We owe how much? KETC hosts free screening of "I.O.U.S.A."
This article first appeared in the St. Louis Beacon: November 14, 2008 - A parody from "Saturday Night Live" is one of the more amusing scenes used by the filmmakers of the documentary "I.O.U.S.A." to explain in understandable language the causes and effects of the ever-growing U.S. national debt, which as of today, stands at just under $53 trillion.
That number, by the way, has more zeroes than can be found on many calculators -- 12 of them -- and looks like this: $53,000,000,000,000. If divided equally, the debt would amount to about $175,000 per person. Will that be cash or check?
But first, that scene from SNL's "Don't Buy Stuff You Cannot Afford,'' broadcast on NBC in February 2006:
"I just can't get these numbers to add up,'' sighs an exasperated Amy Poehler, as she tries to balance her checkbook.
"Like we're never going to get out of this hole,'' replies comedian Steve Martin, portraying her husband.
"Credit card debt. Does it ever end?" Poehler continues, worriedly.
In walks "credit expert" Chris Parnell. "Maybe I can help. ... Did you know that millions of Americans live with debt they cannot control? That's why I developed this unique new program for managing your debt. It's called, 'Don't Buy Stuff You Cannot Afford.' "
"Let me see that,'' Poehler says, grabbing the book.
"If you don't have any money, you should not buy anything. Hmmm, sounds interesting."
"Sounds confusing,'' replies Martin.
An "entertaining" look at the national debt
It can be a hard sell to convince people to watch a movie about the national debt, acknowledges executive producer and writer Addison Wiggin. Hence, the scene with those "trickle-down'' geniuses at "Saturday Night Live" who cheerily explain the harsh realties of economics to a nation of debtors.
"People, when they hear about the movie -- at first, they're like, 'Aw, man, I hear enough bad news about the economy. I don't want to go see a movie about it, too.' But then after they see it, they're really engaged because it's entertaining, and it's not threatening," said Wiggin, during a telephone interview with the Beacon.
While the film's mission is to explain the complexities of the monster debt and what it might mean to future generations of Americans, it also has an underlying message about individual responsibility and the need to push elected officials for change, rather than just shrugging our collective shoulders and accepting the inevitable.
"The most important thing an individual can take away from the movie is that it is incumbent on them to have a basic understanding of the way the economy works -- and the way the government interacts with it," Wiggin said.
He quotes Alice Rivlin, the first director of the Congressional Budget Office, who says in the film that people often think that because financial issues are so complex, the decisions must be trusted to some expert in Washington or banker on Wall Street.
"But that's not true because if you think that, you are basically abdicating your responsibility for holding those people responsible," Wiggin said.
The film includes telling interviews with such familiar financial names as Alan Greenspan and Paul Volcker, former chairmen of the U.S. Federal Reserve Bank. Financial wizard Warren Buffett explains the long-term dangers of trade deficits, and David Walker explains why he retired from his post as U.S. comptroller general to crusade against the national debt.
Walker now heads the Peterson Foundation, which owns "I.O.U.S.A" and screens the film around the country. The foundation is negotiating with PBS and cable networks about a national broadcast of the film, possibly during the week of the presidential inauguration in January, Wiggin said.
Taking charge of your financial future
Wiggin, 40, a financial adviser, has written a companion book to the documentary, also titled "I.O.U.S.A." He also co-authored several other books on the troubled U.S. economy, including "Empire of Debt," and writes the daily "5 Minute Financial'' newsletter, available at www.agorafinancial.com.
Wiggin said when the "I.O.U.S.A." project started in 2005, there was still a false sense that the real estate bubble would continue indefinitely, and no one was listening to the warnings.
"For the most part they got angry -- 'You guys are gloom-and-doomers. What are you talking about?' We were called unpatriotic. Our values were questioned,'' Wiggin said. "People are asking much different questions than they were a year ago."
He hopes people who see the film will realize the importance of taking charge of their own financial futures.
"People factored risk out of their horizon because of a rising stock portfolio or rising values of their homes," Wiggin said. "They figured that you can spend now, and you don't have to save for the future because you can always sell your house. People have misunderstood the value of saving for the future. They have to take responsibility for their own lives and their own savings."
William Emmons, an economist with the St. Louis Federal Reserve Bank who will participate in the discussion after Tuesday's screening, says that to understand the national debt it is necessary to distinguish between personal borrowing and government borrowing.
Government can borrow more than households, relative to cash flow, simply because it has an almost unlimited scope for repaying -- and the ability to raise taxes to repay, he said. And, while households don't plan to bequeath debt to children, the government, by its nature, doesn't have that same limitation.
"In principal, we all expect the government to go on forever, at least for the purposes of our lifespan, so it will never pay off its debt,'' Emmons said. "In fact, its debt will go up because its debt capacity is related to the size of the economy and the growth of the economy -- and we hope that will grow over time."
Emmons said in the hierarchy of borrowers, governments rank at the top, followed by corporations and business, and then households.
"That's not to say that there is an unlimited amount the government should borrow," he added. "The question is, how much?"
Emmons has written extensively about consumer spending and the nation's negative savings rate.