was graduating from college in canada, 50% of the top quartile of the graduating classes were emigrating to the united states. it was a great magnet for talent for canada. i came and went to graduate school in the united states. ended up owing $500 to my law school and i had like a -year-old chevrolet and had a wonderful experience in this country. it is open in many ways, that are so unique to this country and to this culture and it was pacific northwestly clear to me why anybody with energy and talent would want to move here, because of the opportunities that were created not just in terms of economic opportunities but just in general. -- perfectly clear to me why anybody with energy and would want want to move here.

it was much less -- there is much less prejudice in this society. merit and talent was a much more important quotient but have i to say that despite all of this experience that would have and has made me very optimistic on so many levels, i have developed an increasing sense of pessimism about where we are going in the future. future. . re ng in the future. the main reason for that, frankly, is the propensity of the american system now to produce weekly -- leadership to paralyze that leadership. without it, we will have a difficult time solving the myriad of problems that we are trying to grapple with. the emergence of this kind of leadership where, in a sense,

the national interest is put more head of the political interest -- it has always been a part of the history of the united states. what worries me is the rare inability of leadership to concern itself -- to discern itself as leadership. we're living in york where someone came out of the wilds and gave the impression for a very long time that he put the interest of the city ahead of his own political interests. for that reason, his role was enhanced. this is a country that is hungry for that kind of leadership, and we don't see it very often. this is the exception to the rule. what worries me about the ability to produce the right kind of leadership is the nature of our political system and the nature of the role of the media. i find myself a little bit

puzzled. it in terms of our political system, unlike the british system where you have the cabinet and the majority in the house of commons so that your executive and legislative branch comes out of the same party. it doesn't mean you will be reelected, but you can make decisions that will be made legislation. at least there is the chance to implement major programs. we have a system now where the legislator has hundreds of different constituencies and is responsive to various elements and is almost always with depressing ready, you get the depressing ready, you get the putting the national interest ahead of their political interest. it is extraordinarily difficult to deal with the issues, whether it be health care reform or a stimulus program we have a

political system that is not conducive to general leadership. it doesn't mean -- is much more difficult to imagine that occurring that it is. this is something that worries me enormously. it is easy to talk about what would be wise international or domestic policy. it is much more difficult to implement it. the fragmentation of political power is an enormous cost involved in running for office and staying in office. there factors that have emerged in the most recent decade. it seems to me to suggest -- we

will meet increasingly going forward. we have always had the luxury of being shielded. canada was not a threat to the united states. no matter what you may have thought, we're not taking over the country in any way. it is very difficult to attack the united states. one thing is the absolute shock to the system that came out of 9-11 -- 9/11. it was the first time we had an attack on our soil since the british attacked the white house. it happened a scale that will completely upset the whole country. i do not know if we have the

capacity to deal with these kinds of issues. there is such an emotional response that makes it very difficult to govern, and the role of the media does not help. particularly when the media is more visual than it is reality. the images tell partial truth, the humans do not tell the truth. they distort the american political system and indeed, the american political issue. it is astounding to me to see how people can claim a victory on today's news stories. it is going on today, as we speak. i find it very discouraging. i remained optimistic about the qualities of american society. its willingness to recognize merit -- the one thing that is

disturbing to me is the corruption. not just an economic corruption, but in terms of the money that it takes to dominate the media on one level or another and how this can be presented to the american public in ways that really did not tell an accurate story. i have no answer to that unless the other members of the panel decide to run for office. [applause] >> what i would like to do is engage with our panel members. initially, we will do a couple of foreign policy questions and we will do the economic question. i would just ask that we try to keep our answers as brief as possible. not so brief to say nothing, but brief enough so that we get a lot accomplished in this time. .

-- time period. i think we have to ask ourselves this question. i will ask you this, richard and bob. will we have to learn to live with red as a nuclear power -- with i raran as a nuclear power? and will begin this weapon to states like saudi arabia, syria, egypt, turkey, jordan? and what will that do going forward? -- in terms of united states security and global security? >> the short answer is will we have to live with iran as a

state with nuclear weapons, i would certainly hope not. it would provide a backdrop for which there foreign-policy which is already plenty assertive -- this is a principle states sponsor of terrorism. this is the group that is the principal backer of such entities as hezbolla and hamas. an iran with a nuclear weapon would be an extraordinarily bad strategic element. it would place the middle east on something of a hair trigger the next time there were as confrontation between israel and iran, or one of the proxy's. proliferation would not stop there. if iran were to gain nuclear- weapons, several of the arab

regimes might reconsider their own policies or positions. as bad as the middle east is today, the idea of a middle east with multiple fingers on multiple triggers ought to be -- the question is, can you stop it? , one is with the negotiation. i have no idea whether that is negotiable. it is right to try. we will see if we can get the russians and the chinese to join the united states and europeans with a bank of sanctions. given what is going on within iran, nobody would consider with certainty that the negotiations will succeed. the principal alternative is military force in my own view.

the united states would buy a small amount of time, perhaps a couple of years. i do not believe it would change the basics. that would be the principal, a lesson derived by most iranians i would worry that a military strike would short circuit the most interesting and promising political dynamic in the middle east, which is the rise of the islamic revolution. i feel a little bit like yogi berra, if there is a fork in the road, take it. we have no particularly attractive options. we have to look at deterrence. >> i do not have much to add to

what richard said except that if you look back at history at all the times when people say, if only this country had done this, it could have forestalled the horrors to come. if only the french had stopped hitler. if only britain had been able to land the force on the continent that would deter germany before world war one. they are immensely difficult. immensely dangerous. if the actions had been taken, people would blame them for doing it. this is what of those things that of course, it is terribly difficult, but i do believe that as we look back on those episodes, if we look back on this and say that we did not stop iran from getting nuclear weapons, we will consider it a missed element with big consequences. what is interesting to me is

that the breadth of opinion runs from the right to all the way to the non-proliferation. some of the most fervent in the administration are about non- proliferation. you'll get tremendous proliferation following a iran. people see venezuela or brazil drizzling -- pursuing nuclear weapons. the notion that iran can go ahead and do this without consequences is astounding. if something is unacceptable, you have to do [unintelligible] >> is there anyone there really thinks that when the administration says that is unacceptable, will they do anything about it? it is hard for me to understand.

they are an administration committed to engagement. it is the use of the kind of force that it would take to deter a regime like iran. there is concern in parts of the arab world over whether or not this is an administration that is willing to be tough. as a major leader said, we're not sure that the united states has the will to confront its enemies. we don't even know if they have the will to support their friends. i think that if iran and its achievement of nuclear capabilities is going to be the litmus test, and if all the estimates are right, this is going to happen in the next 18 months.

it is certainly a new world. i can't imagine that we hope -- it is something i don't see happening. does anybody here think that the administration is going to oppose force? -- oppose iran with force? >> the pentagon is close to acquiring a deep penetration conventional weapon. why this news has made it to television, i don't know. but i suspect. stranger things have happened in history. i do not rule out the possibility that the administration would take that action. action. in@@@@@ @ @ @ @ @ @ @ g

>> lets talk about taxes. [laughter] with health care and energy, we will be flirting with a 60% federal marginal rate on top of which our state and local taxes and in most day to run the country is the prospect of an increase in those taxes. what will be the impact of this kind of change in our tax policy relative to economic growth? this administration or any would be how you create jobs. can this strategy work? what would you recommend? >> those are a lot of great questions. for the dismal science to become

the more entertaining part is a rare thing. i would begin by saying that marginal taxes are high -- [unintelligible] what the american people for get and what our leaders often forget -- the really fundamental finance decisions are about spending. taxes and deficits are accounting terms that pay for spending. we either pay for today or we shift the bill to our children. are we locking ourselves on to a spending trajectory that necessarily implies tax increases? if we don't make changes soon, absolutely. we have entitlements alone in a commitment to spend 10% of american gdp. we might cut back on defense and education, but we are on the

hook for a tax increase. economists that have studied the link between taxes and growth, if we raised taxes as much as it would take to validate the end of this president's budget, we would probably crowd out about a full percentage point of american gdp growth. that is the entire dividend that we got from productivity since the 90's. these are not nesmall numbers. economists -- the reason i say it is necessary, we cannot raise taxes with the current system enough to accommodate. for a variety of reasons, we will see that. you asked about jobs.

the first is to focus. if you really want to focus on the economy, don't be simultaneously trying to do cap-in-trade and health care. try to figure out what you want to do. we have been talking about mandates in the health care bill, set to increase taxes, all of these things are job killers. that would include a focus on basic skills. >> let me just ask you a related question. i know you have written on it. the congressional budget office has projected that over the next 10 years, national debt will rise from 41% of gross domestic product which it was in 2008, to

82%. two related questions. will we be able to fund this debt without destroying the credibility of the dollar? and relatedly, will we be forced to raise interest rates enough to get them to buy these bonds? what is the risk underlying the nascent economic growth? >> it is clear was pessimistic in my first comment. i think we are in a very strange position as a country in macro economic and microeconomic terms. we have had a shock to the system that is really unprecedented.

it is affected -- it has affected the attitudes of american business. they can make quite a bit more money by cutting costs. the cost is going down. what does that mean? they're letting people go and they are not going to rehire as many people that had been hired when we come out of recessions. other discretionary expenditures which probably have national significance -- i refer you to advertising in print. this is really a national tragedy. wherever business has really looked at their operations and really -- i think productivity went up something like 9% in the third quarter. at an unprecedented and probably unsustainable number.

it tells you something about where the american business world is. we will see a continuation of this as we go forward. because virtually -- in a sense, the growth of the economy is primarily going to be keeping costs under control. the opportunities for hiring or rehiring is the lowest it has been in the last 30 or 50 years. the attitude has changed, and it has changed for consumers. we were on a consumer binge that was sustained by borrowing. that is no longer sustainable. the attitude of the consumer has changed. we will see -- i don't see how

we will be able to sustain -- we will have to do it. as we were implying, there is tremendous downward pressure on the ability of the american economy to grow. i do not think that we're going to be in a position -- we have no choice about that -- debt. if you have too much credit card debt, or a disproportionate low in relation to the value of your home, if you lose your job, you still have to pay your debts. so we will be in the same position as a country. the issue of that has become a more serious political issue.

the country is really worried about the assumption of debt and what it means for succeeding generations. it goes in the same issue that i find pretty deeply troubling. the about the deficits that we are building into our system are really staggering. if you look at the health care system carefully, it is going to add dramatically to our national debt. it is going to be virtually impossible politically. i am in favor of health-care reform, just not this particular form of it. not only will the economy be squeezed, but the public will have a very different attitude. it would be wonderful if that was not the case, i just --

>> i can't put a probability on it, but you raise china as well. china and the u.s. raised the issue of being virtuous, but not yet. make a change about what you have done gradually. the u.s. needs to gradually increase. china needs to go the other way. they need to strengthen safety nets to reduce their savings. >> one or two more questions and we will open it up to you guys.

between 1945 and 1989, the united states went through what is called the long war. the cold war. the cold war against the soviet union. are we got a similar time, but the time of some form of conflict -- are we not in a similar time? the time of some form of conflict? how do we have bill ourselves domestically? ? there is some sort of a conflict or struggle with terrorism that is done in the name of islam. i'm not particularly wild about the metaphor that suggests that military instruments, soldiers, battlefields -- none of those things seem to be right.

one is for people that have made a career choice to be terrorists. we have got to stop them. the best analogy i am able to think of is disease. attack it where you can. you've got to build recovery mechanisms. we're likely to see another -- that is part of what we have to do. we have to go after terrorists in the country's -- counties. that is easier said than done as we see every day with pakistan. pakistan is a painful reminder.

the bigger challenge is to get to people before they make a career choice. we want to somehow interrupted the recruiting chain because there is a limited number of terrorists. there is an unlimited number of what you might call potential terrorists. that requires getting inside the education system, getting inside the process by which religious leaders are taught and trained. at the top of the list, that includes influencing saudi policy. it has been the most unhealthy. it means getting inside pakistan in figuring out ways to bolster the government so they can change the curriculum. to borrow from the late great

political scientist, in order to avoid a clash between civilizations, we have to do what we can to stimulate a clash within the sterilization. -- with any civilization. -- within the civilization o. it limits with the u.s. government can do. u.s. foundations and universities can play a role. for muslims to have within their own societies -- if we limit ourselves to going after existing terrorists, that will be a loser's game. i never forgot what the ira told her. dillard and they came close.

they said that we felt tonight, but you have to succeed 100 percent of the time. we don't. we hope that we succeed 100% of the time. as good as we are, we can't expect to succeed 100% of the time. we have got to somehow figure ways of getting inside the recruiting chain of these organizations. >>@@@@@@g@ @ @ @ @ @ @ @ @ @ @-# >> this struggle will be with us a long time. i am told my policy is too ambitious the notion that a judeo-christian society can get

into the muslim society and change their minds, is a tall order. the ability to influence their decision making process is difficult. we can argue about that but what i worry about and i was critical of the bush administration for this is a foreign policy that is built around fighting the struggle. on this. to see everything going on through the lens of this struggle. the paradox is, as richard says, the risk of making a mistake is so high that the risk of not stopping is so high. you can't make it the only focus of your foreign policy. he had to do your best to deal with this. the other great powers -- i do not want us to lose focus by --

i don't think the military will have a tremendous amount of these struggles. i would say that if you ask me to put money down right now as to whether or not we will wind up taking military action in somalia before the end of the obama administration, i would say it is better than 50%. there'll be times that we will not be able to permit them taking over that territory. is the higher likelihood of death in his chosen career. >> one second. i just have to requests.

-- two requests. no political statements, grand visions, or geopolitical strategies. i just want -- just one question per person. this gentleman is the most eager. he probably has a real soft ball. >> i am impressed with all the members of the panel. whether it is in regard to iran or regard to combating islamic fundamentalism/terrorism, in terms of what you read in the newspapers, china, russia, and other players -- are they at divergent points of view with the united states?

the press reports are indicating they're coming around a little bit, but not cooperating. wouldn't it be the case that they would also have an interest in combating this as well. -- as well? >> the question is whether china and russia are against nuclear weapons. they are. the real question is if they will do something to make that not come to pass. they seem reluctant to introduce or support the kind of robust sanctions that might actually place something in a helpful role. they're both also worried about iranian support of subversion within their territory. russia and china fear the impact.

they're both likely to be what you might call limited partners. the process that is under way, the negotiating phase is going to persuade the iranians that the risks are greater than what they perceive to be the benefits. >> the0 this gentleman right here. -- this gentleman right here. >> they seem to have these long- distance missiles. >> we didn't have to ask the question, can we learn to live with nuclear weapons?

we are already living with north korea at the's nuclear weapons. -- north korea's nuclear weapons. i hope that we will build a missile defenses to deter them from doing that. north korea has so few foreign policy options. they are so bottled up in their miserable corner of the world. if your japan, you don't feel this way. -- if you are japan, you do not feel this way. we learn a great deal more about iran posing nuclear-weapons -- iran's nuclear weapons. i stay up late at night less over north korea. >> the big question i have is china. the one country that has potentially decisive moves on

north korea is china and they have decided not to exercise it so far. we need to get china to play a more helpful role to reassure them about what -- that ought to be the ultimate foreign policy goal. there are limits to what i believe we can do. if the north koreans don't do it themselves, it is in beijing. >> yes, sir? that's it. >> one question, where do we get

the resources to deal with the kinds of things being proposed? [inaudible] we haven't got the forces or the manpower. and we don't have the resources financially. or any of the other things going on. somebody please give me an answer. >> i believe we have the military capabilities. there may be a lot of post of and consequences. we do have the military capacity to be able to knock out virtually everything that iran is doing, assuming we know where most of it is. i don't think that is the issue. we're spending billions of

dollars on our military costs. by almost any standards, that will give us the military capability. as you know, i think our biggest are not going to be on the military side, but on the civilian side of things. these are going to be enormous and growing costs that are not going to be sustainable. if anybody wants to hear david walker, who is now the head of the peterson institute, he knows these facts inside and out. those costs are very frightening in terms of our ability to see them over the next decade. >> there is no question that the united states can finance an elaborate defense establishment in the educational system,

strong public goods, and a good safety net. we are, as he says, on an unsustainable path. the taxes that we raised are incompatible. we must make a decision as a country. we either cut back over the next generation, or we will cut back everything else. >> we have got to get a microphone. >> we seem to be facing a decision on afghanistan right now. the president seems to be getting conflicting advice. where would you come down on this issue, and how would you justified it -- justify the incursions into afghanistan?

>> you may end up getting conflicting device if you go to some of my colleagues on this panel. i think afghanistan is a war of choice. what general mcchrystal has suggested, we have a range of options. in order to make a large investment in afghanistan, is somehow central to the effort. there is nothing special or unique about afghan real-estate. there are lots of other places where al qaeda and groups like it are holing up. it may become a sanctuary where the taliban can undermine

pakistan. if they are already don't have pakistan as a sanctuary. i am not arguing that afghanistan is irrelevant. i just don't see it as critical to the effort against terrorism or the future of pakistan. i don't think the general has made the case -- this is really at the heart of the president's dilemma. would it, in the long run, accomplish anything? would the results be commensurate with the investment? if we put in 40,000 more troops, things will improve. i have no doubt about that given the talent of the u.s. military. the real question is, will it and door once we dial it back? -- endure once we dial it back.

there is also the reality of corruption that we're not going to get rid of. i do not see it as producing commensurate results. i would roughly stay where they are for the time being. i would put an emphasis on training rather than more fighting. i would put much greater resources into pakistan, and i would except at the end of the day, there are limits to what we can accomplish. that is something to you have to keep in mind. you have got to respect political culture. there is a limited ability of the united states to transform them. >> of what this is about

pakistan that was interesting. we used to have telephone conversations with the president of pakistan. i would ask him, what can we do to stabilize your country? his in answer was, textile quotas. think of all the things you can do, but textile quotas? >> it would employ a lot of women and it would help me politically. the congress will not allow an increase in textile quotas for pakistan because of domestic political interests. i went back and said, is there anything else? he said, we have a shortage of flour. i could dispense it to various parts of the country and it would help me. even that could not be done. the when you think about what we can do, it is really a challenge

to come up with something that will have durability. i do feel sorry -- it is sorrya mcchrystal strategy. it was asked that he imlement an obama strategy. after a strategic review, he said that this is what we must do. he then turned to general mcchrystal to get@@@@@@@@@ x$@ >> he said afghanistan was a war of necessity. this is not a policy that is easily reversed. this is not a new discovery. mmit is not have the kind of ]ávcredibility that presidents d

to have. how do you get the president out of the box and put himself in? >> do you want to answer this? [laughter] >> you mean like an entirely different point of view? [laughter] entirely different point of view? we're not showing enough imagination. it is easy to say that we should maintain the current levels. the question was, he is facing conflicting advice. his problem is that he is gotten too much of the same advice from military. they'll think that current levels are trajectory toward defeat. if you maintain current levels, we talk about the ft. we're not showing enough imagination about that. the consequence is not negligible.

almost everywhere we've never fought -- we've ever gought, -- fought, the consequences are still the same. who knows what happens in afghanistan, and who knows what the ripple effect is around the world. when we talk in terms of a massive increase in forces, at least from my historical perspective, that is not a massive number by any stretch of the imagination. we have employed numbers of troops overseas in combat situations. the philippines -- the war comes to mind in 1900. not to mention the thousands of troops in vietnam. an additional 40,000 troops is

somehow unthinkably massive. i believe it is mistaken. finally, the 40,000 troops make a difference? none of us are experts, but what i believe is the goal of the 40,000 troops is to get to the point where richard wants to get to, creating enough space to create stability to beat back the taliban sufficiently as the train the forces. the strategy is to get -- the only way out as forward. we have to fight our way, and if we keep current levels, it will be a very unpleasant experience. >> this is a follow-on to rogers initial question about iran turning into a nuclear power.

i heard the panel state a couple of options. one dealt with negotiations, and the other dealt with military action. i propose a third option, having spent a fair amount of time with leaders of the green party. they believe that their adoption is regime change. they feel that june 12 was a the -- basically, the great many iranians said that they were willing to not only go out and the streets, but to die and be tortured for what they thought was the right thing. is there a way that intelligently, we can bring our power to help those three human-

rights efforts or even through some form of severe sanctions that would strengthen the green party? >> i believe there are three options before you get to regime change. there is use of military force, and living with it. regime change is an important idea, because to put it bluntly, if iran had a clear weapons, but it was a very different terrain, it would not keep us up as much. >> a good point. >> but the fact that it is this iran run by the clerics in the revolutionary guard -- the events in june have lit a fuse,

and it has raise real questions in the arm of political legitimacy. the political regime has been hijacked by these characters. the problem for policymakers -- it is easy to see the title and a nuclear development than the timeline on political change. i suspect that we would prefer to see political change in iran. their limited tools that we, as outsiders -- the imbalance is pretty clear. my hunch is that so long as this regime is released to kill and incarcerate large numbers of its own people, my fear is that it will stay in power long enough and then some to develop nuclear weapons if that is, in fact,

what it wants to do. i believe we should. it is sort of a backdrop for policy, but i don't think that we have the luxury of making american foreign policy to say that is going to be the policy we're going to count on to resolve this problem for us. regime change in the case of the soviet union took 40 or 70 years. by then, iran can have a lot of nuclear weapons. i would be happy to look at ideas of accelerating the process, but i don't think that you can walk into the oval office and say, mr. president, i am confident that we have a policy that would bring about regime change quickly enough to be able to make it likely that a less malign iran would emerge.

>> the last question on this side. ma'am? this lady here. >> can hear me? i called the when a couple of months ago asking them questions. my question was, while of this -- why are all of these countries becoming clear all of a sudden? -- nuclear all of a sudden? what happened that everybody wanted to be nuclear? [unintelligible] they say that france gave it to them. it is sort of an accepted and the secret agreement.

obama is going along with the whole thing. i think it made everybody want to be nuclear. we have our money, our money, our money. i sorta think -- i have great not -- grandchildren now. what in the hell went wrong? when i called the u.n., i never got an answer. everyone i asked a question transferred me to another number. nobody hung up. >> thank you for the question. mort, you are the answer man. >> when richard was referring to

the possibility that belgium had nuclear weapons and it would not -- the same thing is true if israel has nuclear weapons. let's assume that they do. they're not under aggressive expansionist power. there is the idea that they can deter 7.5 million people surrounded by countries that are surrounded by -- that are the size of the united states. it does not worry me, frankly, that israel has nuclear weapons. i think it is clear that they would be using them for defensive purposes. and only to try and protect their country. they will use conventional weapons well in advance. the real danger now is that there is a country that is emerging that has threatened the

very existence of israel, and that is iran. how do you deal with that? iran is clearly doing whatever they can to develop nuclear weapons, and they have not only expansion in terms of israel, but they believe by a large that iran is -- i was in egypt several months ago. they. a hezbolla cell there. what were they going to do? they were trying to blow up the ship in the suez canal, because the revenues from tourism are the two major economic supports for that regime. with them being fairly elderly, they hope to destabilize the regime so that the muslim brother can take over.

i have spoken to most of the arab regimes. they're really concerned about iran pose the expansion. -- iran's expansion. you have to measure, if you can, the level of the intentions. [applause] >> thank you. we said we were going to end, so i apologize to many of you. i would like to ask you guys a couple of questions by a show of hands, just to get some sense of where you are on this. how many in this audience would increase our troop commitment in afghanistan by 30,000 or 40,000? that is probably a little over half, but it is a significant

number. >> by what they're recorded vote. it looks like under half to me. >> a poor sample. the west side of new york. how many in this audience, from what you know, since i'm sure none of you have read the 2000 page health care bill, but how many are in favor of the public option? it's a big number. well over half. last question. by show of hands again, as a last resort, who are you in favor of using military intervention in iran?

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