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tv   [untitled]    August 1, 2011 8:00pm-8:30pm EDT

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you know what will be should be a celebration for the american people everyone should be happy tomorrow that at least at least this isn't being over their heads. a sign of relief for some but not so fast mr speaker my first guest says the u.s. has to cut or earned one hundred trillion dollars over the next decade to get out of this mess so as the u.s. stands broke as a joke is it just due to that. damage has been done no matter what happens everybody thinks the united states. fighting to the debt after months of bickering
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and the after in washington exactly what kind of reception can the u.s. expect on the world stage. and wall troubles are brewing in washington with the tea party they mobilized is it time for progressives to do the same. good evening it's monday august first eight pm here in washington d.c. i'm lauren lyster and your watching our t.v. well the country is approaching the deadline for raising the debt ceiling august second that is tomorrow the u.s. is just one day away little bit more from starting to default on its debt from running out of money to pay its bills and finally at the eleventh hour a plan gets through the house of representatives to raise the debt ceiling to happen just a short time ago hours or to search you know on the news or one fifth you warm.
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well the bill is passed without objection a motion to reconsider is laid on the table. a plan was laid out just last night agreed on by the president and congressional leaders touted as a win by the mainstream media and with a sigh of relief from lawmakers that some deal at least was agreed upon. you know it will push the celebration for the american people everyone should be happy tomorrow but at least at least this isn't being over their heads. the debt ceiling is a gun deal. so we do have a deal. but let us begin to begin with the deal finally reached to raise the debt ceiling. for days now people across the country have been saying stop it and work together. now the saga does continue because the senate still has to vote on this which is expected to come tomorrow at noon according to reports but what exactly is in this deal now critics say oh
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a whole lot is not in there that will tackle the country's debt burden let's take a look at the nuts and bolts of it though this allows the debt ceiling to rise by at least two point one to two point four trillion dollars and it comes in two stages but the good part for president obama is that he won't have to deal with this and till after the two thousand and twelve elections because this postponed any other vote until two thousand and thirteen as far as raising it the government can pay its bills through two thousand and twelve now four hundred billion dollars would go up just right away for the debt ceiling to pay bills and then one hundred billion dollars in its first stage right after that now this is in return for what was touted as about a trillion dollars in savings over ten years the c b o says this is about nine hundred seventeen billion over a decade and so analysts say these aren't really cuts as much as they are caps on future discretionary spending they don't make that big debt now the rest of the savings will come from this joint bipartisan committee formed to find more cuts one point five trillion dollars to reduce the deficit now if this committee fails
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automatic cuts will be enacted on agency budget split down the middle between domestic and defense that's kind of a failsafe trigger but what does this really do for the overall debt picture big picture to remember nine hundred billion dollars in savings is what is in this plan over the next decade for this before the committee blows. it looks like this is what it looks like that is a trillion dollars spread out it is the size stacked up in hundred dollar bills of a football field now that's what would be saved in ten years it's also the less than the size of our annual deficit which right now stands at one point four trillion dollars let's look at how indebted the country is overall ok that is a lot of football fields worth of cash stacked up almost the height of the statue of liberty fifteen trillion dollars that's about what our national debt is approaching right now it's fourteen point five trillion obviously this debt ceiling increase raises it higher and look at that building all the way on the right that's not actually a building that is the scale in cache of hundred dollar bills that amounts to the
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one hundred fourteen trillion dollars which is how much the u.s. does not have funded but has promised or programs such as social security medicare and military pensions those are based on government figures and i have to bill and some say it's even higher earlier spoke with one of them laurence kotlikoff he's an economics professor at boston university even last year at this time he was saying the country is bankrupt he said the u.s. cannot have any more of these no pain all gain solutions i asked him today and that's what this deal working its way through congress is here's his response. yes but this is this is pretty much of a no there's next for you there really haven't made any major changes in title material. you know obviously this ruling conflicts some pain in some people but we need to do something much more massive than this we're talking about energy trying it are true fiscal picture and under control we need something like
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a twenty trillion dollar adjustment which i hear is neither to germany actually no or just mean every ten years now i use that you thought about twenty trillion dollar number it's been pretty widely quoted now even when there was a big deal being hashed out by congress that was for a four trillion dollars deal so why is your projection over what needs to even be the beginning of a deal so much higher than we have here is what are we trying to balance what books are we trying to balance and the idea here is what i'm saying is that we need to look at our long term expenditure obligations and repair them with our taxes and the difference is what we call the fiscal gap the economists that's about two hundred eleven trillion dollars or close that we need to come up with about twenty two to circle if it down to zero we need to come up with about twenty trillion drugs are going extinct so a budget balance is not really the right measure that we should be looking at budget balance we should be looking at generational balance and to achieve
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generational balance you have to eliminate is fiscal gap so what why do you think that that that people are looking at that bigger number there's been a lot of estimates for what unfunded liabilities are some analyses put that number at just about sixty trillion dollars as the usa today and alice as did you put that number as you mentioned at two hundred eleven trillion dollars why is your number so much higher and why aren't more people referring to this is the reality of the debt situation. well they're looking at the cash flows and in the short run the baby boomers who are seventy million larger number haven't yet retired so the cash flows look relatively ok and as for going over the next ten years of their after they get out well full so we're looking to short term that's part of the problem we need to have a long term fiscal plan here and just trying to get these cash flows in balance is not really working long term enough that's the basic problem you know the unfunded
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liabilities of so security and medicare and medicaid are going to go up by more than an choo-choo in this year the probably go up by four trillion so in just one year they're going to go up by or trillion is my sense so here you are trying to reduce expenditures by churchillian over ten years when the unfunded liabilities are going up by four trillion and when you have yet you tell me you were looking at the wrong numbers were looking at the wrong numbers but yet these are the numbers that politicians seem to be looking at and you're calling for a more long term solution they need a lot more cuts what we've seen in the last few weeks is a lot of debate holding up the debt ceiling over what is going to amount to nine hundred billion dollars over ten years straight away so if that's the only compromise that lawmakers can get to is what your calling for ever going to actually happen as a reality is that even possible. well it's going to have to happen because if we don't fix things fundamentally the government's going to be forced to print lots and lots of money to pay these bills and what i want up and i information is not
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hyperinflation so we have to come to grips with this reality we can't keep putting it off now what i'm proposing in terms of policy reforms i think is a lot simpler than may seem because what we really need to do was present when health care is concerned but it is a plan and keep it at ten percent of g.d.p. the total expenditure that's what we're now spending we can just keep a lid on that he would temper some g.d.p. which is what switzerland spends on all its health care that would be fine going forward so we can we have to rationalize these fiscal programs so security health care the tax system and get to something that's efficient and their work preserves time i will eliminate this fiscal gap so there is a way to do this without enormous pain and just sit and politicians are just they're not. you know discussing that they're making points against each other they're playing you know a game of who's right as opposed to what's true let's focus on our kids real
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concern here is is where there are children it's not we're whether it's politicians that politicians reelected or elected next year. so that what point does this actually be an issue that's unavoidable like what you're talking about because you mentioned you know it's not like the government says that i have to print money and print money to avoid that if that's what the government spend doing i mean the federal reserve has shown its willingness to continue to put cash into the economy and to do more rounds of quantitative easing i mean how god can acco why because right now it's going on like that. you know when i think of it we're not bond traders and bill gross from jim crow has decided one of us bond market if either these are gone or traders suppliers in europe china trio they're going to countries are getting sufficient nervous they really understand one term projections and they will surge under bonds and interest rates shoot up even so then we have his jersey and that's it won't be enough i mean i expect. downgraded we're doing companies if
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they're doing their job and are we should probably do you know substantially here in the true picture you know we're just bouncing the wrong books it's that simple that simple accorded laurence kotlikoff professor of economics at boston university now as you heard him talking about the credit ratings agencies those agencies namely f. and p. have said throughout this debate in washington that the u.s. has aaa credit rating may still be downgraded even if there is a deal reached who benefits who could possibly benefit from that well financial analyst max kaiser says this may be exactly what bankers on wall street crave he laid out that case today earlier with our teens kevin owen most of the economy in america over fifty percent of the economy is tied to investment banking and wall street trading so they control the g.d.p. for them to continue to make money they need to look for new business new revenue is turning america's aaa rating to junk will make many many billions of dollars in
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fees it's just simple economics and simple business just follow the money but if everyone can see that it's just piling debts on the debt how the american public by the seeds dealing with this or the american public is having their worth decimated by wall street banks j.p. morgan and goldman sachs are two americas little class what the flow bill was to the buffalo population in america they're interested in like bring them out. the democrats or the politics of it on the face of it anyway it made the biggest concessions to reach this deal crucially eight doesn't involve tax hikes for now at least the republican house speaker told his party that nothing in the agreement quote violates our principles now does that mean that the republicans are just better of brinkmanship or do they just have more clout when it counts. it's soulis
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to think of this in terms of republicans versus democrats this is about as i've been saying savers averse to speculators speculators want interest rates at zero percent and they want u.s. treasury bonds and junk savers who are not getting any return on their investments because interest rates are zero are buying gold which is about to hit another new all time high today hitting new all time highs in currencies around the world they're buying silver that's what the silver vigilantes are doing because they realize that the american folk takhar see and the folks on the wall street have the american public by the juggler and are going to keep squeezing until they end up putting another fifty or sixty million of people permanently into poverty and just destroy this economy for the purpose of making a quick buck these naval or financial terrorists there the nine eleven cried very vaguely crew which includes blankfein and diamond and what a virus obama needs to do if you're working in the interest of the people would be to nationalize j.p.
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morgan and goldman sachs immediately fire these products and start all over again because you've got a predatory monopolist down there on wall street was interested in wiping out the middle class for a quick buck and that is jeremy and now with nancy and les max keiser now leaders may have had a death as a compromise but not everyone was happy with this plan far from it just to bait his pretty progressive on the left who were opposed to this plan against tea partiers on the right some including them accused of holding up this whole process. mr speaker i rise to congratulate the tea party starting a deal made in their image and their image alone the cuts will be beat they will be lasting and they will weaken an already depressed economy what's clear is that the people already is so it logically driven to kill government that they're willing to kill the private sector kill jobs and kill growth in the profits. they have little
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sample of that argument now to talk about the compromise that some say rather than i spoke to senior writer and editor for alter net joshua holland now progressive that said that obama surrendered they call this a failure because it has no tax increases i asked him if obama failed on this agreement take a listen well a lot of progress is are very unhappy with the administration's bargaining tactics and they feel that they gave up. and conceded some of the leverage that they might have held over these negotiations early on so the president said that he would take this so-called constitutional option off the table a lot of progress as i'm hearing from are saying well that was something that was a fallback position that could have. pressured republicans to be more conciliatory what we've ended up with is a plan that is very very skewed towards republican priorities so then what would you suggest defaulting in order to get a better deal. well you know default has been everybody agrees the default is
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a worst case scenario the question is whether the administration might have. played hardball to a greater degree and gotten something that was who are in the middle now how long are they supposed to play hardball right now they're voting and it's the day before the country is going to default. that's true although the estimated that tomorrow is only an estimated date and it may be the treasury can keep going until the fifteenth of august what we're seeing and i can see this point i think most progressive bradley had made it is the power of having one party that's willing to push that limit beyond the date so what we had was a tea party caucus in the house that was saying we don't care if we default and democrats had to move very very far towards their position because at the end of the day they did care about averting default and they wanted to make sure that we didn't see that scenario come to play the obama administration has taken it. ways
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of getting around that debt limit off of the table and these ways are you know there's been a variety of creative proposals for avoiding the debt limit we talked about the constitutional option it's important to stand that congress has given the obama administration conflicting constitutional mandates there is no provision in the constitution that allows the administration took pick and choose which appropriations they pay and which appropriations they don't pay at the same time they have a debt limit that they are not constitutionally empowered to just go over so one argument is that the administration could have simply said to the american people look congress has given me two conflicting mandates i cannot i cannot do both of these things i think that the obama administration has taken a read of the political environment and concluded that there is a large group of independents who are paying a lot of attention to these issues and you know those so-called swing voters i want
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to see significant deficit reduction i think the obama administration has made a calculation that they want to achieve cuts a big package of cuts that they can go into the two thousand and twelve campaign saying look we're the fiscally responsible ones i'm not sure if they're right about the fact that there is this large group of centrist strain voters that are are looking for for deficit reduction as a priority i think that you know the american people are really looking for the establishment to focus on job creation of hurting the foreclosure crisis etcetera etcetera mitigating the foreclosure crisis so i'm not sure if that was not a very severe miscalculation on the part of the administration and yet you're talking about kind of the progressive platform of jobs i want to play a little bit of a real quick piece of sound of kind of that tea party or the tea party challenge that we've seen captured the mainstream media. so you answer with forces and we'll talk about movies all day i want to answer do you have a right even
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a rough year to have you like that if you answer the question oh give you plenty of time you feel like you have made your point and now do you think people are going to think that you're overreaching and that maybe we're going to ruin the clout that you already have in this because you've got here is the problem is that i'm not trying to make a point i'm trying to do what's best for the country so he partiers if that had a country need to default and whether they've been met with criticism or with pride they've got a lot of attention they came out in vote they showed up in two thousand and ten the progressives need to rally the same kind of all the wing and that translates into. elected officials and order to get their platform of jobs more heard. i mean i certainly think that that is something the grassroots have to do and are trying to do you know this narrative that the tea partiers that the deficits are causing our economic woes is exactly opposite of the truth. you know a recent a recent analysis by bloomberg news found that almost twenty percent of the dollars
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in americans pockets last year came from one government program or another and so here we have a situation in the economy where we have a real demand problem that's the fundamental core issue of the economy companies are going to be hiring if there aren't customers looking for their goods and services and so when we're taking a lot of money out of these programs out of the public sector while the private sector is still deeply in recession it's the exact opposite of what we should be doing from an economic standpoint that according to senior writer an editor for alternate joshua holland let's look beyond washington for a second because it's easy to get caught in what's going on in the beltway at least here in d.c. studios they were and even though a default may be averted with the u.s. on the brink of a credit downgrade has a damage already been done to the u.s. reputation over the world all over archie's report i have found out yeah you bet and here's why. and help us avoid before that ceiling nation default and this
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crisis time's running out the entire world is watching it's been a public spectacle filled with bickering grandstanding and lack of compromise i devise a debate over raising the u.s. debt ceiling creative and unprecedented climate of uncertainty over america's so-called sound economy the damage has been done and what happens now everybody really thinks the united states isn't so secure it isn't so safe even if the craziness subsides it seems to have got real close and who knows whether next month next year this won't blow up again since the underlying causes economic problems are getting worse in this country poor point five trillion dollars of america's borrowing is owed by foreign countries experts say washington's mismanagement may cause investors to abandon the devalued dollar and end their partnership with america it's like being married to someone. of the richer you well know what or why
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do you how much can i put up with this relationship to us will be in for a long time the only game in juneau with the. making noises chinese making noises what you know we're not alone now in our ability to be a repository for financing in the world the result could spark a replay of the two thousand and eight economic meltdown except this time washington not wall street would be responsible for the first time in history our country's aaa credit rating would be downgraded leaving investors around the world to wonder whether the united states is still a good bet. interest rates would skyrocket on credit cards on mortgages and on kora loans which amounts to a huge tax hike on the american people as you count down near zero all three big reading giants movies fitch and standard and poor's threatened america's hallowed triple a school unless a deal was hammered out and that fourteen point three trillion dollar debt getting
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higher economists say america's unsustainable budget deficits are the biggest threat to the nation it's like the batteries worn out the spark plugs don't work the tires are flat all of this and so what we're trying to do is say we've got a little bit of money in the bank that's pay that down but we're not doing anything to fix the economy and so we're putting ourselves in a bigger and bigger hole not just because of the dad but really because we're not creating any way to get around the debt instead of the u.s. president repeatedly announced americans over the past week or two during the campaign to borrow and spend more make a phone call e-mail tweet keep the pressure on washington and we can get past this while the eyes of the world have been following the heated saga playing out between u.s. politicians the main problem not going away is america's debt and the growing realisation
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that elected officials may never be capable of agreeing on how to solve it. r.t. new york so all that said what is the view from the outside looking in on what's going on in the u.s. well earlier i was able to ask asia times correspondent pepe escobar here's what here's what he said. well that there were cheers already done in fact look i spent the last two months three and a half months across asia in all of this press few weeks of people start seriously discussing the american that the chinese for instance they are in an awkward position because the the economies are totally interdependent they know that a lot of hot money is going to be in flux in china after this never ending debt ceiling debate which is not going to solve anything as the best american economists including including paul krugman in a very very good new york times column has already warned if you read that the
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harveys link this book which doesn't get a lot of traction in the us but david harvey is read by the best mind and the brightest minds in europe and in china for instance this is basically a real arrangement of capitalism of durable capitalism and the big them is now being passed to china the problem is you know how. i can take you just just to finish this is how the ruling elites in the us and india west in general the ruling atlanticist elites will organize or not organize or refuse to organize this pressing of the bait and from wall street and from the financial system us to china as a pillar of the world economy china for instance cannot have a financial system yes. mark these horses this is us otherwise the whole world
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economy would implode what if the same time though you know you or i can't just go and that tons of money in china businesses can invest tons of money in china as stock market it's not open in the same way so what is really the concern of china on now because from what i understand it's not like you know you could just go out there and they come out how can that money off line to china. how what they are they going to do with their surplus of american treasury bonds for instance they have been diversifying their reserves from dollars to urals and they are doing swap deals using the u. one people like to trade with the south americans of miracles for instance in their own currencies like the brazilian reality or do you one itself they already buying oil from your own. you ones so or do you only scape route that the chinese know of and they already war in on their special mechanism inside the bank of china organizing this transition is to diversify their portfolios will be there by more
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your rules their rules using more swaps with countries currencies and the u. one and their laws being hard inside the i.m.f. inside the g twenty an inside the brics arrangement of five brics countries of which they are the natural leaders we can say for a basket of currencies but until this happens and i will say this won't happen within the next five six to pain years realistically it's going to be an enormous debate in organising the the american financial system and wall street and the washington establishment are resistant to the core but best the only way to go for the international monetary system through work and he'll use me asking of course is . they'd appreciate it if i did a thing that we've heard just that a lot moving away from the dollar as a reserve currency and bric countries of course talking about that and comments like i said stiglitz but at what point does this become do you think that this debt
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debate will factor into that conversation and that will move it along. look i don't see it let's see what happens in the next g. twenty meeting for instance the chinese are be very cautious about it for instance the have not antagonize the i.m.f. directly the could have put their own candidate for the i.m.f. two or three months ago in fact when lagavulin to be jean she managed to convince the chinese would see two hours and they say look let's not pick this fight now let's wait and see what happens lagarde you know by herself although she is chicago wall street let's say she is an american player like go on music and she's not a european player she's an atlanticist with an american but by herself is not she's absolutely important like so this was in the corner of the york times saying let's be patient which is completely. redundant when you think about it so the chinese are picking this fight in the long run and with the help of the brics so if there
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is some modification of the international financial system it has to be engineered by the before largest brics brazil russia india and china i was doing a lot in there and i want to bring out what russian prime minister vladimir putin said he said that this country the u.s. is living in debt it is not living within its means shifting the weight of responsibility on other countries and in a way acting as a parasite is this the concern that you're talking about that china has and is this the characteristic concern of the brics countries how they're doing yes it is it is . putting of course he's very blunt but he articulated what most people on the street level the most developed countries are actually thinking but you know this morning i was reading the brazilian argentine your reaction to the debate in washington and they are terrified because they look there's going to be an influx of hot money here as well like in brazil the worse in some.


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