We just returned home from the live nation wide premiere of IOUSA, a film about the U.S. debt. If only the filmmakers had understood more about the energy situation, then we really would have had something to talk about it. Unfortunately, this film lacked the theme of energy.
Interesting bits were to be found, nonetheless, such as a nice history of the federal debt level, and some clean graphs showing the business-as-usual projections. Again, the graphs didn't take into account the declining oil supply, nor the fact that the U.S. GDP is a function of our ability to supply the energy we need for maximum "productivity". Warren Buffett, in particular, took the role as the cornucopian, saying that everything would be okay, we'll figure it out.
A few other interesting bits were included in the film. One showed how the U.S. used the threat of dumping pounds during the Suez Canal crisis to get Britain to back off and pull out their troops. Another showed the massive outflow of U.S. dollars to China, Japan, and the oil exporters. And a scene where a working class Chinese family saved have their meager $10/week income "for a rainy day". A message repeated during the after-film live panel discussion was that people need to feel that there could be a rainy day, otherwise they won't save, and that bailing out the banks, home builders, and home owners continues a bad precedent.
Interestingly, they interviewed U.S. Federal Reserve chairmen Volker and Greenspan. Greenspan in particular had some interesting things to say, in uncommonly plain and clear language. He explained to the Daily Show host that by adjusting the interest rate, the impact was that savers were "punished" over spenders. Ron Paul also had a nice clip taking aim at the Fed's abysmal forecasting record, to which Greenspan had no response.
Stagflation was pointed out, but again, not the root cause, being a rise in energy prices. The problem with stagflation, rising unemployment coupled with rising inflation, is that the Fed can neither rise nor lower interest rates, because that will either drive up unemployment, or drive up inflation, so it is really a lose-lose scenario.
As for the technical aspects of the event, which was hosted live by CNBC's Becky Quick, things went off with out a hitch. A short five minute live welcome proceeded the film and a fifty minute Q & A followed, with Buffett, Peterson, the former U.S. comptroller, the head of the CATO institute, and the president of the AARP. The CATO rep. suggested that half of an individual's social security contributions be held by that person in a private account that they controlled, and that the 57 million uninsured citizens remain uninsured. This was refuted by the AARP president, who suggested reform in the structure of social security, and the comptroller, who noted that we are the only first-world country without national health care.
Overall, I do recommend the film, as one of a handful that shine a light on the issue of the debt. Any such film, though, needs to be viewed with an understanding of peak oil, climate change, population overshoot, mass extinction and biodiversity loss.
When buying a used car, it is not enough to simply look at one side of it from a distance and to say, gee, it just needs a bit of paint. What about the other sides? What about the interior? Does it have an engine? Does it run well?
Looking at the debt is only one small part of understanding the problem we are in, and that makes this film important but not sufficient, especially due to its lack of energy.