Original Link: http://money.cnn.com/2008/08/21/news/economy/buffett_town_hall.ap/index.htm
The catastrophe looming in the documentary "I.O.U.S.A." isn't romantic like the doomed young love in "Titanic," but billionaires Warren Buffett and Pete Peterson warn it could break many more hearts.
The disaster they warn of could be bigger than any we've ever seen - bigger than an iceberg, bigger even than the current mortgage crisis.
If the U.S. doesn't do something, and fast, to tame the federal government's debts - now more than $50 trillion - the two Nebraska natives warn we will saddle coming generations with economic problems that will make this year's financial turbulence look like a trip to the debt counselor's office.
Premiering Thursday at 358 theaters nationwide, "I.O.U.S.A." is part of Peterson's campaign to give the ballooning debt a central role in the presidential campaign.
A live panel discussion after the first showings - tape delayed for moviegoers in the West - will include Buffett, Peterson and other experts. Despite ticket prices much higher than for a feature, at $11.50 to $20, Thursday's showings had sold out at some theaters by Wednesday, organizers said.
The two prominent investors don't share a political philosophy: Peterson endorses Republican John McCain for president while Buffett favors Democrat Barack Obama. But they say the nation's budget and trade deficits aren't really partisan issues.
"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," former U.S. Comptroller David Walker, one of the movie's stars, said Wednesday.
Peterson - who co-founded the Blackstone Group LP (BX) private equity firm and served as commerce secretary under President Nixon - is financing the movie and the discussion in Omaha to advance the goals of his foundation, created in February, which Walker runs.
Peterson pledged $1 billion to help raise the alarm about the nation's budget deficit, the projected shortfalls in Medicare and Social Security funding, the trade deficit and the meager savings rate for most Americans.
Peterson and Walker both talk about the substantial debt burden that could be left for future generations if changes aren't made.
"We're mortgaging the future of people who can't vote and might not even be born yet," Walker said.
The "I.O.U.S.A." filmmakers followed Walker as he toured the country speaking to college groups, newspaper editorial boards and community groups about the nation's financial problems.
Most of the talks in the movie took place while Walker still ran the Government Accountability Office, an investigative arm of Congress that audits and evaluates the performance of the federal government.
Walker and the movie cite GAO figures that show the U.S. government owed roughly $53 trillion more than it had at the end of the 2007 fiscal year, which is the most recent figure available.
About $11 trillion of that covers the publicly traded government debt, the amount the federal government owes to employee pensions and the cost of environmental cleanup of federal land. The rest of the $53 trillion figure accounts for projected shortfalls in Medicare and Social Security.
The cost of covering those obligations is expected to spiral as more and more baby boomers become eligible for the two programs.
The film also features interviews with prominent businessmen and officials from both major political parties, such as former Federal Reserve chairman Alan Greenspan and Paul Volcker and former U.S. Treasury secretaries Paul O'Neill and Robert Rubin.
Buffett did not respond to a request for an interview for this story, but he has said the United States is essentially selling off chunks of the country to foreign investors to finance the nation's overconsumption.
"We've got a super-subprime crisis brewing - namely, the federal government's finances," Walker said. "The factors that caused the mortgage-based subprime (crisis) to explode exist for the government's finances. The difference is it's 25 times - at least - bigger."
Buffett also has warned for years that the nation's trade deficit - the difference between how much the country imports and exports - was going to devalue the dollar and create other problems.
"Our trade equation guarantees massive foreign investment in the U.S. When we force-feed $2 billion daily to the rest of the world, they must invest in something here," Buffett said in his annual letter to shareholders earlier this year.
Thursday's panel discussion will also feature Bill Novelli, AARP's chief executive, and William Niskanen, chairman of the libertarian-leaning CATO Institute.
With showings in 358 theaters, the movie's premiere likely will be bigger than its planned 12-city theatrical run, which begins Friday.
The main reason the movie is being distributed in theaters is that its makers think it could contend for an Academy Award, Walker said. More people will likely see the movie after it leaves theaters because the foundation hopes to air it on television early next year, he said.
Clips from the movie and panel discussion will be available online.