I have no idea why Leigh Sales interviewed Paul Wolfowitz, one of the dangerous masterminds — possibly worse than Bin Laden — behind the disastrous forever US wars... But bear with the wolfo doctrine of fiddling with the truth... It's a lesson in artistry of the fudge...

LEIGH SALES, PRESENTER: The United States looks as if it's reached a compromise on lifting its debt ceiling - that's the amount of money the US is allowed to owe by law. America's been in danger of running out of funds to service government loans, and as part of a political deal to avoid that, President Obama's agreed to drastic spending cuts. Even though the crisis is probably over in the short term, the American economy is still in dire straits, and that has big implications for global economics and politics. For one take, I spoke earlier to Paul Wolfowitz most recently the President of the World Bank and, before that, America's Deputy Defense Secretary. He's in Australia to speak at the Centre for Independent Studies. Paul Wolfowitz, welcome to the program.

PAUL WOLFOWITZ, FMR PRESIDENT, WORLD BANK: Nice to be here.

LEIGH SALES: I'd like to start with the matter that's pre-occupying the US at the moment, which are the efforts to raise the debt ceiling. The Nobel economist Paul Krugman says the deal takes America a long way down the road towards "banana republic status". What do you think?

PAUL WOLFOWITZ: I think that's ridiculous. I think actually what we've seen is a rather impressive display of the democratic process at work, actually. Australians ought to understand this big noisy debate is not a bad thing: it's a sign of getting the issues on the table. I think the country as a whole is really confronting the fact that, if we keep spending the way we've been spending, we'll end up at some point in the position of Greece when it's too late to do anything about it.

LEIGH SALES: Is it the time, though, to cut spending quite drastically when your economy is in a weakened position?

PAUL WOLFOWITZ: First of all you have to start doing it. Secondly, I think a lot of this spending has been extremely inefficient. You know, if you do the arithmetic even with the administration's own official figures on so-called "job creation", or jobs saved out of the 800-plus billion dollar stimulus, it comes out to somewhere between $150,000, $250,000 a job. I think what is really needed now is to build business confidence, to get people investing.

LEIGH SALES: When you've got a debt at the size it is - you know, $14 trillion-odd in the United States - how do you even begin to get that under control, particularly when you have a couple of costly wars being waged overseas?

PAUL WOLFOWITZ: I'm sorry, it's not the wars that are adding to the debt. And the real problem actually - the huge increase in the last few years - has been kind of explosion in healthcare benefits and retirement benefits. And politicians have been afraid to touch that for years: it was called the "third rail of American politics". Well, they're still afraid of it, but I think we're finally coming to realisation that we're just... and interestingly the younger generation - the 20-year-olds and 30-year-olds - are realising that it's a false promise that they're going to get taken care of in their own age unless the system gets fixed. And fixing means some reduction in the magnitude of those benefits, and some indexing for the-moment things like social security - you get it regardless of what your income. So there needs to be fixes to social security, there needs to be fixes to Medicare. People realise it.

LEIGH SALES: But what administration, Democrat or Republican, is going to be able to convince the public, "Okay, well, we're going to make cuts to social security and health care, but we're going to keep spending billions of dollars on a war in Afghanistan?" It's a hard argument to make to the public.

PAUL WOLFOWITZ: Look, I think the public generally understands that what's at stake in Afghanistan is American security, number one. Number two, we are moving, I think, on a pretty rapid trajectory toward handing that off to the Afghans - which is where, frankly... probably should've been on that trajectory earlier. And the war in Iraq is winding down. Yeah, if you eliminated the entire defence budget you would have some fiscal benefits, but I don't think there's any American that believes we would be safe if we did something that radical.

LEIGH SALES: How much do you think America's economic woes are going to undermine its political leadership in global circles? Is it going to be too distracted by what's going on at home to exercise the sort of leadership we've seen in the past, internationally?

PAUL WOLFOWITZ: It could be. And the people who say, "You can't lead in the world when you're in a mess at home", but you know... I don't want to overdo the analogy, but in the late 1970s, which you're too young to remember [Fuck this, we're older than Wolfo, idiot], I was very aware that post-Vietnam, the US was in terrible economic shape as well. We had double-digit inflation, we had very high unemployment. It was a sort of feeling that our leadership role - particularly in Asia - was finished. And frankly, partly because we got very strong messages from Australia:"Look, you're needed out here. However you may feel about the terrible experience of Vietnam, it is very important for the US to stay engaged", and we did. And the 1980s turned into a very different era - partly because of Paul Volker and getting inflation down, getting the economy growing again. It can be done, and I think there's an American spirit that I hope will prevail here again.

LEIGH SALES: If I could turn to another subject, is Australia wise to rely on China's continuing growth for its economic prosperity?

PAUL WOLFOWITZ: I guess one question is: what's your alternative? I think it's a mistake to rely too much on any one economic factor. It's why investors try to spread their portfolio round. I also think if one had to predict China's economic trajectory, it's bound to slow down. Plus, China's gonna face a shrinking in its labour force much sooner than people realise because of this draconian one-child policy that only a one-party dictatorship could decree and impose; and it's gonna have some strange effects in China, including vastly more men than women in that generation, and a whole generation that has no cousins. If you can imagine - when you think about how the Chinese economy generally works on familial relationships, and you do what these social engineers have done - I think China's gonna have some difficulties. I think it will keep growing and I think that's a safe bet. But not growing at nine or 10 per cent for a long time.

LEIGH SALES: What about on the security side? Do you see China posing any sort of security threat to the Asia-Pacific region?

PAUL WOLFOWITZ: I think "threat" is the wrong word to use, but I do think China would like to be, at some point in the future, the dominant military power in this region. And I don't say that from a Chinese perspective. I suppose that's an entirely reasonable ambition. But from a Korean perspective or a Vietnamese perspective or a Japanese perspective or, I would think, an Australian perspective, it's not such a great outcome.

LEIGH SALES: Paul Wolfowitz, thank you very much.

PAUL WOLFOWITZ: Thank you.

Read more:

https://www.abc.net.au/7.30/extended-interview-with-paul-wolfowitz/2823182

Well played Wolfo... 

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