capacity, so they can raise their prices. an overheated economy is the last thing we need to think about right now. >> mr. campbell of california is recognized. >> i have been talking about the real debt lemon and i have been saying that we have all lot of debate and dispute here in congress over the statutory debt limit, but it is an arbitrary number and a real debt limit is when we reach what we're all calling the tipping point. but the push back and get on that from some people and allied have dr. meltzer and mr. edwards to respond, we are a long way away from that. look at treasury debt right now. it is dropping down below 1.9% and soth, the ns .. there, there is a tremendous appetite for treasury debt.

this is an indication that we are a long way from that tipping point. what either of you like to respond to that? >> first, i would say the size of the unfunded mandate does not -- is thought included in most of the numbers that we talk seven timessix to the size of the deficit, depending on what interest rate you use. that is an enormous amount, just as the chart shows. mr. ball and i agree. is the medicare and medicaid expenditure -- if is the medicare and medicaid expenditure that is going to cause the problem. it pales in in significance compared to medicare and medicaid. there are a lot of things that we can do.

and they do not require taking away promised benefits to people. for example, and one of many examples, we have to ask why do we spend about 50% of the medicare money on people who within six months of dying, now they don't all die, so for some there's a benefit, but there's no co hay attached to that. if we attach the co-pay and graduate it according 20 income, we would reduce -- >> okay, just because i have little time. how do you respond to the people that say in spite of all of this that we have considerably more debt to run up and the evidence of that is the appetite for and the low interest rate on treasury bills. >> the reason we have low interest rate is because the fed enforces it. if you look at where the pressure is coming from, look at the fact that the dollar has depreciated by about 15% against

a weak currency like the euro and a larger percent against the yen. the recent inflation number was 3.8%, well above the feds' target. i don't buy the argument that in a weak economy, you don't get inflation. you gave the example of germany. spain, at the moment, has 20% unemployment. prices are rising. britain has a high inemployment rate, prices are rising. there are other sources other than the labor market to give you inflation, and we're going to get them. >> mr. ed words? >> there's these negative risks out there that something big and bad is going to happen to the american economy. we don't know what it is. look at the january 2008cbo projection, by didn't project a recession, maybe it would happen, but suggested growth will be strengthening in coming years. we'll be surprised by the next

big recession or negative negative factor. what if we have a recession a few years from now, another major recession, you know, tax revenues plunging, unemployment cost soaring, policymakers with another stimulus, and we're in this sort of spiral downwards of debt and poor economic growth, so, you know, we got to start planning now. the risk factors are in the negative side. european countries have a demographic problem worse than ours with debt loads going up. there's, you know, higher their debt load become and the higher ours become, the more risk of an international con they jont. if europe has another deep recession, it causes a recession here. the risks are all on the ugly side, i think. >> okay. last 15 seconds, any want to comment on the things

discussing, what everybody's calling it to change the maturities of the debt that they hold? >> well, too much. they tried it back in the 1960ings. they had a big experiment. it didn't work. that is, their own research of the fed said it didn't work. why? well, think about it. if you suppress long term rates and raise short term rates, what do you think the market people are going to do. they are going to go the other way. okay, my time expired. >> the chair recognizes the gentleman from texas. >> you were not meant to speak today. [laughter] >> probably with good reason. you referenced just a moment ago about the cost of medicare for parties in the last month and

weeks of life. somebody who practiced medicine for a number of years, the principle problem there is the lack of transparency for the patient and they don't say when the last two weeks beginning, and it's difficult for us to balance decisions, but along that line, you talk about the cost drivers contained within medicare and medicaid, and you talked about perhaps changing things so that they don't take away future benefits. i submit within the health care realm, there's $1.3 trillion in immediate savings that will not take away future benefits, and that would be to delay the implementation of the affordable care act which no one seems 20 seriously consider when they have deficit commission or when they talk to the president. is that something that congress should take under serious consideration? >> yes. >> thank you. we also talked, and this is for any one of you, talked a great

deal about cash flow sidelines, i talked to a number of bankers going back this past year and a little bit longer, and the community bankers tell me that they are -- they're hampered by the fact that they must keep their loan to deposit ratio under 80%, or they'll invite a visit from some type of bank examiner, and that visit may not be pleasant, so they take pains to not go that last -- to not touch the last 20% as a consequence they are not making money on that 20% of deposits, the community is deprived of the loans those 20% of deposits could create. do any one of you have a sense that that's a bigger problem than what's been talked about before? >> if i may comment, i think that is a problem. i think probably depressed lending like community banks is one factor holding back the recovery, and perhaps regulators

could change their attitude a little bit or think of creative ways to encourage lending and perhaps help recapitalize community banks. >> right. we have gone the other way in the past 18-24 months, and rather than making regulations perhaps clarifying them even, we've made them more obscure as has been previously mentioned. we frighten people with what are the future regulatory environment that they're going to encounter, and is that one of the reasons this cash stays on the sidelines? >> that's one of the reasons. that is generally regulation. as speaker boehner said so well the other day, you can move the plant to china, but you can't move it to south carolina. that sound funny, but at the same time, it tells us a serious thing about what regulation does to the attitude of businessmen. >> the president now is talking

about raising taxes to create jobs, and yet this is the same white house that sells they can't sell to tie won that the labor relations board says you can't build aircraft in south carolina and the biggest purposers of the country is buying non-boeing products for the first time in the company's history. america airlines is buys non-american produced jets. the 8 to 18 power plants are closing because of the air pollution laws. pipelines argue the environment agents it one one or another, but the white house is not making a decision yes or no for drilling in the or ting. they just will not make a

discussion. the white house is so risk adverse, they are afraid to act. do you have an upon about that? >> i agree with that completely. i think you don't know what the future's going to be. cash is the friend. >> a general comment, there's been so much focus in the last few years by policy in washington, misguided focus in certain ways. microeconomics is extremely important. go back, for example, and uke at what margaret thatcher did in the 70s in britain. she got the macroeconomics in order but did a lot on microeconomics with privatization, all those things -- it's hard to quantify the impact on the economy, but there's no doubt that, you know, fast growth economies, they are getting both the macroand

microeconomics right. >> i would second that. i worked with ms. thatcher some of the time. she was a real leader, willing to make tough decisions. >> thank you. >> thank you, mr. chairman. >> thank you. we're going to under go a second round of questioning by mr. cummings and senator mint. >> what are our deficits being driven by slow economic growth and what impact would more robust economic growth have on the ability to rain in the debt, and the proposals presented by the president, i just wanted to know your opinion of those might be, and do you feel that they would be helpful as some have, many economists projected? >> well, i think there's absolutely no question that the main driving force behind the run up in the budget deficit is

the economic slum. i mean, somebody else referred to lower tax revenues, higher unemployment insurance. i mean, it's a strong economic clarity that deficits go up in recessions. . stimulus program added to the debt, but it was secondary compared to the recession, and absolutely f we can find a way to restore robust growth, that's the best possible deficit reduction plan, and anything that retards growth is self-defeating as far as the fiscal situation because of the effects of growth on the deficit . as far as the president's job plan, i have not studied it in detail, but it seems like a step in the right direction. it seems, frankly we face a huge problem actually whether it's the president's jobs plan or various deregulation or things the fed can do, it's not clear

that any of the measures we have are really sufficient that we may have to either really try something more radical or accept that we're going to live with high unemployment for quite a while. >> mr. cummings, that job plan cost $200,000 per job. my wife, who is not an economist, said give the same people $150,000 and we'll be ahead of the gai. we're not going to get out of this problem by spending $200,000 per job. >> you're saying that you can't -- one of the things that's always bothered me about all of this is you look at the -- something like infrastructure, and in they say there's a sink hole developing every eight minutes. >> i agree with that. >> every eight minutes. we got bridges falling apart.

. you know, i told some people the other day, you can erode from the inside. you can die from the inside. if you're educating your people, not innovating, you can't be competitive, so at whatpoint -- i mean, you got to spend. you got to spend carefully to get the economy going and get people moving carefully, but at the same time, you can't die in the process because by the time you get out of the mess, you don't have a country. >> i agree. >> you agree with me? >> i agree that the infrastructure in the united states is bad. i live in pittsburgh. i'll match you bridge for bridge and have a bunch left over, so absolutely. i've seen the structure, but if you think you are going to take carpenters and brake layers and turn them into road and bridge builders overnight, you're

kidding yourself. building a bridge is a big job and it requires people who are trained in steel. the president said lets just take some of the unemployed construction worker and make them road builders. have you watched them build roads? they use heavy equipment. you have to learn how to drive that. that's not going to be a solution. i agree. we have a long term problem of infrastructure. we are to do what we can about infrastructure. that's a constructive thing. we've waited way too long to do something about it. education -- we really have tried with education. it's terribly important. the gaps in income between the poor and rich is driven mainly by the fact that technology has changed, and, you know, i was a corporate officer or director

and if you didn't have an education, you couldn't read the computer beside your workstation, you swept the floor. that's a loss of people. we need to do something about that. i wish i knee what we needed to do. >> thank you very much. >> senator mint is recognize recognized. >> it did come on. i want to thank congressman cummings for presenting the alternative view today. obviously, we have a big difference of opinion in washington about what we need to do to fix the problem, and i frankly don't think i'm looking at this through a political prism. i'm thinking of it as a guy who was in business for many years. i consulted with a number of other business, so my political perspective is really not a political perspective, and what i'm looking at today by any

measure from a business perspective, our nation is bankrupt. if you look at the balance sheet, we've got a negative cash flow projected continually and indefinitely. every new program we suggest has to be borrowed or aprinted. our fate is in the hands of the credders, and that's a worry smit situation. i don't know how we can get around that, and the solution, if you use a business parallel -- okay, the 3% of americans who make over $200,000 also create most of our job, and give the most to charity, provide 60% of all investment capital. they happen to be the ones making things happen to take in more money for them and give it to people creating the debt does not seem to be making a lot of common sense, so just like a business whose revenue is down, and they disease decide the best way to get out of that is to

raise their prices. that's what we're talking about doing here. the business is down, rev nigh is down, so we want to raise prices on it who are effectively our customers, those creating revenue for us, and that's a difficult thing to swallow when we know, and it may be true in imf economies, but we've got an economy where 3% of economies may over half the taxes, they create jobs, provide investment capital, and frankly, that's not going to solve our problem if you look at the data for the last ten years, the increase in our deficit is mostly attributable to an increase in spending including a lot of discretionary spending. social security has not contributed to our debt at all. in fact, if we had not borrowed $3.6 trillion from social security, we would be more in debt than we are today, and so this is not all on the entitlements. this is on belief of the government that we need to

direct the economy. i think the difference of opinion here is that the government is the primary stimulater of the economy versus those of us who think the reason america was so exceptional and prosperous was we were a bottom up economy with millions of people starting businesses, innovating, being entrepreneurs. those are the people we seem to want to attack right now. 40% of those who have income over $# -- $200 thorks, 40% of the income is small business income, and so i understand the need to balance revenue as well as spending cuts, but we can get new revenue by making the economy grow, and frankly, if you look at 20-year data, you can raise the taxes as much as you want, but the revenue is 20% of the g -- or excuse me, 18-% 19% of the gdp over time. i appreciate the panelists helping us to talk through this. to me, this is a situation where

like all of you said, let's not wait to find out because all of this is going to take is china to say they are not lending us more money to dump our debt at 80 cents on the dollar. the only thing keeping our dollar up, keeping what the economy we have going is faith in the fact that the other economies are worse off than we are right now, but thank you for helping us talk through this. mr. chairman, to you, and the committee staff, i appreciate all the work that's been done, appreciate the folks answering questions, and i hope to follow-up with decisive action to solve the problems. >> thank you for leading the hearing today, both parties, thank you for engaging. i appreciate the insight and thoughts provided by our panelists as well to borrow from the president's current speech, it's clear the real debt limit is upon us now. we have to act credibly to

reduce that debt now. we need to get washington out of the way of our recovery now. with that, the meeting is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

>> you don't play politics at a time of national crisis. you don't play politics with the

national economy, and you never play politics with people's jobs. >> with the british house of commons in recess, annual party conferences are underway in the u.k.. watch nick clegg's keynote this sunday at 9 on c-span. in the weeks ahead, party conferences with labor party leader and conservative leader david cameron. >> thursday, following his morning address to the united nations british assembly, david cameron traveled to canada to meet with steven harper and address the canadian parliament for the first time. in his 20 minute speech, he discuss the global economy and security. this program is curtesy of canada's cable public affairs channel, cpac. [applause]

[applause] [applause] [applause] [applause] >> order. i'll call upon the right honorable prime minister to take the podium. [applause] [applause] >> translator: thank you, dear colleagues. the honorable speaker of the senate, the speak of the house

of commons, senators and members, the chief justice and justices of the supreme court, distinguished guests, ladies and gentlemen -- it is a great privilege to welcome to the parliament today, the right honorable david cameron. [applause] on a personal note, david, i've seen you recently and often, many times, in fact, both as leaders of the opposition of prime minister in great britain, and around the world, but it's a special pleasure to meet you here in canada. where you are joining a distinguished register of prime ministers who have addressed this chamber. >> translator: for example, most recently in 2001, the right honorable tony blair spoke before the house. >> thatcher spoke in this place on two occasions, and perhaps

most famously, it was right here in 1941 during some of the darkest days of the second world war that sir winston churchill made his some chicken, some neck speech that did so much to rally spirits on both sides of the at lain tick. now, prime minister, another preed sees tore called a hearing before this house, and i quote, "almost daunting experience for the visitor." i'll assure you that he found, as you will, that in the traditions we inherited from your own country, that the commons treats its visitors much better than we do each other. [laughter] [applause] >> translator: once again, we welcome you, and we look forward to hearing from you in just a few moments. >> the indulgence of this house

to refer briefly to the matters, security matters, and economic matterrings that brought us together usually with other world levereds no less than seven times in 16 months, matters, i must say, in which cameron's leadership has been decisive and demand to continue purpose. >> translator: i'm thinking particularly of the role our two countries played with the critical assistance of our other great mother country, france, and the efforts made to help the libyan people to build a better future. there undertaking, we have been inspired by certain fundmenteddal beliefs. >> it's that the state is made for man and not man for the state as the right honorable

harold mcmill lain said in that chamber. when we help others to be free, it's our liberty we also secure. it's the rule of law our countries share that are the common aspirations of millions of people around the world. they are clearly the aspirations of the libyan people themselves, and our hope is they will someday enjoy them in all their fullness. [applause] >> translator: and, of course, there are also the very grave problems that are battering the world economy that unit us as partners of the g20. >> will be accused of exaggeration if we acknowledge the most immediate tasks confronting all of us is to avoid the devastating consequences of a return to global recession.

yet without key countries taking systemically appropriate and coordinated economic measures, without resistance to flexible exchange rates, without fiscal consolidation and without a will to address growing uncertainty to tackle what are in some cases dangerous and unsustainable levels of national indebtedness on these matters, the world will not avoid such consequences. >> translator: i would like the emphasize the leadership shown by prime minister cameron on the issues of current economic importance. >> mr. cameron offered to our partners and determined advocacy for fiscal discipline. sec, his consequential handling of the difficult fiscal choices confronting the british economy. truly among our g20 partners,

prime minister cameron has been a leader by example. [applause] we have followed your progress carefully, and i can safely say where it matters most, your thinking parallels that of our own government. to be precise, well, deficit reduction is not on end in itself. the g20 fiscal targets agreed to in toronto last year remain essential elements for rebuilding the economic health of industrialized nations. >> translator: like you, prime minister, we are combining these goals with a clear plan to stimulate job creation and economic growth. later this year, the leaders of the g20 will meet again. >> i dare say when we get there, we will have much to occupy us at the g20.

honorable members, without further adieu, gives me great pleasure to introduce a man of immense resolve and principled action, a great friend of mine and canada, the prime minister of united kingdom, the right, honorable david cameron. [applause] [applause] [applause] >> mr. speaker, mr. speaker of the senate, mr. prime minister, honorable members of the senate, and members of the house of commons, thank you for that incredibly warm welcome. as you said, steven, this does remind me of home.

it's just a little bit bigger. [laughter] and a lot better behaved. [laughter] >> translator: i thank you for the great honor that you have just bestowed upon me by inviting me to address this historic parliament. >> should have proceeded that with the warning churchill gave in a wartime broadcasts when he said, "take care, be careful, i'm going to speak french." [applause] [laughter] let me begin in this place by paying tribute to jack laton, o live ya, his family, his energy and optimism were above politics, and i know he'll be missed by all those who serve

here. [applause] [applause] one of the things i'm finding about this job is whenever country i visit, members of the royal family have got there first. [laughter] i think that the duke and duchess of cam bridge, or will and kate as you call them here -- [laughter] have set the bar high this time. it is a symbol of the importance of the relationship between our two countries and long standing affection people show towards one another that the young royal couple chose canada as the destination for their first ever overseas visit, and that the people here gave them such a warm reception. now, sadly, i won't be landing a

helicopter in a lake or wearing a stetson, and i'm sure prime minister harper is disappointed he can't challenge me at rodeo either. [laughter] as set out, there is a strong argument that the 21st century can be the canadian century. in the last few years, canada's got every major decision right. look at the facts. not a single canadian bank fell during the global banking crisis. canada got to grips with its deficit and was running surpluses and paying down the debt before the recession, fixing the roof while the sun was still shining. your economic leadership helped the canadian economy to weather the global storms far better than many of your international competitors. the way in which you have integrated people from many different backgrounds into a

mature democracy is, i believe, a model of which we can all learn. canada is now preparing for a better future. alberta is the jurisdiction with the best educational results of any english jurisdiction in the world. from blackbury -- [applause] from blackbury to canadum, space shuttle missions, yours is a home of innovation and technology. in fact, blackbury presented our ma jeesty, the queen, with a smart phone when she visited last year, but surprisingly, she had one already. [laughter] canada displays moral clarity and political leadership. canadian servicemen and women have made extraordinary

sacrifices in the defense of liberty and democracy. [applause] yet while some countries do limit and talk a lot, canada is self-sacrificing in its contribution to the fight for a better world, so it is a privilege for me to come here today and to honor what you have done. it is also a great pleasure to be standing here with my colleague and friend, prime minister harper: i've seen at firsthand over the last 16 months his outstanding leadership, including last year. then, as now, the focus of much of our efforts of on the two issues that concern our people most, keeping them safe and getting them jobs. this evening, i want to focus my

remarks on how we can work together to address some of the issues of the global economy, but let me first say something about security. we have all suffered from extremism and violence. i'm just come from the united nations that i argued the events seen this year in north africa and the middle east offer a massive opportunity to spread peace, prosperity, democracy, and vitally security, but only if we work together to seize the opportunity and to support the arab people as they seek to fulfill aspirations for jobs, a voice, and a stake in their society. our two countries have always been prepared to bear the burden and pay the price to make our world safer and to defend our way of life. the peace tower in this building commemorates the 63,000 canadian lives lost in the first world war alone. britain owes an incredible debt

to canadian armed forces, and i want to pay tribute to them today. through two world wars, canada was there. at ridge, passiondale, canada was there. when our forces together suffered the worst losses in history, canada was there. in fact, it was after the psalm that one said this, the canadians played a part of such distinction that thence forward they were marked out as shop troops. whenever the germans found the canadian core coming into the line, they prepared for the worst. in our darkest hour in world war ii, canadian naval forces helped to keep the sea lanes open during the battle of the atlantic running convoys across the atlantic week after week braves mines, submarines, and blacked out ships that was

fundamental to our ability to survive as an independent country. it was the third canadian infantry division and the royal canadian naval that achieved a victory on the normandy landings. on d-day, they got further inland than the other five invasion forces. today, canada is a vital military partner as it's ever been. as members of nato, our forces are proud to serve alongside each other in international operations from bosnia, and most recently from afghanistan to libya. in afghanistan, it's canadian and british forces alongside each other in the south in the very toughest part of the country where few other nations would follow. today, canadian personnel are

engaged in vital work training the forces. in libya, it was a canadian general, charles brushard, who commanded the operation, and pilots who played a role in protecting civilians and helping the libyan people to liberate themselves. [applause] [applause] now, mr. speaker, amidst all of this, there could not be a more fitting tribute to the brilliance of canadian forces and our pride of standing side by side with them other than the recent renaming of the maritime and air command of the royal canadian navy and the royal

canadian air force. [cheers and applause] [applause] [applause] prime minister harper and i ensure that britain and canada keep our defenses strong. we also understand the impact we can have to punch our weight in the world and help achieve freedom, security, and democracy. it's not just about military might alone, but diplomacy, aide, culture, and the promotion of our values. britain is pleased to support the initiative on maternal and child health launched under harper's leadership at g8 last year, and we are invested -- [applause] and we are investing in programs to save the lives of 50,000

women in pregnancy and childbirth and stop a quarter of a million newborn babies dying need leslie. there are, of course -- [applause] of course, at a time when finances are tight, people question whether we should keep our aid commitments. i say, yes. you need to be able to protect military power to protect your security and defend your values, but it is even better to mend broken instigates and to act and stop problems before they come to our door. whether that's waves of illegal migration, spread of diseases, or new fleets to the national security. take afghanistan. if we put a fraction of our current military spending on afghanistan into helping afghanistan develop 15 or 20 years ago, just think of what we might have been able toe avoid over the last decade.

[applause] or take pakistan. must another generation of pakistani children enter life without a proper education or prospect of a job and a head full of extremist propaganda? what are the risks in terms of mass migration, radicalization, and even terrorism? britain and canada have never turned away from the world, so it's right that we have met our aid commitments, and i hope you will continue to join me in working with our international development partners, not just for the good of the developing world, but for the safety and security of us all. just as britain and canada worked together for the world's security, so we must now work together on the biggest challenge this year, securing strange and sustainable growth in the global economy. now, it is important that we are

clear about the facts. we're not quite staring down the barrel, but the patent is clear. the recovery out of the recession for the advanced economies will be difficult. growth in europe has stalled. growth in america has stalled. the effects of the japanese earthquake, high oil and food prices created a drag on growth, but fundamentally, we are still suffering from the aftershocks of the world financial bust and the economic collapse in 20086789 that means -- 2008. that means families in britain and canada are facing a tough time. i believe prime minister harp earn and i share the same analysis what is wrong and what needs to be put right. the world is recovering from a once in 70 years financial crisis and suffering from debts not seen in decades. this is not a traditional

cyclical recession. it's a debt crisis. when the fundamental problem is the level of debt and the fear of those level les, then the usual economic prescriptions cannot be applied. it is not a question of using conventional, fiscal, and military levers to stimlace growth until confidence and normal business activity returns. when households borrowed too much, when banks are shrinking balance sheets and rebuilding their capital, and when governments are accumulating huge stocks of debt, the power of those traditional levels is limited. the economic situation is much more danger, and the solution for most countries cannot be similar -- simply to borrow more. why? because if the government doesn't have the room to borrow more in order to cut taxes or increase spending, people and markets start worrying about whether a government can actually pay back its debt, and when this happens, confidence

ebbs away, and interest rates will rise hitting people with mortgages and hitting companies that want to borrow to invest. we can see this happening right now in some european countries. now, of course, there is a crucial role for military policy to help support economies in the short term. of course, those who have room can use fiscal levers to do the same. yes, demand matters, but boosting if by underminding stability is self-defeating and damages the confidence of which economic growth depends. a long term solution must tackle the fundamental problem. we must address the problem of excessive debt. let me say it again. it is a debt crisis. [applause]

only when we properly recognize this, can we begin to address banks that are too late, and consumers and businesses whose fear of debts mean they dwoapt want to borrow to spend. recovery from a debt crisis is both different and more difficult than recovering from a cyclical recession. ultimately, there are only three ways to deal with the overhang of debts. we lighten them off or paying them back. highly indebted households and governments cannot spend their way out of a debt crisis. [applause] the more they spend, the more the debts rise and the more the fundamental problem grows. we need to confront the problems

directly. we have to do three things -- get to grip with the debt, restore credibility and confidence, make it easier to create jobs by freeing up the economies, and in a global crisis, working to the across the world, coordinating our action including boosting world trade starting with the doharan. first and foremost, we need to deal directly p our debts. in britain, we learned from canada's experience when you take action to pay down debt, when our impost took office in britain in may of 2010, we inherited the biggest deficit in the peacetime history. we faced the risk of rising interest rates, falling confidence, and questions about our credit worthiness as a country. we've taken really tough decisions to rescue our public finances, and we've begun to implement them. how fast you need to go will

depend on circumstances. when the deficit that was forecast to be the highest in the g20 and ballooning debt, the u.k. has had to act quickly. britain's experience contains an invaluable lesson. it is possible to earn credibility and get ahead of the markets through decisive action. by its nature, a global crisis cannot be solved by countries acting alone. 234 a global economy, we need every country in the world to show leadership do address its problems. with others, we continue to argue we need to increase global demand by rebalancing surplus countries spending more, helping deficit countries to increase exports and grow faster. of course, this is vital, and it will help the deficit countries to grow and repay debt. more spending my surplus countries will not only work on its own. we have to deal with the debts. i was an adviser in the treasury

at a time when our currencies were fixed through the exchange rate mechanism in europe. it failed. it taught me that different countries sometimes need very different economic policies, so i don't support britain joining the euro , and i never will. britain has a strong interest in the success of the euro zone as we all do. the problems are now so big that they have begun to threaten the state of the world economy. why? the euro area is one of the largest markets in the world it is the second largest currency. while the problems are not being solved, while they grow, businesses don't invest. confidence is sapped. in the area itself, increasingly worldwide also. euros' countries have to act swiftly to resolve the crisis. they must implement what they

agreed, must demonstrate they have the political will to do what is necessary to ensure the stability of the system. one way or another, they have to find a fundamental and lasting solution to the heart of the problem, the high level of indebtedness in many euro countries, and whatever course they take, europe's banks need to be made strong enough to help support the recovery, not put it at risk. at the same time, we cannot put off a fundamental problem of the lack of competitiveness in many euro area countries. putting off what needs to be done doesn't help. in fact, it makes the problem worse and lengthens the shadow of uncertainty that looms overred world economy. when you can't cut taxes or increase spending to boost demand, and when interest rates are already low, what is left of government is to take those simple, straightforward steps to

boost the potential for growth. we should remember that in the long term, it's not fiscal policy that makes economies grow. it's making us more productive that is essential for our future long term prosperity. that means making it easier to set up a new company, to employee people, to invest, to grow a business. this may sound simple, but that doesn't mean it's easy to do. you quickly find you come against barriers, obstacles, and regulations n. britain, we are determined to address this. we are creating the most competitive corporate tax regime in the g20, cutting the time it takes to set up a business, reducing tax cost and regulatory burdens for new businesses, putting up every regular lag on the internet to people can see what they are and which ones we can get rid of. we issued a one, one out rule for any regulation so any minister with a new regulation has to get rid of an existing

one first. [applause] [applause] with prioritizing finance and infrastructure, reforming the education system, introducing new apprenticeships to increase skills of the young people, we're following in the footsteps of harper and hosting the next summit in london next month to see a thousand young people from 50 countries competing to be the best of the best in 46 different skills from robotics to web design. i argued we have to get to grips with the overhang of debt in our national economies, that we need to make them more competitive, and also that a global crisis cannot be solved by countries acting alone. now, there are those who argue that international action requires new global institutions. i don't agree. it's not new institutions. it's political will we need.

opportunities like the g20 to develop the consensus. [applause] you can have all the meetings, subcommittees, and processes in the world, but if there's no political will, we'll never tackle the problems and secure the growth we need. that's why the political will of leaders at the g20 this summer is so important. nothing sums this up better than the failure to get a global trade deal. i believe we have got to refight the argument for free trade all over again, and for me, there is nowhere better to do it than here in canada, a country built on trade because the truth is that trade is the biggest wealth creator we've ever known, and it's the biggest stimulus we can give our economies right now, a completed trade round could add

$170 billion to the world economy, and yet too many people still seem to believe that trade is a sort of zero-sum game. they talk about it quite literally as if one country's success is another country's failure. they think of our exports grow, then someone else's has to shrink. somehow importing low cost goods from china is failing and all the benefits of china's exports go to china alone when we actually benefit too from choice, competition, low prices in the shops, and the thing about trade is you are baking a bigger cake. everyone can benefit from it. i stand up for free trade, promote investment between our two countries, and with other countries around the world too. [applause]

at the g20, we need to agree to a credible plan to take to the wto in december as a basis to complete the round, and if we caped get 5 deal involving everyone, we need to look at other ways in which to drive forward with the trade liberalization that our world needs. ensuring the continued work of the wto, preventing any collapse back into protectionism which would be disastrous, but going forwards, perhaps with a coalition of the willing, where countries like britain and canada who want to can forge ahead with more ambitious deals and others can choose later or join later if they choose, and let us set an example to the world by concluding early next year comprehensive economic and trade agreement between europe and canada to deliver huge votes

on both sides. [applause] mr. speaker, let me conclude by saying this -- the relationship between britain and canada is deep and strong. at the shadow hotel in 1954 with the second world war still in mind, winston churchill put it like this, "we have cemented all the perils and endures ag nighs of the past. we shall prevail over the dangers and problems of the future. with whole sacrifice, grudge no coil, seek no sorted gain, fear no foe, so let us in this new century look to the future, secure in our joint values and seeking new opportunities. we are two nations, but under

one queen and united by one set of values, so let us fear no foe as we work together for a safer and better world." thank you. [applause] [applause] [applause] [applause] [applause] [applause]

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