Two billionaires used the screening of a documentary in theaters across the US on Thursday to urge the country to come to grips with its staggering debt load.
Warren Buffett and Pete Peterson were at the premiere of the movie I.O.U.S.A. to add their views to the film’s message: An economic disaster will befall the nation if the government’s US$53 trillion in debt continues to grow.
But Buffett said at a news conference before the screening that he doesn’t think the country’s financial picture is quite as dire as the filmmakers portray.
“I do not regard our national debt as unduly alarming,” said Buffett, who is listed by Forbes magazine as the world’s richest man.
Buffett said he’s confident the country would be able to address its debts and remain prosperous, but he doesn’t want to see the share of US GDP devoted to debt continue to grow.
“We’ve overcome things far worse than what is going on right now,” Buffett said, who was interviewed in the movie but is not backing it financially.
The film details the federal government’s debts. It is backed by Peterson — who cofounded the Blackstone Group LP private equity firm and served as commerce secretary under late president Richard Nixon — and is part of his foundation’s campaign to give the ballooning debt a central role in the presidential campaign.
“What concerns me more than anything is our savings rate,” Peterson said.
Peterson said the meager US rate of savings today means that roughly 70 percent of the nation’s debts are being bought by foreign investors and that could create geopolitical and economic problems.
A panel discussion in Omaha followed the movie and was broadcast live to the other theaters. The discussion featured Buffett, Peterson, AARP chief executive Bill Novelli and William Niskanen, chairman of the libertarian-leaning Cato Institute.
Niskanen said the nation has to increase the retirement age in Social Security to at least 70 from the current range of 65 to 67.
Peterson said he hopes the movie will help explain the problems debt can bring, so politicians will feel more pressure to act.
The filmmakers followed former US comptroller David 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 (GAO), 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 US government owed roughly US$53 trillion more than it had at the end of the 2007 fiscal year.
About US$11 trillion of that covers publicly traded government debt, the amount the federal government owes to employee pensions and the cost of environmental cleanup of federal land. The rest is projected shortfalls in Medicare and Social Security.
Buffett said he doesn’t believe those programs that help provide for the elderly will consume the bulk of government resources in the future because the US will be wealthier.
But Walker said he disagreed with Buffett because the predictions the movie highlights about the country’s debt assume that the nation will be wealthier.
Walker said he hopes the Democratic and Republican candidates for president will acknowledge the staggering debts and pledge to look for solutions.
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