” the film points out, “is not someone hiding in a cave in Afghanistan or Pakistan, but our own fiscal irresponsibility.”
Based on Addison Wiggin and William Bonner’s book Empire of Debt, the movie uses the Fiscal Wake Up Tour to explain in clear and compelling terms problems that have been in motion for decades — exacerbated over the past eight years of profligate (and poorly monitored) wartime spending. Bonner recalls that Thomas Jefferson called it “immoral for one generation to load up the next generation with debt.” However you understand the moral element in the Bixby insists the tide can be turned: “If this were gloom and doom,” he says, riding a down escalator in the DC metro system, “We wouldn’t be doing it.” He calls for discipline and planning for the future, a substantive change from current practice. “It’s a lot like dieting,” he adds.
The film use of clever visual cues like this help to make its bad news less daunting, if not in concept, then at least in delivery. And that’s part of the point here: we can only solve this problem if we can discuss it. “Squanderville vs. Triftville,” illustrated by cutesy animation and accompanied by plinky piano, is a “story by Warren Buffett.” None of it is news, exactly, but it framing as a kind of children’s story underscores the damage done by childlike refusals to contend with debt. “Economics,” laughs Buffett as he tells his story, “tends to put people to sleep, and I thought maybe by creating a couple of islands with inhabitants of quite widely different activities, that it might get across the point that otherwise they get lost on.” As he puts it, “The thrust is if you own a lot of property, you can trade it off into things that you eat and consume every day,” but eventually you run out of nonrenewable material. “Any short term actions,” he says, “have long term consequences.”
The film suggests that China is booming in large part because it is a kind of Thriftville. A couple appears on screen who makes $10 a day working in a factory and saves more than half. “We take care of each other,” he says. “We are very ambitious… Our goal is to live in comfortable neighborhood, maybe own a car.” By contrast, Los Angeles is introduced with an image of a car junkyard, a depiction of the stunning scale of American waste. Doug Kramer of Kramer Metals says he sends the metal he recovers to Asian markets — China, Thailand, India, and Japan. “We’ve killed our industrial base,” he concludes. “We’re a net importer when we should be a net exporter. The only thing we’re net exporting is scrap.”
Though the film doesn’t look carefully ay how the Chinese economy exploits its workers and resources, how its environmental policies, for instance, enhance profits at the expense of a livable future (cf. the United States policies), it does illustrate American fears of China, noting the failure of the British empire had to do with its eventually overwhelming debts to foreign economies. North Dakota Senator Kent Conrad, chairman of the Senate Finance Committee, says the U.S. last year borrowed 10 times more money than the next biggest borrower nation. “If 15 or 20 years from now, 2 or 3% of the GDP is being paid abroad merely to service the debts or the ownership of assets incurred because we’re over-consuming,” warns Buffett, “That will be politically unstable.”
I.O.U.S.A. does offer possible solutions (cut back on the consumption of foreign goods, stimulate U.S. exports) that frame the problem as one nation against the world. Whether this is the only way to solve the problem is not clear. Still, Walker says, “It’s “a lot of fun to be able to get out and meet people” on his tour (which obvious parallels with Al Gore’s Inconvenient Truth lecture tour, the one that inspired the movie). More importantly, he says, he feels hopeful. “When you state the facts and you speak the truth to the American people, they get it, they’re ahead of their elected officials.” The question remains, however, whether that matters anymore.