Students received contrasting messages from the fiscally-frightening documentary “IOUSA” and the proceeding panel discussion with Cal State Long Beach professors, who reassured students that national debt, to a point, is necessary.
The film, shown on Tuesday night in the USU Beach Auditorium, deals with the U.S. financial situation and urges Americans to tackle the problem before it’s too late.
“I agree with the premise of the film,” said Lisa Grobar, CSULB economics professor and director of the economics forecast project. “Where I disagree is in the severity of the problem.”
Grobar explained that the country’s debt should be lowered, but not be completely eliminated, because it “actually plays an important role in the economy.
The danger, she said, is if the debt grows faster than the economy.
Economics professor Steven Yamarick agreed, saying that the current U.S. gross domestic product (GDP) is in the middle range compared with other countries’ GDP.
“The fear is what happens if it goes much higher,” Yamarick said.
Edgar Kaskla, a political science professor, expressed a lack of faith in future leaders’ ability to deal with the national debt.
“What I’m really worried about is that there is no one in the political arena willing to take on these issues and make decisions that are unpopular with many sects of society,” Kaskla said.
Yamarick explained that the two key decisions that brought the country to its present state were Bush’s tax cuts and the Iraq War. However, he said, the financial problems won’t go away by simply eradicating tax cuts and ending the war. He is more concerned with under-funded programs like Social Security, Medicaid and Medicare.
“Probably what you all should do is stay healthy, reduce yourcarbon footprint, save your money and floss regularly,” dean of College of Business Administration Michael Solt said.
For the recent financial crisis on Wall Street, though, the panelists told students they should spend to stimulate the economy out of a recession, but to never buy anything they cannot afford.
According to the panelists, the chances of the U.S. going bankrupt as the film insinuated are very unlikely.
“With a country as big as ours, there are always options like to raise taxes and print more money, so there is no need for the country to go bankrupt,” Grobar said. “We don’t have a problem attracting people because our debt is desirable, since interest rates are low and the rest of the world sees U.S. treasury bonds as most attractive in safety.”
Some students were confused between the film’s blatantly harsh message filled with overwhelming figures and the panel’s refusal to emit that same intensity.
“The panel threw off the movie’s point,” said Jamison Hart, a senior finance major. “I think they shrugged off the movie’s message to the younger generation that has to deal with it.”
Hart said the panelists equated the situation with past financial disasters and put too much faith in the country’s system, that it will fix itself, and cannot fail.
“America can’t go on forever just because it’s America,” Hart said.
Other students such as Sergio Argumedo, a finance graduate, believed in the panel.
“They are wiser because they’ve been through all this before,” Argumendo said. “What we see on TV and hear on the radio is exaggerated because it is news and entertaining.
As for the future, Grobar said taxes will increase no matter who wins on Election Day, and Solt explained the Fed will help by cutting rates and introducing stimulus packages.