the structure is very unstable, the ground is very unstable. but we're right sort of the middle of demolition right now. >> what keeps, we're looking at pictures right now. what keeps that giant machine that is demolishing the home from sinking into a sinkhole or making it worse. i mean, it must weigh tons. >> it does. basically the last couple of days our contractors and engineers have been establishing the perimeter of the sinkhole and they determined that it would be safe for equipment to operate from the roadway. so, basically not going any further with the equipment than the sidewalk and because of the reach of the arm, he's able to do his work. >> do it safely. tell me about any danger of similar things occurring or of this hole getting bigger and incompassing the other houses. can you give us an update on

that? just tell us in general how rare is this in your area? >> well, sinkholes are not, are not rare. and they do happen from time to time. this one is extremely unique. many of the folks who have been working with us over the years, contractors who see sinkholes all the time throughout florida have not seen anything like this because of its depth and its aggressiveness and the way that it continues to collapse. >> we want to thank you for your time. the county administrator in hillsboro county. good luck with this work. thanks so much. cnn will continue to follow the story throughout the day. thank you for watching "state of the union" today. head to cnn.com/sotu.

if you missed any part of today's show, find us on itunes, search state of the union. fareed zakaria "gps" is next for our viewers here in the u.s. this is "gps globing public square." welcome to all of you in the united states and around the world. i'm fareed zakaria. first, was there a breakthrough in the nuclear talks this week? is a deal possible? a rare response from the iranian government. i have an exclusive conversation with iran's ambassador to the united nations. then, the automatic spending cuts have kicked in, but are they so bad? maybe not. i've got a great battle to hash it out. with italy's bizarre election results this week, is the euro crisis back? and why is silvio berlusconi so popular? we'll talk to italy's premier journalist. but, first, here's my take.

john kerry is making news on his first foreign trip swinging through nine countries in europe and the middle east. he's talking about european trade deals, about providing greater assistance to the syrian opposition and he's talking about iran, of course. these are all important issues. but i wonder if kerry should, instead, just visited two countries on his first trip. china and japan. that's where the most significant and dangerous new developments in international relations are unfolding and where america diplomacy could make a big difference. the world's second and third largest economies have been jostling for months over territory, revolving ugly historic memories and making clear that in the event of a crisis, neither side would back down. trade between the two countries, which usually hovers around $350 billion a year is down substantially. an accident, miscalculation or unforeseen could easily spiral

out of control, and that would mean conflict between great powers in the fastest growing region of the world. the kind of problem that always has global consequences. the obama administration came into office determined to make a share priority, topped by its ties to china. hillary clinton's first trip as secretary of state was to asia. the administration wanted to engage china as a partner. china's reaction to these overtures was confused and muddles. beijing worried that it was being asked to involve itself in superpower diplomacy, which would distract it from its single-minded focus on economic development. wonder if it was a trap forcing their government to rubber stamp decisions that would be shaped out of washington. as a result, beijing's response to the obama administration's initial policy was cool, sometimes even combative. meanwhile in asia, they were worried about a new china from

japan to vietnam to singapore, governments in asia signaled that they would welcome a greater american presence in the region. one that would assure them that asia was not going to become china's backyard. the obama administration shrewdly responded combining economic, political and military measures all designed to signal that the u.s. would strengthen its role in asia, balancing any potential chinese. >> while enhancing our presence in southeast asia. >> the result was to further strain u.s. relations with beijing. today china and the united states maintain mechanisms like the strategic and economic dialogue between senior officials, but formal and ritualistic. no american or chinese officials have developed genuinely, deep mutual trusts. a containment strategy and believes that rising japanese nationalism tolerated by washington is responsible for the crisis in the east china seas.

the lack of progress in u.s./china relations stands as the single greatest vacuum in president obama's otherwise reasonably successful foreign policy. whoever is to blame, the fact remains that the only doable path to peace and stability is a strong relationship between the united states and china. the two countries are are not always going to agree, but they need to have much better and deeper ties. so, when he gets back from his trip, secretary kerry should start planning his next one to asia. for more on this, go to cnn.com/fareed for a link to my washington post column. but up next, iran. let's get started. expectations were not high for this week's nuclear talks with iran, but then the chief iranian negotiator said the meeting had been a turning point. and secretary of state kerry

called the talks useful. by the standards of these meetings, this is giddy optimism. so, what happened? and what can we expect in the next round of talks? joining me now in a rare and exclusive interview is iran's ambassador to the united nations mohammad khazaee. welcome. >> great pleasure to be with you. >> tell me what specifically iran sees as a turning point in these negotiations. is it the issue of the nuclear facility that it does not have to be shut down, but merely suspended? is it the issue of the 20% enrichment uranium? what is the turning point? >> thank you, that's a good point. eventually, in my view, none of them makes the negotiation a turning point. in my view, as far as i am informed, both sides are getting closer to each other.

and the proposals put on the table by the five plus one were much closer to the realities on the ground, to the kind of a sense of having bitter cooperation with yoiranian. the whole idea was idealistic and done before. so, therefore, i think that both sides have found some grounds for cooperation in futures. >> let me just spell it out. so, the things that encouraged you is there was some talk about relaxation of sanctions and some understanding that you did want some 20% enriched uranium to be used in the teheran research reactor for medical purposes. so, these you regard as steps forward. >> deaf nfinitdefinitely, defin.

you know, we have to have a realistic approach in the negotiation. of course, the details should be discussed from the technical point of view in the course of next couple of weeks and next few months, which they will discuss both sides. but the feeling that iranian have negotiation that both sides are getting closer to each other. that's the main point. it doesn't mat about the details discussed right now. the details could be discussed later on. when they decide to negotiate with each other with more comprehensive simultaneous steps should be taken. these are the important points. so, for example, how much stockpile iran can have or how much enrichment at what levels should be in iran. those are, in my view, a small, technical point that should be discussed. besides that, my understanding is that iranian will be able to enrich uranium at least up to 3% level at least what they need

for more than 1 million patients. so, these are the good and positive signs that we can take. of course, we still have a far way to go ahead to fulfill iranians' expectation from the other side, from confidence building measures. but, i think over the last few years it was a turning point in the negotiation. >> one of the things that disappointed many people here was a turn of events that took place about two weeks ago and you were in tehran at the time and you have access to all the top leaders. let me ask you this. vice president biden raised the prospect of direct talks between the united states and iran. the supreme leader of iran seemingly responding to that said, you know, we're not going to do things like that. the u.s. is pointing a gun at iran and wants us to talk to them, the iranian nation will not be intimidated by these actions. so, my question to you is, does

iran want to have direct negotiations with the united states on a broad range of issues? >> iran is for negotiation. and definitely we welcome any kind of dialogue and talk with the united states as well as any other country, all other countries around the world. this is the principle of iranian foreign policy. so, if you have also the statement made by ayatollah the supreme leader of iran, which i have his statement. he says, "we reasonable. all officials are reasonable. all people are reasonable. we understand reasonable deeds and accept reasonable views." the americans should show that they do not try to threaten. they should show that they do not speak an act unreasonably.

and then at the end, he says, this is the way to engage islamic republic of iran. americans should prove their good will. if they do, if they do, then they will see that the iranian people will answer in an appropriate way. it's a clear message. >> what is the message? >> i can tell you. the clear message of iran is if we see that the united states is serious and is honest about this proposal for negotiation, cooperation, direct talks with iranian, iranian will accept it and we will welcome it. no doubt about it. i can confirm it here with you and also for your distinguished audience that iran welcomes negotiation and talks with the united states. provided that we make sure the u.s. is serious and do not act differently. but let me go to sentence by mr.

biden. with due respect, what he says here exactly just one sentence. he says, "there is still time. there is still space for diplomacy. backed by pressure." look, it doesn't work that way. the most important point is that some officials in united states should understand how to speak with iranian. you heard secretary john kerry. he was talking about mutual respect. we welcome that. mutual respect doesn't go along with pressure. >> we'll be back in a moment with irain's ambassador to the united nations. when we come back, i'll ask him exactly what the united states needs to do to get direct talks with iran going. to provide companies with services... like helping hr departments manage benefits and pensions

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and we are back with iran's ambassador to the united nations mohammad khazaee a rare, exclusive interview talking about the prospects of a deal with iran. u.s. the representative of the government of iran, iran would welcome direct talks with the

united states as long as it shows it's serious. what is the sign that the united states needs to show, to show that it's serious about these talks? >> you know, the system here is very complicated. >> also in your country. >> also in my country, but some differences. iranian have been victimized by u.s. policy. american have not been victimized by the iranian policy. >> you took our hostages. but let's not get into this. tell us what is the sign -- >> even that one, even that one. if some american complained, it's different. >> for the future, what should the u.s. do? >> look, asking for guided talks with iran. at the same time, i'm not saying it is necessarily the policy of president obama or secretary of

state or is the policy of the congress here because there are some differences, you know, among their views and their approaches of iran. i do want to talk about or blame anybody. but my point is, we are ready to talk to you, but at the same time, we punish you and put pressure on you and your people. iranian cannot accept it. let me make it clear here. as long as the pressure continues on iranian, nobody in iran will dare to talk about negotiations. but if iranians see a single, small indication that, okay, today the united states is going to talk and act wisely vis-a-vis iranian talking to the united states or any other nation around the world is a welcoming approach and policy by the

iranian. and not talking to u.s. is not holy book or something like that. no. >> so, you just want to see some sign that the united states sends a signal. maybe some relaxation of sanctions or some indication that this is not just pressure. >> of course, we are not right now negotiating here, obviously. but the point is, iranians should make sure that america is not using pressure on iran for negotiations. negotiation should be for negotiation, talks for talks to find common ground and solve if there is any misunderstanding or problem that, obviously, exist. may i add just my own experience. >> sure. >> and i am not a politician, put it this way. i'm talking from the bottom of my heart. let me put it to you this way. eight years or nine years we

were under attacks by saddam hussein. the whole war which was supposed by u.s. and some other countries i remember those years that every day you could hear the strange noise of bombs in tehran and other cities. i had three kids. it was difficult event to fi findphilfind fi milk for your baby in iranian market. but iranian stood against the pressure and head germany off outside nation from them. eight years fighting and defending ourselves. so, therefore, with such a nation and the history that you know very well, talking about pressure and putting about and threatening iran is not going to work. >> we have to go, but i have to ask you. you are one of the officials who was part of starting the iranian

film industry. many, many years ago you were one of the guys funding it. i have to ask you, what did you think of the movie "argo"? >> thank you very much as you rightly mention it. i was member of the film jury for five years when i was in iran. from the technical point of view, to be honest with you, if i was a judge, the movie is a very weak movie. >> weak movie. >> i'm not saying really weak or not compatible with other kind of movies which hollywood produces, but compair to "lincoln" and compare to "life of pie" and it did not deserve to receive oscar prize. first of all. there are many mistakes in the movie. for instance, you are familiar with our culture. even the producer or the director the iranian culture.

in iran when we want to say hello to someone we say salaam and even the movie, they were going to saying -- so, the producer or director, they're not familiar with the culture. to be honest with you, whoever in iran saw the film, they felt insulted by america. it was politically wrong and technically wrong and i think the producer of the film that is known as ambassador of peace, as i heard, should be ashamed of producing such a film that from the technical point of view, political point of view was wrong. as well as insulting a big nation like iran. i would like to invite the producer and the director of the film to travel to iran and when they travel to iran the day

after they will apologize from the big nation of iran for producing. >> always a pleasure to have you on. >> thank you very much. pleasure to be with you today, fareed. up next, a different movie. we're going to talk about a world leader who doesn't even want to watch an oscar nominated film from his own country. [ male announcer ] this is the opposite of subliminal advertising... there's no subtext... just tacos. yeah, it's our job to make you want it. but honestly... it's not that hard.

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now, for our what in the world segment. this year, oscar nominated movies have had a strong tie to real geo political events and they have everyone watching and talking. "zero dark thirty" was all about the race to catch osama bin laden and senators and cia directors have all weighed in on the movie. "argo" told is tthe story of si american diplomats who managed to escape iran and michelle obama presented it with the best picture prize. but there is a major world leader who says he has no interest in watching an oscar nominated movie about his own country. i'll get to the world leader in a moment, but, first, the movie. it is "the gatekeepers."

it is about israel's internal security service. no one has ever interviewed any one of its leaders on camera. "the gatekeeper" talks to six of them. the last six directors to retire. it is unprecedented to hear top israeli spies discuss issues like collateral damage or the morality of killing terrorists, but in this film, they do. they are honest about the methods they had to use, deadly, brutal, effective. all of them believe these matters were justified, given israel's circumstances, ruling over millions of palestinians with terrorist groups operating among them. but what was stunning to hear is that all of them believed the only real solution for israel was to end the occupation. now, take a look at these clips

from the film. this is former director who says israelis have become cruel. he goes on to say the army has become a brutal occupation force, similar to the germans in world war ii. another says this, we win every battle, but we lose the war. and this -- >> one man is another man's freedom fighter. >> these are the kind of words you'd hear from left-wing dubs. the film is getting some attention there. more than 50,000 israelis have seen the film, a pretty substantial number for a documentary. but as i mentioned earlier, one very important person hasn't watched it. and says he has no plans to. the prime minister of israel. benjamin netanyahu is likely to

form a coalition and begin a new term as prime minister this month. one of his first big projects will be to welcome president obama to his country. obama will make his first visit to israel as president. what will they discuss? for sure iran and, of course, discuss syria and the unrest across the arab world but "the gatekeepers" is a reminder that the question of what to do about the palestinian territories that israel has now occupied for almost 50 years should also get on the agenda. at least that's the message i got from the last six directors. men who have devoted their lives to defending the state of israel. maybe they know something. when we come back, that nine-letter word that everybody knows but doesn't quite understand. sequester. i've got a great panel to talk about it and europe. [ male announcer ] this is anna, her long day teaching the perfect swing

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i'm candy crowley in washington with a check of the headlines. crews began demolishing the florida home. authorities called off the search for his body yesterday. the demolition could take a few days. the man who was behind a deadly january attack on an algerian gas facility is dead. moktar belmoktar led a jihadest group with al qaeda. gathering in rome to prepare picking for a new pope.

the first sunday without a pontiff. but the cardinals will have their first meeting tomorrow. benedict officially retired last thursday. and vice president joe biden is in selma, alabama, today to commemorate the 1965 voting right march. the vice president will deliver the keynote address at a brunch and then join others retracing the walk across the edmund pettis bridge. 48 years ago this month that alabama state troopers attacked a group that attempted to march from selma to montgomery in what would become the voting rights act. those are your headlines "reliable sources" is at the top of the hour. now back to fareed zakaria's "gps." first we went over the cliff and now we have been sequestered all in the span of two months. how bad are these automatic spending cuts economically in the short term and long run?

how bad does the united states look to the rest of the world. we will ask all this to our panel, zanny minton beddoes david leonhardt and roger atman two stints attest the highest levels of the u.s. treasury. welcome. david, you wrote a piece in which you said, this isn't so bad after all. that's sort of what the republicans are saying. so, let me give you the opposite view which is, you only have seven months to squeeze all these cuts in. while it looks like it's 2%, since so much is exempt, it is a lot more than 2% and because it's done in this cleaver-like fashion, in fact, this will look pretty bad. >> all depends on what your priorities are are. if it won't matter, clearly won't matter. if will this send us into a recession or fiscal cliff, it's not as bad as that. the big problem here is the makeup of the cuts, not just the

size. as a percentage of gdp, it's not horrible. but the problem is it's so arbitrary. you listen to economists and so many use dumb and stupid, not technical words to describe it. hard for agencies to react to it. >> ask you described this, this is like being attacked. >> when the attack came from afghanistan. >> explain why. the way to think about it is all the stuff we should be cutting in the federal budget under the sequester and all the stuff we shouldn't be cutting is the stuff we are cutting. >> the two big problems relative to the fiscal condition of the united states are , on the one hand, growth in entitlement spending, which isn't addressed by the sequester. and growth relative to sequester is not addressed. >> so what it cuts, instead, infrastructure, sicience, research. >> which has been cut by $1.3

trillion, that's a lot. in terms of gdp, the nondefense portion of discretionary, which is substantially affected by the sequester is approaching a 50-year low. so, it's in effect shooting the wrong victim. and that's why it's so stupid. >> zanny, the latest gdp numbers, the revised numbers suggest that the economy is barely growing. so, isn't it possible even though this is not a large part of gdp, this could actually have the effect of tipping the united states into something like a second recession? >> i don't think it will tip the united states to a second. but i think what could have been a rather more vigorous recovery will remain lackluster, at best. overall, not as bad as if we have gone off the fiscal cliff. i think the biggest of any major economy. so, it's really not what the u.s. economy needs because as

roger says, this doesn't solve any of the u.s.'s real problems whi which, it cut stuff that is good for the economy and it weakens a lackluster recovery. on all accounts, it's dumb. >> one thing that is fascinating is the financial markets, you can see it in the stock market, which is off to the best start in something like 17 years, is looking right through this. it's essentially saying we got through the fiscal cliff, no serious economic effect. all the threats of the debt limit, that's off the table. we're going to get through the sequester and the risk of a government shutdown and the financial markets are looking ahead to roughly the end of 2013 and seeing a transition towards a stronger economy. >> but what about people like your colleague paul krugman you have 20 million people unemployed or underemployed what you need far from moderate austerity programs, you need a big fiscal push and spending plans. >> we have evidence that

austerity does not work after a financial crisis. the united states in the '30s, japan, europe relative to us and yet the united states has turned after really being aggressive in 2009 and to some extent early 2010 turned towards austerity. it's remarkable to see that the united states has been cutting government employment over the last few years. something it did not do during the reagan years or the '90s. the idea that the best combination here some short-term investment and long-term austerity is pretty widely accepted and we're not going to get it for political reasons. >> i completely agree with that. what strikes me in this debate is often people on the left don't really want to do the long-term entitlement reform. i think we could have a different debate. you're absolutely right on the short-term, even if we had, from theed a ninstration and certainly from commentators more focus on long-term entitlement reform and the u.s. would say, look, we solved our problem and

put the house in order and not doing short-term cuts. >> the question is your time frame. right? over the next few years the deficit isn't our problem. over the next 20 years the deficit is a problem and it's important to acknowledge that, as you say. >> you, on the other hand, are bullish on the u.s. economy. you think even by next year growth will be strong enough that the fed might have to raise rates or some of these cuts would be fine. >> i'm not sure about when the fed will change monetary policy. actually, i think the president maximum ease policy will remain through the end of next year and probably into 2015. one thing people miss about the debate in austerity, i want to be very clear that i don't think the 2008 financial collapse was a good thing. it was too much anguish and pain and so forth. but it tends to have a dramatic restructuring effect. it had that in the united states and about to begin to have that or is beginning to have that in europe. i want to focus on the private sector because it had a

tremendous structuring impact on the private sector. you see this, as zanny said, this housing boom. i think it will be a boom. u.s. oil production just passed 7 million barrels a day and some think it will get to 10 million barrels a day. tremendous competitive advantage. you see the american household finally coming to the end or about the end of deleveraging and seen the statistics of borrowing on a net bases for the first time since the kriss and the point is the events of 2008 and the great recession have had a big, call it cleansing effect, on the private sector. it is now beginning to kick in. so, i think we're going to have quite a strong economy, give or take beginning in 2014. some people think the beginning and some people think the middle and that's one of the reasons why you see financial markets so strong. >> we need to take a break, but when we come back, we go to italy. what the elections there mean. do we have another euro crisis

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after this week's itailian elections, italy is essentially leaderless, according to my next guest. he says between the pope's

retirement and soon to be retirement of the president of italy and a hung parliament that will be unable to pick a new prime minister, no one will be in charge. columnist and an author. he is one of italy's most respected journalists, i'm, of course, also joined by my panel, zann mintonbeddoes and roger atman and david leonhardt of "new york times." does it matter that no one is running italy? the line in italy has always been the government sleeps and the economy grows. >> well, no, it does matter to be honest. it does matter a lut. we're not worried. you shouldn't be worried. things will be sorted out and we'll go how into a little bit. don't panic. i was in the aspen ideas festival late june 2012. everybody was talking about the doom day and everything is over and i told them, keep quiet.

let's see what happens. and, in fact, it turned out that things got better. so, before we decide that it's over. i think the expression is not over until the fat lady sings. it comes from opera. opera is italian, don't forget that. >> but let me ask you, beppe, why did the italians do this? it is one thing to reject astaiusterity and things like t. you rejected one or two depending on one's estimation of silvio berlusconi. what are the italians saying? >> out of four italians. one didn't vote, one voted for berlusconi. one voted for the center left and that's why we are in a stalemate. a wrecking ball for italian politics. to be honest, some of the italian political building needed to go down. political parties asked for it.

the question is, will we be able to build up something to replace what we pull down? >> roger, your point about europe, as i understand it, is particular countries like italy. it doesn't matter what they say and how much they protest, they're going to have to put in place some of the austerity measures that have been demanded because it's the market that's demanding this, right? >> of course, there have been austerity measures already begun, look at ireland for instance. but, yes, i find some aspects about the debate austerity is good, austerity is bad to be misguided because at least, initially, looking back a year ago at the worst of the crisis, the euro zone crisis, it is the global of capital markets that demanded changes in the financial conditions or fiscal paths, debt paths of some of the prorifferal paths. there was no choice when a

borrower uses market access. no choice but to restructure. restructure means consolidating your finances and other steps that are seen as austerity. so, i don't think if you look back on if, there was a choice whether to have austerity. the issue is how much and over what period of time. >> i have a slightly different view. i think italy has big problems and i think the problems are not primarily fiscal. primarily, that the italian economy hasn't grown. italian productivity is terrible and per capita income has -- what does italy need? it needs huge reforms of its markets and it needs to open things up and all kind of deep fundamental reform to energize the economy. it needs huge political reforms, too, because there is a sort of outrage at the italian political elite. i don't think austerity tax increases which there has been a

lot and hitting short-term deficits is really the source of italy's problem. i think the emphasis was wrong. to make that point more broadly within europe has been much too much on hitting short-term deficit targets and much too little on the kind of overhaul that europe needs to boost growth. i do slightly disagree with you, rog roger, in terms of emphasis. would have both made the economics of the reform program more sustainable and also help the politics. >> so, in a way, you needed less austerity and more structural reform. but the structural reform is actually the hardest thing to do because that's when you're breaking up gills and taking on unions and opening up protected sectors of the economy. frankly, we haven't done that much of it here. >> that's exactly right. on the one hand, italy's problems are clearly worse than ours. we haven't had any demands from the global financial markets to restructuring the way that italy has. we haven't had any sort of

valus. the sequester has the opportunity to make it worse. one thing i worry about and you hinted at this before, the sequester effectively hits things that provide to future economic growth. medicare and social security, but don't contribute to economic growth. and growth is the best way to solve deficits. italy's problem and in a lesser way, it's our problem, as well. >> beppe, what about this issue that italy has done a fair amount of austerity, but very little reform. if you look at unit label costs which is one proxy for reform, they're barely changed in italy down substantially in places like spain, even greece. that if you look at the structural reforms that people think italy needs, they haven't done that much with all mario monte's efforts. >> don't forget, it's very important for people who are looking at this program to understand how we get there. give me like ten seconds. when the crisis hit, every country reacted in different ways.

you in america, what happened, on the left, people occupied whatever it was free to occupy a tea party on the right. even greece they clashed in the square and in france they took to the streets. italy was all very quiet and people accepted mario monte bitter medicine. these are the reaction. a bit delayed, but i think now they managed to put together, i agree with zanny, we need to go into structure reform. berlusconi was a disaster as prime minister because italy became 2001 and 2011 grew only a few countries in the world. grew less than italy. how is that possible? we sell prada, we sell mazerati and ferrari. bigger than britain in terms of manufacturing. we need to go back to what we can do and restructure.

they'll do everything. >> beppe, zanny, roger, david, thank you all very much. up next, why are the people of egypt and tunisia shaking and why might those nation's leaders be shaking, as well? we'll explain, when we come to make you want it. but honestly... it's not that hard. old el paso. when you gotta have mexican. tens of thousands of dollars in hidden fees on their 401(k)s?! go to e-trade and roll over your old 401(k)s to a new e-trade retirement account. none of them charge annual fees and all of them offer low cost investments. e-trade. less for us. more for you.

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pope benedict xvi left office on thursday. we all await the election of his successor. did you know that person will take up two jobs? the papacy and sovereign of the vatican city state. that brings me to my question of the week. the vatican is a small country, but how small? how many official citizens does the vatican city state have? "a" around 450. "b" around 4, 500. "c" around 450,000 and "d" around 4.5 million. stay tuned and we'll tell you the correct answer. go to cnn.com/fareed for more of the gps challenge and follow us on twitter and facebook. remember, if you miss a show or a special, go to itunes.com/fareed. this week's book of the week is "l