tv Breaking the Set RT November 14, 2013 8:30pm-9:01pm EST
we did ration and launch out of afghanistan but i know it's a. it the those programs are put in place for a reason and they've kept the safe from another mass casualty attack since nine eleven. and there's a great deal of evidence that we would have had additional attacks if it hadn't been for those programs. and you can see more of larry's interview with dick cheney on politicking coming up at the top of the hour right here on r.t. and that does it for now i'm maggie lopez have a wonderful night. it
oh there i marinate this is boom bust and these are the stories we're tracking for you today first up if all you want for christmas is to be debt free men look into occupies debt you believe you will tell you all about it coming right up and it's musical chairs over at the c.s. to see once again so who's come and who's going we'll fill you in and finally james golfers sat down with juan in studio to discuss debt ceiling debt crisis and the deficit of knowledge in congress you won't want to miss that it's coming right up but now let's get to the ship.
with the holidays just around the corner we decided to kick off today's headlines with some debt free jubilee now this story it started all a little over one year ago when a group of occupy wall street activists created these strike down debt project known as rolling jubilee today the group has managed to abolish almost fifteen million dollars worth of personal debt now described on its website as a bailout of the people by the people rolling jubilee buys debt for pennies on the dollar but instead of collecting on that debt they've been abolished it now by purchasing the debt are dramatically reduced prices the group has managed to free thousands of people from dutch the group has focused on buy and mainly medical debt and with spending only four hundred thousand they've acquired fourteen point seven million dollars worth of debt not too shabby. in other news timothy mossad was in charge of cleaning up the last financial crisis so why not employ him to prevent
the next one well that's exactly what president obama does has decided to do obama name a saudi chairman of the commodity futures trading commission on tuesday to see if d.c. polices some of wall street's riskiest activity and as top cop of the sea of t.c. mr assad will no doubt her to use his experience as a former assistant secretary of the treasury and while in that position he oversaw the unwinding of the troubled asset relief program better known to most people as tarp if confirmed by the senate massage it will replace gary gensler. and finally starbucks announced tuesday that it will pay crawford's two point seven five billion billion with a b billion dollars to end a lengthy dispute over distribution of packaged coffee now the payment was ordered by an arbitrator following the coffee giants early terminations of a bagged coffee grocery deal between starbucks and foods starbucks said that bridge contract agreements a mismanaged the brand while kraft denies this of course they demand that starbucks
pay them a fair value for the business the award will now go to monday's international which spun off from crawford twenty twelve. those are some your headlines for today is always will be tracking these stories and keeping you posted on all the latest. now just last month u.s. national debt seventeen trillion dollars historical record but also unprecedented is the rate at which the debt is growing now it is grown from about one trillion in one nine hundred eighty two five trillion in two thousand there is an additional ten trillion over the past decade now i should note that this does not account does not account for inflation now some including economist peter schiff have warned that the rapid growth in public debt will never believe lead to a u.s.
default however not everyone is in agreement earlier i sat down with james gall birth professor at the university of austin texas and son of prolific economist john kenneth galbraith i first asked him if the fears about u.s. public debt crisis are overblown. absolutely no crisis in the public good story. here's to that point or. completely over the you know you say that the ceiling the debt ceiling is an anachronism based on the idea that the government must raise money from else. where before it is able to spend that money why is this this not the case today while the debt ceiling initially was and acted in one nine hundred seventeen and it was a device to facilitate the issuing of bonds for the first world war. since that time we have moved to a system which is. very much a system of what you call what i call fear money and when the the government writes
you a check the your bank simply credits that sum to your to your balance so the government does not actually have to find the money anyway anywhere it simply sends a signal to your bank and the money appears now why do you believe the us government will never ever have a problem finding its public expenditures and deficits because the electricity supply to the computers that send those signals will never be cut off it's that simple simple as that every day and they can't be cut off if you see you know how much of the us debt it's in the form of short term borrowing and that needs to eventually be rolled over obviously what's this mean in terms of the country's future financial strength nothing in particular. obviously it would be possible for those who hold u.s. treasury bills and bonds to sell them by some other countries obligations but first of all there aren't enough of those obligations out there in the world to make up
for the supply of u.s. run so it's not a practical option and secondly there is no other. asset out there which other countries with another creditors regard as being as secure so the chances of this happening in a on any substantial scale are really very remote and if they did then you know the european central bank of the russian central bank of the people's bank of china would all step in and buy up the assets because they don't want the u.s. dollar to fall now they can leave me in my next question i do. i know how you're going to answer this but why are the hmong term rates on t. bonds so low because the short term rates have been low for such a long time now. practically zero sense the big beginning of the crisis in early two thousand and nine that. people buying u.s. treasury bonds have an expectation that the fed is going to keep in that position and they're probably right and as
a result the long term yields have fallen on the you the prices have risen it's that simple simple as that so it's just going to say well the fed is in a bit of a box because it has while it has been some parts of the leadership of the federal reserve have been talking about tapering about reducing the program of. capital assets when they do that but that causes a great flutter in the markets and then they have been obliged basically to back off so that has reinforced the expectation this is going to go on for a long time but you've said in the house that you believe markets are unreliable cracked there's been evidence of this well depending on what you mean by that but the fact that you know they're doing this like you said the tapering even murmurs of taper has caused major fluctuation in the markets so if that happens what would be the results you know if the taper. if there were a real change of policy by the fed that was determined then you would almost immediately see yields rising and that would cause
a new wave of mortgage defaults and to wage a wave of problems in the private sector and the result of that is either the fed would tolerate a significant impact on actual economic activity or they would once again say oops no we didn't mean to do that and stop and my guess is that the second outcome is much more likely in fact what's much more likely now is will simply see them receding into the background and doing very little on this front for the foreseeable future now some argue that the united states is the next greece in terms of song. credit and you know you have a particular position on this how would you respond to such an argument united states cannot be anything like. greece except by inflicting on itself the kind of austerity policies that the greeks have had imposed on them by the by the troika. troika so interesting russian word actually how yeah are you
getting what i need do you draw that in there are you know. in terms of the financial stability of the united states the conditions of the two countries are totally different the greeks have to earn euro in order to pay interest on their bonds and the united states government does not need to earn dollars in order to pay dollar interest on dollar bonds so. it simply as the world sees this is not just the united states the same the world has equal confidence in britain or dramedy or japan for example plants too for that matter so it's kind of comparing apples to oranges into something the u.s. can print money and it's own money correct and cannot that's exactly right yes now what percentage of congress do you think understands the relationship of debt and the economy. if i got all of them off the record i imagine i could find one or two . really i haven't tried it yet but you're dead pan serious on it so much ok my
next question then now you've lectured congress multiple times yet your message on dead deficits does not seem to be trickle wien down here at home. is it difficult to make affect of policy if the majority of americans including the politicians and when i say the majority of americans have no idea how the engine actually works that's a huge challenge absolutely and this is a situation which has been going on in the united states for forty years roughly said richard nixon took the us all closed the gold window when one thousand nine hundred eighty one. changed the can the real financial relationship of the united states to the rest of the world we became the reserve currency in a major way in the 1980's and it's true our political leadership does not understand the significance of this fact and simply just doesn't understand it doesn't understand the relationship between our trade deficit our budget deficit and they make assumptions that the desirable state is some thing called balance in
which revenues and expenditures become equal to each other which is not only completely undesirable for the united states it's also a practical impossibility it is a promise from possible since it's been so long as the u.s. maintains its position as a supplier of reserve assets to the world it cannot run a. trade balance or budget balance for anything but a very short period of time ok now dick cheney he once said that out loud want to get this straight reagan proved that deficits deficits don't matter he was lying bastard by both sides for making this this comment do you agree with mr cheney on the deficit matter it pains me to say so but i do can you expand the well this was the experience the people in the reagan administration had that they launched a program based upon a very large tax reduction very large increase in least one aspect of government
spending. and they were threatened with the same kind of calamitous financial outcomes and yes interest rates went up in the early reagan years and i think eighty one eighty two but then they stabilized and came down again simply because the federal reserve changed policy so it became clear that the reagan administration could in fact get away in the world the climate that was just being established at that time with the financial. posture that they took. coming up more with james galbraith. and what happens in congress refuses to read the raise the debt ceiling we discussed what a u.s. default would entailed and smile you're on mug shot dot com i'm not joking now websites the publish mug shots and then charge arrestees hundreds of thousands of dollars or just hundreds however much that ends up taking to take the pictures down are now in the spotlight rachel perseus and i discuss how credit card companies could switch off the lights of this profitable business that's coming up in today's
over the past few years there have been a slew of proposed deficit reduction plans from simpson bowles to the ryan budget now earlier i asked james galbraith if the u.s. should target the deficit in terms of a percentage of g.d.p. and here's what he had to say. the math of this is such that if the interest rate on the lies below the growth rate of the economy in nominal terms it's nominal economic output grows maybe five percent if the interest rate on the debt is lower than that then the debt to g.d.p. ratio which is the question you're asking will stabilize at some point it may be at a fairly high value by historical standards but it will stabilize so that's and as
such the criteria and for now that interest rate is certainly substantially below the growth rate of g.d.p. in dollar terms and should there be a target and i know we've kind of specifically if you had i don't think so no i think i think so long as you have a. position which is tending toward stabilization then over the long run you're. not facing a. significant problem the problem that the greeks have is that with six years of declining output their debt to g.d.p. ratio continues to go up and that's what started under ten percent or twenty percent of g.d.p. it's now one hundred seventy percent of g.d.p. it was pale at the start of this it's much more unpayable now and everybody knows there is going to have to be. a restructuring of that debt in the u.s. case if you're trending toward stabilisation everybody knows that there will come a point when. when things will either go on indefinitely at that situation or
actually the debt to g.d.p. ratio will start to decline now you've been a big proponent of pushing for transparency at the fed can you tell us why this is so important well the federal reserve is a creature of the congress and i started my career working for the banking committee which had oversight responsibility and the difficulty that we had was that there was no effective way of getting federal reserve the federal reserve chairman for example to answer simple questions like what's your outlook for the economy so we set up a framework where they had to come back on a regular basis and face the same people and face the same questions and that began to create a climate of much more responsiveness and i actually think the federal reserve has come in the normal sleeve all the way over the over the last thirty or forty years they used to be very obscure very. opaque agency and now
they are much more open they do explain themselves to the to the world and they the federal reserve board is intellectually i think in many ways the most interesting place in washington at the moment. now should the u.s. continue to borrow as long as rates are low and if so if you think yes how can this possibly sustain itself without ever becoming a problem. well so long as you are borrowing at a rate determined by your own central bank and that rate is practically zero for the short end of the spectrum that really can become a problem should the federal reserve change policy then you again you would have a higher short term interest rate and that would cause problems for the private sector but the real. purpose of the policy is to get to a point where. private financial institutions are again functioning and providing loans for the expansion of business activity and when that happens then the public
sectors share of financial activity will naturally decline focusing on the public sector and saying we've got to cut that back on the assumption that the private sector will then somehow magically rise like a phoenix from the ashes is is is fallacious it's like going into the emergency room and saying gee look at all these i.v. bags that they must be causing terrible problems let's pull them out of the patients vanes them and get them up and get them working the more that doesn't always or isn't it's not it's not it's sort of not clear on the concept here that you know i've got my final question for you can do you as things stand it's current account relationship with the rest of the world in particularly china. so long as the chinese wish to sell to us more than they buy from us that relationship will be sustained yes the chinese may change their posture they may decide they don't need the export markets they may and they are increasing their imports as perfectly as commodity prices have risen their been obliged to so the chinese position will
possibly change this does not necessarily pose any great problem for us it simply means that the accumulation of assets that was going on becomes a little bias so you think we should all just calm down and that are sure we should we should be with respect to the states much calmer it's not the proper focus for policy concerns we have enormous problems of energy climate unemployment foreclosures. a whole spectrum of things which from which we are diverted by this discussion of financial ratios of the budget deficit of the financial condition of the social security fund which is basically just fall. and that. both gets us into a position where we will make bad decisions but also gets us away from
a discussion of the problems we really should be facing now i have one more question i just have to ask you directly what would happen if in february the government simply decides not to raise the debt ceiling if interest rates don't do . nobody no. it would pose terrific problems operationally for the treasury because they're not set up to cut off payments and they do not know which paved the way to to prioritize the payments they would continue in the payments that they would cut off. and it would cause of course if they did cut off payments in general that would cause a lot of problems for people who were on the margin who were depending upon a social security check or a or a a payment on a contract so you could imagine a good deal of disruption of actual activity or you could imagine that the treasury would come up with some device for. continuing to make the payments there are ways the government could slip around this they're there they're well known the
government has chosen not to do so i think the actual situation is that the republican party has caved on this issue there is not a majority to block the rise in the debt ceiling and so this problem having been resolved through weeks ago will be resolved in february in essentially the same way and i think everybody now realizes that that's the case so i'm confident actually that this problem is has been dealt with at least for now. that was james galbraith professor at the university of texas at austin and son of prolific economist john kenneth galbraith now it's time for today's big deal. joining me now for today's big deal the one the only rachel corrie's is how you
doing lady i'm doing great how are you ok now this is one of my favorite subjects that we're going over today celebrity photo. but some of the best ones now some of the most sincere and candid voters they come straight from the slammer yeah now here are some of our favorites we've picked these out check this hugh grant after he was caught with a hooker there is mel gibson twenty eleven paris hilton looking remarkably good when she said i mean come on that's a mug shot and of course one of the many many mug shots of miss lindsay and i think we have another here check this. one branch oh no oh no. that i don't have. to get are all i know is i wish there were some way that i could pay for that mugshot to be removed from the public record check this out rachel now you can your mug shot is in public record and here's the news this is kind of incredible not web sites like just mug shots dot com they publish mug shots online
and charge arrestees upwards of three hundred dollars to remove the picture off of the mug shots are of people who were found not guilty now to put a stop to this payment companies such as master card american express and pay pal are taking matters into their own hands perhaps because some of the big wigs at those companies had mug shots at one time and they announced that they would not that they would cut ties with mug shot websites but in a major damper on the business model rachel do you think this is the right thing to do yes or no i think it's up to these companies it's clearly a brand thing they were getting a lot of flack for the fact that they were participating in this whole scheme and it is a scheme that it's three hundred dollars a photo but let's say you have five mug shots you can get a deal you can pay a little less you know a bargain deal but what's so fascinating to me about it is that let's say it pay three hundred dollars to get myself through for a one mug shot web site there are still eleven or twelve other mug shot websites that i have to go to so it's a total racket it's incredible so these these companies essentially are saying they don't want to be involved any more but it is as i said
a total branding thing they just want to look good by saying we're not complicit in all of this awful stuff going on but it will have a big effect on these websites now here's the question mug shots they are. part of the public record corrupt they are i mean think about the most popular feature of any local newspaper it's the police blotter people love to know who got arrested for what all of the dirty nasty details and that is part of the public record. all of the actual mug shots that they got these website companies got they got using essentially software that true that crawls through sheriff's web sites to get it so it is public information but the question is whether i mean they're seen as guilty for google another company that's kind of taken action has actually changed their algorithm to put these these websites with mug shots much lower thank you grohl yeah i mean the last thing i want is for that much i'm doing a lot of that was them but at the same time with these websites are saying is listen how can you how can you say this isn't true most shot exists look at it was
that. the truth is that it was taken but what would people who are in those pictures are arguing is what you're missing is the context like the follow up that says the way out charges were dropped this was this wasn't true at all. as speaking as a journalist i found those websites incredibly helpful when filing reports the navy yard shooter the first images of him came up from a mug shot website now and we also talked about this a little before the show you know kind of brought this other minded view of the my space model yes it was a time when my space i'm not sure if this is savannah but that my space was actually having people pay to delete their accounts people who no longer remember their passwords didn't have the same e-mail address to retrieve their passwords find if you really want to delete it pay us ten dollars you know you're home and when your business model is pay us to shut down your account and you don't want it anymore great will make money on that happening my space. horrid but it's all over you can see all segments featured in today's show on you tube at you tube dot com
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think i think. over the if you go did you know the price is the only industry specifically mentioned in the constitution and. that's because a free and open press is critical to our democracy correct allmers. in fact the single biggest threat facing our nation today is the corporate takeover of our government and across cynical we've been hijacked by handful of transnational corporations that will profit by destroying what our founding fathers one school class i'm tom mark and on this show we reveal the big picture of what's actually going on in the world we go beyond identifying the problem. rational debate and real discussion critical issues facing define ready to join the movement and walk a bit of.
the forty sixth president of the begin ited states dick cheney he's one of the most influential and controversial men ever to hold the all of us he was a heartbeat away from the presidency and irony to the senator in his long battle with cardiac disease it chronicles that in his new book heart an american medical out a see he's with me at the historic day out of his hotel overlooking the white house and the executive office building it's all next on politics case. welcome to another edition of politicking with larry king this will be one of my favorites coasts where with an old friend dick cheney the former vice president.
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