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Noam Chomsky on the U.S. Economic Crisis: Joblessness, Excessive Military Spending and Healthcare

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President Obama sent his new jobs proposal to Congress on Monday with a plan to pay for the $447 billion package by raising taxes on the wealthy. Noam Chomsky says, “The healthcare system…the huge military spending, the very low taxes for the rich [and corporations]…those are fundamental problems that have to be dealt with if there’s going to be anything like successful economic and social development in the United States.” As Republican presidential candidate, Texas Gov. Rick Perry, calls Social Security a “Ponzi scheme,” and Democrats buy into the narrative that the program is in crisis, Chomsky notes that “to worry about a possible problem 30 years from now, which can incidentally be fixed with a little bit of tampering here and there, as was done in 1983, to worry about that just makes absolutely no sense, unless you’re trying to destroy the program.” [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Our guest for the hour is MIT professor Noam Chomsky. His latest book is called 9-11: Was There an Alternative? That last question, “Was there an alternative?,” referring to the assassination of Osama bin Laden. Aaron?

AARON MATÉ: Well, Noam, you mentioned the changes in discourse between 10 years ago and today. And actually, this issue of the reasons behind 9/11 came up last night at the Republican presidential debate. Congress Member Ron Paul of Texas drew boos from the crowd and a rebuke from other candidates on the podium when he criticized U.S. foreign policy in discussing the roots of 9/11.

REP. RON PAUL: We’re under great threat because we occupy so many countries. We’re in 130 countries. We have 900 bases around the world. We’re going broke. The purpose of al-Qaeda was to attack us, invite us over there, where they can target us. And they have been doing it. They have more attacks against us and the American interests per month than occurred in all the years before 9/11. But we’re there, occupying their land. And if we think that we can do that and not have retaliation, we’re kidding ourselves. We have to be honest with ourselves. What would we do if another country, say China, did to us what we do to all those countries over there?

So, this whole idea that the whole Muslim world is responsible for this and they’re attacking us because we’re free and prosperous, that is just not true. Osama bin Laden and al-Qaeda have been explicit. They have been explicit, and they wrote and said that we attacked—we attacked America because you had bases on our holy land in Saudi Arabia, you do not give Palestinians a fair treatment, and you have been bombing—I didn’t say that, I’m trying to get you to understand what the motive was behind the bombing. At the same time, we had been bombing and killing hundreds of thousands of Iraqis for 10 years. Would you be annoyed? If you’re not annoyed, then there’s some problem.

AARON MATÉ: That was Republican Congress Member Ron Paul of Texas speaking last night at the Republican presidential debate. Noam Chomsky, your response?

NOAM CHOMSKY: I think what he said is completely uncontroversial. You can read it in government documents. You can find it in polls. Maybe people don’t like to hear it, but, as I mentioned before, it goes back to the 1950s. Actually, right after 9/11, the Wall Street Journal, to its credit, did a study of privileged Muslims, sometimes called “monied Muslims,” people in the Muslim world who are deeply embedded in the U.S. global project—lawyers, directors of multinational corporations and so on, not the general population. And it was very much like what Eisenhower had—was concerned about, and the National Security Council, in the 1950s. There was a lot of antagonism to—a lot of antagonism to U.S. policy in the region, partly support of dictators blocking democracy and development, just as the National Security Council concluded in 1958.

Also, by then, by 2001, there were much more specific things: very much a lot of anger about the U.S. backing for the way—Israeli occupation of the Occupied Territories, settlements, the bitter oppression of the Palestinians, and also, something that isn’t discussed much here but meant a lot there—and remember, these are privileged Muslims, leaders of—those who kind of carry out, implement the general U.S. economic and social policies in the region. The other thing, besides the Israeli—support of Israeli crimes, was the sanctions against Iraq. This was 2001, remember. The sanctions against Iraq were brutal and destructive. They killed hundreds of thousands of people. Both of the international diplomats who administered the Oil-for-Food program, distinguished international diplomats—Denis Halliday, Hans von Sponeck, in sequence—both of them resigned in protest because they regarded the sanctions as genocidal. They were carrying out a kind of a mass slaughter of Iraqis. They were strengthening Saddam Hussein. They were compelling the population to rely on him just for survival. And these were major crimes of the 1990s. And privileged Muslims, monied Muslims, in the Saudi Arabia, elsewhere, were bitterly opposed to this, not because they hate our freedoms, because they don’t like murderous and brutal policies.

AARON MATÉ: Noam, before, you were quoting a CIA analyst saying that the U.S. had actually become Osama bin Laden’s biggest ally through being drawn into so many wars abroad, and talking about how all this engagement has undermined U.S. standing. What has this decade of war meant here at home for the domestic situation and how that relates to bin Laden’s goals of bleeding the United States?

NOAM CHOMSKY: Yeah, he was pretty explicit about that. He wanted to draw the United States into what intelligence agencies called a trap, which would lead—which would inflame and incite hostility in the Muslim world, he hoped, help mobilize people for his cause—I don’t think that happened—but also bankrupt the U.S. at home. I mean, current estimates—there was a recent estimate, a study at Brown University, estimated the cost just of the two wars at about $4 trillion. If you count in the costs of, you know, homeland security and so on, probably doubles that. That’s pretty serious. That’s the—between the wars, the housing bubble and Bush’s tax cuts for the rich, that—it creates the economic crisis that we’re now in.

AMY GOODMAN: On Monday, President Obama sent his new jobs proposal to Congress. In a new challenge to Republicans, Obama said he would propose paying the $447 billion package by raising taxes on the wealthy. Around $400 billion would be raised by eliminating a number of deductions claimed by wealthy taxpayers. Obama discussed the bill in a White House speech.

PRESIDENT BARACK OBAMA: On Thursday, I told Congress that I’ll be sending them a bill called the American Jobs Act. Well, here it is. This is—this is a bill that will put people back to work all across the country. This is the bill that will help our economy in a moment of national crisis. This is a bill that is based on ideas from both Democrats and Republicans. And this is the bill that Congress needs to pass. No games, no politics, no delays. I’m sending this bill to Congress today, and they ought to pass it immediately.

AMY GOODMAN: Noam Chomsky, what is your assessment of President Obama, whether we’re talking about his new jobs plan or whether we’re talking about his foreign policy?

NOAM CHOMSKY: Well, I can’t say that I find it disappointing, because, quite frankly, I never expected anything. Actually, I wrote about it before the primaries, just based on his record on his website.

I think my—I should say, first of all, that this latest jobs plan is one of the better things he’s done. I don’t think it goes anywhere near far enough, but at least it has elements that are going in the right direction. There was, when the—during the lame-duck session, the serious question was whether—what to do with the Bush tax cuts. The Bush tax cuts were carefully designed so that, at the beginning, everyone got a little, and you had a feeling taxes were being reduced. But they were designed so that, as the 10-year period ended, it was overwhelmingly going to the very rich. Now, the population is strongly opposed to that. You take a look at polls during the lame-duck session, when this was coming up: very strong support for increasing taxes for those with incomes over, say, quarter-million dollars a year. Well, Obama didn’t push that. If he had appealed to the public, they, I think, could have overcome the opposition of the financial institutions, you know, the Republican—the new Republican congressional delegation and so on. But he didn’t even try. And that should be done.

Now, the current proposal goes partially in that direction by indirectly increasing taxes through elimination of deductions. But the tax code simply has to be revised. It’s become highly regressive. In fact, the share of GDP, you know, national income by—of taxes, is probably lower than it’s ever been, far lower than 20 or 30 years ago, particularly for the rich. All of that should be adjusted. There is a stimulus in the program, which is a good idea, but it’s much too small. And the concentration on deficit reduction, when the problem is—the serious problem is massive unemployment, I think that’s a very serious error. You can understand why the banks and insurance companies, and so on, like it, but it’s completely wrong for the—for trying to extricate ourselves from quite a serious economic crisis. The other things are unfortunately—the deficit itself, if you want to take it seriously—I don’t think it’s the major issue, by any means. In fact, I don’t even think it’s a serious issue, at least in the short term. But if you do want to take it seriously, it’s pretty easy to trace it to the roots.

Dean Baker, very good economist, has done—has pointed out, done the calculations which show that if the United States had a healthcare program similar to other industrial countries, which is not a utopian dream, not only would there be no deficit, but there’d be a surplus—that plus the huge military budget. Military budget is probably half the deficit. It’s way out of line with anything needed, certainly for any defensive purpose, but for any justifiable purpose. Ron Paul, who you heard before, was quite right about that. If the military—I mean, the U.S. is spending about as much as the rest of the world combined almost on military spending, technologically very advanced, new destructive techniques developing far beyond what any other country has. This is all—first of all, it shouldn’t be done, on principle, but it also ends up being harmful to us, essentially for the reasons that Paul mentioned. The—and very expensive, of course. That plus the hopelessly dysfunctional healthcare system, those are fundamental problems that have to be addressed.

Now, that could have been addressed. At the time of the healthcare reform, a large part of—depending on how the question was asked, either the large plurality, often a majority, of the population was in favor of some form of national healthcare, which would be incomparably more efficient and more humane. But Obama just dropped that. The public option remained as a possibility. That was supported by, I think, maybe almost two-thirds of the population. Obama just dropped it. So, everything is in the hands of the insurance companies. We continue to have roughly twice the per capita healthcare costs of comparable countries, some of the poorest outcomes. And it’s the only large, almost unregulated, privatized system. Yes, it’s highly inefficient; it’s also very inhumane—not to speak of tens of thousands of people without insurance or many more with not enough insurance. Well, that can be changed. It should be changed. If it could, the deficit issues, such as they are—I think they’re secondary—would largely disappear.

There’s a long-term debt problem. That’s a different matter. And that can be dealt with—the best way to deal—we can trace that to its roots, too. Ronald Reagan, who was fiscally totally irresponsible, tripled the U.S. debt and shifted the U.S. very quickly from the world’s leading creditor to the world’s leading debtor. George W. Bush enhanced it with his fiscal policies, including the huge tax cut for the rich, the wars. And in the long term, that’s a problem. But the way to deal with that problem, in the long term, is with economic growth, appropriate economic growth, sensible economic growth. Well, that can be done, but it’s not going to be done through deficit reduction programs or tampering with entitlements, as is on the table, unfortunately.

So there were elements—and infrastructure development is significant, and Obama mentioned it. There’s small programs. I think that those are—he talked about work sharing, which is quite an important proposal. I don’t know if anything will be done. It was done in Germany, and it cut down unemployment very sharply, led to substantial economic growth, even through the recession. Those are options that could be pursued. They’re mentioned. They should be pushed harder. They should be expanded. But at least there are elements there that could turn into a constructive program—however, not until the core issues are handled.

One is enormous unemployment. That’s the worst problem, and it’s becoming almost permanent unemployment. Another is the deterioration of manufacturing, meaning offshoring of manufacturing. The only way that can be dealt with is by cutting back on the overvalued dollar, that would improve possibilities for exports. The healthcare system, which is grotesque—it’s an international scandal; the huge military spending; the very low taxes for the rich, by comparative standards, also corporations and so on—those are problems that—those are fundamental problems that have to be dealt with if there’s going to be anything like successful economic and social development in the United States.

AARON MATÉ: Noam, you mentioned entitlements, and obviously this is an issue that’s come up a lot in the deficit debate. Governor Rick Perry, the Republican presidential hopeful, has called it a Ponzi scheme. But even Democrats seem to buy into this narrative that it’s in crisis. Can you address that?

NOAM CHOMSKY: Social Security is not in any crisis. I mean, the trust fund alone will fully pay benefits for, I think, another 30 years or so. And after that, taxes will give almost the same benefits. To worry about a possible problem 30 years from now, which can incidentally be fixed with little—a little bit of tampering here and there, as was done in 1983—to worry about that just makes absolutely no sense, unless you’re trying to destroy the program. It’s a very successful program. A large number people rely on it. It doesn’t pay munificently, but it at least keeps people alive, not just retired people, people with disabilities and others. Very low administrative costs, extremely efficient, and no burden on the deficit, doesn’t add to the deficit. The effort to try to present the Social Security program as if it’s a major problem, that’s just a hidden way of trying to undermine and destroy it.

Now, there has been a lot of opposition to it since—you know, since the 1930s, on the part of sectors of extreme wealth and privilege, especially financial capital. They don’t like it, for several reasons. One is the rich don’t barely—for them, it’s meaningless. Anyone with—you know, who’s had a fairly decent income, it’s a tiny addition to your retirement but doesn’t mean much. Another is, if the financial institutions and the insurance companies can get their hands on this huge financial resource—for example, if it’s privatized in some way or vouchers—I mean, that’s a huge bonanza. They’ll have trillions of dollars to play with, the banks, the investment firms and so on.

But I think, myself, that there’s a more subtle reason why they’re opposed to it, and I think it’s rather similar to the reason for the effort to pretty much dismantle the public education system. Social Security is based on a principle. It’s based on the principle that you care about other people. You care whether the widow across town, a disabled widow, is going to be able to have food to eat. And that’s a notion you have to drive out of people’s heads. The idea of solidarity, sympathy, mutual support, that’s doctrinally dangerous. The preferred doctrines are just care about yourself, don’t care about anyone else. That’s a very good way to trap and control people. And the very idea that we’re in it together, that we care about each other, that we have responsibility for one another, that’s sort of frightening to those who want a society which is dominated by power, authority, wealth, in which people are passive and obedient. And I suspect—I don’t know how to measure it exactly, but I think that that’s a considerable part of the drive on the part of small, privileged sectors to undermine a very efficient, very effective system on which a large part of the population relies, actually relies more than ever, because wealth, personal wealth, was very much tied up in the housing market. That was people’s personal wealth. Well, OK, that, quite predictably, totally collapsed. People aren’t destitute by the standards of, say, slums in India or southern Africa, but very—suffering severely. And they have nothing else to rely on, but what they—the, really, pittance that they’re getting from Social Security. To take that away would be just disastrous.

AMY GOODMAN: We’re talking to Noam Chomsky. He has a new book out, 10 years after his book 9-11. This is called 9-11: Was There an Alternative? We’ll come back to this conversation in a minute. And if you’d like to get a copy of the full show, you can go to our website at democracynow.org. Stay with us.

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