I just finished watching I.O.U.S.A, a short version is embedded below for your viewing pleasure (or displeasure). You can watch the full version online if you have Netflix. I've linked above to an article by John Fund in the Wall Street Journal in which he interviews David Walker, former head of the Government Accountability Office (I know, sounds like a contradiction in terms, but stay with me).
I encourage you to watch this video and to read the article. It is non-partisan, but extremely important. We are racking up debt at an unprecedented pace and we've been doing it for years now. Did you know that adding Medicare Part D added an additional $8 trillion unfunded liability to our nation's balance sheet (which shows up off-the balance sheet!)?
We are on a path toward destruction and its not just one party. In our two party system of Democrats and Republicans we have essentially a one-track mind - Spend, Spend, Spend. Democrats prefer Tax and Spend, Republicans prefer Cut Taxes and Spend - both parties are very united behind one value - Spending. Sure, they like to spend on different things, but they both spend and are both out of control. America and its politicians are addicted and each new session of congress is the fix our congressional leaders need to satisfy their obsession. Spending has become so profligate that many people mistake the Swine Flu for a condition that politicians have when pushing through their pork barrel spending.
David Walker is on a national tour and a life journey to save America from itself. Our spending has now even become a matter of national security. The Chinese and other foreign countries own nearly a third of our outstanding treasury bonds (this doesn't include the GSE debt), if you don't believe this buys them a seat at the table then you can ignore when Timothy Geithner rushes over to China to calm them down about our spending (its pretty bad when the Chinese are lecturing us). In addition, an overleveraged nation that runs into borrowing trouble will be less able to protect themselves.
The consequences of current policy (which is the same as the old policy) of spending and more spending without any real reform could be devastating to our nation. We must address this problem and we must start now.
I urge you to watch the full version of I.O.U.S.A., but if you don't have enough time at least read the linked to article and watch the embed below. This is no longer about our future, but about our kids and grandkids.
Scott Dauenhauer CFP, MSFP, AIF
