evening and welcome to be alone or show where you'll get the real headlines and none of the mersey were coming live out of washington d.c. i'm lauren lyster in for alona now the debt debate is bringing us one day closer to default the u.s. may lose its aaa credit rating and everyone of course is worried but these ratings agencies were so worried about how the shoddy track record to begin with their wives and all from the business of business insider is going to be here to talk

about that and don't forget at the same time folks we are still out war a few of them actually at a price we cannot separate from our fiscal crisis and the longer yet it is all being overshadowed by money talk we will tell you all the details you need to know about afghanistan pakistan and other places where the u.s. is dropping bombs still plus senators may be sneakily in talks to renew a law that lets buy agencies track your location at any time with no oversight we'll have all of that and more on tonight's show but first what did the mainstream media. all right as the fall continues to threaten the country the mainstream media took a break from their coverage of that to report on the horrible fate that has the fallen a popular game show host take a look. game show host elektra bell extra back found himself in serious jeopardy

when police say an intruder broke into his san francisco hotel room to state evening jeopardy game show host alex threw back toward his achilles tendon chasing down a burglar. he. will have should reach morro in view to cast for six weeks. ok we all love jeopardy i have to admit that i do feel low to show staff to we are all huge fans we even play it live at times and we feel real real sorry for alex track that he has gotten rob has hurt his ankle it's horrible but does this really mean there are reports on all the mainstream networks live hits with reporters for the very latest on his tendons seriously i look at the ticker at the bottom of one of those reports had the suicide bombing in iraq well they're devoting the spotlight to her back anyway as the debt stalemate continues and doom and gloom continues to be debated

we think that an important part of that story is being largely overlooked the us is aaa credit rating what happens if the us loses it everyone is worried about the three ratings agencies that are threatening to downgrade the u.s. debt and what that means the calamitous chain of events that that could lead to some analysts say that a downgrade is inevitable at this point even if the debt ceiling is raised eventually some like investor jim rogers who i've interviewed many times he thinks the markets already accepted that the u.s. is downgraded but what about the track record of these very ratings agencies that everyone is so concerned about let's talk about japan it's a great example standard and poor's downgraded their rating not one not two but the re times about a decade ago between two thousand and one and two thousand and two and what happened to the markets freak out you know the market did not freak out. government borrowing costs did not soar and back there was actually

a steep decline and borrowing costs for the country now it's been a decades and chapin lost the aaa credit rating and its ten year yield is close to a whopping one percent and its currency hasn't been taken down and it's actually at the strongest levels of the decade now just as a refresher on government it's basically the interest rate that the government pays on its gone so if it's low which one percent sure is that suggested investors are willing to make very little money on that investment in order to hold that debt now ok japan that's one country what about others let's look at canada australia they have lost their aaa credit rating in the past they were only marginally impacted and they got their aaa credit rating back after a few years old discipline now exact it actually turns out that when you look at the history of all aaa downgrades by s. and p. yields have traditionally gone down afterwards not to mention there are other

examples ratings agencies are blamed for missing the housing crisis the financial crisis inquiry commission and facts reported back in january of two thousand and eleven that the three credit rating agencies were key enablers of the financial meltdown enablers the mortgage related securities at the heart of the crisis could not have been marketed and sold without their seal of approval that was a quote those were their findings the inquiry commission now in addition to all of those examples the u.s. dollar and u.s. debt have been considered safe havens in the past and as joe weisenthal who will speak to you in a minute has pointed out on the business insider the truth is that there really isn't that much other aaa rated stuff for people to invest in so is everyone calls calamity on the loss of the u.s. is aaa credit rating not questioning the history of the ratings agencies who threaten to take down that score that is what the mainstream media is missing.

all right the debt stalemate continues in washington lawmakers are heading for another showdown tonight as if we haven't had enough republicans in the house are set to vote on the speaker's plan which of course the senate says that it won't pass now the republican and republican plan has gone down to deficit cuts whittled down to just nine hundred billion dollars over ten years nine hundred billion pretty wimpy compared to the fourteen trillion dollar debt nonetheless the eleventh hour deal making or the lack of it continues the u.s. further towards this scary default deadline so now everyone's wondering if come tuesday washington hasn't gotten this figured out who's going to get paid conventional wisdom seems to think that it's investors and on top of that predictions about and over whether a downgrade to the u.s.

is aaa credit rating is coming on tuesday and how markets the world over will react to that well here to help us understand all of this is joe weisenthal he's deputy editor of the business insider and it's so nice to see you thanks for having me yeah so first of all as i just pointed out minute ago and as you pointed out and you're writing the track record of these ratings agencies isn't exactly stellar do you think that means that if the u.s. gets downgraded it won't be armageddon. well you know i don't think it will be armageddon that's not to say there won't be issues there are the key thing is that there are investors who are compelled by regulations or rules that require them to hold aaa credit and that could become an issue if the u.s. lost that status and how they would never gave that. becomes a problem as you said earlier one thing going in the u.s. his favor is that there isn't that much other aaa rated credit out there of any

volume so it's not like people can just switch to something else is pretty scarce so popular line of thinking is that if the u.s. were to lose its aaa rating that all those rules would kind of be suspended or ignored but you know you don't really know how things are going to go in practice and you know until you get it you're not sure i guess what i would say is that this is probably the overhyped isn't it because i would be the fold on the debt would be a big crisis payment produce zation that forced the government to cause cut spending would hurt the economy even if we didn't default and then somewhere below that i would put the aaa rating is kind of it should be down there on people's concerns like me ok so what do you think wall street is concerned about most when you know their banks have come out warning obama and congress to reach ideal. very soon they say that this is a very grave danger is if i think remain isn't reached and they point out a number of things they named all the things that you just did what do you think

that they're most concerned about and you know do they really think that this is going to be such a bad situation or are they looking out for their own interests and talking their own books. i think it's a bit of both i think if there were they're worried that it could get to a situation in which maybe there is an actual default on coupon payments and that would be. probably catastrophic it could easily start a banking crisis and unlike the last period in crisis that was so true doesn't it there wouldn't be a federal government with the ability to bail it out so that is extremely scary but look we're just heading into financial uncharted territory here and bed scares everyone i think if you know in the very few individuals will say i expect a true default but the fact is they just don't know what's going to happen on august second or august third or whatever and no one wants to see that and why you might say that the wall street banks are just looking out for themselves there's

just no separating the banking system from the overall economy ok speaking of markets speaking of people being scared how do you read what's going on in the markets i know that's and p. five hundred for a fourth straight day in a row but you've also seen some complacency you've also seen some predictions that stock markets are going to tank and then them not tank so what do you think investors i thinking. we're going the stock market the first i would say is that despite the following is still pretty close to its highs of the year it's actually remarkable given how much has been thrown at this market in the form of a weak economy and this crisis of the situation in europe of the japan earthquake how well stocks have done i think there's diddly no sign that stocks or anything else is really panicking yet you start to see it a little bit in the credit markets some nervousness but for the most part it's just wall street has this view and everyone keeps saying it go they'll get it done in the end they always do maybe there will be a tarp type vote where there is like a panic and they'll get it done i don't know i think the market's been pretty behind the curve i think

a lot of market participants don't understand how washington works they don't get the dynamics they've been pretty flat footed on this pretty surprised that it's gotten this far so i'd say part of the reason the market hasn't panicked maybe just because they don't realize how serious the danger is ok do you think that there is there is danger that lawmakers won't get this done someone that has an understanding about. yeah i do i would still say the most likely scenario is that they get something done but. there's a lot of moving parts here and there's not a obvious or easy path from now to you know passage in the next few days i could spell out that you know people could spell out that a lot of this might happen and they'll vote on this in the senate and the house but this is incredibly dynamic there's definitely no historical precedent for this do you think that i know you said that you think that maybe investors don't quite understand how washington works do you think that washington understands how the market works do you think that lawmakers plan to vote on the plans tonight after

the market closed on purpose. there is awareness of the markets are watching last weekend for example you heard john boehner say they wanted to have a plan by the time the asian markets opened they didn't get a plan and would there's no question that especially the leadership is looking at the markets and you know what i'm certain the white house and the treasury or looking at the markets so there's awareness of it whether they really get what the markets are looking for i don't really know and i would say that outside the leadership the rank and file especially of the tea party republicans there's a probably a pretty big ignorance of how the markets work i think can be geithner usually has a pretty good eye on what wall street and what the market i think is always pretty concerned about what they're thinking but what about what economists are you thinking that say that the bigger threat to the u.s. is not you know the debt ceiling is not this debate right now that the bigger threat is the u.s. debt problem that fourteen trillion dollars that that's so high and that reining it in is really what global investors want in order to assure the faith and credit of

the u.s. the lawmakers have anything on the table that sends that message to the world i mean painters plan out what could nine hundred billion bucks over a decade. you i don't know to be honest i've been calling this a pretty split on that yeah there are a lot of people warning about this as the us did but there are also a lot of economists warning about what spending cuts will do to the u.s. economy in the midst of a very weak recovery that's already faltering if you look at china and you look at europe their project is concerned about that what does that mean if the u.s. engine of demand really slows down over the next year to their economies. it is a mix of real quickly because i want to get in there because you mentioned that people that advocate for stimulus and spending some are coming out saying all of this debt talk shows that keynesian thinking is dead and that this debt debate has proven that do you think that's true yes or no no i think. he is not very

popular right now in motion soon but i don't think it's been debunked or anything like that all right well we will have to see what the areas argue bunking which proved true as we had closer to this d.-day of default on tuesday see what happens i want to thank you so much for coming on the show it's so nice to see you thank you as always and still ahead right here stick around the twin terror attack in norway has ignited a debate here in the u.s. we'll look at prison conditions in both countries in just a minute to compare and while everyone is focused on the debt ceiling debate we turn our attention to u.s. wars they are still raging overseas lou in a sense foreign policy analyst at the cato institute joins us to talk about u.s. war policy in just a few minutes. you know sometimes you see a story and it seems so for sleep you think you understand it and then you glimpse something else you hear or see some other part of it and realize that everything is ok if you don't i'm sorry welcome to the big picture.

and yet. i. feel for fear for. the so. let's not

forget that we had an apartheid regime right. leg i think rock easy to be funny well. whatever government says they're keeping safe get ready for freedom. all right anyone who's seen the pictures knows there's been an outcry from some groups over the way the norway bomber and shooter anders breivik may be imprisoned you see the alleged right wing extremist who killed seventy six people could end up at a seemingly pretty cushy prison called howden prison although we should know that he's

held no that he's currently held in solitary confinement at a different facility he's not there but as of now breivik is charged with terrorism related charges which carry a prison term of up to twenty one years behind bars if convicted but if he's charged with crimes against humanity he could get thirty years may seem low but most people are concerned about the place where he may end up headlines have been everything from the luck super the super luck super max to world's poshest prison to if i ever get sent to jail i hope it's norway's held in prison and fox news of course spent time discussing the luxuries of this prison in detail it's a gold bedroom at the holden prison complete with a flat screen t.v. prisoners have access to a state of the are jammed where they can shoot hoops or do a little rock climbing and there's artwork sprinkled throughout the facility including this mural and we're not even showing you the prisons recording studio where inmates are were pursing the prisons first musical production. that's

a bit of anxiety in that report i personally like the prisoner artwork but aside from that the daily the new york daily news also expressed disgust over breivik possibly entering this facility in an article they wrote such as life in the hold in prison we're doing hard time means doing without h.b.o. and where inmates don't fear their showers because every prisoner has a private bathroom ok back up wow so the new york daily is angry because breivik won't fear for his safety when he showers because the threat of rape isn't always just around the corner when he bends down for so ok it's obvious that the united states and or we have very different opinions on how prisoners should be treated in norway all these elements like recording studios personal bathrooms personal trainers are considered crucial for the rehabilitation process which is what norwegian officials consider the incarceration process and it's clear of course

that the united states has taken a different approach overcrowding is rampant medical care is poor and the prevalence of gang violence is on the rise within prisons but let's take a look at some of the hard facts here some statistics from time magazine ok when norwegian prisoners are released from jail only twenty percent of inmates return within the course of two years however the us has a much higher rate of return with the numbers hovering around fifty to sixty percent not to mention the difference in each country's prison roll norway has about sixty nine thousand inmates per one hundred thousand people the u.s. it has seven hundred fifty three per one hundred thousand people. now that is a big difference so is this proof that norway's rehabilitation approach for prisoners is actually working i'll let you decide for yourself but i want to go back to the media coverage i want to be clear i do not think that any man who has massacred innocent people should go unpunished i think that breivik should face the

most serious repercussions for what he has done if convicted for the new york daily to be disappointed that the norway bomber will not be rate in prison that should maybe raise eyebrows i understand that people are in pain and mourning after the horrific tragedy and oslo but this is to feed a little of the purpose of showing your humanity to mourn something like this when at the same time you're beginning to lose your own sense of it by suggesting a prisoner should be raped perhaps it's time for an ethics check here but i think it's safe to say that the daily crossed the line this time. and now as the debt debate eclipses all other battles do not forget that yes we are still out word the united states is still at war and those wars and us defense spending are incidentally costing a lot of money and they can't really be separated from the fiscal crisis the u.s. accounts for close to half of global spending on defense the wars have cost one point two trillion dollars since two thousand and one that is almost the size of

the country's deficit and some put the figure much higher a brown university research project with the final bill at least three point seven trillion to four point four trillion yet u.s. troops are committed to afghanistan until two thousand and fourteen some u.s. officials say many more years into the future baby what's needed people are still dying just today more than twenty people including a b.b.c. reporter were killed in a suicide attack the taliban claimed responsibility for that one and in iraq this week in the country's leaders are supposed to decide whether or not they'll ask u.s. troops to stay be on the december withdrawal deadline the u.s. of course is offering them and then there's u.s. involvement in libya along with covert operations at some point to war in places like pakistan yemen and somalia so here to talk about all of this going on and what we really need to be focusing on is blue in a sense she is foreign policy analyst at the cato institute thank you for being here thank you now i know that this is something that you focus on when you travel

to pakistan and you travel to afghanistan as well i'm curious how you read the violence that we've seen recently against u.s. officials statements because today we have an attack by the taliban the u.n. put out numbers saying that violence and afghan casualties have increased in the first six months of this year to two very high levels to i think record highs there increased sharply and then this kind of seems to contradict what u.s. officials have said you have betray us before he went out saying that you know violence is on the decline and you had obama saying the taliban is broken is a situation getting better or worse there i think the problem in interestingly enough europe or or truce. we call these gains that we've seen in the past year or so alleged gains fragile and reversible and as we've seen over the past several months there's been a slow chipping away of the fragile and reversible security of the u.s. and coalition forces have tried to bring about especially in the southern and eastern provinces i think a lot of the this sort of targeted assassinations that we've seen over the past couple months are that some of all the cars were the head of the kandahar police

chief and we also saw the attack on the intercontinental hotel just recently i think all of these sort of bouts of violence shows how fragile the coalition government that we've supported for the past ten years really is and how it's sending endless streams of foreign aid dollars to a fragile corrupt incompetent illegitimate regime ultimately will begin to unravel whether we remain in the country indefinitely or whether we pull out tomorrow i think unfortunately we've seen the history of the country the ethnic and political fracture of the country is beyond our wisdom is beyond our patience and it's beyond our ability to sort of carry out this this humanitarian nation building a humanitarian peerless mission i think you know i want to ask you because i think i interviewed you last about this probably more than a year ago and at that time you said this is a classic case of mission creep i think absolutely and sense that you've seen more rhetoric about how there's no military solution this needs to be a civilian and a diplomatic solution here and that's what we've seen many officials push for is the u.s. had they had further and further in the wrong direction i think so i don't think

we'll actually be leaving in twenty fourteen i hope so but unfortunately you know we've seen president obama say that we'd be out of iraq within sixteen months of going into office and now he has his own pentagon officials trying to big the iraqis to stay there he said you'd be out of iraq now we're in libya so i mean even the promises of getting out by twenty fourteen i think are highly unlikely especially when we look at the expanse of world that the united states has taken in terms of building permanent regular basis throughout the country with dozens of a good basis all across any road that's a question i have for you because you have one last time you visited me last night because there have been a lot of rumors of permanent bases are planted. and as you've seen some senators talk about that do you know that there are plans for permanent bases have you seen permanent bases what they're calling it it's a little rhetorical trick because joint bases because the afghan security forces aren't competent enough to operate them independently earlies operate in an inherently coalition forces so beyond twenty fourteen it's likely that we're going to have u.s. and coalition forces in a training position or a support mode for these joint bases but in all intents and purposes it will

actually allow the united states to have a power projection presence in central asia in china in russia's backyard allowing of course the indians and pakistanis to sort of take root there all of course to the detriment of u.s. interests and it continuing to evaluate and of our power of our resources and of our military strength why when wars are so expensive defense is so expensive and our country is and its debt crisis that lawmakers have been talking about nonstop for twenty four seven last few weeks and months don't you hear more people in washington saying that clearly you're not the only person that has this information i think some of my colleagues at the cato institute i think the they're just cynical as me i think they would argue that there's a pervasive hold within the congress and within the executive branch of the military industrial complex unfortunately there are many people within the within the beltway who profit off of war in this not necessarily security folks but also development folks we see whether it's come on it's whether it's the weavers or we see these huge development construction companies that have left the country of

innocent and riddled with failed foreign aid projects there's tens of billions of dollars that are being spent but even though those dollars have been wasted you know no policymakers and say we're going to stop and pull our forces out or sort of stop our humanitarian mission because again they sort of gloss onto these altshuler sticky aims and at the same time underneath those altruistic gains we see a lot of money being spent a lot of people being killed and at the same time you hear reports came out earlier this week you had reports of counterterrorism officials and leaders saying that al qaeda is on the brink of collapse that after osama bin laden's death after year. they said it's collapsing what do you believe that and if so why are more people questioning why then we're in afghanistan at the height is going to weaken well before the. assassination or really that killed him even before it but we only know nine is where we really saw his capabilities severely severely diminished whether that was in pakistan or in afghanistan or in yemen in somalia and i think now we

sort of seen the shift in focus to the horn of africa and now that's sort of the new i guess the new mission that will allow the united states to sort of begin poor in its resources pour in the nation building. in the humanitarian peerless aspect it's unfortunately i think a lot of people they want to stop short and not really voice their opinions because they don't want to seem to be unpatriotic but it's incredibly patriotic to be critical of expansive government power that is leading to the deaths of innocent civilians and of course our men and women in uniform but if those are where the threats are shifting and coming from does the united states need to shift its resources and protect the country from those threats we've made it ok to be much much menace much more menacing presence that really is it's not this existential threat against the united states can be dealt with through terrorism operations it does not need to require at least one hundred thousand foreign troops in these foreign countries and i think honestly i think that drones of course are a lesser of two evils compared to having hundreds of thousands of goods on the

ground but at the same time i think drone operations enhanced the proclivity to want to use an insert u.s. military power so there's also a cost to rely too much on kind of terrorism as well but i think that that's again the lesser of two evils and just quickly with this weekend being a deadline where an iraq you know they're going to say whether they want troops to stay or not there's a december deadline do you think that it even matters i mean are you it's true it's just going to stay there anyway or there's a mercenary army going to protect the state department very well i'm happy you brought that up in fact i think a lot of people who have been critical about the war just in the last several months have been bringing up the economic argument but. we're going to be scaling down somewhat in the next you know several months at least until next year but we'll still be having twice the number of troops compared to when obama took office and by the end of next year around the campaign season which is convenient of course for president obama but realistically we're not going to be decreasing the amount of money that we're being imported i mean just in fact for a pentagon official just recently was quoted as saying that we spent twenty billion

dollars a year on air conditioning alone in afghanistan in iraq for the troops i mean so these are these are costs are either ignored or they're papered over because of again these games that people continue to invoke when you look beneath the surface surface needed reading about what's really happening on the ground no one really support what we're doing there while i want to thank you for giving us your insight as you spend time there and your research and you have a great perspective thanks for being on the show now instead of i'm here tonight our thursday edition of showing how class not everyone is focused on the debt ceiling talks there is actually a debate in d.c. bright now over a number of strips away more of your civil liberties we'll talk about the fights and then just. do the work to bring justice or accountability. you have the right to know what the government's true if you want to know why i.