US government shutdown 'could be devastating to the weaker members of society' - expert
Diane, thank you for being with us. So, Republicans voted to cut Obamacare. Do you think that this will be passed? It seems that the Senate and Congress will not approve it.
No, I don’t think that will go through. The Senate is not going to pass uniformly. But I think the problem is actually much bigger and it is beyond Republicans and Democrats.
Okay, what is the problem?
The problem is that really since the repeal of the Glass–Steagall Act separating commercial saving and loan banking from speculative banks and the policy, that we’ve had starting actually with Bush and continuing through Obama, of trillions of dollars of bailouts being printed we are still doing $85 billion a month in quantitative easing. But we don’t have a productive economy. We are not actually producing anything that is worth this amount. So, all the tough ends we have postponed as the inevitable blow out of the transatlantic system. And I think that’s what we are actually looking at. And these debates about debt ceiling and budget, and so on are like a smokescreen over the magnitude of the actual crisis.
Let’s go back again to the vote. Does this increase the stalemate on a much needed decision for on the budget?
Perhaps. I think we are in a very unpredictable situation. LaRouche had said that just the other day when I was speaking with him. I mean, any number of things could happen which will turn the debate. For example, happily, with the Russian diplomacy we have managed not to launch strikes on Syria, which was something that would have made everything quite unstable and dangerous. And as I said, the Congress right now is very unpredictable.
And I think people might be interested to know there is a battle raging on the Glass–Steagall Act in both the House and the Senate. And the legislatures around the country with the Wall Street banks making, I’ve been in Washington quite a bit over the last couple of months, and I can tell you that JP Morgan and Bank of America, all of them are up and down the halls of the Congress trying to prevent the separation of the banks and anything that would cut off this seemingly unlimited pumping of liquidity. And I cannot predict what the Congress is going to do or how it is going to play out. I think it is very fluid and very unstable.
I’d love to have you back and talk about the Glass–Steagall Act and how the big banks don’t want to be cut out of this. Do you think the US government may shut down?
I can’t rule that out as a possibility. I don’t think it is particularly likely at the moment, but if it were to occur I would not be surprised.
Okay, let’s say that it does. What would be the consequences of that?
I think it would be devastating for people who depend on Government programs and also military functions, things that the Government is directly responsible for operating. We already have, as you heard, the defunding of Obamacare. There are massive cuts to the food stamps program in the US. So, depending on how long the Government will shut down, it could be quite devastating to the weaker members of our society.
Let’s talk about that for a moment. What are the consequences of the food stamps being cut as well?
If that is implemented, if that manages to go through… I mean, we have people starving. I happen to know of a person (just to give one case example), an elderly man, he and his wife were both collecting social security. His wife passed away, so he no longer gets her social security. He was receiving $123 worth of food stamps per month. He was recently cut down to $16 per month.
How do you live on that?
You don’t. He was trying to get someone to move into his house and pay for a room. I mean, you just scramble to be able to eat. It is really an embarrassment in the US to have people in such a situation. And this is a man who worked hard his whole life, who ran a relatively successful business in Manhattan and now is reduced to this.