I did a search here on Daily Kos to see if any diaries had been written about the new documentary I.O.U.S.A. (Click to find a theater near you.) I was shocked not to find any.
CNN Money has been promoting the movie. After the documentary tonight, there will be a live discussion with Warren Buffett and Pete Peterson. We all know Warren Buffett. Pete Peterson is the Senior Chairman of the private equity firm, the Blackstone Group and was a Commerce Secretary under Richard Nixon.
I will be attending my local showing tonight and I am urging other Kossacks to attend as well. Even given my concerns that I will enumerate after the jump.
CNN's article today says "Peterson pledged $1 billion to help raise the alarm about the nation's budget deficit, the projected shortfalls in Medicare and Social Security funding, the trade deficit and the meager savings rate for most Americans."
Here is where I have my greatest concern:
Walker and the movie cite GAO figures that show the U.S. government owed roughly $53 trillion more than it had at the end of the 2007 fiscal year, which is the most recent figure available.
About $11 trillion of that covers the publicly traded government debt, the amount the federal government owes to employee pensions and the cost of environmental cleanup of federal land. The rest of the $53 trillion figure accounts for projected shortfalls in Medicare and Social Security.
The cost of covering those obligations is expected to spiral as more and more baby boomers become eligible for the two programs.
The movie is billed as "non-partisan," but as the above paragraphs make clear, the general theme is that our nation's budget shortfall is mostly the fault of Social Security and Medicare.
I would like for comments here to help refute such propaganda -- not just for tonight, but also in the months leading up to the election in November. It sounds like the groundwork is being laid to say that we can't afford Social Security and Medicare. The neo-conservatives hate Social Security and Medicare because it represents the success of the New Deal. If you read their sites, they constantly refer to Social Security and Medicare as "Ponzi schemes." (Actually, it is a form of social insurance.)
I know that when Congress "borrowed" from the Social Security Trust Fund, that it adversely affected its future projections, but how much has been borrowed and how much that has affected future projections, I don't know. (I am hoping comments here could help out.) Social Security taxes were increased under Ronald Reagan; and I'm sure that will be used to argue that Social Security will continue to be a increasing burden.
I actually take a more "radical" view of the Social Security issue and argue we should be going in the other direction. I think we need to consider making Social Security into a full pension. I realize that creates its own problems, but I think that it represents a better solution than allowing worker's pensions to be taken by corporate executives in Chapter 11 bankruptcy. The backstop for such practice is the Pension Benefit Guaranty Corporation (PBGC), which is supported by taxpayers (you and I).
There is no doubt in my mind that there is a debt problem -- even crisis -- in the United States, both in terms of personal debt and governmental debt. One large city in California has already declared bankruptcy and rumors are flying that there are likely others coming soon. There is trouble in the Auction Rate Securities (ARS) market, the mortgage crisis, the credit crisis and rising credit card defaults. As a former bankruptcy attorney, I am very concerned by what I see.
The economic crisis is something that we need to stay on top of. We cannot allow the debate to be framed as being caused by Social Security and Medicare. However, personal and national debt are a large problem. The question is: how do we use this to our advantage?