In 2008 the movie “I.O.U.S.A.” came out (that was the year it came out, some of the data in the movie came from the previous year). The movie stated that the national debt was $8.7 trillion, the deficit was $400 billion, unemployment was 5 percent, and that Social Security was in the black, but by 2017, Social Security would be in the red.
Because of the dire fiscal situation the country was in at the time, the Concord Coalition had already started a “Fiscal Wake-Up” tour across the United States.
Now, it’s 2013, what has the so-called fiscal wake-up tour gotten us?
The national debt went from $8.7 trillion to $16.4 trillion. The deficit went from $400 billion to $1.2 trillion, the unemployment went from 5 percent to 7.8 percent, and the unemployment is staying stubbornly high. Lastly, Social Security, which in the movie was expected to be in the red by 2017.
In the movie, David Walker, comptroller general from 1998 to 2008, stated, “The magnitude of our problem is much bigger than people understand!” So, if the problem was “much bigger” in 2008, what’s the magnitude of our problem now?
Obviously, the fiscal wake-up tour didn’t work. Americans are still sound asleep (no prescription drugs needed here).
One final point from the movie, Walker talked about an incident in the fall of 1956 where Britain and France were engaged in a battle against Egypt over control of the Suez Canal: “The Soviet Union was threatening to intervene on the side of Egypt. America wanted to avoid military action at any cost and demanded that the British and French allies withdraw from the region. When their request was denied, the U.S. turned to financial warfare.”
Since the U.S. owned a lot of Britain’s debt, the U.S. threatened to dump some of the debt, which could have destroyed the British Pound. Within weeks, Britain and French military forces withdrew from the Suez region.
If the U.S. used threats of financial warfare against one of its friends, what do you think a communist country like China would do (they own a lot of our debt), if push came to shove with America? Local businesses and schools need to start preparing for a third language. And for the few who are still “net” taxpayers, get ready for more tax increases to pay for it.