"So what are they [the newly-elected Republican reactionaries] gonna do? Well, let's look back [to 1995]. Let's look back to Newt Gingrich [and] Dick Armey....What Newt did was to say: 'We're demanding savage, brutal cuts in Medicare, Medicaid, Social Security. We want to gut unemployment benefits; we want to gut welfare.' -- which still existed at that time (Aid to Families with Dependent Children)....And he attempted to do a coup d'etat from the House of Representatives...So we got to this moment in October/November of 1995. Many people did not believe that this would happen. But what it was, was then that Gingrich essentially issued a kind of ultimatum to Clinton, saying: 'I demand these cuts. And if you don't give me the cuts I want, we won't pass a budget, and we will also prevent the raising of the debt ceiling on the public debt of the United States.' And this then went to a confrontation. This is where we're headed now, and we'll talk about this in the upcoming segment. This is now the grave danger that hangs over the world -- a lunatic ideology which has now been given at least a share of power in Washington....
"So it was 1995. It was Newt Gingrich, speaker of the House, [and] Dick Armey of Texas....They wanted to force the cutting and gutting -- the same agenda -- of the New Deal
social safety net....So Gingrich then said: 'If you don't give me want I want, I will block the raising of the debt ceiling.' And the day that he made this announcement, the dollar went down 5% in one day. Now I submit to you: in the current situation of an economic depression and financial depression gripping the world, if you go to this brink, you will not get the dollar going 5% down in one day, you will get 25% down or maybe 50% down in one day. And that will blow up the world. That will pull down the rickety arrangements that we still have in the world that allow the production and sale and transportation of goods and services around the world. It is an action with genocidal implications, especially when you get further down the road to places like Somalia or Bangladesh, and Ecuador and Bolivia, and places like this. Let's just get into this, now.
"In the middle of this crisis [in 1995], Senator Pete Domenici of New Mexico came forward to say that he had been meeting with a group of ten Wall Street insiders. And these look like they were hedge fund operators. One of them was Stanley Druckenmiller, who was, of course, from the Soros group at that time. And these Wall Street insiders had assured Domenici that if it came to a choice between eternal deficit spending and living beyond your means and rising debt, if it came to a choice between that and a default -- the bankruptcy of the United States, something that's never happened in all of history; the United States fails to make a payment -- that the Wall Street people thought that default would be, of course, a bitter pill, it would be unfortunate; but in the long run it would be better.
"Now, here's my premise. I want to stake a firm policy position: Any government official who knowingly courts, promotes or connives to make the United States go into default -- who contributes to the national bankruptcy of the United States -- is guilty of high treason!
And there is also a little matter of wars. There's a war in Iraq, there's a war in Afghanistan, there's a war in Pakistan, there's a war probably in Yemen by now. Somalia also seems to be a theater of war. Basically every country around Iran is also a theater of war. If you attempt to bankrupt the United States government and force it into default under those circumstances, it is high treason. The Constitution says the Congress shall have the power to borrow money on the credit of the United States. And if you attempt to sabotage that provision, saying -- 'No, the Congress should not have the power to borrow money on credit of the United States, and we're going to enforce that by extra-legal means; we're going to do it through Moody's, Fitch, and Standard & Poor's, through the debt downgrade and the inability of the U.S. to float a bond issue.' -- then you're violating the Constitution. That's already impeachable right there. So impeachment first, and then the rest.
"Now, the other thing is: it will always be possible to show the conniving. Domenici was lucky. No charges were brought against Domenici. I called attention to this in my journalism at the time. What Domenici had done was to enter into a conspiracy with these hedge fund operators, and essentially say: 'Well, they're telling me that this is what we should do.' Now, did Domenici come forward and say: 'I have examined these hedge fund operators to find out if they have conflicts of interest -- if there's insider trading and conflicts of interest going on because these hedge fund operators are simultaneously shorting the dollar, shorting U.S. Treasury bonds, Treasury securities, and otherwise taking a short interest or short view on the economic prospects of the United States. Are they selling this country short? Are they selling the United States of America down the river?' Domenici never referred to this question. He never said whether he had quizzed them or asked them about possible conflicts of interest, of the kind you can see on CNBC. (When an analyst comes on you can find out whether they own the stock, whether they’ve shorted the stock, or whatever it is.) It will always be possible to show that members of the legislature have been conniving -- once you have subpoena power and you can go after them, which the Justice Department will continue to have -- you will probably be able to show contacts between them and people who are doing the shorting. And I believe you can still find on the Internet: Peter Schiff, the failed reactionary candidate in Connecticut, he says that [the] default of the United States would be a good thing.
"Why do they want it?
"Remember: these are right-wing anarchists. Their theory is to 'starve the beast.' That means, essentially, bankrupt the federal government. Their idea is that if you cannot borrow money, if you destroy the full faith and credit of the United States government and make that into a laughing stock, then the United States government cannot borrow for any
reason -- and this, of course, includes war. It's the same story. This is where you get into the little matter of a state of emergency and several wars -- quite a few wars going on now that you didn't have in 1995. But they feel that the response to the inability to borrow will be to force the government to live within the realm of the tax income, the tax revenue. And that will mean, of course, the destruction of Social Security, Medicare, Medicaid, unemployment benefits...and all the other essential programs that make up the tattered remnants of the New Deal safety net. And, again, they will probably say: 'Well, no, we'll do it in such a way so that the defense budget is shielded.' Well, once you have default, you can't borrow for any
reason. So they'll say: 'We'll maintain the funds going into the defense budget.' But, of course, once you can't float a bond issue, it's not clear that they'll be enough for that either. So this is a recipe for catastrophe.
"Such an event -- again, in 1995, it was minus 5%...in the dollar in one day -- if it becomes this mudslide, then you have a world catastrophe. Remember, if you read Surviving the Cataclysm
...you will see that the nightmare of Paul Adolph Volcker (as long as he was at the Federal Reserve) was that once the dollar began to slide -- and we now have this -- once the dollar began to slide, it might turn into an unstoppable mudslide, as we've seen in the California valleys when it rains too much and the vegetation is not enough, of various places in Latin America -- the whole side of the mountain comes down, and there's no force available to stop it. We now may be very close to this. So we cannot allow a bunch of right-wing anarchists in the Congress to throw their crazy weight around at the expense of the American people, because make no mistake: The national bankruptcy and default of the United States would be catastrophic for the average American working family. It would be a catastrophe.
"And it's very easy to make facile statements about this -- how the U.S. is bankrupt and all this stuff. It's baloney. The U.S. is viable, much more so than Moody's, Fitch, and Standard & Poor's. As a matter of fact, as I've said repeatedly, Moody's, Fitch, and Standard & Poor's ought to be quaking in the criminal dock because of their corruption in 2008, when they were telling you that Lehman Brothers was Triple A and [that] subprime was Triple A until minutes
before the bottom fell out of the whole thing, and those poor schmoes who believed them [were] left high-and-dry."