PARK CITY, Utah (AFP) — With the US national debt topping nine trillion dollars, and climbing, filmmaker Patrick Creadon warns of a looming US fiscal crisis in his “I.O.U.S.A.”
The documentary film premiered at the Sundance Film Festival this week, exploring the implications of America’s ballooning federal debt on the republic and its citizens, if left unchecked.
US Comptroller General David Walker “has crunched the numbers and they don’t add up,” Creadon said in an interview with AFP.
“We’re not going to have a heart attack in the next few years, but we’ve been diagnosed with a fiscal cancer and if we don’t treat it, we’re going to die,” he said.
“What lies ahead will be worse than any recession, and strains in the American economy will have ripple effects worldwide,” he added.
The filmmaker previously had fun with crossword puzzles in his 2006 hit “Wordplay.”
His latest documentary film is based on the New York Times best-selling book “Empire of Debt” by William Bonner and Addison Wiggin. Speeches by Walker regarding America’s “federal, savings, trade and leadership deficits” also provide a framework.
In the film, Creadon follows Walker as he travels across the nation urging people to reign in Washington’s wild spending or boost taxes, weaving in archival footage, economic data and candid interviews with investment guru Warren Buffett and former US Treasury Secretary Paul O’Neill.
The aim is to try to demystify complex economic principles and government fiscal policy-making ahead of the 2008 US election, with terms “economic slowdown” or “recession” on the lips of many analysts of late.
“This isn’t ‘an election issue.’ It’s all issues rolled up into one. It’s a global issue. The Iraq war, arts funding, Medicare, taxes, they’re all line items in the government’s budget,” said Creadon.
“One of the by-products of America being so wealthy for so long is that we’ve become fiscally illiterate.”
“There’s a sense of dread about financial matters now, and that’s made worse by the fact that people don’t like to talk about it because they don’t understand it. Hopefully, this (film) will help them understand it,” he said.
Of course, “this is America, and we don’t do anything until it’s a crisis,” he added.
Creadon also noted that US voters have traditionally rewarded politicians “who are not financially responsible” and punished politicians who up taxes or slash spending to try to balance the US federal budget.
“People don’t want to vote for the guy who tells them the party’s over. But the party is over,” he said.
“It’s a tough message to sell.” But, he added, “I’m very hopeful that people are going to hear this story and they’re going to change their ways.”
“At the end of the day, if you don’t pay for the services your government provides, your kids will. And that’s really selfish, and we’ve had a long run at being selfish.”
“We want our children to have a better life than we did, but that’s not going to happen for the first time in America’s history if we continue the way we’re going.”
The film notes that 46 percent of the US federal debt is held offshore in the form of treasury bonds, and warns this could weaken America’s sovereignty if Washington and its mostly Asian bankers ever butt heads over US foreign policy.
It cites as an example the events of 1956, when the United States threatened to dump the British pound and cause it to drop in value if Britain and France did not stop bombing Egypt in their fight for control of the Suez Canal.
Washington at the time was concerned Russia would enter the fray on the side of Egypt, and the war would escalate.
It is widely viewed by historians as the year of the demise of the British Empire, the film says. At the same time, it notes that Communist China currently holds the largest chunk of US federal debt.
Of course, in the short term, China needs America to buy its goods, as much as America need China’s loans.
On other fronts, the film laments America’s trade deficit — scrap metal is the second biggest US export to China, after electronic components, following decades of hollowing out of the US manufacturing sector.
And, the film says, individual Americans have spent more than they’ve earned over the past two years, falling deeper into debt — a trend that is unsustainable over the long term.
“If you’re addicted to debt, at macro or individual level, constantly living beyond your means, you’ll wake up in a world of hurt someday,” Creadon commented.
The film ends noting that the US federal debt stood at 9.2 trillion dollars on January 19, or about 30,000 dollars per American, and it went up by 86 million dollars in the 85 minutes it took the audience to watch the film.
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