I.O.U.S.A: One Nation. Under Stress. In Debt

by Addison Wiggin, Kate Incontrera, David Walker (Foreword)

The United States has been spending its way deeper and deeper into the red, and saddling future generations with the mess—but who's paying attention?
To answer that question, the companion book to the critically acclaimed documentary I.O.U.S.A. talks with some of the most revered voices in the nation, including Warren Buffett; former Treasury Secretaries Paul O’Neill and Robert Rubin; Pete Peterson, CEO of The Blackstone Group; Congressman Ron Paul (R-Texas); and bestselling Empire of Debt author Bill Bonner.
Armed with these interviews, historical references, and damning statistics, the book takes a lively and entertaining romp through the four deficits the nation the budget deficit, the personal savings deficit, the trade deficit—and what former U.S. Comptroller General David Walker, who resigned abruptly in 2008 over Congress’s lack of action, calls the “leadership deficit” in Washington.
Defiantly non-partisan, the empowering solutions outlined in these pages are a must-read for any American who wants to help change “business-as-usual” in Washington as a new administration heads towards the Oval Office. “We the People” can get our politicians to stop spending, promote responsible economic programs, and hand our children and grandchildren the secure future they deserve.

Genres: Economics, Politics, Nonfiction, Finance, Business, Audiobook

288 pages, Paperback

First published January 1, 2008

Reviews

[Kim · Rating 5 out of 5]

This book may have been written 2008 (sometime before the financial crisis of that year. However, the lessons and warning of the book are still, if not more relevant now.

Basically, I.O.U.S.A chronicles the looming peril if the United States does not voluntarily face, let alone constructively deal with its money management. Long story short, the borrowing ‘party’ still can go only as long as the creditor believes that the borrowing party is still a good credit risk – likely to repay the debt and the assets the borrower has is worth something. However, as in individual circles, if one does not repay the debt, the borrower is not only inclined not to lend the borrower any (more) money, but then has the right to take the property the borrower has to repay that debt. So take the national financial situation with regard to foreign debt with the clock still ticking, with the belief that as long as our creditors believe that the United States is still a worthy credit risk, the borrowing can continue.

The other side of the debt is the looming debt in Social Security, Medicaire and Medicaid. Health/retirement costs. These are staggering and unfunded; one solution there is for people to become aware and proactive toward getting those costs down, and in Steve Forbes’ opinion, for people to have individual accounts where the government cannot control, and therefore, spend that money. The problem is we the people are not always aware of the looming crisis, and we are conditioned to believe that the funds for these programs are taken out of our paychecks and saved for us for when we need them. However, they are not: they are spent as soon as the government receives them. This has created a looming unfunded system, which will be insolvent as more and more people retire, AND that there are not enough people working now, to continue to fund the system, whether the deducted funds are saved or spent: there is not enough money over time to go around, and that deficit will be on top of the United States’ national debt. The ‘perfect storm’ will be the unfunded debt becoming due *(though the interviewees in the rear of the book feel it’s unlikely, but they cannot say it is not impossible) with the staggering unfunded health care/retirement liabilities. People then will rightfully feel that they have paid into a system that is deficit when they need those funds, and their property being seized by creditor governments. Something Thomas Jefferson lobbied against at this country’s inception.

The book is very informative and it useful to have economists of different perspectives agree that the current mode of financial management is not sustainable, with the different ideas and perspectives on how to resolve it. Yet, in resolving it, it is going to take people having to make tough choices, with leadership becoming more honest with the people they are to represent rather than think about only their re-electibility.

[Sharon Ouderkirk · Rating 3 out of 5]

This book was written to accompany the 2008 documentary, which I saw back in the day when the financial world was on fire. I originally read the book back then too, but recently found it again in my bookshelves, and I thought I would take another look. Back then, the US debt to GDP was around 68%; now it's about 124%, so the problems that were addressed have pretty much doubled.
Their argument for fiscal prudence centers on four deficits - the budget, savings, trade and leadership deficit in America. In this section, the writers provide an idea of the current (2008) state of affairs, why the lack of savings, or the trade deficit or federal deficit is a problem, and why American leadership is not taking it seriously (because it won't get them re-elected). I found this section weakly argued and not very well-written, but the stats alone were still sufficient to scare the average reader.
The last section includes interviews with the movers and shakers who appeared in the film - Warren Buffett, Robert Rubin, Alan Greenspan, Paul Volcker, Peter G. Peterson, among others. The opinions here were mostly pessimistic - Buffett was the sole optimist who insisted that America would be able to grow its way out of its troubles. Many people, myself among them, think Greenspan bears a lot of the responsibility for the financial crash; his time as the Chair of the Federal Reserve was marked by easy credit and low interest rates that led to much of that disaster, so including him as an 'expert' on how to solve the problem seems a bit galling. I found Paul Volcker and Peter Peterson to be very persuasive in their arguments, Steve Forbes was incomprehensible (expensive education wasted), Arthur Laffer appears to be living in a bubble where only rich people are important to fiscal policy (his neighbors in the bubble all follow Reagonomics and think the water coming through the roof is the trickle down effect).
The debt problems outlined in the book are even worse today, but nobody is talking about it. I sincerely hope that Warren Buffett is correct in his belief in the power of the American economy - he has been right about so many other financial issues. His interview was the one relaxing chapter in the book - may his positive attitude infuse the nation and grace the economy.

[Martinez · Rating 3 out of 5]

Very interesting read

[Joshua Fawzy · Rating 3 out of 5]

It was crazy reading this in 2025 and how we are seeing what was warned about in this book starting to come to be

[Telly · Rating 2 out of 5]

This book was a pretty good read. As many people know, there was a lot of emphasis in the last election on government spending and the debt. I wish I read this book during that time. The book provides a straight forward, simple (if not overly simplified) overview of the nation's financial condition and, in an extremely scant summary, how we ended up in this boat. The authors, by interviewing numerous politicians, administrators, and business folks, propose the condition is even worse and that action is required. The action requires addressing four major challenges: a budget deficit, a savings deficit, a trade deficit, and a leadership deficit.

What I found particularly interesting was that much of the interviews take place in 2007 and 2008, just as the economy was starting to show signs of stress and collapse. What I found alarming was what this doom and gloom means for people in my generation (X), particularly as we reach retirement age in the 2040s. I have to admit, too, that when you look over the data, figures, and statistics, it is very clear that it is the Baby Boomers who have left us in this situation. America has always had a percentage of debt to its GDP because it has always had a Federal debt (yes, even immediately after independence); however, this debt has always been paid down to a manageable level. At least that was the case up until the 1970s with the Johnson Administration. This trend continued all the way through the Reagan Administration, particularly at an alarming rate during the Reagan Era. By the 2000s, the debt was skyrocketing. What took over 40 presidents and two years to accomplish, a one-trillion dollar debt, the Bush Administration not only achieved in eight years, but actually doubled. This trend is continuing with the Obama Administration.

If you are young enough to be looking, hopefully, at thirty or more years in front you, I do not see how you cannot read this book and not walk away enlightened, in awe, and in fear of what the future holds. Perhaps this will inspire the next generation of leaders to start making the brave, albeit potentially unpopular, decisions that are required to address serious issues such as Medicaid, Social Security, and Medicare liabilities, international trade, healthcare reform, and economic theory regarding the "free" market and the "benevolent hand" that guides monetary policy and touches each of our lives.

[Liz · Rating 3 out of 5]

Every parent: if your son or daughter is in high school, make sure he/she reads this book. It is imperative that they are aware of the facts laid out in this book and understand the threat imposed by our country's four great key deficits --- Budget, Savings, Trade and Leadership Deficits.

The first half of the book explains in simple terms the depth of our predicament with respect to these deficits. Does so in a moderate tone so as not to scare the bejesus out of your child (Adults should be frightened out of their minds, but let's not overly panic our children...yet).

The second half of the book is composed of the transcripts of the interviews the authors conducted for the movie. Those interviewed include William Bonner, Robert Rubin, Perter G. Peterson, Ron Paul, Paul Volcker, Alan Greenspan, Warren Buffett, Steve Forbes, among others.

There is a frighteningly large segment of the adult population that is unaware of the extent of the fiscal challenges we face. They too must become aware -- this is a good starting point.

[D2MillerGR · Rating 2 out of 5]

An book with an important message. The first half of the book, the part written by the authors, summarizes the perils of national debt and is well worth reading whether or not you agree with every premise or care for the simplistic tone. The second half consists of essays and interviews by/with noted economists, policy makers, and business people who have mostly been shown clueless by recent events which should have been foreseeable by anyone who passed Economics 101. The admirable attempt to provide a mixture of opinions serves only to serve up many of the platitudes that have got us into this mess. Take this with a grain of salt from one who thinks Alan Greenspan has done a shameful and grossly inept job of policy making and who thinks economists are like weathermen, as Dylan says, you don't need one to know which way the wind blows. Get a copy from the library or a friend; important but not a keeper.

[Jeremy · Rating 4 out of 5]

Quotes:

“I’ve often found that one of the characteristics of a free society is that we are free to be irresponsible. I don’t like that fact, but the ability to do so is an essential freedom because unless you voluntarily do the right thing it’s not going to work. And if you are fundamentally an irresponsible person, no matter what government does, it'll show up in one way or another.” Alan Greenspan

“Government allocation of resources has tended, too often, to misallocate, and I think a market system does a pretty good job of allocating.” Warren Buffett

“In fact, almost every time over the past 30 or 40 years that the federal capital gains tax rate has been lowered, revenues increase.” Arthur Laffer

[Mason Kirksey · Rating 4 out of 5]

This book is what was later made into a documentary. The author takes a step-by-step look at what our current (as of 2009) fiscal situation in the US is. It's a scary thing to understand not only what position the US is in in terms of financial debt, but also the reasons for it. I highly recommend this one, even though it is a bit dated now.

[Mylinda · Rating 4 out of 5]

So far this book has opened my eyes further to the many lies that our elected leaders keep feeding us about the economy, debt, inflation, etc. I knew some of this before starting to read, but the examples and what certain people and groups are doing is just astounding.

[Jim · Rating 4 out of 5]

Definitely an eye opening view of how debt will affect us all. The book is intended as a bit of a supplement to the documentary, as the first half is dedicated to the concept, and the second half is interviews with folks about the debt situation.

[Heidi · Rating 2 out of 5]

Best see the movie...this book seemed to cover the making and essence of the movie and was hard to focus on the point--the U.S. debt is overwhelming.

[Brian · Rating 3 out of 5]

In America, we are travelling down an unsustainable economic path. Entitlement programs are mortgaging the wealth of future generations. Interesting read that spells out the course we are on.

[Jarrod · Rating 2 out of 5]

I read the book, probably should have seen the movie instead. The interviews are the most interesting part and why I check the book out in the first place

[Howell · Rating 5 out of 5]

Go to the website and watch a snippet from the movie. Highly recommend the book.

[Kyle Brown · Rating 4 out of 5]

Excellent so far!

[Jef · Rating 4 out of 5]

scary, and mostly true, i think.

[Beau Gunderson · Rating 3 out of 5]

The book was alright but the movie was mind-blowing and should be required viewing.

[Bill]

runaway spending must stop

[Jason · Rating 4 out of 5]

Pretty cool book, has interviews from several very influential economists and influential policy makers....I enjoyed it, and it was a very easy read.

[Danjel Lessard · Rating 3 out of 5]

On the rare occasion a movie is better than a book. This, for me, was one of those occasions. The movie was much more terrifying. Both, however, got the message across.

[Bjorn · Rating 2 out of 5]

I didn't learn much from this. The movie may be better.