I.O.U.S.A.

Warren Buffett used to warn people about the housing crisis and the mortgage GSEs, now he's (along with Black Rock co-founder Pete Peterson) warning people about the pending crisis from our government's debts.

(From CNN.COM): "Omaha, Nebraska [AP] -- The catastrophe looming in the documentary "I.O.U.S.A." isn't romantic like the doomed young love in "Titanic," but billionaires Warren Buffett and Pete Peterson warn it could break many more hearts.

The disaster they warn of could be bigger than any we've ever seen -- bigger than an iceberg, bigger even than the current mortgage crisis.

If the U.S. doesn't do something, and fast, to tame the federal government's debts -- now more than $50 trillion -- the two Nebraska natives warn we will saddle coming generations with economic problems that will make this year's financial turbulence look like a trip to the debt counselor's office.

Premiering Thursday at 358 theaters nationwide, "I.O.U.S.A." is part of Peterson's campaign to give the ballooning debt a central role in the presidential campaign.

A live panel discussion after the first showings -- tape delayed for moviegoers in the West -- will include Buffett, Peterson and other experts. Despite ticket prices much higher than for a feature, at $11.50 to $20, Thursday's showings had sold out at some theaters by Wednesday, organizers said."

The thing that concerns me the most about the nation's debt issues isn't the fact that the problem exists (in of itself) - it's the fact that people tend to ignore bearish or gloomy forecasts in favor of optimistic ones, thereby setting us up for an even bigger fall later. It's the equivalent of ignoring a grease fire in your house until your entire home is engulfed in flames. There was plenty of evidence that the tech boom was an outrageous bubble, plenty of evidence about the housing boom, etc, but people ignored the obvious and chose to side with the optimistic forecast of the gravy train lasting forever or things "working out".

What will happen to our nation's economy if we continue to ignore the realities of our nation's dubious finances until it's too late?

I'm going to see the movie tonight, I'll write up a quick review and post it here; you can read the article in full here.

Sources

From CNN.com:"Movie paints picture of catastrophic future" -- August 21, 2008

Disclosure: At the time of publishing the author didn't own a position in any of the companies mentioned in this article.

Comments

[adan:]

my wife and i saw the movie last night - my own bottom line about it is it will stimulate, finally, discussion of the problems so many of us have either been unaware of, or thought impossible to address

surprising, to myself, was how hopeful the movie actually made me feel (along w/the panel discussion afterwards)

2008 Aug 22 09:26 AM

[RobertsJim:]

There are three ways out of this mess: reduce spending, increase taxes or both.

2008 Aug 22 10:03 AM

[caveatBettor:]

increasing taxes increases poverty. I think that leaves us with one solution. Indexing Social Security to morbidity fits into that category.

2008 Aug 22 11:22 AM

[Jason Rines...:]

I am in the camp that it won't be "future" generations problem. The problem and fiscal crisis of the century is here, it is now and will cumulate by 2011-2012. Any geopolitical event mostly out of our control will crash the entire financial system. And the bad news is that our enemies know this. When a government begins acting Karl Marx, you get the rope from your enemies to hang yourself with. But, after shocking the black dark pool hard enough, the water will turn blue again. Take care of your family and neighbors. It will be alright but the easy days are over for a time.

2008 Aug 22 07:31 PM

[mlyn:]

Like IThinkBig, I also believe a risk event will push us over the precipice. I think Buffet did not answer well the question about the U.S. dollar. He said something about foreigners can sell us back our dollars or sell to some other country as though it has no impact on value. I don't think people understand what it means to have the international reserve currency; it has its benefits but we've also abused our responsibility. A major risk event is when/if the U.S. dollar is dumped for another currency as the reserve currency like the euro. As it is, Russia wants to dump Fannie and Freddie shares; a Chinese economist says that the loss of Fannie and Freddie would change the international financial system . . . that means the end of the U.S. dollar as the reserve currency.

2008 Aug 23 01:28 AM

[Bill James:]

We can start our way out of this by changing the lifeblood of our economy from oil to ingenuity. Oil is finite. The more we depend on ingenuity, the more ingenuity we get. Here are 4 links:
1. PRT to preempt oil in urban transport: seekingalpha.com/artic...
2. End Urban Planning, we should have learned from the Soviets that planned economies are brittle facing changing circumstances: economiclifeboat.com/w...
3. Plans versus Performance Standards: seekingalpha.com/artic...
4. Wrong problem, we have a planning not an energy problem: www.earthtoys.com/emag...

2008 Aug 23 07:28 PM

[d.a.n:]

You know something is seriously wrong when no one can answer the simple question:

QUESTION: Where will the money come from to merely pay the INTERST on $53 Trillion of (one-simple-idea.com/Di...) nation-wide debt , much less the money to reduce the current PRINCIPAL debt of $53 Trillion, when that money does not already exist? Especially when now, (one-simple-idea.com/Di...) 80% of the U.S. population owns only 17% (or less) of all wealth, and 1% owns 40% of all wealth (up by 20% from 20% in year 1976); a wealth disparity gap that has never been worse since the Great Depression.

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect (one-simple-idea.com/Co...), . . . , at least until that finally becomes too painful (one-simple-idea.com/Ne...).

But, perhaps enough voters will be less apathetic, complacent, and blindly partisan when enough of the voters are deep in debt (one-simple-idea.com/De...) , jobless (money.cnn.com/2008/06/...) , homeless (one-simple-idea.com/Di...) , and hungry (www.results.org/websit...) as a result of these 10 abuses (one-simple-idea.com/Di...) and these 17 deteriorating economic conditions (one-simple-idea.com/Ne...) ?

2008 Aug 29 10:46 AM

[BiggityBilly:]

I.O.U.S.A. is now available free on Lycos Cinema, the social video site that allows viewers to watch and chat with other viewers in real-time, here: cinema.lycos.com/movie...

What's cool about this is it's not only a chance to see this important movie, but also to discuss it live with other interested citizens. Check it out.

2008 Nov 24 12:55 PM