Peter Schiff is a businessman and author that was known by many as “Dr. Doom” before he became widely credited with foretelling the U.S. economic crisis years before it occurred. During a phone interview, The Daily Caller picked his brain about the current economic crisis, the impending crash, and what Americans can do to protect themselves.
The Republicans have caved on raising the debt ceiling, as you predicted in your interview on CNBC on Oct. 11. Why do you think they did, and what steps do you think should be taken to pay our bills?
I don’t think Republicans have the fortitude to bring about the painful process of correcting the mistakes we’ve made. If we don’t raise the debt ceiling, we have to deal with the fact that we’re broke. We will have to make serious cuts. If we don’t raise the debt ceiling, we’d have to meaningfully reduce the size of government. Republicans aren’t willing to vote for it. They always campaign in favor of a balanced budget amendment, and that means the budget has to balance.
By not raising the debt ceiling, it means we’re forced to balance the budget. Republicans don’t want to cause it because it means disappointing somebody. Telling somebody they’re not going to get government benefits is not default. People that pay the Social Security tax think they’re being promised something, but it’s not a choice. They’re not getting their own money back. What the government does is it takes from the younger generation. None of it gets invested, and it’s already spent.
Republicans shouldn’t have dug in if they weren’t willing to take it all the way. Obama knew they would cave since the media put it all on the Republicans. Even though Obama said, “It’s my way or default,” it was still the Republicans’ fault. They lost the PR campaign. It shouldn’t have been about Obamacare. It should have been about the budget. Obamacare would have died if the debt ceiling was not raised. If you vote to raise the debt ceiling you’re voting to increase government. Whatever the crisis, the real one will be much worse because we did raise the debt ceiling.
When creditors decide to not play the game, how do we pay back bond holders? Where do we get money to pay them back? We’re saying to the world, “As long as the world keeps loaning us money, we won’t default.” The debt ceiling is not a ceiling. We should just call it the debt sky! People voting to raise it wouldn’t vote to eliminate it. The ultimate hypocrisy and example of this is our president and his statements in 2006. He made all these claims that increasing the debt ceiling was leadership failure, yet who created this phony crisis about the debt ceiling needing to be raised?
If the debt ceiling is all a manufactured crisis, how can the GOP get the message to the people that we are not putting the full faith and credit of the U.S. at risk?
They lost the media battle. There’s definite media bias, but again they shouldn’t have had the fight unless they weren’t willing to raise the debt ceiling under ANY circumstances. If Republicans had dug in, they’d have to reduce spending by about a trillion dollars a year. Many departments, such as Energy and Education, would have to be eliminated. If they were not willing to do that, they should have just given the Democrats everything they wanted so their fingerprints would be all over it.