Debt to income ratio. Fiscal responsibility. Credit facility. Stagflation. Recession.
I don't blame you if you're asleep 10 words into this post. There's a reason accountants don't get reputations as killer partiers. Maybe it's because they're the ones that tap you on the shoulder and tell you the party's getting a little expensive.
That's what's going on in I.O.U.S.A.
Authors Addison Wiggin and Kate Incontrera decided to spoon-feed Americans an explanation for why they're country's in serious trouble. It's also an "I told you so" from Wiggin, who forecast all kinds of problems in his 2006 book Empire of Debt.
The volume also pushes ex-US Comptroller General (think king of US accountants) David Walker'sFiscal Wake-up Tour. Because, as I mentioned, this stuff puts people to sleep until said beds have been taken away by banks.
The authors break the problem into four ominous deficits. Like four horsemen! Excuse me if this sounds really basic, but that's the point.
- Budget Deficit - Like your parents sitting around the kitchen table deciding what they'll be able to afford over the coming year, then overspending by $300 billion dollars. The Silver Tsunami's (boomers) going to make this way shittier.
- Savings Deficit - This is a biggie. People in the States stopped putting away money for rainy days. Homes, which can lose value became the primary investments when they should have been simply shelters? Why? Because the feds tax savings incomes and inflation erases the rest. So now personal savings rates are -2.9%. Contrary to MasterCard's motto, there is a price - default.
- Trade Deficit - Basically America imports tons of cheap foreign goods. This is okay if trade is fairly balanced, but the book points out America is lazy. It takes in goods, and exports electrical machinery, nuclear machinery and scrap. That scrap then gets sold back as new stuff to consume. Oh and in the meantime foreign investors buy up debt.
- Leadership Deficit - The partisan point. Bush 43, as the authors refer to G.W. Bush (it kind of sounds like a viral strain, not the 43rd prez), was a disaster. We get that, but they put some numbers to it.
Basically Bush 43 inherited the first modern surpluses thanks to the Clinton era - then promptly doubled the US federal debt to over $10 trillion. Ooops. They even had to get a new debt clock because the old one ran out of spaces.
There are all kinds of solutions proposed in the book, but the meat is in the amazing interview transcripts with Robert Rubin, Paul Volcker, Alan "I guess I screwed up" Greenspan, Warren Buffett and more.
A lot of the material in the book is in the film, but somehow the screen version comes off as a snoozer. Maybe it's that the film dumbs it down even further to the point where it feels like people are just sitting there telling you credit cards are bad and nobody cares, whereas the full spectrum of gloom sits in your hands for as long as you need to absorb the downward spiralling graphs.