When the invitation showed up in the mail, we knew this was an event we couldn’t miss. The premier of the documentary film I.O.U.S.A. was to take place in downtown Omaha at the Holland Performing Arts Center and be broadcast to over 400 theaters across the country. After the film, a round table discussion featuring Warren Buffet, Pete Peterson and David Walker would provide insights into the film.

The event didn’t disappoint, our evening was spectacular on all fronts. After a brief introduction by the film’s director, the lights dimmed and my eyes opened wide in anticipation. The film clearly explained the state of our nation’s current financial crisis. It drove home the importance of not only national policy, but also personal responsibility.

I.O.U.S.A. examines the rapidly growing national debt and its consequences for the United States and its citizens. America must mend its spendthrift ways or face an economic disaster of epic proportions.

The numbers were staggering, the nation now has over $53 trillion in total liabilities, and that isn’t going anywhere soon. The nation’s budget is far from balanced, running a deficit year after year. Currently, our national dept is equal to 64% of our GDP and growing. Within 20 years, it is projected to exceed 100%.

In 2008, the Congressional Budget Office projects a deficit of $357 billion ($553 billion excluding the Social Security (surplus). That estimate reflects the impact of the economic slowdown and legislated stimulus efforts, but not pending supplemental funding for operations in Iraq, Afghanistan and other purposes that could add more than $180 billion in deficit spending over the next two years.

The federal budget should serve as the fiscal roadmap for federal policy making. However, the budget and its related process have major weaknesses when it comes both to understanding and to managing the
financial condition of the United States government. The annual budget process focuses on the immediate budget year and largely discounts the future implications of current decisions. Decision makers do not devote the same level of scrutiny to future impacts as they do to current costs.

The film’s graphics did a fantastic job of offering a clear understanding of the scope of the problem, how issues are interrelated, and where the crisis is headed. As a way of throwing the staggering number in perspective, the $53 trillion was put into more understandable numbers. They calculated the burden to:

• $175,000 per person living in the United States
• $410,000 per full-time worker
• $455,000 per household

As the film ended, citizen’s were challenged to demand that Washington policy makers begin to address these issues. Rethink our priorities. We should focus on critical societal needs and programs and policies that work. In addition, we should not assign responsibilities to the government that we personally are not willing to pay in taxes. And also recognize that there are no easy answers.

The discussion that followed the film was interesting, but also strange. One member of the audience opened with a question that made me wonder if he had even watched the film. He asked, ‘Does anyone really want to live in a world where we all exercise fiscal responsibility?’ How bazaar?

I was absolutely impressed by Pete Peterson and David Walker, but was befuddled by Omaha’s own Warren Buffet. He just came across like a booster for the US financial system. He kept rambling on about the size of the ‘pie’ in order to help the audience understand that we could count on growth and continued prosperity. He was no better than the guy who asked the opening question…did he even watch the film? The he made some statements that totally reflected the Horatio Alger Myth, implying that we can all be billionaires if we just work a little bit harder.

I was so happy to hear the thoughts of Peterson and Walker, both of whom came across as grounded and insightful. They drove home the reality of our current financial crisis and discussed the practical issues which we must face in order to slow or stop the impending disaster.

The messages of the film was just one more reminder of the importance of Simple Living and a sustainable financial life.

If you are a numbers person and want to see how the film’s data played out, click here to download the complete citizen’s guide on the Financial Condition of the US.

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Simple living and a sustainable life, there are so many reasons to commit. It is natural for someone who first approaches these concepts to believe that they are just about the environment. While the environment is an essential concern, the benefits of these choices extend into many other areas of life. Health, happiness, and serenity also result, but financial freedom should not be overlooked.

The content below is largely a reprint of a story posted yesterday on CNN Money, written by Geoff Colvin. I thought it was an important story to share, being that a crisis may be approaching, and I believe that answers can be found in a sustainable life.

We made it through the bursting of the Internet bubble and now the bursting of the real estate bubble. Next we may be approaching the end of the most worrisome bubble of all: the standard-of-living bubble.

That conclusion comes from the latest data on credit card debt. It’s growing fast, but the problem is bigger than that - and to understand what it means, we have to take a few steps back.

For the past several years, the average inflation-adjusted total pay of American workers hasn’t been increasing. That means we haven’t been building a foundation for increases in our living standard. You might be tempted to say that by definition our living standard couldn’t have increased, but that’s not quite right. Even with stagnant real incomes, we can always live a little better every year through borrowing and pretending that our living standard is still rising, just as it was for decades.

So the Great Bull Market made us feel rich, and we felt justified in saving less and borrowing - and spending - more.

After stocks collapsed, home prices took off, making us feel rich all over again. So we continued saving less and spending more, creating the illusion that our living standard was still rising. In 2005 our personal savings rate went negative, but even that didn’t slow us down, because our homes were still appreciating - and rising home values meant that household net worths weren’t declining.

Of course, we don’t hear those assurances anymore. Stocks are back where they were eight years ago, and home prices are where they were five years ago. But personal debt is much higher than ever before, and average pay is still going nowhere in real terms. So now how do we live as if our living standard is still rising?

That’s where the credit card reports come in. Last year, just as the subprime crisis happened, credit card debt took off. The home-equity ATM had been shut down, so people turned to the last source of easy money they had left, the most expensive debt on the menu, credit card borrowing.

Since credit card debt has been growing much faster than the economy - more than 8% in last year’s third and fourth quarters and over 7% in May (the most recent month reported)- people are apparently using it as a substitute for income. Thus, for the past year or so we have still maintained the standard-of-living illusion.

But a big crunch is coming - and here’s why. Credit card debt, like mortgage debt, gets bundled, securitized, and sold off by banks. Citigroup, one of America’s largest credit card lenders, just reported that it lost $176 million in the second quarter through securitizing such debt. That happens when the buyers of those securities observe rising delinquency rates and rising interest rates, and decide the debt is worth less than Citi thought. More generally, the amount of credit card debt that is securitized nationwide has plunged by more than half in the past five months because it’s getting riskier. That means credit card issuers will be charging customers higher interest rates, and since the banks can’t offload as much of the debt as before, they’ll have less money to lend to cardholders.

The squeeze has already started, which is why Congress is in the process of passing the Credit Cardholders’ Bill of Rights, which would prevent issuers from changing rates and terms without warning, among many other provisions. But bottom line, the credit card money window is going to start closing - and soon.

So now what? It’s hard to see where consumers can turn next. Home prices seem highly unlikely to start rising again soon. Stocks? You never know, but the Great Bull Market looks like a once-in-a-lifetime event. Homes and stocks are households’ biggest asset classes by far. There isn’t much else to borrow against.

It may be that the standard-of-living bubble finally has to deflate. Sustainable increases in living standards have to be earned, not borrowed, and that means performing ever higher value work that can’t be outsourced. We haven’t been meeting that challenge very well; doing so will probably require much more and better education for millions of Americans, which takes time and money.

The result may feel like deprivation, but I don’t see it that way. Who knows - we might even find that living within our means and saving a little money actually isn’t so bad.

I’m just finishing an amazing book by David Wann called Simple Prosperity: Finding Real Wealth in a Sustainable Lifestyle. Mr. Wann is an avid organic gardener, and he sings the praises of growing your own food. I was totally on the program, but then the storms hit and challenged my resolve.

It just so happened, that today I read a chapter called The Currency of Nature. In it, he has a section called Ten Rules of Thumb for Those Seduced by Gardening in which he inspired me to replant.

“If at first you don’t succeed, keep planting. Wipe the slate clean by burying the evidence or hauling it to the compost pile.”

“Gardening is best practiced without shame, doubt, regret, envy, or dread. The only good garden is a no-guilt garden.”

“Harvest the intangibles. This may be the most important rule of all. It’s not just food we’re after, but knowledge, serenity, and a sense of purpose. Remember, what gardens fdo best is help gardeners grow.”

Inspired by this selection, Corey and I set out to replant. We tore out the ruined plants and tossed them in the compost bins. Then we grab the leftover seeds from earlier in the year and started the planting cycle all over again. We even took the opportunity to make some improvements. So in a way, the loss of the garden has some advantages. We got to innovate for an extra crop this year.

This book is an amazing source of knowledge and inspiration on all aspects of a sustainable lifestyle. I recommend that everyone interested in building a better future for yourself and our world read it.