congress has much to be proud of none of the core issues at the heart of this deadlock have been dealt with washington gridlock issues like that can't be kicked down the road. has a new alert. scared me a little. there is breaking news tonight and we are continuing to follow the breaking news. alexander's family cry here is a. great thing. that. we have. found. is a story. playing out in real life. hello

and welcome to crossfire all things considered i'm peter lavelle crisis averted at least for now washington's dangerous and even the responsible political circus has taken a time out with barack obama still standing however nine of the president nor congress have much to be proud of none of the core issues at the heart of this deadlock have been dealt with washington gridlock issues like they can't be kicked down the road . to cross the american fiscal crisis i'm joined by philip wallach in washington he's a fellow in governance studies at the brookings institution in new york we have less polled he is the director of the labor institute and author of how to make a million dollars an hour how hedge funds get away with siphoning off america's well. and in dallas we cross to he is the founder of chop wood finance dot com and

an internationally recognized expert in wealth management right gentlemen crosstalk rules in fact that means you can jump in anytime you want philip if i go to you first in washington after this drawn out crisis a circus in washington it's come to an end what's changed not much if you fell asleep two and a half weeks ago i woke up today you wouldn't have missed my. ok but i mean i'm laughing about that and should i be laughing about that because after everything that's been said and done is it a laughing matter well listen you know the end of it we really believe the old saw about democracy is the worst system of government that's ever been tried except for all the others it's not pretty it's very messy but at the end of the day it did not lead us into a catastrophe ok less if i go to new york why should and why did it have to go to the point of a catastrophe in the first place then well actually i think it is moving towards

a catastrophe and that catastrophe is the evisceration of the social safety net in the united states the net result of this. effort is going to be an agreement to whittle down so-called entitle minutes in order to pay back the debt that was run up by the wall street crash so we're heading in the wrong direction and this almost pseudo crisis is going to is pushing us further in that direction ok ed you want to weigh in on that just a matter of time before we get back to the same place go ahead. yeah i mean i you know i don't i don't agree with what let's just say i mean we definitely have a huge deficit we have a huge debt it was not brought on by a wall street crash it was brought on by many other things including a part of that was a liquidity crisis that occurred in this country not brought on by wall street but more importantly we are in a situation where we are short about one trillion dollars every year from what we

spend we don't bring in that revenue so what we do is we raise the debt ceiling bring on more debt print more money devalue our currency that's why things cost more money and less again all the all the challenge here you know is there is the good of the country to have a safety net or have a strong economy where people can take care of themselves that's the real question and everyone around the world was talking let's talk united states isn't here just to take you're talking about this strong economy go ahead last you know let's talk about this strong economy. since then we don't crash and then we have a really terrible yeah i'm. just. like go ahead let's ninety five percent ninety five percent of the growth has taken place since the crash has gone to the top one percent and the average wage of the ninety nine percent has gone up point four percent nothing whereas the folks that you represent have gone up by thirty four percent we've got an economy that is running. low well

let's like that's going on now let's get to your questions how why do we have such an enormous debt we have the bush tax cuts they went to the super rich we have unfunded wars we have a crash in the economy caused by wall street's unbelievable reckless gambling that now has increased social expenditures to take care of unemployed and decreased revenues we have thirteen trillion dollars in bailout money that's gone to the financial community and you are worried about entitlements that could take years from now i think i think you have your priorities upside down and i think most people in the world it's a good rating by and for the rich all right ed reply real quickly then i want to go to philip go ahead to be fair. well look i'll make it real quick because obviously the discussion is about that let's your very articulate your very you know intelligent man but your facts are absolute hogwash you can sit there and throw

those out left and right but you know what the show is not about that but i will tell you in another time in another place i'll be happy to talk about it but stop will continue with this rhetoric because it's really not accurate you can say it all you want but it doesn't make it ok but philip if i go to you during this entire political circus in washington stock market wasn't really affected very much people with enormous wealth went worried about it because you know it doesn't really affect them ok i mean if the government shuts down so what i don't care i don't i have plenty of money i can avoid all of government services i don't need them i mean that's one of the huge disconnects it's happened in the political process and in the economy in the united states in the last thirty to forty years well first let's be clear so the shutdown was a partial shutdown of government essential government services were all kept going nobody missed their social security checks you know the military didn't stop doing its job around the world so it was a partial shutdown and yet lots and lots of people were affected but others managed

to go on pretty much normally with their lives and i think everyone thought that if we had reached the debt ceiling and gone through the debt ceiling that would have caused. an economic catastrophe but i think why you saw wall street not really getting too excited was they thought this whole negotiation was probably a farce and it turned out they were right it was the republicans felt like they had to ask and ask and ask in till finally they ran up against the deadline and they couldn't ask any more and then they would just let let things go on the way they've been going which you know either add or less can get angry about from different directions but it is not leading us into any kind of immediate catastrophe so. i think i think it's easy to get over. that about exactly just how perilous the situation was the well i mean if you are postponing it postponing it less if you can weigh in here because it is kind of postponing doomsday here i mean and i agree

with ed there on the on the debt level i mean you just can't keep going up and up i mean very serious questions have to be defined if you can and that's ok go ahead but you could get up and up ok if we had a financial transaction tax so that we could pay just a little bit for all the damage they created then don't tell me that they didn't create damage don't tell me that we didn't run a fantasy finance economy that absolutely imploded killed six million jobs in a matter of months they haven't paid a dime for the damage they did now with small financial tracks which would fall on its clients would. more than make up for any kind of problem that we might have in thirty years with social security we have twelve trillion dollars is that how much it is offshore hidden in accounts a lot of it got in there illegally not through web but through other wealth management people oh my god we have everything has

a spirit so you well i think these are no yeah sad it's not a good yeah i think you're going to i think you know what well go ahead let's let's i think you're going to try and get will tell you it's and i think fact that where the care of the illegal it is wall street well where is the haircut how come the wall street hasn't made a sacrifice how come they're not contributing how come we're paying back the debts that they ran up this is happening here and it's happening in europe how come we. have to continue where was the hundred fifty billion dollars in bonuses that were taken after we provided the tarp money how can we let that happen now ed you've got to face up to reality we are operating in the banking community ok we're asked to tighten our belts why should someone be fair why should someone. coming up how the head lice go ahead i tax the rich why not go ahead you guys going to already know you can afford it go ahead yeah tax the rich i mean yeah of course not let's

there's so much nonsense that you're saying i don't know which one the address first but first of all you tell me that there is money there illegally it's being very specific what money is oversea is the legal and peter you said you agreed i'd love to know what money is there even legally it just hasn't been brought back a lot of that money because there is money there because of the heavy tax burden that they would face when they came back to the united states when that money came back here that one to the liquidity crisis didn't occur because of wall street you have to learn your facts and understand why the liquidity crisis occurred but you know that's not so bad to show not what you believe is your right you do something you're not good let's really look at it here i got to finish talking head if i got to talking head of you i'll let you talk i'm going to talk a minute cure ties did fair enough suitors fanning soon as fannie mae as soon as fannie mae securitize something it became aaa rated that's what happened when fannie mae backed any kind of instrument of any kind so soon as they did that it became aaa rated you could borrow ninety percent against

a aaa rated government security that uses leverage they sold them off people borrowed against it if street was such a terrible place that if they were you know if wall street was the problem people would be going to jail because i assure you that obama and the attorney general would be going after him so the point is you say this stuff and it's nonsense the reality is we do have a debt ceiling problem and the reason we have a debt ceiling problem is we have to print money devalue our currency and we're going to become like japan where they have two hundred fifty percent of their g.d.p. is their debt that's the problem that we're going to have it is a problem less and you've got to learn you don't know where all street but you write books about it all right a little bit of a fella pair philip dewey does the u.s. have an economy does the u.s. have an economy to record towards the rich. well let me let me answer something that before i get to that so i think you know worrying about getting to levels of debt to g.d.p. that japan has right now you know if we were actually headed there that would

really be something to be worried about but that's just not what the data tells us the recent the recent projections by are now an artisan congressional budget office tells us there are our debt to g.d.p. levels are going to stay right right around where they are for the next ten years and yes they're going to gradually rise after that we do need to look at ways to reform our entitlement so that they don't get out of control but that's again not an immediate crisis right solution and it's not right to say that i want whenever we raise the debt ceiling we're somehow devaluing our currency. the debt ceiling as an american like you or you want the countries around the world do there gentlemen gentlemen i have john friedman here we're going to go to a short break and after that short break we'll continue our discussion on america's fiscal crisis stay with r.t. . the little.

mission. critic a should treat in store charges free. range month free. three stooges free. download free blogs just plug in video for your media projects and free media oh don to our t.v. dot com you. click on your whole show marginalise should be making news all the face you know about.

a pleasure to have you with us here on t.v. today i'm sure. you'll rights. to the lives. of the young girls. all four of the future hotter. between two and three hundred million guns united states so you can act like they're not here and keep kids away from them. the pass' that is the law or you know i mean this teaches them a lot of are a responsibility and simply can debate through the eyes of children if we can't do it for our children for our future what is the country will solve.

please. welcome back to cross talk where all things considered i'm peter all about your mind you were discussing the fiscal crisis in the u.s. . well if i go back to you in new york how much is this crisis an ongoing crisis because we have only pushed out some of the deadlines here how much is that has to do with ideology i mean is this over over talked about here because you know you'll have some people say it's the tea partiers you know they're just this is their last chance in the history of the united states to overturn the the new deal in the

great society in all kinds of things like that i mean how much is ideology play a role in it in your mind as the united states continues and i said in the introduction of this program kick the can down the road. and i think this is an artificial crisis there is no current crisis going on except for the fact that wall street is still not carefully regulated and if you notice the conversation in washington is all about entitlements it's no longer about wall street regulations so we're seeing a continual drift towards a any a logical direction that says the government is the problem the private sector can handle all this stuff on their own and we've just lived through a period where we let the private sector handle this all on their own and they took down the global economy and i can today a long time about the causes of that but i am absolutely certain that the causes

are a basically a financial system run wild that's still going on we still have. a system. that. majority but almost the majority of of big banking in. in our banking centers is proprietary trading gambling and if that system crashes again we're going to have another crisis that's the crisis we need to be worrying about not this fiscal crisis. can agree completely that this is something that we have years and years to work through when once the wealthy start paying their fair share of taxes again get rid of this ridiculous tax loophole called carried interest which we have the united states that lets wealthy finance ears pay a lower tax than everybody else once we start cleaning up that mess and dealing with taxes on the wealthy we're not going to have a problem you know i estimated if we had a financial transaction tax the united states a small sales tax on buying and selling of government. bonds and stocks and

derivatives and such we could finance we could finance free higher education at every public college university in the country we could enter the rest of the. industrialized world and provide education for our people instead of putting our kids into trillion dollars worth of debt this could all happen if we focus on the correct crisis which is a banking community run wild ok all right all right ok if i could if i could encapsulate it and if you're the problem ok i say that you know good spirits here but i mean again you know it gets down to the regulation that you guys you know it's that the system is there for you to make money and if you can't make money with it forget it you cast it aside. i mean it takes a lot to get me speechless but less congratulations because i don't know how to react to what you just said i've never heard such

a pile of you know what in my life but why don't we change this from the standpoint that i'm sure you're a nice man less but you don't see the world differently than not just me but most people. who are on the side of the grass but having said that i will say to you that why don't we do something different why don't we drove underneath the ground bring out natural resources and grow our economy that's one way not taxing the system you tell me wall street run wild i gotta tell you i spend about twenty five percent of what we make here on regulations and making sure that you know with our audits and so on and so forth i mean it's ridiculous how much government is overwhelming us and you want more government and you're trying to say that wall street is the problem well furthermore also i need to bounce back over something phil was saying phil the reason that that we come up a trillion dollar short every single year the reason that our deficit or excuse me our debt is a problem today is that we have to print money and issue debt to countries that don't really like us and that devalues our currency that's why your costs when you

go to the grocery store no matter what you're in washington less you're in new york i'm in new york and washington every week it seems to be i know how much things are going up in cost that happens because of our deficit today not something that might happen down the road because it's a problem and where do. you want to be you want to pick you want to you know contribute to getting down getting that deficit down with you and your clients would you contribute to the. we do every day matter fact is fair share thing less is ridiculous the top ten percent of wage earners pay sixty to sixty five percent of all federal income tax into the system what's not fair about that last tell me ok but but do you pay the carried interest do your clients pay the carried interest tell me that they could be a significant wealth that number less hang on well most why do we have a shared interest levels do we. well let's have it most people don't take up and

it's going to come down to me answer the question very specifically why is it that you're telling me that top ten percent pay sixty to sixty five percent of all federal income tax that's not fair answer that question. you want to get a if you make in want to let me jump like that you know if i. actually it's like a street fair let's all go to back to you in a second philip go ahead weigh in fair time i don't problem no problem i just want to know when we talk about just the income tax it's not as if the income tax is even a majority of all the taxes paid in the united states there's a lot of other taxes you the rich the rich could pay more let me let me say again countries don't really like us buying our debt well they buy our debt because they like our debt and we get great rates for right now we pay historically low interest cost. of borrowing right now and if china if china doesn't doesn't like that

you know they just collect their interest like every other bond holder they don't have any special leverage over us by holding our bonds ok let's see one jump in. the head less. well i'm going to be awfully good but not but not quite we're suffering we're suffering not from inflation point out we're suffering from debt deflation we have any collapsed economy where prices are not going up nearly enough to produce. enough demand in the economy so that people can be put back to work we have the highest level of sustained unemployment since the great depression and yet and yet the top one percent are making more money now than they ever made before we have a situation right now in new york where a person a hedge fund person in one hour. in one hour makes as much money the average family

makes in forty seven years and you're telling me that person can't pay more taxes please ok. not everyone. action if you go on to the right asked if the guy has the real world and you ask people whether they think whether they think wall street is a problem i think they would agree with me that wall street is a problem and go ahead i i will tell you i'm in the real world i don't know what world you're in less but the real world they want the economy going they want their wages going higher they want prices lower and that's the world i live in i see it every day i don't know where you are in terms of what you're seeing and how you're seeing that and if that guy makes that money on wall street congratulations he earned it and people didn't give him money to manage he wouldn't have made it so you know what that's what this country is about less it's not about building a security blanket it's not about the way you see this world one day i'll come to

new york will sit down and i will help you because i think i there is a truly odd situation here less i really do philip philip do you still like the the mary of too much government too little government because that's how it's sold quite a bit of the time i mean from perspective there's too much government and i think for if i can be fair less would think that there should be certain social structures that the state should be responsible for towards the majority of citizens go ahead philip. well listen you can argue about too little or too much really we want smart we want smaller government programs and smart government regulation you know i think some things about financial regulation have really improved since the crisis you know we're having much more strict capital requirements for our big banks so they're less likely to need government government help in a liquidity crisis as it says. we are banks are considered much safer than the ones in europe and let me just say something about the inequality issue that's getting

talked about so much that's a global trend that's not something unique to the united states of america we see middle class people struggling all over the globe and struggling to find their place in the twenty first century economy so yeah we really do need to think about solutions to help the middle class get ahead but by just blaming it all on something peculiar about america doesn't make much sense when it's a global trend that's a very good point last i think i agree but let's. go at last the numbers i look at actually suggest that the nice united states inequality is growing faster and is larger than what's going on in europe especially in the northern europe and the second question is that there is a deep second observation is there is a real difference between the financial economy and what economists call the real economy and what we have now is a financial economy that's going to dwarf the real economy and it's acting it's actually acting what economists call it's extracting rents from the real economy in

other words you know it's ripping off the real economy it's not producing value so what you're having a situation where you have a larger and larger percent of the economy not producing real value that's guaranteed to produce an economic crisis so if we want to help the economy we have to tame wall street we have to bring it down to size we can't let the banks continue to get larger and larger their larger now than they were before the crisis they're even. if there is another crisis we're going to have to bail them out ok i'm going to be fair to everyone here i am he said you've got thirty seconds you got the last word here again it's the financial ization of the economy that's the problem go ahead. yeah i don't know what les just said or what he was attempting to say i can just tell you that the way we're going to get the middle class going is by growing the overall economy you're going to do that by cutting taxes across the board stimulate the economy grow the tax base that's how you grow our economy if you don't grow economies by taxing it like less would have you know ok gentlemen

a fascinating discussion would run out of time many thanks to my guests in washington new york and in dallas and thanks to our viewers for watching us here see you next time and remember crosstalk. wealthy british style. is not on. markets why not. find out what's really happening to the global economy

with max cons or for a no holds barred look at the global financial headlines tune into kinds a report. and. i would rather ask questions to people in positions of power instead of speaking on their behalf and that's why you can find my show larry king now right here on r.t. question for. the it was a new alert animation scripts scare me

a little luck. there is breaking news tonight and we are continuing to follow the breaking news the alexander family cry tears of joy at your grave things rather that there have been red dark and a quarter of a wall around online is a story made sort of movie is playing out in real life. the in. the news today violence is once again flared up. and these are the images the world has been seeing from the streets of canada. trying to corporations rule the day.

in the. middle of a. good coach. ladies and gentlemen welcome to everyone's favorite game show revolted that door today. and security million dollar question is who's going to replace general tony was head of the d.h.s.s. folks the stakes are high it's a position that oversees two hundred forty thousand employees including fema ice the t.s.a. and the coast guard so who is the lucky winner johnny let's give the audience some clues is a physics old male who's sitting formally pretty in the pentagon and he's friends of barry zero has also helped lay the groundwork for ending don't ask don't tell.