Fiscal apocalypse U.S.A.

“I.O.U.S.A.” is a 2008 documentary on the U.S. debt crisis and some related issues. The documentary follows the non-partisan Concord Coalition, led by Robert Bixby and the former Comptroller-General David Walker, as they attempt to build awareness of the crisis. Few people seem to care, and “I.O.U.S.A.” does contain some absurd moments, as when a New Hampshire news broadcast doesn't cover a coalition meeting in the state capital, preferring instead to mention a thief who had swallowed a super-expensive diamond ring! A group of concerned teenagers who are recruited to the cause and try to promote it through street theatre are brushed off by passers-by. Meanwhile in Congress, President Bush insists that the state of the Union is “strong”…

When the documentary was made, U.S. national debt was $9 trillion. Today, only seven years later, the debt is $13 trillion. Budget deficits are systematically covered by the surpluses of Social Security (the U.S. national pension plan). A less charitable way of putting it is that Social Security is being plundered. By 2017, these surpluses will be gone. Even worse, the three major federal programs (Social Security, Medicare and Medicaid) have promised to pay a total amount of $53 trillion which they simply don't have, unless taxes are tripled (!) or all other branches of government are closed down (!). A substantial portion of the U.S. national debt is owed to foreign nations, including China. While some fear that China could use this to make the American economy collapse, “I.O.U.S.A.” rather believes that their respective economies are so intertwined that America will take China down with it in case of a fiscal meltdown in Washington.

The documentary argues that political leadership on these issues is lacking. While the Concord Coalition is non-partisan, it does point an accusing finger at Republican presidents Reagan, Bush and Bush II for letting the debt spin out of control, since Democratic president Clinton managed to balance the federal budget and drive down the debt levels (“I.O.U.S.A.” was made before a certain Obama entered the White House). The coalition proposes to cut spending, raise taxes, or perhaps both. At least in the documentary, however, there are no concrete proposals on who or what the additional taxes should be levied. Banks and big corporations? The rich? SUV owners, perhaps?

In the end, this doesn't really matter. Even truly confiscatory tax rates wouldn't help. Today, the U.S. national debt is 103% of the GDP. (In 2014, the GDP of the United States was around $17 trillion.) The debt is projected to rise steeply in the future. Even if the U.S. would default on all its debt payments, there is still the issue of $53 trillion in unfunded benefits. Add to this peak oil and climate change, which will wreck the U.S. economy (and its politics) even more, and a truly grim picture emerges. Not just for America, but for the entire world. The absurd situations in “I.O.U.S.A.” are funny, in a wry kind of way, but in the end, I got seriously worried watching this documentary…

This is the fiscal apocalypse.