The United States is witnessing the 'second wave' of economic depression as pressure grows on the US administration to hammer out a deal to avoid a debt default that could have global ramifications.
Press TV talks with Dr. Webster Griffin Tarpley, an author and historian in Washington, for his insights on the US economic situation and the potential risks of a default.
Press TV: If we look at this in context of tough economic times, can it be argued these negative sentiments are natural in such trying times?
Tarpley: Well, the negativity is fully justified. We are in a world economic depression as in the 1930s, it comes in waves. We had the first wave in 2008 were the bankruptcy of Bear Stearns [Companies], Lehman Brothers [Holdings] and really all of Wall Street. We are no going through the second wave of the depression, on the one side, the European debt and banking crises, or the euro crises, but that is now joined by these really unnecessary crises around the dollar and the US public debt. We have a mass of fanatics inside the Republican Party; this is known as Tea Party [movement]. These are reactionaries. They are founded by extreme right-wing business men, like the Koch brothers [of Koch Industries], they want the United States to go bankrupt, they want the US to default because they figured that if the United States can no longer borrow, they would be able to destroy the social safety net that we have had left over from the new deal, that is to say Medicare, Medicaid, social security and so forth.
Since they can't get that done by legal means, they are trying to go outside of the government and the constitution to force the bankruptcy of the country, thinking that in that case there won't be any money for these programs.
Unfortunately, Obama has not put up a good front against them; he has gratuitously said that he wants to sacrifice parts of Medicare, Medicaid, and social security. That was the surprised announcement that he made at the middle of last week.
Right now though Wall Street is making its voice heard. If the Unites States defaults all central bank reserves in the world will be radically devalued, there will be a world panic, a catastrophe.
Press TV: Some economists say that neither party would let the US default, and that they are simply playing politics. Do you agree?
Tarpley: Normally that would be true, but we know have a group of true ideological fanatics, the Tea Party. They believe in the Austrian school, and the Chicago school. They believe they you can have market without a government. They are neo-feudalist, right-wing anarchist - whatever you want- they believe that.
Now, the leaders of the Republican Party are getting calls from Wall Street right now saying that either you raise the debt ceiling, and preserve some kind of stability, or you are maybe sleeping with the fishes or a cement overcoat, that's the level that it has come to. The problem is that there are 70 or 80 or 90 Republicans in the house who are impervious to all kind of reason discourse. They are getting threats, they may come around as a result of the threats, but the situation is now on the brink, it would never be this way if you never had these fanatics who are essentially beyond all reason.