I.O.U.S.A., I Want a Refund

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Writes Stephen Fairfax: “The film was billed as inspired by Empire of Debt, but it is an extraordinarily poor and biased rendering of a very good book. While Bonner and Wiggins provided a thoughtful and entertaining exposition of the entire problem of excessive debt and credit, the movie focussed entirely on government debt. Watching it, one would not know the private sector exists at all. The only significant examples were an American scrapyard contrasted with a new Chinese compact fluorescent lamp factory.

“Before the movie started, a debt clock marked the ever-increasing $55 trillion debt figure calculated by Mr. Walker. But the first 3/4 of the movie focused almost exclusively on the on-budget federal debt and the ratio of national debt to GDP. Why a ratio of two politically rigged and entirely suspect numbers is a useful indication of anything was never discussed. There was some heavy-handed posturing about Clinton and the ‘surplus.’

“I checked the index of the book; gold was cited 23 times, government debt 19, David Walker only once. The movie offered a hagiography of Mr. Walker, complete fixation on government debt, and no meaningful mention of gold. The highlight was a brief snippet of Jon Stewart using a few deft questions and his keen insight to force Alan Greenspan to admit that his policy of low interest rates favored Wall Street and hurt savers. Even that was largely muted by the decision to show Mr. Greenspan denying that Fed decisions can influence markets, placed several minutes later where the lie was considerably less obvious.“The book offered several options for dealing with the debt; the movie had only one: more government. The post-movie ‘town hall’ was as silly and even worse than I feared. It took only a few minutes before new taxes were proposed under the guise of “forced savings.” More than once, the worthies on the stage opined that if several of them were to huddle, they could solve this problem. Of course, their solutions invariably included taking more money from one or another out of favor group. Once again, even so much as the possibility of market solutions was never acknowledged, let alone discussed.

“The notion that government is the source of this problem and unlikely to be the solution was never raised. The book made this point clear, the movie carefully ignored it. The movie focussed exclusively on the problems of paying this government debt; the book explored other, more realistic options, such as repudiation and inflation. The book explored the enormous malinvestments, misallocation of resources, folly, and harm caused by the same policies that allow such a monstrous pyramid of debt and credit to be created in the first place. The movie studiously ignored any mention of the harm these policies have caused to civil society.”

10:44 am on August 22, 2008