Billionaires Bleak Over Effect of US National Debt on Economy

25 August 2008

OMAHA, Nebraska: The Sage of Nebraska, the world's richest man, Warren Buffett (pictured), is promoting the latest disaster movie. His co-promoter is fellow-Nebraskan Pete Peterson, who co-founded the private equity firm Blackstone Group and served as commerce secretary under President Nixon.

Both billionaires are supporting the launch of a new movie – a documentary titled I.O.U.S.A – which warns of financial Armageddon.

And even though the late great Sam Goldwyn advised moviemakers "If you've gotta message, send it by Western Union", that advice has fallen on deaf Nebraskan ears.

The Peterson-funded movie premiere was attended by both billionaires who participated in a live panel discussion after the first showing.

"What concerns me more than anything is our savings rate," Peterson said. He pointed to the current meager US rate of savings, which has resulted in approximately 70% of the nation's debts being bought by "foreign investors". [English translation: Red China and the oil-rich sheikhs.]

This situation, said Peterson, could create serious geopolitical and economic problems for the country.

The two billionaires views are presidentially bipartisan: Peterson is rooting for Republican John McCain, Buffett favors Democrat Barack Obama. But the duo insist that the nation's budget and trade deficits are not partisan issues.

Other contributing to the live debate are Bill Novelli, ceo of the  AARP (American Association of Retired Persons) and William Niskanen, chairman of CATO Institute – a body that promotes the traditional American principles of limited government, individual liberty, free markets and peace.

Says one of the movie's 'stars', former US Comptroller David Walker: "Our situation is a lot worse than advertised, and we need to start making some tough choices if we want our future to be better than our past. We're mortgaging the future of people who can't vote and might not even be born yet."

Walker and the movie cite GAO (Government Accountability Office) figures that show the US government owes roughly $53 trillion (€35.8tr; £28.58tr) more this year than it had at the end of the 2007 fiscal year - the most recent figure available.

"We've got a super-subprime crisis brewing – namely, the federal government's finances," Walker warns. "The factors that caused the mortgage-based subprime [crisis] to explode exist for the government's finances.

"The difference is it's twenty-five times (at least) bigger."

Buffett declined to be interviewed regarding IOUSA, but he has publicly voiced his concern that the United States is essentially selling off chunks of the country to foreign investors to finance the nation's overconsumption.

Data sourced from multiple origins; additional content by WARC staff