One nation under debt

I.O.U.S.A. delves into America’s
epic monetary crisis

LIBERTARIAN LAUGHS: Ron Paul

by MATTHEW HAYS

There are a series of strange cases of prescience in the cinema, when filmmakers seemed to predict, with eerie clarity, what was about to happen. Francis Ford Coppola’s The Conversation (1974)—a conspiracy movie about taped conversations—came just in time for the unfolding Watergate scandal that derailed the Nixon presidency. And in 1979, Jane Fonda was (again) dissed as a silly lefty when the film she starred in, The China Syndrome, criticized the nuclear power industry. Three weeks after the film opened, America experienced its worst nuclear accident at Three Mile Island.

But the filmmakers behind I.O.U.S.A. found themselves in an odd spot while working on their feature. Their film was based on the 2005 book Empire of Debt (by Bill Bonner and Addison Wiggin), which warned of America’s burgeoning, epic debt load (both by the U.S. government and individual Americans) and what catastrophic results this could well have for the country—and, by extension, the world economy. As the authors, and director Patrick Creadon, were working on their feature-length documentary, they found that all of their dire warnings about the American economy were coming true, before the final cut was even complete.

“One thing that really struck us was that, in the film, we predicted that the U.S. national debt would break the $10-trillion mark,” says Wiggin, the co-writer and executive producer of I.O.U.S.A. “It happened even faster than we’d anticipated. It almost made what we were doing feel dated.”

But there’s nothing dated about I.O.U.S.A., an exquisite primer on how America went from being the world’s biggest creditor nation to its biggest debtor in the span of a mere generation. The filmmakers have managed to corral everyone from Alan Greenspan to Warren Buffet to grassroots economist Robert Bixby to chime in on the current mess, and to point to possible solutions. As well as the fantastic ruminations of public figures—Republican presidential candidate Ron Paul is a standout—I.O.U.S.A. includes hilarious clips from Saturday Night Live and The Daily Show ridiculing the American attitude towards the economy (Jon Stewart’s tête-à-tête with Greenspan is priceless).

FIGHTING FISCAL FOLLY: Robert Bixby

CASSANDRA COMPLEX

The film is receiving rave reviews for putting the current disastrous mess into context. But Wiggin recalls that when the book first came out, the responses weren’t so positive. “We questioned how the housing boom was going to play out, and we were called Cassandras and doom-and-gloomers by much of the media. We were really placed way on the fringe. We were just making a very basic point: that people can’t spend more than they take in.”

Wiggin says that the blame for the current economic mess stretches back a long time, and is careful not to point fingers at specific political parties. But he does see a deepening of the crisis in the past eight years. For all of Clinton’s faults, he did work across party lines to balance the budget—for example, eliminating the deficit. It was Vice President Cheney, who famously said “Deficits don’t matter,” that Wiggin sees as a turning point. “If you’re going to have new spending, you’re going to have to cut somewhere else or raise taxes,” Wiggin argues. “Frankly, I think it should be illegal to run deficits.”

Wiggin holds out some hope for the new Obama administration, but with a solid degree of caution. “He is very charismatic, but he seems to be following a Keynsian idea: that to run up deficits in bad times is okay because it’s necessary for the economy to recover. But that means they should have been saving in good times, and they weren’t.”

But given the strangeness of making a prediction that began to come true during the production’s final stages, Wiggin says the weirdest, most shocking part of making I.O.U.S.A. was the ignorance of so much of the American public. “I knew from our publishing work that the average Joe on the street didn’t know all that much. But I was shocked at the level at which people were ambivalent or completely ignorant. They didn’t see their role in it, they didn’t see the impact on their lives. There was a sort of aggressive apathy to some people. They seemed annoyed if they were asked about it, as though we were bringing something up that we shouldn’t be.

“On the positive side, we were thrilled at the level of people we got to agree to be interviewed. I felt like we got the Mount Rushmore of American economists to appear in the film.”