tv Prime Interest RT November 13, 2013 11:29pm-12:01am EST
crosstalk rules in effect that means you can jump in anytime you want. i know c.n.n. the m s n b c news have taken some not slightly but the fact is i admire their commitment to cover all sides of the story just in case one of them happens to be accurate. that was funny but it's close and for the truth and might think. it's because one whole attention and the mainstream media works side by side the joke is actually on here. to be coming back . at our teen years we have a different approach would look a bit o. l. because the news of the world just is not this funny i'm not laughing dammit i'm not i. but i think. you
guys have to the jokes will handle to make that happen. oh there i marinate and 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 then look into occupies debt do 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 one off 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
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 assad 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 put 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 kroft foods 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 giant early terminations of a bagged coffee grocery deal between starbucks and foods starbucks breach contract agreements and mismanage the brand wall 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 summer headlines for today i was 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 by 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 five trillion in two thousand then it was 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 leads to a u.s. default however not everyone is in agreement earlier i sat down with james k. gall birth professor at the university of austin texas and son of prolific economist john kind of the culprit i first asked him if he fears about u.s. public debt crisis are overblown. absolutely no crisis in the public debt of the state so yes here's to that point are. completely overblown now you say that the ceiling the debt ceiling is an anachronism based on an idea that the government must raise money from elsewhere before it is able to spend that money why is this this not the case today while the debt ceiling initially was
a back to did nine hundred seventeen you know that 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 money and when the government writes you check your bank simply credits that sum to you or to your balance of the government does not actually. to find the money any way anywhere it simply sends a signal to your bank and the body 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 not simple simple as that every day and they can't be cut off as you see you know now much of the us it's in the form of short term bahrain 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 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 us run so it's not a practical option and secondly there is no other. asset out there which other countries and other creditors regard as being as secure so the chances of this happening. on any substantial scale are really very remote and if they did then you know the european central bank and the russians 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 flow now it can only it's not even my next question i don't 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. 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 in 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 seen. 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 slaughter 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 past 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 it 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 hopes 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 we'll 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 sovereign 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 you are getting what i need do you draw that in there. 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's simply and the world sees this it's not just the united states the same the world has equal confidence in britain or germany or japan for example plants too for that matter so it's kind of comparing apples to oranges of the something the u.s. can print money and it's own money correct and cannot that's what i think right
this 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 if you're dead pan serious on it's ok my next question then now you've lectured congress multiple times yet your message on dead deficits does not seem to be trickle we 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 a sense richard nixon took to us all closed the gold window with nine hundred seventy one and 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 doesn't doesn't understand it at all 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 yes it's 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 i want to get this straight reagan proved that deficit deficits don't matter he was mombasa by both sides for making this this comment do you agree with mr cheney on the deficit
matter pains me to say so but i do can you expand please 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 at 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 maybe one maybe 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 reason the debt ceiling we discussed what a u.s.
default would entailed and smile all your own mug shot i'm not joking now websites the publish mug shots and then charge arrestees hundreds of thousands of dollars or just hundreds however much it ends up taking to take the pictures down are now in the spotlight rachel courteous and i discuss how credit card companies could switch off the life of this profitable business that's coming up in today's big deal and as we had to break here's a quick look at some of today's closing numbers. the upside to an active campaign had a long time ago where patients are forced battling after a malingerer strike never turned the world's attention to the places that some jobs
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 specific if you had i don't think so not 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 it one hundred ten percent or twenty percent of g.d.p. it's now one hundred seventy percent of g.d.p. it was unpayable 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 you know 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're borrowing at a rate determined by your own central bank and that rate is practically zero for the short end of the spectrum it really can become a problem should the federal reserve change policy then you get 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 veins them and get them up and get them walking the more that doesn't always work is that 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 less siddiqui shelves 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 lied 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 it does it's down to. nobody knows 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 or 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 a 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 doing great how are you ok now this is one of my favorite subjects that are going over today celebrity photos and they're not always from the red carpet some of the best ones now some of the most sincere and candid photos 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 the hooker there is mel gibson twenty eleven room paris hilton looking remarkably good when she said i mean come on that's a long shot and of course one of the many many mug shots of miss lindsey lowe and i think we have another here check this was why joel oh no. how did that i don't have a i've got are well 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 money 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 the. 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 of you 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 paid 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 in 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 correct 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 web site 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 web sites with mug shots much lower thank you 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 what these websites are saying is listen how can you how can you say this isn't true mode shot exists look at it let
it out if that's the way it is this is 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 web site now and we also talked about this a little before the show you know kind of. at this other reminded you of the my space model yes it was a time when my space i'm not sure if this is so vain 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 my space and find if you really want to delete it pay us ten dollars you know you have all and when your business model is paying us to shut down your account and you don't want it anymore great will make money on trying to help and that happened in my space and. hurried that's all for now but you can see all segments featured in
cross talk rules and the fact that you can jump in anytime you want. this is my point when i read through the lord want to look at all this i still can't believe i still put george. my first. try to be good for the. good fortune to be able to help others. very probably level so that these awards are by telling the truth. give me a body or. i feel i look the more. i am the president and. i think. trying to convey to. the bank all that all about my.
america's most decorated veterans deny. the facility to twelve years old it's very easy to end one ton of. you released the man. you're not prosecuting. but the white house is unswayed saying gee process is a luxury can do without it in detail in these men. it's hard to tell right now exactly what will be done here in this mission. we report from inside guantanamo bay on the future of one of the world's most maligned prisons plus it's a visit yemen the homeland of more than half of the remaining inmates we report on plans to build one town in my basic sets of there and how detainees relatives view the situation. and a publicly funded.