Tom Keene Talks to James K. Galbraith

Tom talks with James K. Galbraith of the University of Texas’ LBJ School of Public Affairs about the failure of the supercommittee

Why couldn’t the supercommittee get anything done?
I think the supercommittee did the best thing it could have done. Any agreement would have caused much more damage than no agreement at all.

In what sense?
Their mandate basically was to make long-term cuts in Social Security, Medicare, and so forth. That would have done enormous damage to the bulwarks of what remains of the middle class.

What would you suggest we do in the short term to restore confidence?
The U.S. government does not have a funding problem. The bond markets don’t move at all, not at all.

So what should be done?
Since we cannot persuade people to make investments in the reconstruction of the country, I would say right now the most useful step we might take is a massive increase in the minimum wage.

Would a further downgrade of our debt give you pause?
Ratings agencies are obviously a joke. They completely missed the subprime debacle, and made enormous amounts of money peddling corrupt securities to the world. Now they presume to come and pass judgment on the government of the U.S. I say give me a break. This is a complete comedy.

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