IOUSA

This begins by asking members of the American public if they know “How much is the National Debt?” The astonishing correct answer is $8.7 trillion, (and by January 2009 it will have reached 10).

Creadon’s film, made earlier this year and a big hit at Sundance, sets out to find out just how the US economy has reached this desperate situation. Admittedly “not a sexy message” and “more like a cold shower”, this could be uphill work. Using headings such as “Budget Deficit”, “Saving” and “Trade Deficit” and making generous use of graphs and pie charts doesn’t usually promise a good night out. But just as An Inconvenient Truth was able to reach a wide audience thanks to a strong, well-presented message, this film has the potential to do the same.

So, who cares? People like David Walker of the Government Accountability Office who describes this as “a fiscal cancer which could have catastrophic consequences for our country” and a coalition of concerned groups on a “fiscal wake-up tour” talking to people around the country, and an awareness group calling itself the CYA. (Concerned Youth of America).

It really isn’t that difficult to follow the history of the budget deficit via the peak expenses of wars and the control measures like the public savings bonds of WW2. Vietnam, Medicare and the disaster of Reaganomics – all this is well and concisely presented. Then it’s the lack of savings, the culture of personal debt – easy to understand – and soon we’re onto trade deficit, which Warren Buffet has helpfully created a cartoon to illustrate. Basically too much buying and not enough selling.

The US has killed its industrial base and given it to India and China, yes strong China, with its tradition of saving, some of it in US bonds. What if they started asking for their money back? This is a serious question. Being so dependent on foreign loans affects foreign policy, as demonstrated by US financial power over Britain during the Suez crisis.

But where it all gets really scary is when it comes to “leadership”. There is a sign which hangs in New York City called the National Debt Clock, created by one Douglas Durst. It was switched off in 1998 when the Clinton government succeeded in getting the debt under control. But it was switched on again in 2000 when, thanks to the Bush administration, the dollar began its long, steep decline against other currencies. Tax cuts, eight reductions of the interest rate, the wars following 9/11 and impossible spending promises, plus the misspending of public money – $2.3 trillion simply couldn’t be tracked - and when the Treasurer issued dire warnings he was fired. The Vice President said: “We don’t need to worry about deficits.”

What can be done? Measures such as reversing tax cuts and withdrawing troops will only address a fraction of the problem. David Walker says, “It’s not really that complicated. It’s just the old saying – there’s no free lunch.” He compares it with going on a diet. “We’re trying to consume more than we produce.” But it’s a message no one wants to hear. “Only the President can bring this message home to the people.”

Good luck, Obama!