>> up next, contributors to the book, the 4% solution lay out a plan to return to a 4% economic growth rate. which they argue is necessary to restore america's economic health. president george w. bush wrote the forward to the book makes opening remarks. this is about 45 minutes. >> thank you all for coming. when we have an event like this a year from now, as nice as holland's operation believe that you would like it. it is a pretty good interim step. ..

>> laura and i just got back from africa in zambia. we went over there because at the bush center one of our major initiative is the to honor human life. we believe all life is precious whether you live in america or on the continent of africa, and

we are disturbed by the fact that many mihm who have got the -- women who have got the hiv virus are getting cervical cancer, and not much is being done about it. so with your hope, we put together a collaborative effort to save lives. part of the mission was to kick off the what we call pink ribbon/red ribbon in botswana as well as follow up in zambia. but laura and i also wanted to go and refurbish a clinic. i wanted the message to be it didn't matter what your status in life is, you're never too proud to handle a paint brush. i ended up with more paint on me than the wall. [laughter] so we went over to a clinic, and i wish you could have seen the faces of the ladies who showed up at this refurbished clinic to

be screened for cervical cancer. um, 158 women have now been screened since we've opened it up. 20% of whom had cancerous lesions, most of whom were treated right there at the clinic. the reason i tell you this story is the bush center is involved with saving lives and, therefore, you are as well. and i hope it makes your hearts feel good. it makes a difference to people who you'll never know. but know that their lives have been changed immeasurably. secondly, we believe that we can do better in growing our economy. and so jim who is going to come up and introduce our panelists here in a second who is the founding executive director of the bush institute, the action-oriented place the smu

campus -- [laughter] and i as well as amity shlaes and others decided we would assemble some of the finest meendz in the country who shared the optimism that we have that the private sector can grow at 4% if we put the right policies in place. we'll never fix the deficit without growing the private sector, that the balance sheet -- [applause] and so, therefore, you shouldn't take my word for it, you ought to take the word of people who are experts on the economy. and here is our product. and you're the first to see it. so we published a book. the 4% solution. and jim's going to introduce many of the folks -- or the folks who are here who have written some of the chapters. and then the very-anal editor -- very-able editor of the book will be conducting a panel.

so if you'd, please, welcome jim glassman who is the founding executive director of the george w. bush institute and has led us nobly in our first 18 months of existence, and we're proud to have you here. thanks for coming. [applause] >> thank you, president bush. the panelists may come up. president bush talked to you about what we're doing in africa, and one of the ways to sum up what the bush institute does is advancing freedom. you can't be free if you're sick. you can't be free either if you live in a society ruled by dictators as the people of iran or syria or cuba do. so with the freedom collection, we're showing dissidents and freedom advocates the way. we're freeing young minds with our education programs. we're helping to build the free institutions of civil society in

the middle east with our women's fellowships, and soon we'll be helping fighters for freedom, wounded warriors and other veterans and their families through our military service initiative. today, as the president said, it's about economic freedom which is the surest route to growth. as president bush wrote in his forward to "the 4% solution," free market capitalism offers the most efficient and just way to order an economy. such a system allows individuals to decide the course of their own lives. and this book does not exist in a vacuum. it's part of the 4% growth project headed by amity. shlaes, the project began at a conference at smu in the spring of 2011. i know many of you were there. we hired top economists, we started a vigorous web site, we held a second conference on tax policy in may in new york, and

we've got an event scheduled in september in chicago that will feature golf mitch dan -- governor mitch daniels. and like the prompt as a whole, this -- like the project as a whole, this book seeks to focus on americans as the solution to our problems, as the way to advance opportunity and prosperity. we're currently growing at 2%. that's not good enough. this book offers ways to get to 4%. and if we get to 4%, unemployment will plummet, and so will the burden of debt. we hope that this book will become the focus of discussion about the economy during the election campaign and beyond. it's about growth and freedom. so today we're going to have a short discussion up here among three of the contributors to the book. i want to introduce, first, my good friend and former colleague kevin hassett who's director cough economic policy studies -- director of economic policy studies who wrote a great

chapter on the path to growth focusing on spending, taxes and certainty. next on the far end, jason fitcher in, senior research fellow at the her cato center and former chief economist and deputy commissioner of -- during president bush's term of the social security administration. and with charles, he wrote a superb chapter on how social security should be reformed to encourage growth. and finally, as president bush said, brandon minister who edited this book. i just want to take the opportunity to thank contributors to the book who are here today. additional contributors who are not on the panel but are here today, peter of the dallas fed. raise your hand, there she is. who wrote about immigration. michael -- i'm sorry, richardal m of smu and michael cox of smu. you both here? yep, hi, michael.

and as you can see, smu's very important. in fact, maria of smu is not here today, i don't believe, also wrote a chapter for the book, and smu is very, very important as president bush said to the bush center. this is the bush institute's first book, the first of many as you will soon see. and it's unusual in that it was published by a major trade publisher, crown. and as a result, will get broad circulation. many of you here are supporters of the bush center, and we thank all of you for making this book possible. and in a real sense, this book is literally yours, and you will get a copy of in this book as you leave, a signed copy by president bush. and we'll also be taking some questions from the floor. but i want to go to -- are you guys comfortable here? do you want to sit down? >> absolutely. [laughter] >> i like you better sitting. i do. so, brandon, you did the impossible which was to kind of wrangle, as we say in texas, 21

authors -- many of whom are, i'm not talking about kevin or jason, but sort of temperamental types. tell us, tell us a story about getting these people to write for us. >> sure. you know, this past fall president bush gave a speech at smu's campus where he noted the book, and he said, you know, we have four nobel authors in the book. so i was in the audience, and i said to myself, well, i better check on those guys that all of them come through. and the first one i reach out to is robert lucas. robert lucas, brilliant guy, growth theorist, really wanted him in the book, and he says, you know, i'm kind of busy. i'm not 100% sure i can fulfill this. i said, all right, i better go out and get myself an insurance policy. so i approached vernon smith, another nobel who i knew, and i said, vernon, would you write a chapter for us? and i pitched a chapter to him. he came back and said, no.

so i'm thinking to myself, this isn't very promising, i might have to go back to the president and say we got a little out ahead of you, sir. then vernon then comes back to me and says, you know, there's a chapter i would like to write, not the one you mentioned. i've been studying the housing crisis, and i've been looking at every recession since the great depression. and what i'm finding is that housing has actually led us into every recession except for two, and out of every recession. it's actually a better indicator than business investment on both the coming recession, the severity of the recession as well as the recovery. and the two exceptions don't disprove his research. one was the recession we had shortly after world war ii when it was the -- [inaudible] recession, and the other was in 2001. and i said, well, that's interesting. he goes a little further, and he says, you know, the exception of 2001 actually helps us understand 2008 a little bit

because housing didn't decline dramatically as you would expect in 2001, it actually powered through the recession. and what we saw later became a bubble. and i said, wow, that's a really good chapter. so he came through wit, and, you know, i thought it was a great addition to the book. and then after it comes rolling in, robert lucas comes back and says, well, here's my chapter after all. so i say, well, this worked out pretty well. now i get to go back to the president and say, well, in fact, we didn't have four nobelists, we got five. >> yep. i think this book is unusual in that it has five nobel prize winners among its 21 authors. and that doesn't include kevin hassett who's a future nobel prize winner. [laughter] so i want -- and by the way, i just want to thank kevin and jason for coming down from washington just for this event. so, kevin, big question. is it possible to get to 4%

growth? >> yeah, it's absolutely possible, and i think that it wasn't going to be possible, then we wouldn't let you name the book that after all. [laughter] you know, but before i go to that, i'd just like to thank harlan and jim and acknowledge the president for his vision. you know, you might not be able to tell, but i'm not from texas. i'm from washington, d.c. and that's a big difference between me and president bush because if you want to mess with washington, d.c., go ahead. that's absolutely fine. but aye been living in -- i've been living in washington, d.c. for a long time and watching policy debates go on, and i've never seen a president that was as down in the weeds secretly as president bush is. and i just wanted to start with a little anecdote that, actually, i think the 4% solution was visible back then. but way long, long ago in the early years of president bush's administration, he called a bunch of nobel prize-winning economists to meet. and it was my very first time ever seeing president bush, and i think it was the roosevelt room it might have been?

and i was very nervous, of course, and i wondered what the heck am i doing amongst all these great economists, and then i wondered what president bush was like. and right at the beginning of the meeting he started asking the nobel prize-winning economists questions that had been bugging him about moral hazard, a very technical economic issue. so he plays the rancher and the texan down here, but when he came up to washington, he was kind of a policy wonk too. that's why the bush institute, i think, has been founded, because president bush has had a curiosity about policy that's governed his life, and it's benefited us all. now, in termses of 4% growth and whether it's possible, yeah, it is possible. there are three things in my chapter that i talk about that we could do that can really turn the country around. the first is to get tax policy right. it's very, very simple to get tax policy right, but we're not doing it. right now we're the highest corporate tax country in the developed world, we're the third highest on earth. there are two countries that are less friendly right now for new

businesses than the u.s. on earth, that's guyana and the congo. [laughter] but after those two, you know, we're the least friendly place. and i summarize a bunch of research that shows if we could sort of fix the stupid things we're doing, you could add about a percent of growth to gdp growth for the u.s. over the next decade, and we're starting around two, that gets us to three. and then the second thing is right now we owe a huge amount to foreigners and are running massive deficits bigger than a trillion dollars a year. if you want to think about how big the deficit is, then you probably have in your mind some idea about what government does, right? like government is the parts and the sense and, you know, the people stamping things in offices and so on. everything you think that government does if we were to set it to zero right now, we would still have a deficit right now. that's how much the government is just sucking out of the economy. so what we need is spending reform that pares back government because that's really

harming growth. and, again, as the big literature that i cite in my chapter that shows contrary to what keynes said, if you're in a situation like we are where you've got unsustainably high goth spending, that if you pare it back, you can get a lot of growth sometimes relatively quickly, and i think there is about another half a percent to a percent if we could just have what economists call fiscal consolidation. sadly, there are a lot of countries throughout the course of history that have been as messed up as we are, and we've seen a lot of them fix it by cutting government spending a lot. and the third thing we need to do is to stop having everything expire in december. we've got this thing coming called taxmageddon, right? i know there are a lot of business people in the room, should you add a new factory? should you hire a bunch of new workers? well, you don't know what the rules are going to be, right? if you could just fix those rules kind of permanently so people could look at them and say, oh, that's what the rules

are going to be, that would unleash a lot of pent-up activity. steve davis, a professor at the university of chicago, just published a paper that i talk about in my chapter that shows that last year by his estimate economic uncertainty was the highest it had ever been in the u.s. he came up with a very clever measure that used technical google things to measure uncertainty and so on. last year was the highest it had ever been, and gdp growth was a percent and a half lower because of the high uncertainty about all the things that were going on with the fiscal cliff and the debt limit and can so on. so that's a prosecutor and a half. -- percent and a half. so we got a percent out of taxes, we get half a percent to a percent out of fiscal consolidation and a percent and a half out of certainty. that gets you way above four. now, there's going to be some interaction, so if you do it all at once, you won't get the high-end number from fixing all those things, but i and president bush are very optimistic that if we just get ahead of the curve, we can have the country that we remember once again. thank you. >> thank you, kevin. i want to turn to jason.

he wrote a fabulous chapter. we all mow that in a financial sense social security and medicare -- know that in a financial sense social security and medicare are in trouble, but what we asked jason and charles to do was how do you reform the social security system so that we get growth? so it's not just fixing it in terms of making it balanced, but what do you do to get growth. so what's the answer to that question? >> and i have two hours to give you an academic, technical answer, correct? >> more like two minutes. [laughter] will. >> i want to echo the comments and, mr. president, thank you for your remarks -- >> why don't you sit here, because we're getting a little -- >> feedback in. >> yeah. >> this better? again, thank you, mr. president, for your remarks. and also, i apologize that i didn't get the no tie memo today, but that's all right, i look the fanciest up here.

[laughter] >> you can take it off. >> once it's on, it doesn't come off. when i was deputy commissioner at social security a passion of mine was retirement security. and that literally means for some those who are young going to be old and those who are old today. and a lot of time people get social security, and they think that's their savings plan. and that is a false assumption. one, the money going into the trust fund is being used for government spending, not productive capital purpose, so it gives this false impression that we can use it for growth, and people actually think th have an account with their name on it and they own that account, and that's not true. i think we need to put private accounts back on the table for discussion because one of the things we're looking at now is a very low savings rate. some reports came out yesterday about consumption has gone down, and the savings rate ticked up to somewhere in the mid threes. that's still horrible. we are borrowing too much money, and the social security system has perverse incentives that,

unfortunately, discourage work. and you're never going to grow the economy 2% a year, 3% a year, not even 4% a year if we do things that discourage work amongst our economy. the social security system, for example, encourages people, basically, to retire at 62. we penalize them by cometting to tax them past -- continuing to tax them past 62 and a negative return on their investment if you think about the social security system. we have a system right now that basically penalizes second earner couples, the social security system. so we need to figure out ways, and one of the things i write about in the book is how to change those incentives so they are at least work neutral. right now we are discouraging work, and that's holding this economy back from actually growing. so one of the things we could do is raise the retirement age. change the formula from the benefit structure. we could change the tax structures that people who start working when they're past 62, they don't pay payroll tax into the system, so we don't tax them. retirement earnings test, when

people want to work but are reflecting benefit past 62, we tax them. why would you want to work and collect benefits if you going to get taxed on them? you need to change those formulas. another thing we've looked at is fertility. i'm not looking for a child tax credit break, but one of the things we see with countries is those who don't produce enough children end up stagnating and die. and if we go back to a post-world war ii steady growth of fertility, we wouldn't have a social security trust fund problem right now. so one of the things, it's not fully developed, is how do we change the tax system on the payroll tax side to incentivize a lower tax rate for those who have children under age 18. they would still pay the lifetime sort of tax benefit and burden over time that they're paying today, but to make that burden smaller trying to raise children. so it's a pro-family, pro-work reform. and these are all things we have to consider going forward. and the last thing is, again, looking back at private

accounts. we need to return back to this idea that people need to save and put that money to capital use. that's good for the economy to grow. without capital investment, without personal responsibility for savings, we're not going to hit 4% growth. so we're looking at how we would actually do that today. >> thank you. >> go ahead. >> so let me just open the floor up to questions. you've got a great opportunity. we've got a bunch of brainy people up here. not only are they brainy, but they generally do a good job of explaining stuff, so -- yes, sir. yeah, wait for the microphone. >> dr. john deely, and i love action. >> i'm sorry, can't hear. it's a little bit too close, i think. >> this better? >> yep. >> okay. dr. john deely, and i love action. >> good. >> so i'd like to ask each one of our panelists what is one thing that the people here tonight can do before we go to bed tomorrow night to move us towards president bush's dreams

which were talked about in this book? >> okay. so if you didn't hear the question, it is, what is the one thing that people here in this room can do before they go to bed tonight to advance us toward president bush's dream, our dream of 4% growth? >> can i start with that? >> yes, sir. >> i don't mean this to be glib. buy two copies of the book. keep one and give one to your neighbor. [laughter] [applause] >> there you go. >> again, i don't mean this to be glib, but one of the things we are not having in this country is a concerted, real dialogue and discourse about the problems we have. we really need to have a discussion, and you're not getting out of washington. you're getting left-right politics thrown back and forth. the media's not helping. we need to actually share information that is real, trusted and honest so we can start having those kitchen table conversations again. only by actually getting real numbers out of the discussion do we start influencing the debate. that's one small step you could do to start the process.

>> that's fabulous, and i love that, but i want to ask for an amendment, also, because 90% of the books that are bought are never read. so can you give us a three-page e-mail that we can send to our friends to give a summary of the book? now, i understand it won't -- >> we have it, we have it. we've already done that. >> okay. let me just ask all of you, because i know we're having some mic problems, can people in the back hear when jason talks? you can? okay, fine. all right. not very well? because -- here's what i'm going to do, i'm going to bring everybody up here, we're going to get really cozy. maybe it's his microphone. >> it might have been too low. >> kevin, you know, i think that the read the book point is correct, but the reason why the book is so effective is that the stuff makes sense. so you're just listening to jason. when you read the chapters, just

as we were talking about dealing with economists, you know, brandon put a lot of work in to force people to be understand blg. it's a lot of work. but what happens when you go through the chapters, you start to understand why we're in the mess that we're in and what we need to do to fix it, and it makes perfect sense. and, you know, part of it was what jason was saying, but one of the things i learned was this, if i don't eat manager or why a -- eat something or buy a new car this week, then next year i've got some money in the bank. if i'm careful about what i consume, then in a few years i've got money in the bank, and if i start using that interest, i have a higher level of consumption than i would have if i'd been consuming all along. a few years down the road i have the wherewithal to buy more stuff. well, the same is true for the united states of america, and we've not been doing that at all. we've been borrowing and spreading the wealth around and

feeding a consumption binge, and we haven't accumulated the assets we need to feed future consumption and create growth. so what we need to do, and this is something that was evident in president bush's speeches early in the 2000s, we need to create an environment that's friendly to business, friendly to capital so that businesses and capital come here, and we'll have more businesses in the future, and we can grow our consumption, and we can grow our well being. we can have 4% growth. but the book makes sense, and i think we all need to become advocates for doing the sensible thing because that's the last thing the people in washington are talking about right now. [laughter] >> and i think that there are, there are four chapters in the book that kind of sum it up. president bush's forward, my introduction, brendon's chapter on why growth, and kevin's chapter, chapter six, which presents three or four -- as he just outlined -- quick ways to growth. so maybe that's the best answer to your question. other questions? >> actually, could i just follow on that for one second?

>> sure. >> one of the goal cans we have for this book is to change the conversation to growth. we have in this debate between austerity and growth. growth really matters, okay? if you're growing, all right? if the economy's growing, people are prospering, it makes solving these other problems a lot easier to do. so we have, you know, you asked what we can do. we have to absorb the fact that growth matters, and if you start thinking about growing versus just cutting or just austerity -- i think us aer auss important, i point that out in my chapter -- but growth is ultimately the target. we have to grow the economy. >> so there are other questions? do i see another question? yes, sir. >> [inaudible] >> okay. >> if, god forbid, we get obama for four more years -- [laughter] what would you suggest we

propose as opposition policy? >> president bush has been really admirably nonpartisan, and i think that -- >> [inaudible] >> i agree. and as i say, he focuses very much on substance. and the one thing i can say is that if you focus enough on substance, you can convince anybody because the arguments are so sensible. and i think our objective as policymakers and as think tankers and do tankers, whatever we're going to call ourselves, is to make convincing arguments. because there have been times when convincing arguments have won regardless of who was in the white house. and i think the fact is that unemployment is so high right now that, you know, we're really desperate for good ideas. and i've got to say that if you look, "the new york times" gave this book a kind of rave review. now, i know "the new york times" is famous for being in the tank for president bush -- [laughter] but i think that they probably did that because they recognized the gravity of our current

circumstances, and they as well as we are hungry for ideas that'll work because we've seen things that don't. and i can't imagine a patriot not having that attitude regardless of who wins in november. >> unless the patriot -- [inaudible] >> yes, sir. >> if obama is reelected, what t are your percentage chances that the u.s. will eventually end up like greece? >> i'm an optimist on america. if america was a publicly-traded company, i'd buy the stock every day. this country and this economy is tremendously resilient. and one of the great things, i think, about our book is it's got ideas that require action in washington, also ideas that require action on a state level, individual level and a business and corporate level. so, you know, what are the odds? you know, i'm an optimist. i would say we will, we will get back to -- [inaudible] >> kevin?

>> the oecd, which is an organization that studies large, developed nations, just did a big study to try to identify how big the policy challenges facing the nations around the world are. and they estimated something called the fiscal adjustment this is -- which is the change in policy necessary to make it so the debt to gdp doesn't explode out into no man's land, you know, enough to destroy the country. and the fiscal adjustment for greece that they need which is either the immediate tax increase or the immediate reduction in spending necessary to make it so that their economy doesn't just explode is about 3% of gdp. so they would have to, you know, which is a pretty big adjustment. they'd have to east increase their -- either increase their taxes by 3% or cut spending by that. the oecd estimate for the united states is that we would have to have a fiscal adjustment of 8%. our policies are far worse than

greece. if somebody says, you know, i think we're kind of like greece, then my answer is, in my dreams, okay? our situation is actually far worse. we promised much bigger benefits than we can afford, and we don't have a plan to pay for them. and we're going to have to make big changes, and i don't know if we're going to make the big changes this year or if we're going to have a crisis like greece is having. but there's a big benefit to getting out ahead of it, and that's sort of like the optimist answer. because we're in worst shape than greece, we need an 8% fiscal adjustment to fix things, then the policy opportunity is unprecedented. if we get ahead of the curve, we can grow 4%. >> [inaudible] the first two have not given -- [inaudible] [laughter] >> well, i can understand that from kevin because he's an economist. yes. yes. kent. oh, okay. we're going to get -- get the doctor a microphone, and in the meantime is there another microphone anywhere? we'll just wait.

>> thank you very much. can you hear me? >> yes. >> do you -- since we're action-oriented, do you have, any of you, concrete ideas that can resolve the problem between the dilemma that on the one hand if you cut the taxes, you're really cutting jobs -- i'm sorry, if you, yeah, if you cut the taxes, you're cutting -- i'm saying it wrong. >> if you cut the spending -- >> pardon? >> you're saying you cut the spending -- >> you cut the spending, that's right, you cut the spending, that means you're cutting jobs. if you keep on spending, it means you've got to problem that ultimately we go bankrupt. so we need something concrete to say about that rather than, you know, we need to grow or things like that. >> okay, good question. i'll just repeat the doctor's question. he said how do you resolve the paradox or the conflict between people who say that be you cut spending, if you cut government spending, you're going to cut

jobs, but if you don't cut government spending, you're going to increase deficits and debt? now, i hate to have kevin dominate this, but kevin's chapter actually goes into this in, i think, a very interesting way. so you want to answer the question and then jason -- >> yeah. there are two answers. one is that cutting spending isn't always bad for the economy. if you eliminate a government job, it's not necessarily bad. for example, does anyone know that in the last three years the federal government in the u.s. has added 35,000 regulators? they've hired 35,000 new regulators, more than they had when president obama took office. i don't think those regulators are necessarily good for the economy on net. and so there's that. but the real answer is just that you have to change the long-term growth of entitlements. that's the big problem. and, you know, jason's got a great chapter on how to do that. and if you do that, then you're not necessarily causing a big, radical reduction in government spending this year. what you're doing is you're making it so ten years from now

it's way, way lower than we currently expect, but we know we can pay for it. you're reducing uncertainty in a way that people can see. there's this old joke, something like kids today, more of them believe in extraterrestrials than they'll get their social security. [laughter] and so if we change their benefits, then they don't actually think that they're worse off, right? so right now we're promising them a benefit they know they can't get. if we promise them a benefit they know they'll get, they might decide they're better off, and you're not going to create the negative spending effect the keynesians talk about. >> there's a great parable in the book, and i can't remember who wrote it, if it was you, kevin, but it was about the u.s. engineer who went to china and saw them building a dam. and the u.s. engineer goes to china, and he sees them building a dam, and they're all using shovels. and the engineer asked the

chinese engineer, why are they using shovels? why don't you have them using modern equipment? because we're trying to create jobs. and the engineer says why don't you give them spoons? [laughter] all jobs are not the same. and i'm not saying that, you know, we don't need government at all. obviously, we're all government employment. but the idea that we somehow reduce spending or even if we reduce the growth of government spending which would be an important full step doesn't say we're going to see retardation in growth levels. people doing government jobs would go to the private sector and do productive capital investment which would actually grow the economy. kevin said entitlement reform, we spent roughly $be.5 trillion last year -- $3.5 trillion. of that about 1.5 was social security, medicare and medicaid. three big government programs are about 45% of government expenditures. those are growing. in 2010 medicare and medicaid combined crossed social security and combined spent more than

social security. social security's a $700 billion program. it's growing. health care, medicare, medicaid, it's growing. if we don't do something to rein those programs back many and change the incentive structures to get more pro-market, growth-oriented policies in place, we are going to hit a fiscal cliff. not at the end of the year, we're not going to be able to afford our interest payments. we're lucky our interest payments are so low. where are you going to put your money? they don't want to put it in greece, spain or portugal, so they're putting it here. we can borrow so low. that's not going to last photographer. we go back up to a long-term average of 8%, roughly every one percentage point we add on to our interest rate, we add a trillion dollars to our debt service over ten years. the interest alone will swallow up half of our federal expenditures. we'll be paying china for their military. we can't allow that to happen. that's one of the reasons why we were so proud to do this book. we really are putting policies in place and gentlemen,

regardless of who's president in january 2013, they're going to face the exact same problems we have today. somebody has to tackle it. and part of what this action-oriented institute's doing, this book is doing, is putting those ideas out there so we can start having a discussion about, one, the importance is real, and here's you get reform in place with pro-growth policies. we've talked about greece and their debt crisis. economists have looked back over history about when do countries hit the tipping point, and generally the idea is on gross debt when you hit 90% debt to gdp, you start seeing a retardation in growth. you may may not go negative, but you're going to slow your growth. right now we're at 100 percent. our debt is $15 trillion, and it's climbing. we are now seeing a reduction in our growth potential because of our debt. and one of the things about, you know, we wrote these chapters blind. we didn't see each other's chapters, brendon did, but we didn't see them as authors until they were done.

there was a uniform concept to most of the chapters, that we need to get our debt in order, we need to have savings, more savings in this country that encourage investment, and we need to encourage labor participation and work. that's a uniform theme throughout the entire book, and these policies need to be put in place regardless of who's president in january or we're all going to face more difficult problems going forward. >> i'll take one more question. there was somebody here. yeah. >> i think you hit the nail on the head. we're spending roughly a trillion and a half more every year federally than we bring in. my question is, let's say by some miracle romney actually wins the election. will there be the political will to combination effectively reduce spending and raise taxes to the point we can effectively reduce that, and that's in light of historically low interest rates that, you know, at some point are going to go up, and china's going to realize our debt's no good. i'd be interested in each of the

panelists' comment on that. >> okay. each of the panelists, quickly s there the political will? >> i think the answer's, yes. what's good for the goose is good for the gander. we have the highest corporate tax rate in the oecd. 5%. president obama and -- 35%. president obama and governor mitt romney have both come out advocating for reduction of the corporate rate. president obama says 28, mitt romney says 25. if lowering marginal tax rates is good for corporations because of the incentive effect, aren't they good for individuals because of the incentive effect? so i think we start having that dialogue. because there's a commonality on the corporate rate, we might see something happening in 2013 because the democrats are also interested in corporate tax reform. that's a wedge on tax reform in general. and you mentioned the $1.5 trillion sort of deficit each year. for those new york times columnists who think that the stimulus bill we put forward wasn't big enough, $1.5 trillion

extra spending again is enough still rahtive right there, and how is that working for us? >> you know, in many any discussion about economics -- in any discussion about economics, you quickly get to a chart. we didn't treat you to wonderful charts tonight, but i will mention one in answering this political will question. you know, we had robert lucas do a chapter, and he had a very fascinating chart. he put on a line that said, you know, here's average gdp growth, united states. and you can run this line back almost 100 years. it's about 3%. sometimes it's less and sometimes it's more. after a session it's usually much more around 2-3%. and something very interesting, you look at the recession in 2008, and it has taken a step down, and then it started to grow at a lower trajectory. so we never had that catch-up growth. we never caught back up to where we should have been. and not only that, we're on a lower trajectory. so over time we're going to get further and further from where

we should be and where we could be. and another one of our chapter authors looked at that and said, you know, this is not too dissimilar from where europe was in the early 1970s. if you'll recall, europe grew at about our rate after world war ii, we were pretty much in line, until the early to mid '70s, and all of a sudden they took a significant step down, and they were on a lower growth trajectory. they had taken a step down and were on a lower growth trajectory. so year after year after year that gulf got wider. it's now about 40% gdp per capita. that's a pretty significant gap. we're looking at, you know, just to get back to lucas' chart, we're looking at the beginning of that for us. and we say if we don't get back to that growth, we could look at europe and say that's our future, right? and since we have that benefit to look at europe, look at greece, look at what's happening around the world, we can say, well, that's not the future we want.

and nothing concentrates the mind like a crisis or like people being unemployed. i would say 8% unemployment is a crisis in this country. finish and, you know, i think what you'll see in washington after the politics is done in november is that there will be a consensus on getting back to growth and getting back to the policies that we know will put americans back to work. kevin?e to >> i think that you have toun understand that the way that we got into this mess, sort of the second mess, not the first mess, is that a number of policy people including columnists in "the new york times" ande advisers of the president whot really wanted to try to fix the country said that what we need to do is take a chapter from keynes, and we need to borrow a lot of money and spend a lot of money, and if we do that, it'll be great. us and there were those of us at the time who said that's notgoin going to work, and the reason we said back then it's not going to work is that if you put in thisg year a big surge in governmentem spending, then even if thatth

makes gdp go up next year, when you take it away next year, it goes down again. so if we're going to do the policy they recommend, we not only have to know that it's a bad policy this year, and we could afford the lose the 2%eam growth when we take the stimulu away.le and since that didn't seem plausible back at the time, you know, what we argued back then, i could e-mail you testimony pue policies that are somewhat reminiscent of what was he in the 4% growth chapter now. the fact of testifying a little while ago and were taught about what step that should be and it was a democratic senator in that hearing who was going to defend the stimulus on the record. and i was being pretty combatant in my testimony, and nobody argued with me. and the point is that the economy is still terrible. i think 2% is optimistic we are growing what do. nobody wants to do something to fix it, and that's a great opportunity for president is going to try something new. >> thank you. and i just want to emphasize,

we've been talking a lot about fiscal policy here, about spending and taxing, and entitlement policy, but this book also yet gets deeply into energy, into immigration, entrepreneurship and a lot of other areas. but we think policies, if they change, can promote growth. so i thank you all for coming. thank you, mr. president. and please, pick up your book on the way out. [applause] and read it. >> is there a nonfiction author or book you'd like to see featured on booktv? send us an e-mail at booktv@cspan.org, or tweet us at twitter.com/booktv. >> and now from louisville,

kentucky, we hear from local author dewey clayton. his book is "the presidential campaign of barack obama." >> host: clayton, how historic was the campaign of barack obama? >> guest: oh, it was truly historic. it was a transformative election. we had had 43 previous presidents in this country. they had all been white, and they had all been male. and so here comes a young senator, okay, who has a bold and innovative strategy as to how to win the white house. many people felt that it wasn't his time, many people felt it wasn't time for an african-american. he was running against in the democratic primary, he was running against hillary clinton who had the name clinton being, you know, the biggest, largest brand in the democratic party. she had a considerable war chest advantage as well as name

recognition, and the fact that he was actually able to defeat her and then go up against war hero and a maverick in the general election -- and america as such -- was truly incredible, truly historic. sometime between 2006, 2005-2006, sometime in there enough people began telling him in various forums that we think that the time is now right for you. one of his advisers said that, you know, timing is everything in politics. and one of his advisers, i think, in early 2005 said even though others may be saying that this is absurd, began saying that now might be your time. and clearly one pivotal moment was the speech that he delivered. he gave the keynote address at the democratic national convention in 2004.

and when he delivered that speech, he became a rock star almost overnight. and that clearly sort of catapulted his stock and his ability to sort of get known to voters. most peopling when you mention when did they ever hear of barack obama, many people will refer back to that speech where he basically talked about racial reconciliation, and many people think that in that speech he knew what he was doing and that he was laying the groundwork for america to move forward with a presidency. in 2006 when there were the midterm elections, congressional elections, he campaigned for democratic candidates throughout the country. and so not only did people get to know him in doing that, but he got to know the country as well. and i think at that point it just, it was nonstop. he knew very well that it would

be very difficult, that previous african-americans who had run for president had not fared very well. reverend jesse jackson had made two unsuccessful runs in the 1980s, 98 and 1988 -- 1984 and 1988. reverend 58 sharpton -- al sharpton ran. he knew it would be difficult paragraphly because in america one of the things that has existed and is changing now is the fact that a condition of racially-polarized voting very much exists in this country, and that is where white voters largely vote for white candidates and black voters large ri vote for black candidates. and so barack obama realized that if he were going to win the presidency, he would have to run a different style of campaign than traditional african-american candidates ran. and so, therefore, he developed

a -- he's not the first to develop this, but he decided to run a deracialized campaign and to downplay his race as such. and so unlike jesse jackson or al sharpton who ran as an african-american candidate, obama ran as candidate who happened to be african-american. and there's a big distinction here. and so that was a large emphasis that he placed on his campaign from the beginning. and it was a successful one as well. that was just one tenet of his overall strategy. early on barack obama's team or team obama decided that they were going to run a grassroots campaign or bottom-up campaign as opposed to a top-down campaign. and one of the ways i think that, one of the keys to this was using new media, social media, and particularly the internet. and so early on they began

organizing in an incredible way. in other words, back in 2004 howard dean, democratic candidate, had first begun using the internet. but dean did not take it to the level obama did. one of the things obama did early on was that he hired one of the founders of facebook, chris hughes. and he hired him to be head of his sort of technology team as such. and so he decided that if i create this medium called my barackobama.com which is very much identical to facebook, then i will make it easier for young people to go on the web site and access it and get engaged. so to answer your question, the way he beat hillary clinton largely was by using social media and by outorganizing her.

when hillary clinton and john edwards were going around iowa, you know, making campaign appearances, barack obama had already held numerous events where literally hundreds of thousands of people had been mobilized and had begun organizing, campaigning, working with each other, recruiting other, and the likes of which we had not seen ever before. in fact, joe trippi who had been howard dean's campaign manager said that the dean campaign's use of the internet was they were like the wright brothers, and he said that obama was like the apollo team. so he really took it to another level. and the iowa caucus which was the first caucus held in january of 2008, out of nowhere barack obama won in iowa. he won the iowa caucuses. had he lost the iowa caucuses, he probably would have lost the election because i think that hillary clinton would have been,

had so much wind behind her sails that she would have been unstoppable. but by him winning there, i think that said not just to white america, but it said to black america as well that he was a viable candidate. and people began to say, well, we need to take a second look at him. heal got some major endorsements which did not hurt as well. oprah winfrey early on decided that she was going to support barack obama and began campaigning for him. ultimately, jesse jackson, al sharpton, others came on. but i think, clearly, it was just a movement. it was a tidal wave, and people began to hear him, see him, plus there was the realization by many that this was an african-american who had a legitimate chance to win. and many people began saying i never thought i'd see this in my lifetime. so it was just, it was a wonderful time in american history. people clearly when i was going to campaign events and what not,

i would begin asking people why are you here. people began thinking it was very historic, and there was an opportunity that this person could be the first african-american president. >> host: can you compare his 2008 campaign to the campaign that he's running now? >> guest: you can compare it because there's still a lot of similarities, although some things have changed. clearly, um, at that point, um, we had for the first time we did not have a president who was running for second term and the vice president was not running as well. so you had, basically, an open seat as such. for the presidency. however, he was able to sort of run on the record of the previous president, that being george bush. this time he's the incumbent, so it's a little different ball game when you're the incumbent. it's very, it's not as easy to

sort of -- you have to take responsibility for what's happened. so although he's running the same type of campaign, the rules are different. for one, one of the obama -- obama outraised george, i'm sorry, john mccain in the 2008 election considerably, and one way he did that was as i talked about, using the media and what not. and so he, he raised-a billion dollars -- almost a billion dollars in that campaign, and that was unheard of. that was the most money that had been raised by a single candidate for a presidential election ever. but this time around it's a different story because in 2010 we had a supreme court decision, citizens united verse is the the sec -- versus the sec, so that is changed the rules as far as money is concerned. so now we have the creation of super pacs who can raise unlimited amounts of money. and just this past quarter we found out that the romney

campaign had actually outraised president obama by $17 million. and so already we see that the advantages that obama had as a candidate in 2008 probably have disappeared. and that money advantage was very helpful for him in his ability to execute a 50-state strategy in 2008. so that's one change we've seen. once again, he's the current president. the current president and although he inherited an economic mess, it doesn't matter. many people still may blame him because unemployment is still up at 8.2%. many people are unemployed. housing values have fallen. so the strategy's different. and so the message of hope and change has had to change because, in essence, many people are not satisfied with what he's been able to do.

one of the things that as our american political system has made clear now is that the president cannot do everything unilaterally. i think a lot of people had expectations that he could do so much. but in reality he has to work with congress to do a lot of things. and many people would argue that the current congress that he has worked with, particularly since 2010, has been largely recalcitrant and has been largely unwilling to sort of work with him to help create much of the legislative agenda that he has wanted to pass. so that's been a difficulty. and he's clearly facing those challenges. but as far as the type of campaign he's running, i think clearly he's still using the internet. i think he's still organizing in an incredible manner that i think his opponent may not even be aware of at this point. there's something called dashboard that the

administration has sort of moved into now, and that's an ability to identify voters and target them specifically. so i still think that much of the way he campaigned before he will campaign again this time. but the hope and change, the historic nature of the election, that's not totally with us now. and so he faces many more challenges, particularly, as i said, the economy. and that's something that he's going to have to deal with. however, a lot of people still will more than likely see that in spite of the economy he's moving the direction, the country in the right direction. and so many people will not hold that against him, like i said, because we knew he inherited an economic disaster largely, and many people know that it takes time economic -- the economy runs in cycles and up times -- often times no matter who's in office you cannot do so much.

but that's the challenge he will face now. but i still think he's mixing old media with new media and even though job approval is not where he'd like it to be, clearly, he's likable. and i think his personal likability he's still trying to ride on that and social issues. i think, clearly, the democratic coalition that i talked about, that coalition that he's built, i think that's the till there. i think a lot of people are not really sort of paying much attention to that, but if you look at the latino vote, there's a large gap now between support for romney, governor romney and president obama. if you look at the african-american vote, i still think that's going to be extremely high for president obama. i think young people largely that vote's going to still be high for him as well as women. i think that women and women's issues, i think that if you look at those issues, they're going to be supportive of him. and so i think that, ultimately, it's going to be a much tighter

race than it was last time, but i still think that given b that emergent coalition, i think that ultimately he very well may still prevail. >> for information on this and other cities visited by c-span's local content vehicles, visit c-span.org/localcontempt. local content. >> what are you reading this summer? booktv wants to know. >> i'm david gregory of "meet the press." so much to read before the presidential election. i'm still reading robert caro's biography of lyndon johnson, "passage of power." also going to read something else from that era, mark shriver's new biography of his father, "sargent shriver: a good man." one 245 i'm reading is about -- one that i'm reading now is about discussing god with children and how to explain god to children. and speaki