On September 17, while the financial world was still reeling from the collapse of several Wall Street institutions, a next day air envelope arrived at my house. I probably should have opened it and read its contents before this weekend, because it has a direct bearing on the present crisis.
Inside I found a copy of I.O.U.S.A., the companion book to the movie which was released in theaters last month, along with a one night town hall meeting with several financial luminaries that was simulcast to some 400 theaters around the country. I watched the movie and town hall meeting and commented on them earlier; I won’t repeat much of what I said about them.
I.O.U.S.A. opens like this:
On January 28, 2008, the forty-third president of the United States, George W. Bush, gave the final State of the Union address of his presidency. During the speech, he was interrupted 72 times by applause. Curiously, the president only broached the nation’s deficit once, briefly, and then only to reassert the administration’s pie-in-the-sky projection that it will be reduced to zero by 2012.
We’ve all heard the real economic news by now, or worse, experienced it. You’ve gone to the bank to find it closed, or you’ve gotten laid off, or you’re just feeling the pinch in your wallet as money grows ever tighter. You need to understand how and why it happened if you’re going to get yourself out of this economic mess, because surely you’ve figured out by now that your so-called leaders in Washington aren’t going to do it; they seem hell-bent on making things even worse for you.
The book, an advance copy graciously sent to me by its publisher Wiley & Sons, is divided into two parts. Part one is a scant 94 pages which you could read in 94 minutes if your jaw weren’t constantly dropping to the floor at the eye-popping numbers and graphs illustrating the United States’ fiscal recklessness, many of which were also presented in the movie. The book covers the same four deficits as were illustrated in the movie: the budget deficit, the savings deficit, the trade deficit and the leadership deficit. I won’t repeat those here, either.
Weaved in with the shocking statistics about the $9 trillion plus national debt and the $53 trillion plus in unfunded obligations coming in future years, I.O.U.S.A. also acts as economic primer and tells the story of how the documentary came about. Inspired by the 2005 book Empire of Debt, former comptroller general David Walker, who actually quit his job as the nation’s top accountant to help bring the documentary to fruition, came together with Empire of Debt authors Bill Bonner and Addison Wiggin and the filmmakers who would eventually think I.O.U.S.A. the most challenging project they had ever undertaken.
Indeed, how do you make an economic cold shower interesting when the economy isn’t obviously falling apart, as it wasn’t a mere month ago? Today, with the recent economic turmoil expected not only to continue but to worsen, I’d expect interest in both the book and the movie, which is currently in limited theatrical release, to be much higher. The movie did very well at making an inherently “unsexy” topic interesting, and the book will do for those who can’t find the movie playing near them.
Like many other Wiley books, this part is also peppered with quotations and notes in the margins which explain various different economic concepts. Not to mention the occasional sidebar, such as “Ron Paul’s Historic Love Affair with Alan Greenspan” which explains that they “have had a long and tumultuous relationship.” Of course, Rep. Ron Paul (R-Texas) is well known for skewering the Federal Reserve chairman, whoever he happens to be, in Congressional hearings.
As usual, I won’t share much of the content of the book with you, though I will say that there’s a lot of detail crammed into those 94 pages that simply could not be covered in the 85 minutes of video that comprised I.O.U.S.A.: The Movie.
The other reason to buy this book is part two, the other 164 pages: Interview transcripts with twelve “economic luminaries.”
Those interviewed include Alice Rivlin, who helped balance the budget during the Clinton administration; Wiliam Bonner, who founded Agora, Inc., and wrote Empire of Debt which inspired the I.O.U.S.A. project; former Treasury secretaries Robert Rubin and Paul O’Neill; former Commerce secretary Peter G. Peterson, who co-founded the Concord Coalition and the foundation which bears his name; former Federal Reserve chairmen Paul Volcker and Alan Greenspan; former presidential candidate Ron Paul, staunch opponent of the Federal Reserve system; (and those 14 pages are worth the price alone) world’s richest man and Pollyanna Warren Buffett; James Areddy, China correspondent for the Wall Street Journal; economist Arthur Laffer; and last but hardly least, Steve Forbes.
You should not be surprised that the so-called experts disagree with each other, though you’ll learn much and gain a lot of insight from reading what they had to say. Their fundamental difference is in the school of thought. There are two main schools of thought in economics: Austrian economics and Keynesian economics. Which is right? Austrian economics predicted the current economic crisis. Keynesian economics said everything was fine, still is fine, and is getting better. Your wallet will tell you which one is right, and which one you should learn — fast — before there’s nothing left of your wallet.
Meanwhile, the national debt is a problem which can be ignored no longer. I.O.U.S.A. lays out the problem in frightening detail. Without solving the problem, economic collapse the likes of which America has never seen will be the result. Incidentally this is why there must be no bailout: we cannot afford even one more cent added to the national debt, let alone another trillion dollars. I.O.U.S.A. explains why.
By the time you read this, I.O.U.S.A. should be in your local bookstore. Or you can pick up a copy from Amazon. In addition, attend the Concord Coalition’s Fiscal Wake-Up Tour when it comes to a city near you and see David Walker explain the economic crisis in person.