Republicans to attack welfare system

Republicans are blocking Democrats on how to bring down the debt and budget deficit, which could be cut immediately if they weren't corrupted.


Press TV talks with Ian Williams, Foreign Policy in Focus in New York, who explains the Republican's sinister agenda to play into the hands of their backers by sacrificing state welfare. He also points out rudimentary failures in the Obama camp also. Following is a transcription of the interview.

Press TV: What possible way does the US have to go to get out of this current crisis?

Ian Williams: It has to start paying taxes the way the rest of the world does - that's the precise issue. The Republicans do not want to see tax increases on the rich people - in fact it's not even a tax increase, it's a restoration of the taxes they paid before [former US President] George W. Bush reduced them. That would solve the deficit in no time at all.

President Obama is in severe risk of alienating his base when he talks about shared sacrifices because you can't share sacrifices between a few billionaires paying a few cents extra in tax and millions of hard working Americans having their social security payments reduced not least because the social security fund is actually in the black and is going to be in the black for the next twenty to twenty five years - it's actually paying money into the treasury not taking it out.

So this is not a shared sacrifice at all this is highway robbery by the Republicans on behalf of the plutocrats who run the US.

Press TV: You mentioned raising taxes. One of the things Obama did was promise when he was running for president to tax those who made over $250,000 annually. Now raising taxes is a proposed option by Obama, but will this effort not hurt job production, which is also another major issue currently in the US?

Ian Williams: We had a position, for all of his faults, when President Clinton left there was a huge surplus in the budget, the deficit had been paid off, the economy was thriving - George W. Bush came in and introduced tax cuts on the rich and disguised tax increases on the poor; the economy started stagnating almost immediately and at the end of it all we had the world's biggest financial crisis, a huge deficit which Obama has inherited and people are asking, which model works?

The model is quite clear here - if the emphasis is to pay the deficit down then taxation has to be increased, but what the Republicans are doing and in an intensely ideological way is waging a war upon the welfare states that Franklin Delano Roosevelt left. They want to attack social security and Medicare and all of the public provisions.

If they wanted to halve the deficit they could simply cut the Pentagon spending right away. They could go into surplus immediately if they cut spending on the Pentagon. But they won't do that.

So this is not about the deficit, it's about an ideological reshaping of American society for basically a libertarian pipe dream - a neo-liberal pipe dream, where every time it's been tried in the world has failed.

Reducing tax on the rich does not produce wealth it does not produce jobs it just makes the rich richer. And that introduces the types of imbalances and floods of naked liquidity and wealth that we saw producing this world economic crisis most recently.

It's because these people have so much money to spend, they're not investing it they're speculating - basically they're playing cards with it.

Press TV: I'd like to broaden the question a little bit - China owns the largest amount of US debt around 1.15 trillion dollars and they have the greatest amount of foreign direct investment (FDI) - How does this affect the US and the value of the dollar as a world currency - and this is of course in the future?

Ian Williams: The dollar I think is artificially inflated in its price. Because it's the reserve currency it has a sort of certain cushion to go with.

The minute there is a deficit of any kind... What the republicans don't have in their mind is that all those foreigners who are holding debt refusing to pay pensioners who are owed money by the government who have put their money in social security contributions, it's on a par pretty much of failing to pay foreign banks or central banks interest and the debt.

So any form of default next month at the time is going to catastrophic effects upon American prestige and what we see in the markets is sentiment is everything. The markets are not rational; the markets are run by small groups of people who are chasing their own tails in terms of money; what George Soros describes as reflexivity.

Basically, we have an instant feedback in the system - one person panics all the others panic because it's rational to panic if somebody's panicking. It's only a few very steady heads like George Soros and like Warren Buffet who keep their heads when all around are losing theirs, but the markets are mostly composed of intensely greedy essentially A-moral people who are not very rational.

And the Republicans want to hand over the world to them. It's like giving the keys to the lunatic asylum to the people in the lock down cells.