Budget Deficit

America Now Too Bankrupt Even For a Telethon


In his Decatur Daily column, occasional Hit & Run commenter Franklin Harris greets the return (at least to the manufacture-on-demand-DVD ghetto at Warner Archive) of the great prophetic film of the 1970s. It's not a celebrated visionary masterpiece like Network or THX-1138 or even Bad Ronald.

Harvey Corman did what he had to do to keep working. You can't judge.

The movie that explains how we got here is Americathon, a farce (and perpetual Reason favorite)featuring the explosive casting mix of Elvis Costello, Chief Dan George and subsequently murdered starlet Dorothy Stratton Stratten. As Harris explains, the movie, written by the Firesign Theater's Phil Proctor and Peter Bergman, is prescient not only about monetary policy but about the long shadow cast by Jerry Brown:

Set in the then-future year of 1998, "Americathon" depicts the United States as flat broke, and the mortgage is coming due.

No one can afford a house, so everyone lives in their cars. But that's OK, because no one can afford gasoline, either, and everyone rides bicycles or jogs to work.

(Conveniently, everyone also wears track suits because riding a bike in slacks is just asking for trouble.)

The dollar is worthless, and everyone has to pay for everything — including phone calls — in gold. (Ron Paul called to say, "I told you so.")

Meanwhile, the Chinese have become successful capitalists, Vietnam is a vacation and entertainment hot spot and the Jews and Arabs have put aside their differences to create one huge country, the United Hebrab Republic.

You know, apart from that last bit about the Jews and Arabs, none of it seems that farfetched now, does it?

Presiding over America's decline is President Chet Roosevelt (John Ritter), a former California governor apparently based on once and future California Gov. Jerry "Governor Moonbeam" Brown.

The more-zany-than-amusing-in-the-classic-sense comedy posits a revenue-raising telethon to bail out the federal government, with featured acts including Jay Leno boxing with his mother (above) and the Vietnamese "puke rocker" Mouling Jackson. Younger readers familiar only with the dour Jerry Brown of today may not recognize Chet Roosevelt as being modeled on the New Agey Brown of 1979, a figure everybody from Jimmy Carter to Jello Biafra feared would become president in 1980. In a characteristically madcap scene, the president and puke rocker get ready to "ball," as they used to say: 

Note that a telethon to pay off the national debt today would be even more hopeless than the one in Chet Roosevelt's time. Based on current household net worth of $53.5 trillion and a current debt of $13.8 trillion, every American would have to pledge about 39 26 percent of his or her life savings to make the telethon a success. Maybe if they gave out copies of Of Thee I Sing as pledge gifts.

In an Arizona Republic column, Robert Robb proposes another solution to the problem of a dollar/credit system as terrifyingly misdirected as this dance number. He says it's time to let interest rates go where nature wants them to go—up:

In the United States, the Fed is trying to artificially lower interest rates supposedly to reduce the high unemployment rate. The theory is that if the cost of borrowing is less, then businesses will be more willing to expand and hire. This is a serious misdiagnosis. The reason companies aren't hiring isn't because interest rates are too high.

The Fed is also giving mixed signals. Fed Chairman Ben Bernanke is saying lend and borrow. But banks report that Fed regulators are telling them to maintain tight lending underwriting and reserve even for performing existing loans.

But that's not the real issue. Banks also report a low demand for loans. And surveys of small businesses do not show access to credit as a big problem.

The policy of fighting unemployment with low interest rates has been given a long enough run to conclude that it isn't going to work. Moreover, an employment surge fueled by artificially low interest rates might not be sustainable. Economic recovery should be built on a solid foundation. Current monetary policy doesn't offer one.

Without the intervention of economic policy makers, interest rates would be naturally higher. That would increase the cost of borrowing for businesses and consumers, but there would be some offsetting economic benefits.

Savers are getting screwed by the current monetary policy, and screwing savers is seldom a wise economic move.

Interest rates are the return to saving and investing. Increase the return and you are likely to get more of them. You might even bring risk capital back into the housing market.

An interest rate spike would also increase the cost of debt service and force the federal government potentially, and many of the states definitely, into Iceland-style bankruptcy. We can agree to disagree on whether that would be a good thing. At the very least, higher rates would force government at all levels to reduce the growth of spending. In other words, this is probably the last time you'll hear anybody making the case for higher higher interest rates.

NEXT: Culturomics: Hacking The Library of Babel

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  1. So does President Ritter actually wind up boning that skinny dude or what?

    Don’t make me have to add it to my Netflix queue to find out.

    1. You can’t get it on Netflix; you basically couldn’t get it anywhere, which is why Franklin wrote the article about its upcoming DVD release.

      1. You can get it now, but it’s a burn-on-demand DVD-R that you have to order direct from Warner Archive. Warner Bros. has been shoveling its catalog titles onto DVD-R for months now, ever since the market for DVDs started to dry up and Walmart and Best Buy started reducing their selection.

    2. I’m pretty sure she got boned in “Up in Smoke”.

    3. He better not if he expects to live in my building!

  2. Did Iceland ever default on their sovereign dept? I’m pretty sure they didn’t. They just let their private mega banks fail.

    1. I thought they were taken over or something not very free-markety?

  3. I actually liked that movie. Of course, I used to do a lot of drugs.

    But the flick is almost spot-on about our current mess, except that it’s all a lot more fun when Ritter is failing to live up to his “I am not a schmuck” promise than when Obama is blowing hope and change.

  4. Okay, probably a dumb theory, but maybe we shouldn’t let bald guys be head of the Federal Reserve.

    1. The Fed is also giving mixed signals.

      Hence my beard.

  5. Network is shit. If you like it then you are shit too.

    1. db, that’s a little harsh. “If you like it then your taste is shit too” would be more accurate.

      1. Yeah, that was some un-fucking-subtle drunken trolling. And overly harsh too. I blame my drinking buddy for falling asleep in bed while drinking beer and hence not making to the movies on time.

  6. How about a national raffle? Anyone who wants to play buys a chance for a dollar. Once a day the Raffle Czar draws the winner. The prize could be any number of desiderata: no income tax for life, a get out of jail free card, beer with the President, …

  7. Based on current household net worth of $53.5 trillion and a current debt of $13.8 trillion, every American would have to pledge about 39 percent of his or her total net worth to make the telethon a success.

    39% of $53.5 trillion = $13.8 trillion? How does that work?

      1. While your math is bad, if interest rates go up you can bet that net household worth is closer to $30 trillion than $53 trillion.

        The entire reason the Fed wants low interest rates is to save the banks (and insurance companies and pension funds and retirement accounts): if those interest rates go up the demand for houses goes down and then we really do find a bottom in housing prices. And if we find a bottom in housing prices, probably a quarter of the remaining performing mortgages will be so far underwater the borrowers won’t bother paying.

        Basically anyone with more than 10 years to go on their mortgage is underwater because the market prices are still artificially high due to artificially low interest rates. Those rates will eventually hit their natural level, there is little the Fed can do now to delay the inevitable by more than a few months.

        I fully expect US remonetization to happen within 8 years. If for no other reason than to screw the foreign holders of US currency (they hold roughly half).

  8. That was so goddamn full of AWESOME.

    1. Thanks for the warning. That guy is apparently _really_ stupid.

    2. He sent me over the edge with that bullshit. Apparently, the amount of knowledge distributed throughout humanity is finite, and Tony ended up with none of it.

  9. Of all the articles currently on Reason, and this one only has 15 comments? I’m honestly shocked.

    1. No dogs were shot in Americathon. And Ayn Rand never wrote about it. Two strikes right there.

  10. Because politicians only thinks of themselves and is honest to it’s people. They want us to be blind and deaf in what they’re doing, but if everything turns out wrong, blame always goes to its people?

  11. Please read: an urgent appeal from Reason reader Colin Fraizer.

    I think you’re confused. Dorothy Stratton was the WWII director of the SPARS, the Coast Guard equivalent of the WACs and the WAVES: special “women’s reserves” branches of the military.

    I think you mean Dorothy Stratten (with an ‘E’, not an ‘O’).

    Check out the Wikipedia pictures. Stratten was definitely the hotter of the two.

  12. db, that’s a little harsh. “If you like it then your taste is shit too” would be more accurate.


    “I tried to like Putney Swope, because people who are smarter than me say it rules, but it was full of black people! I mean, what the fuck is that about? But fortunately, someone plagiarized it and bowdlerized it, and produced the ultimate filmic of expression of Whitey’s self-love. That’s so much more than I asked for! *****” isn’t a matter of taste.

    Network is he shittest of shits, and its fans are racist cunts.

  13. I liked that movie and can’t believe it’s only just becoming available on DVD. I think it’s probably a little uneven (“probably” because I was a kid when I saw it), but it had some great scenes. And Chief Dan George!

    1. It’s “not really” becoming available. It’s only available if you order it, then WB will make you one. And you might have the option of downloading it for 24-hour rental instead of getting the DVD.

      1. Well, that’s unacceptable.

  14. Interest rates are the return to saving and investing. Increase the return and you are likely to get more of them.

    But the last thing we want is saving; consumer spending drives the economy! If consumers don’t spend at least 150% of what they earn, the world will end.

  15. “Based on current household net worth of $53.5 trillion and a current debt of $13.8 trillion, every American would have to pledge about 26 percent of his or her life savings to make the telethon a success.”

    I’d donate 1/4 of my dough to bail out the US government if everyone else did likewise. But once the checks started rolling in, our dear leaders wouldn’t pay off the debt. Instead, they’d decide a national emergency of some type required them spend most of it — i.e. transfer it to their favorite cronies and stalwart supporters.

  16. Based on current household net worth of $53.5 trillion and a current debt of $13.8 trillion,

    I thought, taking our unfunded entitlement liabilities into account, our debt was north of $100 trillion somewhere?

    I saw a guesstimation that every American’s share of the debt was something like $320,000.

    Naturally, linking to any of this would be too much work.

  17. You can bet that if the government takes Tony’s advice and jacks up taxes on the rich, interest rates will go up.

  18. Ha ha ha, this looks good. I wish this movie was playing at the drive-in. Too bad the two drive-ins around these parts are long gone. Commie bastards.

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