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In late August, I attended the premiere of the movie I.O.U.S.A. and wrote a review about the movie. I generally appreciated the movie for its revealing examination of America's perilous debt problems, but I thought it came up short on specific solutions. The movie went into wider distribution last month. Soon after that, the Center for Economic and Policy Research (CEPR) attacked the movie as being "one-sided and misleading." The CEPR dismisses I.O.U.S.A. as a "scare story." On November 10, the CEPR distributed a press release graphically displaying its objection by pointing to a "Deficit Calculator" with a catchy proclamation: "It's the Health Care, Stupid!" The CEPR has even provided a viewer's guide (click here to download the PDF directly) that combs through the entire movie looking for any snippet of objectionable material. Beyond the points about healthcare, most of the CEPR's objections in this guide seem lost in the weeds, discarding the broader context and themes that are so important in the movie.
I.O.U.S.A. zooms in on Social Security and health care spending as the biggest problems in America's 4-piece deficits in the Federal budget, savings, trade, and leadership. However, CEPR seems to think Social Security is just fine the way it is for decades to come: "Social Security will be fully financed from its designated tax until 2049. Therefore, it makes no sense to blame Social Security for the budget problem. The projected increase in its outlays over the next four decades is covered by taxes already collected or that will be collected" (from the viewer's guide). In fact, the co-founders of CEPR, Dean Baker and Mark Weisbrot, have long held the belief that Social Security is fine as demonstrated by a book they published in 2001: "Social Security: The Phony Crisis."
(You can also review a CEPR paper on this topic: "The Forty-Four Trillion Dollar Deficit Scare")
I assume that what concerns CEPR most about I.O.U.S.A. is that it believes I.O.U.S.A.'s sponsors want to undermine social spending for the sake of balancing the budget. In essence, we have an ideological problem, even it is more perception than reality.
The CEPR insists the only debt problem comes from health care spending: "The only real threat to future standards of living is our health care system, with its out of control costs. If we can contain health care costs in the same way that every other wealthy country has done, then we will be able to both keep our budget deficits under control and sustain a healthy rate of growth of income" (from the viewer's guide). That sure sounds like one BIG "if" to me. The CEPR is full of ideas on how to accomplish this feat, such as outsourcing and buying into the healthcare systems of other countries. Hardly the kind of solutions that will be readily or easily adopted. Whether or not you agree with CEPR's solutions, you should not be discouraged from watching this movie for yourself. There is much more to this story about America's economic health than health care problems. I believe that the CEPR is doing the movie and its (potential) audience a huge disservice by attempting to deconstruct the entire movie over its ideological differences.
Ironically enough, the I.O.U.S.A. panel that discussed the movie after the premiere uniformly agreed that healthcare costs are America's #1 budgetary problem and greatest unfunded liability (click here to see my summary of that panel discussion. IOUSA seems to have only posted snippets from this panel on YouTube. The longest clip comes from the panel's attempt to recommend what individuals can do about the debt problems. The IOUSA site also lists all related video clips). Privatizing Social Security was also raised but there was no agreement on the panel for that.
If you missed the movie, you can read the companion book. I highly recommend either one:
(You can also see a condensed 30-minute version on YouTube)
As President Obama (I LOVE saying that!) gets ready to face a deficit closing in on a trillion dollars and a growing list of industries and needy individuals looking for government help, I encourage you not to dismiss I.O.U.S.A. as the CEPR has done.
Be careful out there!
Full disclosure: No related positions. For other disclaimers click here.