Democrats have contributed to the current government shutdown by making the mistake of compromising with Republican “extortionists” during the last debt ceiling showdown in 2011, Robert Reich said.
“Once you start compromising, once you start negotiating with extortionists, there's no end to it because they will always increase their extortionist demands the next time around,” Clinton’s labor secretary told “Top Line.”
Reich described the current political standoff – with the government shutdown now in its sixteenth day and the possibility of default only a matter of hours away – as “crazy” and places the majority of the blame on Tea Party “extremists.”
He also had a sharp warning about what default would mean for the U.S. economy.
“If we ever get to an actual default, then interest rates are going to spike more than they actually have, we're going to see dramatic declines in share prices, the world economy is going to be affected,” Reich said.
Reich is the star of a new documentary, “Inequality for All,” which makes the case that the United States is facing an economic crisis of sorts because of the income gap that exists between the wealthiest and poorest Americans.
“The rich have become extraordinarily wealthy, and the median household is actually getting poorer and poorer adjusted for inflation,” Reich said.
The documentary, which is now in theaters, prescribes altering economic policies in ways that would favor middle- and low-income households.
“The way you get the economy going is from the middle out,” Reich said. “You build middle-class incomes, you enable a lot of poor people to go into and join the middle class because there are more and more opportunities, and therefore because there is more purchasing power in the middle, the economy has a fair chance of moving forward.”
For more of the interview with Reich, including why he thinks the Tea Party is preventing the Republican Party from picking a viable presidential candidate in 2016, check out this episode of “Top Line.”
ABC News’ Betsy Klein, Misyrlena Egkolfopoulou, Gary Westphalen, Dick Norling and Barry Haywood contributed to this episode.
- Politics & Government
- Budget, Tax & Economy
- Robert Reich