Republicans have agreed to a vote today on a budget plan they say will cut the deficit $917 billion over 10 years. The move sets the stage for a showdown against unified Democratic opposition in the Senate and threats of a White House veto. To discuss the debt talks and economic austerity worldwide, we’re joined by Richard Wolff, Emeritus Professor of Economics at University of Massachusetts Amherst and author of several books, including "Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It." "This is political theater in which two parties are posturing for the election coming next year," says Wolff. "To put it in perspective, the number of times the government has raised the debt ceiling since 1940? Ninety, almost twice a year. This is a normal, automatic procedure. Every president, Republican and Democrat, has asked for it."
TRANSCRIPT:
JUAN GONZALEZ: After weeks of infighting, Republicans have agreed to vote today on a budget plan they say will cut the deficit $917 billion over 10 years. The move sets the stage for a [showdown] against unified Democratic opposition in the Senate. Independent Senators Joe Lieberman and Bernie Sanders are promising to block it. White House spokesman James Carney warned yesterday that time is running out to reach a compromise. Carney also said Treasury Department officials may soon have to decide who will get government checks and who won’t, if the Treasury loses borrowing authority.
PRESS SECRETARY JAY CARNEY: Among the many obligations we have, the 80 million checks that the Treasury Department alone issues, payments that it issues every month, of the 1.2 billion payments the federal government makes in a year, those include veterans’ payments, Social Security payments, disability payments. They include the bills to contractors, small businesses, big businesses, that do work with the government, the people who manufacture the ammunition that we send to our troops in Afghanistan. And choices then have to be made. And it’s a Sophie’s choice, right? Who do you save? Who do you pay? That’s an impossible situation that this country has never faced, and should never face, if Congress does what it was elected to do and does its job.
AMY GOODMAN: White House spokesperson Jay Carney.
To discuss the debt talks, we’re joined by Richard Wolff, Professor Emeritus of Economics at University of Massachusetts Amherst, visiting professor here in New York at New School University, also hosts a weekly program on WBAI called Economic Update.
Welcome to Democracy Now!
RICHARD WOLFF: Thank you.
AMY GOODMAN: So we are watching this dance in Washington. The House is going to vote today around the issue of the debt ceiling. The Senate says it’s dead in the water. President Obama is vowing to veto. What does this all mean?
RICHARD WOLFF: Well, basically, your word "dance" is perfect. This is theater. This is political theater in which the two parties are posturing for the election coming next year, using this occasion—to put it in perspective, the number of times the government has raised the debt ceiling since 1940? Ninety, almost twice a year. This is a normal, automatic procedure. Every president, Republican and Democrat, has asked for it. When they ask, typically, the representatives of the other party say, "Well, you’re not managing the government real well," and then they vote for it. And that has happened over and over again. So what you’re seeing is a decision, politically, to make it theatric, out of what otherwise would have been a normal procedure.
A hundred years ago, the Congress said, in order to control the government and not to allow businesses and rich people to be able to invest in government money easily, we’re going to have the government limit how much can be borrowed. That was the idea. Now it became automatic, as we became a debt society—excuse me—and so, suddenly, the Republicans basically decided to make theater, to run their campaign a little early this year, and to slow it all down and make a big to-do.
The world expects that this will have to be undone in a few days or weeks. They’re kind of amazed to see it being stretched like this, this old, normal procedure. And the assumption is that the politics in the United States has become as dysfunctional as our economic situation. And so, that’s the danger, that this rigmarole, this theater, is really a sign that normal life in the United States has been disrupted on a scale that people haven’t seen before.
JUAN GONZALEZ: But when you say that the Republicans decided to make theater out of it, it seems to me that the Democrats also have participated in the process by making this seem like it’s—Armageddon will occur unless we get this done by August 2nd. And in essence, at times it seems almost like the Obama administration is seeking this deadline to start moving in a more centrist direction economically that it has wanted to do, but has been absent the type of crisis that it would be able to convince the American public that it needs to do.
RICHARD WOLFF: There are certainly signs of that. And they’re very troubling to many of us who are economists, right, left and center, because basically, the Democrats have said, "We will do massive cuts. They just won’t be as massive as the Republicans want." And then they will appeal to the American people in the hope that Americans will choose the lesser evil: the Democrats who won’t cut so terribly compared to the Republicans.
And the Republicans are appealing to folks that are very upset by the economic situation, don’t know who to be angry at. In the American way, they get angry at the government. It’s a little bit amazing, if you take a step back. The overwhelming majority of people who’ve lost our jobs in this crisis have been fired by private employers. The overwhelming majority of people who have been thrown out of their homes have been—have had that happen because a private bank has gone to court to get that to happen. And yet, the American people have this tendency, built into our culture, to leap right over the person who’s actually done you the damage and to blame the government. And so, the government, in general, and the particular government of Mr. Obama, is the target, and the Republicans are playing on this. And that’s their ploy.
And the Democrats are saying, "Well, we’re not so bad. We’re going to tax the rich, just a little, and the corporations a little less. And that’s something the Republicans won’t do. And we will protect your Social Security, at least more than..."
But you’re right. In the process, everything moves over to massive cutting. And besides the morals of that, it’s economically crazy. In an economic situation where recovery is very poor, very uneven, to have the government cut back, the way that spokesman for the White House just told us, is to make an economic situation that’s bad worse. So you see a kind of political game being played at the cost of worsening the underlying economic situation. And for the world, that suggests a society that’s not working.
Read more here.
