The US national debt has swelled to more than USD 16 trillion, giving cause to Republican’s criticism of President Barack Obama just as the National Democratic Convention (NDC) begins.
When Obama took office in 2009, the US debt stood at USD 10.6 trillion, but the figure has soared despite his pledge to cut it by half by 2012.
Immediately after the US Treasury announced the figure, Obama’s Republican rival Mitt Romney released a one-minute video highlighting Obama’s pledge to halve the debt by the end of his term in office.
Back in 2008 and during his first presidential campaign, Obama had slammed the USD 4-trillion rise in national debt under his predecessor George W. Bush as “irresponsible” and “unpatriotic.”
House Speaker John Boehner described the news as “another sad reminder” of Obama’s broken promise to cut spending.
Press TV has conducted an interview with author and historian Dr. Webster Griffin Tarpley from Washington to shed more light on the issue at hand.
He is joined by Iraq war veteran Michael Prysner from Los Angeles on Press TV’s News Analysis program.
What follows is an approximate transcription of the interview.
Webster Griffin Tarpley first to you, tell us what you think. The government has an official debt of 16 trillion dollars as it has been announced and it is mounting.
This means every man, woman and child in America has about 51,000 dollars share of this debt.
It does not include the liability from social security and from Medicare, of course when you factor those in this it has been said that amounts to about 120 trillion dollars or more.
What is your impression of this? What does this mean for America’s economy and its people?
Well, of course the figures that you said about the social security and related entitlements are spread out over half a century. So this should not be seen as something [that has] to be paid right now.
The political party that is going to pay most attention to this debt situation are the reactionary Republicans and their candidate, the Wall Street asset stripper and hedge fund hyena Mitt Romney.
Because they want to focus everybody on debt and deficits. I would say from the point of view of actual economics, this is not the main thing. We have a world economic depression. One of the symptoms is that the public debt is going up, but this is not the cause and I would not focus too much on that particular aspect of the crisis.
The main problem for the whole economy and for the individual in this country is unemployment. The fact that we have about 30 million people who are either completely unemployed or underemployed or have given up in despair.
The problem with the debt is simply that it seems to be bigger than it is because of the rest of the economy is so depressed. We had known this since Alexander Hamilton that a funded public debt can actually be an advantage as long as it is not excessive, and the excessive means compared to the economy that you have.
So the problem that we have is four years of stagnation, and the reason for this of course is that we have got too big to fail.
We would need to have recovery. In order to have a recovery, the traditional way that has been done, is to have the banking system come up with credit, loans for plant and equipment and new jobs and they finance the recovery.
The problem is that we have zombie banks that are all bankrupt. They are all wards of the US Federal Government.
They have been judged too big to fail, which is illegal but both parties agree on this. We have got the Wall Street puppet Obama and we have got the hedge fund hyena Romney, and they both agree that Wall Street will be completely unaccountable and above all that the derivatives would be untouched.
That is about 1.5 quadrillion to two quadrillion derivatives that are weighting down the US banking system.
This is why we have this prolonged stagnation and no recovery. And Obama is too weak. He is too devoted to the cause of serving the Wall Street to be able to make a brake with these bankrupt policies but naturally what Romney wants to do is, in many ways, to go back in grand style to the Bush-Cheney policies that created the bubble: Union busting, tax cuts for the rich and comprehensive deregulation.
Romney would, actually, make a bad situation worse.
And the people from Occupy Wall Street, I would ask them, Where is your presidential candidate? If you do not like Obama and Romney, most Americans would agree, where is your presidential candidate?
I guess they never quite got around to thinking of that, did they?
Well, Webster Griffin Tarpley, you mentioned 35 million Americans that are unemployed. Figures of Americans on food stamp are hovering at around 50 million people, of which that amount has increased in the past four years that Obama has been in office.
Is this going to get worse when we have… this figure of five trillion dollars in just three and a half years that Obama has spent.
You do not consider that to be excessive spending and then compare that, if you may, with what is going on with Americans who are on food stamps.
Is it bad bookkeeping? Explain that to us please.
The problem with the increase in the public debt is it is not being used for the right things. It has been used to bail out zombie banks, which is a hopeless task because those zombie banks are full of derivatives and there is no way in the world [that] you can bail out that mass of one to two quadrillion dollars worth of derivatives. The problem is we need a recovery program…
I am sorry to jump in, but what about the argument that these banks, who have been given stimulus money, are sitting on top of cash for a variety of reasons, one of which has been for emergency uses.
Of course, you know, we do not know where that emergency is actually, the money is in liquidity form right now sitting on top of these financial institutions.
But money that is supposed to be pumped into the economy, to give people credit for example, whether it is for car loans, whether it is for homes, etc.
Why is not that happening? Who is to blame for that? Why is there money sitting? Is not that part of the problem of this 16 trillion dollars debt that it has amounted to at this point?
I would call that a capital strike. In other words, it is sabotage for economic and political reasons on the part of the Wall Street people themselves.
It is not the first time that they have done that in the American history. I would say that the heart of the matter was what you mentioned before. We have about 50 million people in the United States who are on the brink.
They do not have a job. They might have had unemployment benefits but those are gone. 99 weeks was the most you could get and after that nothing and in most states it is much less than 99 weeks.
They do not have any healthcare, that is again about 50 million people, and there is no more welfare. If you had women with young children in the home, we used to have welfare from the Social Security Act of 1935. That was actually abolished by Bill Clinton in order to get himself reelected in 1996.
So this is a bipartisan effort in favor of Wall Street and really to inflict, I call it a ‘genocidal budget cuts’ on the American people.
And right now we have about 50 million people who live on food stamps and food stamps in a place like New York City is about 180 dollars a month, which comes to about 1.50 per meal, which is you cannot have good nutrition for that kind of money.
The only difference between the Republicans and the Democrats in the Congress right now is that the Democrats say cut the food stamp budget by six to seven billion and the Republicans say ‘No that is not enough! We want more genocide. We want to cut 30 to 35 billion dollars.’
And I would have to say I cannot justify the behavior of Occupy Wall Street. The strategy they seem to have is simply defeatism; that they are giving up on these points. You have got to get out there and fight, at least fight programmatically; do something against the austerity, right? That we cannot have any more austerity cuts or austerity cuts do not work. We have seen it in Greece.
You cut the budget this year, the deficit is bigger in the following year. The balance budget is not a policy goal. That is crazy especially in depression. Again that is what a Republican or a Libertarian might argue.
But we are headed towards a kind of an emergency here at the end of the year where, I think, the Republicans if they get control of the government, the presidency, the House and the Senate, the Republican plan would be to cut the already depressed standard of living in the United States about minus one third or minus one quarter; Something along those lines.
And again that increases the death rate in the population quite markedly.
I fail to understand when we talk about this huge figure that is amounted to 16 trillion dollars of which Obama has spent, five trillion dollars; how this can amount to this much [amount of] money given what Michael Prysner [other guest of the show] just said, taken away from Americans.
I mean we are looking at this devastated…sucking the budget from the American taxpayer dollars and of course Michael Prysner, you even mentioned about these wars, like the Afghanistan war three to four hundred million dollars daily and Obama is criticized by Romney for not taking a stronger pro-war stance such as against Syria or such as against Iran.
When it comes to these wars, Americans will not see a relief there from their money, will they?
I think one of the untold stories of the Republican Convention last week and the people around Romney is that Republicans do not say a word about foreign policy.
I do not think there was very much about foreign policy at all… maybe Condoleezza Rice one speech, but the secret is that the Bush era Neocons, the people like Bolton and Elliot Cohen and Dan Senor and Robert Kagan, they are all back and they are going to be in the Romney administration if you get it.
In other words the warmongers are waiting in the wings and they have been very impatient with Obama. They say Obama is not a big enough warmonger, we need more extreme, aggressive policies, we need more adventurism, more hostility.
They want to pick fights with Russia, with China, with Iran, as you say with just about everybody in the world.
So this is going on behind the scenes. But again we have got to go beyond protest. Protest is necessary but there has got to be something more and that is called power and seizing power.
If you cannot seize all power, seize some of it and try to turn these things around. Just in terms of maintaining the social safety net.
One of the things most of the people do not understand about the US tax system is that Wall Street pays no tax or virtually no tax.
Most people here have to pay a sales tax. If you want to buy a pair of shoes or some consumer electronics depending on the state you are in, you are going to pay between six and about 12 percent as sales tax. That is a regressive tax.
But when Wall Street zombies and hyenas, when they do their high frequency trading, flash trading, a million transactions per second, they do not pay anything on that.
So a lot of people would say why do they not pay a Wall Street sales tax?
Make it one percent. Give half to the Federal Government, half to the states to maintain the social safety net. What we have been talking about, so that there will be unemployment benefits, there will be food stamps because otherwise people are simply going to die.
That is not a recovery but it is absolutely essential because you have got to preserve your labor power.
If you would like to get a recovery, you have got to go beyond that and seize the control of the Federal Reserve and use that for cheap credit for production.