Posted on April 7, 2009 at 8:00 am

Two guys who are super-smart and super-rich, Warren Buffet and Pete Peterson and one guy who is just super-smart, former Comptroller General of the United States David Walker have a message for Americans — don’t spend money you don’t have.

Think of Maxed Out, the terrifying documentary about the way credit card companies exploit the weak, the vulnerable, and the spendthrifts, crossed with An Inconvenient Truth, the terrifying documentary about the way the century following the industrial revolution has caused irreparable damage to the earth’s ecosystem, and you have “IOUSA,” which shows us irrefutable evidence that the biggest balloon payment in history is about to come due.

Using the now-familiar combination of folksy faux-archival educational movies, person-on-the-street interviews with completely clueless citizens (“I thought the US was lending money to other countries,” one says when asked about the size of our debt), bad news from a lot of very erudite talking heads and some really, really scary charts, “IOUSA” tells us that while we have been lowering taxes and increasing benefits we have been pushing onto our children and grandchildren the fastest-growing debt load in history. We finance this by selling our debt securities to countries that can afford them, like China. Foreign interests hold more than half of U.S. debt. China owns more than $500 billion worth. So does Japan. The movie says that the inability of Great Britain to defend the Suez Canal in 1956 was in part due to its vulnerability caused by post-WWII debt. It is certain that having countries like China, Japan ($583.3 billion), and the oil exporting countries ($170.4 billion) holding our I.O.U.’s puts a worrisome burden on our ability to engage in diplomatic negotiations.

Most troubling is that the Enron-like accounting that hides the real debt level for political expediency. Just as Enron used “special purpose entities” to keep its debts off the balance sheet, the government does not include Social Security and the costs of other benefit programs in its financial statement. The entitlement programs currently in place will bankrupt the system when the baby boomers start receiving benefits.

It is difficult to make a dry and disturbing subject like budget deficits seem interesting and vital. There are no cuddly polar bears trying to hold on to shrinking ice caps or visceral individual stories like those in Michael Moore’s movies. But this movie makes a devastating case for the consequence of our current “rob Peter to pay Paul” budgetary shell game. It is like fiscal musical chairs; when the music stops, there will be no place to sit.

America has redefined the rules and shown the world new possibilities since our beginning. Now we face the direst challenge in our history — to reverse what has always been the inevitable cycle of history and create sustained growth and prosperity. This movie asks the important questions and makes it clear that it is we who must answer them.

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Teens Learn About Less in Chicago

Posted on March 9, 2009 at 8:00 am

The Chicago Tribune reports on a class that teaches teenagers “voluntary simplicity,” giving up one something significant each month and thinking, talking, and writing about what it feels like. Begun last fall as a project to inspire mindfulness in the spirit of Henry David Thoreau, the program now seems even more meaningful in light of the economic troubles. Students are evaluating what it is they really “need” and gaining a deeper understanding of the impact they have on the world and the impact the world has on them.

The Mundelein teens’ project began in November, when they gave up sugar and eating at chain restaurants. A television blackout followed in December, and January’s challenge was to forgo using sheets of new paper. They pledged in February to avoid buying anything that might end up in a landfill. The next challenges are the boldest yet: a March without cell phones and an April without the Internet.

I especially liked the comments of the expert quoted in the article, Madeline Levine, author of The Price of Privilege: How Parental Pressure and Material Advantage Are Creating a Generation of Disconnected and Unhappy Kids
The Price of Privilege: How Parental Pressure and Material Advantage Are Creating a Generation of Disconnected and Unhappy Kids. She said that going without can be good for teens.

Packing lunches, skipping the trendiest jeans or canceling cell phone service gives children a new role as a family contributor and a vital lesson in self-discipline, she said. In the process, young people reared in times of economic abundance may rethink their expectations.
“For many kids, this is an opportunity. I think that most of them are rising to the challenge,” she said.

The economic upheaval provides an excellent opportunity to talk to kids of all ages about the role they can play in helping the family. It does not have to be scary. Indeed, it cam be very empowering to teach them that the feeling of confidence and satisfaction they get from doing without and making a contribution is far greater than the momentary pleasure of being given something that can be lost, broken, or outgrown.

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Commentary Teenagers Understanding Media and Pop Culture
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