Agora Financial was one of the sponsors of the IOUSA movie.  Prior to watching the movie, I had previously read Empire of Debt, which the documentary was loosely based off of.  I have also read numerous other books that tackle the national debt subject, and I’ve spent significant time trudging through the United States Treasury website and the historical debt tables from Whitehouse webpage. I have a better understanding of United States government finance than nearly anyone in congress (Ron Paul and a few others being the exception).  And the producers of the IOUSA documentary certainly have a clear understanding of our fiscal situation; they just didn’t do the best job explaining it.


But viewers of the IOUSA documentary will not come out with more than a cursory knowledge of our government’s fiscal situation, unless of course, they had it going in.  The issue I have with the movie is nearly the same issue I have with the Empire of Debt book, but on a lesser scale.  There is a lot of information crammed in, but its just to incongruous.  The premise of the movie is that we have four serious deficits that need to be addressed - the budget deficit, the savings deficit, the trade deficit, and the leadership deficit.  Everybody watching the movie clearly understands the leadership deficit in this country, but the explanation of the other three deficits was rushed through in between comical clips.

Here are just a few issues I had with the movie:

  • Turning off the debt clock during the Clinton era - Not since 1957 has this country seen a year over year decrease in the nationabl debt.  There were week over week periods during the Clinton era, but not an annual decrease.  The IOUSA documentary completely ignored this fact.
  • Measuring outstanding government debt as a percentage of GDP - In my opinion this is a worthless measurement.  It makes sense to measure the trade deficit as a percentage of GDP, but the national debt should be measured as a percentage of non “trust” fund government revenue.
  • Poor Explanation of $53 trillion unfunded liabilitiies - The calculation starts with an $11 trillion figure that had zero explanation (our current national debt as of 8/20/08 is $9.6 trillion).  It then adds in promised but unfunded government liabilitiies, and then throws in a “Miscellaneous” $1 trillion.
  • After movie discussion on privatizing a portion of social security taxes - I laughed hearing the oxymoron description of “Trust Fund” - Not funded, and not to be trusted.  But one point they did not make is that the stock market, unlike our federal government, does NOT operate on IOU’s.  Privatizing can only work AFTER we clean up the mess.

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