Warren Buffett used to warn people about the housing crisis and the mortgage GSEs, now he's (along with Black Rock co-founder Pete Peterson) warning people about the pending crisis from our government's debts.

 

(From CNN.COM): " OMAHA, Nebraska (AP) -- 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 thing that concerns me the most about the nation's debt issues isn't the fact that the problem exists (in of itself) it's the fact that people tend to ignore bearish or gloomy forecasts in favor of optimistic ones, thereby setting us up  for an even bigger fall later. It's the equivalent of ignoring a grease fire in your house until your entire home is engulfed in flames. There was plenty of evidence that the tech boom was an outrageous bubble, plenty of evidence about the housing boom, etc, but people ignored the obvious and chose to side with the optimistic forecast of the gravy train lasting forever or things "working out".

 

What will happen to our nation's economy if we continue ignore the realities of our nation's dubious finances until it's too late?

 

I'm going to see the movie tonight, I'll write up a quick review and post it here tomorrow; you can read the article in full here.

 

Sources:

 

From CNN.com: "Movie paints picture of catastrophic future" -- August 21, 2008

 

Disclosure: at the time of publishing the author didn't own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn't be viewed as financial or investment advice.