Judging Freedom - Prof. Jeffrey Sachs : American Wars and Govt Debt

Episode Date: June 10, 2024

Prof. Jeffrey Sachs : American Wars and Govt DebtSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Thank you. Hi, everyone. Judge Andrew Napolitano here for Judging Freedom. Today is Monday, June 10th, 2024. My dear friend, Professor Jeffrey Sachs joins us now. Professor Sachs, thank you very much for your time. Great to be with you, of course. Thank you. The New York Times is making a big deal out of the resignation from the war cabinet of former defense, the Israeli war cabinet, a former defense minister and former IDF chief of staff, General Benny Gantz, because he wants to run for prime minister against Prime Minister Netanyahu. Wouldn't this just be Tweedledee and Tweedledum? Isn't this just a

difference of no more than personality? I don't think we know fully what's happening, because just as we're speaking, the UN Security Council has passed a U.S.-backed resolution for essentially a permanent ceasefire. And this is a plan that Biden attributed to Israel, except the key partners in the Israeli government completely repudiated it, while Hamas had tentatively accepted it. Is this the three-stage plan that the president announced about eight or nine days ago? It seems to be, and I'm just seeing on the wires that it passed the Security Council by a 14 to nothing vote with Russia abstaining just a few minutes

ago, just before we started our discussion. Now, this suggests a further shakeup in Israel's politics if this is the case. I somehow doubt that the Biden administration would do this, but for some kind of reshuffle in Israel. I know some of the opposition leaders said that they support this. Maybe there will be a reshuffling of the cabinet. maybe the tough talk by the extremist, most extremist of an extremist government, Ben-Gavir and Smotrich will be not, or maybe the government will fall. So I think there are dynamic events underway right now, and we can't really tell. The fact that the U.S. is pushing essentially what on paper appears to be a permanent ceasefire is a positive move. Of course, there have been many U.N. Security Council resolutions completely ignored by Israel and by the United States. So whether this is something more real in the sense

that it will be implemented is another question. But I do think that something is changing right now. But with 80% of the Israeli public supporting the war and the manner in which it's been waged, which is slaughter of innocents and genocide and war crimes? Is it realistic to expect that there would be change of policy because of a vote in New York? Well, Israel's policy would change completely if the United States policy were to change. Israel cannot make this war without the United States. Again, it may be that some of the major Israeli politicians outside of the current coalition have said, go ahead, and that they figure that there is some kind of governing majority for a ceasefire. Again, I think in these matters, by the way, the American public has little say. I don't think the

Israeli public has much say. I don't think these are democratically taken decisions. I don't think anything is explained honestly to anybody by our governments right now. So I don't think anything is explained honestly to anybody by our governments right now. So I don't think that one could read decisively anything from an opinion survey as to how events will unfold. The U.S. is absolutely facing diplomatic isolation if it continues on the current course, in a rather stark way. Let's recall events of the last few weeks, aside from the continued slaughter by Israel, which is massive war crimes and genocidal behavior. But diplomatically, the Arab League countries, the 22 countries of the Arab League met in Bahrain in mid-May, as we've discussed, issued a strong call for the two-state solution. And then immediately, and I think this is quite telling, the king of Bahrain started international travels. And where were the first two stops? The first stop

was in Moscow, where President Putin said, yes, I support you. The second stop was in Beijing, where President Xi Jinping said, I support you. Now, is the United States going to see its geopolitical position completely ripped to shreds by the likes of Smotrich and Ben-Gavir? Well, it has so far, I would say. And Biden is courting electoral disaster for that as well. But geopolitically, the U.S. would face complete isolation if it continues the way that it's going. So it may be trying to retake the initiative by proposing something that actually could have international standing. I have to say that anything that can work

will have to be done to a significant extent despite Israel. This is clear. It will have to be imposed to an important extent. Israel will have to be told, no, you cannot continue a murderous rampage, period. It's not your choice. It's not your taste. It's not your desire. It's not going to happen. That's the only way this murderous rampage is going to stop. Over the weekend, the IDF slaughtered 260 innocent unarmed civilians in Gaza in order to extract four innocent unarmed hostages from Hamas and another 600 Gazans were injured and two sources independent of each other report that American Special Forces were part of this yes and then I would add on top of that injured yes wounded course, they were caught in an Israeli massacre in a refugee settlement

that was known it was going to cause hundreds and hundreds of casualties. It was a brazen, disgusting action in which the United States, again, was surely complicit. These are war crimes, and they are very serious war crimes. And the fact of the matter is that these four hostages could have been released absolutely peacefully, according to the deal just voted by the UN Security Council. There is no justification whatsoever in killing 270 plus, and the numbers continue to rise, and wounding hundreds more for four hostages that could have walked out peacefully on the basis of a ceasefire agreement agreed by Hamas and rejected by the Israeli extremists. So this was another major war crime, and I'm sure that the United States knew about it. It may have been actively complicit in it, but it is the kind of outrage that will only stop from the outside.

It will only stop when the United States finally has enough of its complicity in genocide. When will the resistance in the Middle East to the Israeli criminality come out of the closet? People in the Middle East do not want a wider war. It's perfectly understandable. They don't want more war. The Iranians don't want a war. The Saudis don't want a war. The Egyptians don't want a war. The Syrians don't want a war. The Jordanians don't want a war. You know, they don't want more destruction. They want Israel to stop a genocide. They want the United States to stop arming a genocide. So they have been saying for months, don't provoke us into complete disaster in our region. We've had enough of it. They have gathered repeatedly diplomatically to say two-state solution.

They have said mutual security for Israel and for Palestine. They have completely proven that it is Israel which can't say yes to peace and that the United States absolutely is up until this moment 100% completely beholden to the Israel lobby. Now, whether this will change because it's so disastrous for the United States to follow Israel down this absolutely dark path or not, this is what we're trying to ascertain right now. But it's not a matter of goading them that they're itching for a provocation and they want to let loose. They want to live their lives. They need to have economic development. They've got a lot of people in a lot of need, and they're saying we want peace. Can't you understand that,

United States? So apparently, we're going to put up a full screen. Apparently, we're going to put up a full screen. Apparently, there are serious allegations that Tony Blinken's floating dock was used for U.S. special forces to meet there by helicopter in order to participate in this slaughter that killed more than 250 innocent people. My argument is, and I think you probably agree, Professor Sachs, the U.S. is complicit in these war crimes, absolutely complicit. Well, there's no question about that, because we have been arming Israel, and we have been providing intelligence for Israel. This might be the first time that we provided troops on armed uniform, troops on the ground. Well, of course, I'm seeing this for the first time and all sorts of allegations are made. I have no idea whether it's correct or not. But if it is correct, it's, of course, shocking. But frankly, we've seen enough that's completely shocking.

We don't need even to pile on. The U.S. is complicit in a genocide. This is the basic point. And the United States people know point, they get arrested. They get beaten on their heads by the police. This is the basic situation we're in right now. These decisions are in the hands of a very few people. They've made terrible decisions up until now, and maybe they made this awful action this past weekend. Taking a broader view of all this, how dangerous, I'm going right to your wheelhouse, how dangerous is the debt of the federal government of the United States? Well, right now, depending on how you count, it's somewhere between $27 and $34 trillion for an economy somewhere around $27 to $28 trillion. Everything depends on which dates, which calendar, and there are different definitions of the

debt. What's total, what's held by the public, what's intergovernmental. I just want to make sure that nobody gets fixated on a very specific number. The debt held by the public, one concept, is around 100% of our national income. The interest on that debt, because now the interest rates are 5% or higher on short term debt, the interest is now several percent of GDP just to service the interest costs on the debt. And the debt has risen since the year 2000 from around 30% of national income to roughly 100% of national income. It's on a tear, by the way, upward. It's on a tear

because both parties are complete fakes. Neither party cares at all about budget discipline. They like tax cuts for their rich clients. They like tax credits. They spend money where they want for their particular lobbies. And so both parties have run up this debt, doesn't matter whether it's Democrats or Republicans. The Congressional Budget Office makes an assessment each year of the look ahead roughly 30 years on the debt and based on just a kind of mechanical extrapolation if we keep the policies that are on the books right now. And that extrapolation, not a projection because things will change, but an extrapolation of current policies, puts the debt close to around 200% of GDP sometime around 2052, 2053. Paul Jay That's not sustainable. David Schawel

So all of this is no way to run a serious country. And the results show up in many harmful ways. It shows up in slower economic growth. It shows up in budgets that cannotS. dollar and in the use of the U.S. dollar in future years, which in turn will have knock-on effects on our credit ratings, on our interest rates, and so forth. Countries that get into a debt crisis that is chronic and a reflection of a political system that is dysfunctional, like ours is, get into all sorts of economic troubles down the road. We've largely avoided that kind of crisis for a long time, but we have been building up the debt relentlessly. And thank you, U.S. government, it's all your wars. One war after another, Afghanistan, Iraq, Syria, Libya, Ukraine, your 750 to 800 military bases overseas, your trillions of dollars of military spending as if money doesn't matter. The extra $61 billion just voted for these useless, cruel wars in Ukraine and in Gaza that should end immediately at the negotiating table.

This is a significant part of where our debt comes from. The other part comes from our domestic lobbies of very rich people who don't like to pay taxes and from the giveaways of the government. Is the economic dominance of the West now history? Well, yes, in the sense that we came to know it and treat it over a period of two centuries. It's a fascinating story. story, essentially starting around 1500 with the voyages of discovery, so-called, of Christopher Columbus and Vasco da Gama and so forth, Europe started to spread across the world in transoceanic empire. First the Spanish and the Portuguese and later the Dutch. I live in New Amsterdam, after all, now New York City, but the Dutch and the British and the French and so on.

All of this meant that what had been an Asia-centered world for at least a millennium before 1500 increasingly became a European-led world. Now, that was strange because Europe was kind of the poor edge of the Eurasian landmass. The real weight of the economy, of population, and of technology for vast periods of time was China and India. And throughout history, the Arab lands were conveyor belts to this poor western part of Eurasia of advances that were being made elsewhere. Well, by around 1800, Europe was already with colonies around the world in the Americas and in Asia. But then a funny thing happened, and that is that James Watt improved the steam engine that actually was first developed in China centuries earlier, then reinvented, as it were, in Britain at the end of the 17th century. And James Watt, tinkering in his lab in Glasgow University in the 1770s, said, I got a good idea how to make steam power a lot

cheaper and a lot more efficient. He put a condenser onto the steam engine. And lo and behold, Britain became the first industrial power. And then in the 19th century, Europe basically took over the rest of the world. The United States was still fighting our battles with the Native Americans and our civil war. So the U.S. got into the international imperial scene only starting in 1898 after the continental United States came under Washington's control. Well, by the 19th and 20th centuries, Europe was ascendant, powerful, dominant, militarily colonizing and imperializing the rest of the world. And if you looked out in 1900, you would have said, well, that's forever. The advantages over the poor rest of the world are limitless.

Of course, Europe then did the typical thing, which is it got into two civil wars. We call them World War I and World War II. They destroyed themselves and they ended the European empires. The United States came in and said, okay, we'll take over a lot of that. Thank you. We became an imperial power using the CIA and our worldwide military bases to dominate countries around the world, to change their governments, to overthrow governments, to do all sorts of things, because we could, because we were economically dominant. But the point of your question and the point of my long recitation is that with the decolonization, the end of European imperial power, starting at the end of World War II and into the 1950s, 60s, and 70s, sometimes with these wars of independence, sometimes peacefully, countries started to develop literacy and school systems and

infrastructure and technology. And lo and behold, of course, this came most dramatically in East Asia. First, Japan's recovery after losing the Second World War, the War of the Pacific. Then countries like Korea, Singapore, and parts of China, Hong Kong, and Taiwan. Then China started its remarkable catching up around 1980 when Deng Xiaoping, probably the greatest economic reformer in history in the scale of individual impact, helped to change the Chinese approach to an open economy and a market economy. And China had dramatic growth for four decades from 1980 to 2020. India started fast growth about 20 years behind China. And when you look at it today, and this is the bottom line of the question, I hope I didn't just ramble on uselessly. No, no, no, it's a fascinating history.

The bottom line is that if you look just 30 years ago, 30 years ago, the so-called G7 countries, the big seven on our side, quote unquote, the U.S., Canada, Britain, France, Germany, Italy, and Japan. That was nearly 50% of world output. And if you look at what today we call the BRICS countries, Brazil, Russia, India, China, South Africa, and now a number of new members, Egypt, Ethiopia, the United Arab Emirates, and Iran. And maybe Turkey. And maybe Turkey soon. And by the way, there are dozens that want to join that grouping. But those nine, back in 1994, just 30 years ago, had about 18% of world output as a share. This is taking the gross domestic products, that measure of the size of an economy, at what we call purchasing power parity. So in other words,

more technical issues. But when you compare economies, you use a certain standard. And the G7 was about 45% of world output, and the BRICS countries were about 18%. Now it's all flipped. Now the BRICS countries are about 36% of world output, double what they were 30 years ago. and the share of the G7, which is us and those other large so-called Western countries, plus Japan, are now about 29%. So the BRICS group is larger than the US-based group. Now, here's the issue that I keep coming back to. In Washington, of course, this is a kind of panic to the level of neurotic state of anxiety. To me, as an economist, it's, oh, it's good. You know, other countries are catching up.

They're not in poverty anymore. Isn't that nice? But if you're playing a board game, who's on top, not are you well off? Oh, this is horrible. They're catching up. And what it does mean is that the U.S., which would snap its finger and get its way, can't do that anymore. The United States finds itself even isolated on issues like Israel and Palestine, just alone with Israel right now. Yeah, the king of Bahrain goes to Moscow, he goes to Beijing. This is the real life. Let me just stop you for a minute, and thank you very much for the really superb history. Does the government of the United States, does our hegemonic culture,

that we are the indispensable country, understand what you just described? Not at all. It's so weird. And it's very annoying to me, Judge, because these are my students, many of them. So they just have to listen to their old professor. They do not understand this. Biden, of course, he lives in the past. You listen to him, he lives in his imagination of the 1980s and 1990s. But there's been a generation, I've watched it at the Harvard Kennedy School or at Columbia or elsewhere, these people are taught, you are the unipolar power. They're not taught that by me, but they are taught that by a lot of our international relations professors. And by the way, they're paid to learn this because the military industrial complex supports a lot of

these institutions, these so-called think tanks, which aren't thinking very hard. My work for the last 40 years is working in places we call the emerging and developing economy. So I go to China several times a year. I've watched it for 43 years now with my own eyes. It was poor in 1981 when I first got to Beijing. There were no personal cars at all. People were wearing Mao suits. There were a lot of bicycles on the street, but there were no personal vehicles at all. It was impoverished. This was just after the end of the Cultural Revolution. Deng Xiaoping had just come to power. Now you go and you see there are more than a hundred cities in China of more than

a million people. Sometimes you go to gleaming metropolises in China, gleaming fancy stores, and you realize, gee, I never even heard of this city before I arrived here earlier today. I mean, that's literally happened to me on a number of occasions because there are more than a hundred. I don't know many of them, but I go there for visits or to give a lecture and you see the wealth. And when you travel around the world, you see how much change. And by the way, I take heart from it because I want people to live well. I don't want people to live in misery so the United States can say we're number one. I want people to live well. And I don't think they get this in Washington. They are trash talking

China until today. Why? China's not a threat to us. It is not an enemy to us. It's just catching up for lost time. And by the way, a lot of the lost time came from the horrible misdeeds by the United States, by Britain, by other Western powers, and by Japan on China in what they call the century of humiliation from 1839 to 1949. What happened? China was repeatedly invaded by, quote, our side. You know, Britain went to war in China in 1839. For what? Well, it's called the First Opium War because Britain told the Chinese leaders, you must open your markets to our opium because we want to get rich addicting the Chinese people. And when the Chinese leaders said no, the British invaded. They did that twice again in the 1850s. We're nasty. This is what real imperialism is about. Of course, Japan invaded in the 1890s. It invaded in the 1930s. China's making up for lost time. Are they an enemy? No.

The problem for the United States is there are a lot of Chinese people, 1.4 billion. We're 335 million. We're a fourth of the Chinese population. So now that China is about 30% or one third of our living standards, but four times the population, if you do the arithmetic, they're a larger economy than we are. How dare they be a larger economy, say our policymakers. We need to contain them. We need to stop them. This is the mindset in Washington that's so dangerous right now. And they don't understand that what's happening is good. Actually, the United States wanted to spread the benefits of modern technology. It helps all of us that we don't have a world of impoverishment elsewhere and instability, and a bigger market means more innovations, and it means better living standards if we use it right, rather than for all these

horrible and useless wars. But when you ask, do they understand this? No, because the Council on Foreign Relations, which I'm a member, publishes a journal called Foreign Affairs. And it's frankly like a neurotic journal because every issue is, oh yes, the United States can stay number one. Not can the United States be safe, healthy, prosperous, but can it be number one? That's what counts to them, not to me. What counts for me is our security, our safety, our well-being. When we pick this up, I will ask you about the CIA's role and the danger of the American national security state. But thank you very much for this fascinating history. I know this is your wheelhouse, and I can tell from the number of people watching and from their comments, it's very much appreciated,

Professor Sachs. We'll look forward to seeing you again next week, my dear friend. Absolutely. Thanks a lot. Bye-bye. All the best. All the best. That is why Columbia students are so fortunate to have lecturers who can rattle off a history just like that. Tomorrow on Judging Freedom, Colonel Karen Kwiatkowski, three o'clock in the afternoon Eastern. Senator Tommy Tuberville is going to let Senator Lindsey Graham have it right here. Lindsey Graham's not going to be here, but Tommy Tuberville will give him a piece of his mind at four o'clock Eastern, at 4.30 Eastern, the inimitable Scott Ritter, and at five o'clock Eastern, our dear friend Matt Ho.

Judge Napolitano for Judging Freedom. Altyazı M.K.