without abigail, there is no john. without john, there is no abigail. >> don is important to history. -- john is important to history during for that, abigail is important. >> yes. with the support she provided to him in europe, in the presidency, in the vice presidency, she was so trustworthy that she could to carry things. so he could go off and be this great public person, which was exactly what she wanted. >> our thanks for helping us understand more about the life and legacy of america's second first lady abigail adams. thank you for your time here at >> thank you.

[captioning performed bynational captioning institute] [captions copyright nationalcable satellite corp. 2013] >> next monday, how a young quaker widow turned into the woman that america remembers, dolly madison. she hosted afternoon parties for politicians on different sides of the aisle. and although she was frightened as british troops were on their

way to burn the white house, she boldly saved the fortress of george washington. our website has more about the first ladies, including a special section, welcome to the white house, produced by our partner, the white house association, which chronicles life in the executive mansion during the tenure of each of the first ladies. we are offering a special book, "first ladies of the united states of america." it has comments of noted historians and talks from michelle obama on the role of -- of the role of first lady throughout america. >> c-span, created by america's cable companies in 1979,

brought to you as a public service by your television provider. >> coming up, former federal reserve chairman paul volcker and congressional office director speak at the association. that is followed by the second installment of c-span's first ladies. >> former federal reserve chairman paul mercker -- paul volcker said it would be difficult for the federal reserve to end its economic growth program. he'll service funded to criticism of the volcker rule, restricting certain kinds of trading at banks with government insured deposits. his comments came at the national association for business economics. this is 40 minutes.

[applause] >> thank you, mr. president, fellow honorees, old members, new members, guests, all economists, i assume. [laughter]this is a very well- organized affair. a wholesome introduction was long enough to convince me to eat a chicken. this is a real special privilege and honor to be here.

after all the years that i have been around concerning economic policy, i assume one major altercation for this award is that it is a lifetime award. you have to be at least 80 to receive it. it is now a competition a bit. [laughter] but i am really -- when i think of this, i am considerably above above 80 at this point. he was so active he had 16 different patterns. the only thing that came to mind was, oh, to be 80 again. i certainly appreciate this award. memory was good enough. i can now identify the year. for two years ago, 1973i received another first award from nabe. it happened to be the new york chapter who was inaugurating their award for one william f

butler who was well-known to me me because he was my boss at the time. thank economists were in a rather prestigious era after the war and in the early post-war years. these banks were in competition with each other. four or five banks, six or seven banks that consider themselves at the top of the league. they each had a sizable economic departments and pretty well- known economists as their leaders. if you were a spokesman for the bank, you were an educator. you became part of the banks

management. it seems to me, as i look back, this is an occasion where that kind of high point of business economists and bank economists became less usual. banks undecided that their economics department was expendable.as we get into the 1970s, things were in turmoil. banks and other industries were more stressed. you did not hear so much about inc. economists. i think it is fair to say that has now passed. in an area where economics and people with economic training are in fact very much in major

institutions. that goes on about economic policy. there is not any significant area of economic policy, monetary, fiscal. they do not have a legitimate concern or legitimate point of view. there was a period, as you know, where all of this was considered irrelevant.there was a strong

school of academic inking that markets could take care of themselves. the government should retreat from markets as much as possible. with efficient markets and national expectations, you know the story. all the confrontations, all of the brilliance of a financial engineers, all of the premium on trading which arose very rapidly into 1980's, it was a different world. that confidence -- that feeling that markets can take care of themselves has evaporated at this time. it is the biggest crisis we have had in economics in may be short

of 100 years. how many people anticipated anything like this situation 6 or 8 months before it got underway? it just kind of a commentary i guess on the state of economics and economic analysis and theory. i think you can learn something from this. right now, i read almost every day. i was struck by all the great uncertainties that exist. problems as far as the eye can see. the euro, a great recession, the rise of china.

what uncertainties are there? i looked at a sheet i had gotten from a major financial institution giving the forecast of their economic department. what struck me was the dissidents between all of the uncertainties that we all know about and the economic forecast when i could not -- from this years of performance. the continuity oh up from 2.3 or 2.5. whether europe would be -0.2. there is such a quietude in markets.

i wish i knew how to analyze it all. then i could say something useful to you this afternoon. [laughter] i tell you, i have two other things in my mind. at least one of them may strike you as a bit unusual, but i think it is a too much neglected subject, to fight the fact that -- despite the fact that it seems to me to have been in the making of the financial crisis we had. i am talking about the monetary system. as you know, it is hard to call it a system. the system concerns itself with parts and a mechanism that are working together to produce some stability and progress. that is hardly a description of the international monetary system. the reason i say it, i am not

going to write about it right now. look at one characteristic of that system in the early part of the century. the biggest characteristic of the system was a big surplus on the part of china. a huge accumulation and u.s. dollars. looking at the other side, the united states -- it had gotten, in my memory anyway, the biggest economy in the world. five percent, six percent of the gdp. financing most of the federal deficit by far. happy to land very low interest rates in a seemingly prosperous world.

would anybody really designed a system that would commit the chinese to run surpluses and japan on top of it and trillions of dollars cumulatively over a few years? and we ran deficits of that size. for a period of time. without suspecting that something is going to happen in a serious way to upset the system. it is all very nice to be able to finance your deficits, but what happens? sooner or later, the world is giving you a lots of rope on this. at what part does rope get to the point that it strangles you? we tried to avoid that. i am not sure that is true yet. the lack of discipline in the system, which is replicated within europe, where deficits

can go on indefinitely in the eurozone until finally something happens and we find ourselves with a degree of indebtedness that is not easy to manage. the other area is a lot more parochial. what is going on in our financial regulatory system in the united states? we had dodd frank after considerable debate. i note is a complicated bill out but 2.5 years later we cannot have a regulatory apparatus? by the most important piece of legislation in recent years?

that suggests that something is rather wrong. something is dysfunctional.about the way in 2013 we go around regulated financial markets with a very familiar agencies that were created in quite a different circumstances and have had their difficulties over the years where markets were a lot more primitive. i think demonstratively are having great difficulty in producing timely and effective regulation along the lines that we really need in this country. i know i'm supposed to have a little fireside conversation about the fire.-- conversation without the fire. [laughter]

the fire has come in other ways. those are two areas that i want you to concentrate on. i am not giving you much opportunity. we will have a discussion here and see what sense i am making. what i wanted was both of these areas -- it is affecting the whole world and affecting us. the other right here, not abstract at all. the regulation, i could parallel it with what is going on in european regulation. the contrast to a few years ago justified the declaration 150 years ago that money will not manage itself. so, i think we can have a little discussion about that. thank you. [applause]

>> thank you so much. you have no longer than almost anyone in the room, there is necessary as a free lunch. when i first came up, i thought you would not get lunch at all. now you have to pay for lunch. having this fireside chat, we just have a fire, but we have someone good at firing questions. the chief economist, cnbc, familiar to many of you who at on the other side of the firing line. please welcome steve. [applause] >> thank you very much. thank you for having me. it is a pleasure. i came many, many years ago. i got a lot of education and my education continues here. all of the alcolades they said about you, only two naval awards. when are you going to do something with your life?

that is what is called the disarming question. [laughter] >> that is a eulogy. >> let's start off with an important area of controversy that has your name attached to it -- the volcker rule. i imagine that is part of your complaint here. it is 2.5 years and there is still no volcker rule. we hear from bankers it will hurt their business. we hear from regulators it is a hard role to implement. my question is this. do you still endorse? >> of course. let me make a point.

the philosophy of the rule, which is adopted in the law, is that institutions that are being supported, defended, encouraged by corporate policy, namely-- encouraged by public policy, namely commercial banks, who do have i think a general consent of some activities and their functioning that is essential to the operation of the economy, if they do have that kind of public support, which certainly now looks much more apparent than you would have thought 10 or 20 years ago. a direct way of reducing financial costs and continuity. it should not be expending their energy and their risks on proprietary trading and doing it for the benefit of the stockholder, perhaps.

hopefully, it should not be supported by public policy. that view is, i think, widespread in europe. looking at the same subject, they came up with a somewhat different approach but philosophically it is grounded in the same thing. in principle, it is adopted by the british government. they separate out not just proprietary trading, but all trading. all of their activities you loosely associate, away from the core commercial bank. keep it in the same holding company and convinced that you can really isolate those two a little skeptical of that. more than a little skeptical.

you run into the same problems. there are some exceptions to that. there are some activities that are vital to the commercial think. they have not settled all those questions. all i am saying is that recognition of the efforts, the dangers of combining them, and these are two related efforts, people tell you they do not know what a proprietary trade is. it is a forum.-- you know, it's phony. you can have a litmus test from the head of a bank. i was a regulator. mr. chairman, do you know a proprietary trade is in your bank? i have not found one yet that says i do not know what a proprietary trade is. [laughter] if they said to me, i do not know, i would say, we should be looking for a new chairman. [laughter] it is not a question of having

to look at every possible trade and decide. the question is whether it is a pattern of proprietary trade. i am confident that is attainable. it is a matter of the management insisting upon it. you have it in many, many ways. there's not a trading bank bank that does not have a daily report on its trading positions. where they are, what are the are, what the losses are.what ventory is.ng of the in you give me those statistics. >> that is different from making a role which looks like it is running into several hundred pages at this point. >> no.let me interrupt you. >> it is mostly my job to

interrupt you. >> how may times of i heard when that preliminary role came out, it was 300 pages long? i must say, i cannot read the thing it was so dense. they had an introduction which was not the role. not a masterpiece of clarity, if i may. [laughter] they said, our preliminary role. here it is. it was 35 pages. and, to be sure, there was an appendix. about 30 pages was the kind of statistics that they would want reported.then it had 200 pages of questions from lobbyists. 200 pages about why lobbyists are not the rule. i have no doubt that there were

many that were entirely appropriate. 200 pages? how many lobbyists were writing this, not with the intent of clarity, but with the intent of obscurity? i hope that when they come out with the new one which obviously they are having difficulty with and this gets to the point. we have five agencies the rule is supposed to be common above those agencies. what does that mean? any one of those agencies can veto any one of those points that are made. those agencies do not have the majority to do anything.

this has been going on for weeks and months. how many times people tell me six months ago that it will be two weeks. it looks like it is right to-- right there before the end of december. before the end of january. you cannot operate an effective system when you have this so- called f-sock. they had this directive when it first fell. this is the way to approach. go at it. >> can i interrupt? >> i am anticipating your next question. [laughter]

>> i am done here. [laughter] >> you are permitted to refute what i say. money market mutual funds. >> that was not my next question, but go ahead. [laughter] >> i hope it was a question. i am so old that i was there when money market mutual funds were created. i remember very well. i do not like them. i said this is pure regulatory arbitrage. banks could not pay interest. so, somebody came along and said, invest in the bank's cd. it has a little gimmick attached to it.mutual funds convey the

going tohat you are market the market every day. he said, we are creating a special mutual fund that is not market to market every day. we will save is worth the dollar. they were given regulatory permission to do that. the act of value got within a very narrow percentage and 0.5%. they maintained all of that. because it was a great economic advantage, they grew. rapidly. now, the obvious regulatory advantage is gone because banks can do all of this stuff directly with their deposits. a crisis came along.

one of these funds could not maintain that dollar value.that occurancen infrequent historically. typically, they would put the money and to make up the difference. there were dozens of instances when that happened but you did not notice it because bear stearns or whatever it was put the money in. there was a big run. hundreds of billions of dollars were taken out of money market funds. they were buying commercial paper. that would've been a guarantee for banks. the treasury and the federal reserve were forced to put in hundreds of millions of dollars to support the money market funds because the commercial paper market had become dependent upon these funds.

the legal authority that either of those institution had to do this is interesting. the treasury used the exchange stabilization fund. maybe that's because some of these money market funds had so many foreign bank certificates in them. [laughter] anyway, the situation was a stabilized but this cannot be a normal, satisfactory situation to have these essentially under- regulated institutions, no capital, no expressed governmental support being able to invest in a rather interesting way, trillions of dollars. a couple of years ago, we found out that half of the assets of these major institutions were in european banks. people got a little nervous when it all came out. not a great

force of stability in financial markets. the interesting thing about this is at least four of those five agencies plus the treasury have said, let's correct the situation. one agency has held out. nothing happens. >> it sounds like the way you are saying to speed up regulatory reform is to consolidate the agency. >> this is a very difficult, tricky problem. i do not profess to know the answer. i think it is an area that everybody thought needed examination when the crisis came. >> they had an opportunity and they did not take advantage of it. >> they had an opportunity and they they did not take advantage of it because they found it too difficult, too politically encrusted.

they went ahead with subsidy reform. it is not just the united states. it is true in europe and a lot of different countries. if you think it is easy, look at the uk which is fairly simple, theoretically. they have a much more unified financial system. five or six years ago, they decided the thing to do was put it all in one agency. and then take it out, central bank, leave it alone. all in one agency. the treasury will look at it a bit. they got into the crisis, it did not seem to work very well. let's put it all back. it is not so easy. it is more complicated here. it gets a very bureaucratic. lots of reasons to complain. how do we get this political

miracle of a little competition in the business. but not a degree of complexity that is necessary. >> another unsustainable -- what people think is an unsustainable situation is what we call too big to fail. they envision handling large banks, but the problem is extra capital surcharges. is that enough to solve the too big to fail problem? should the big banks be broken up? >> there is a lot of uneasiness about this.a lot of angst. too big to fail is a big problem. it is related to banks that have access to the federal reserve. everybody assumes they will be saved. they assume they will be saved and it affects behavior patterns.not just by the bank

itself, but by the creditors and so on. big problem. dodd frank did take this on head-on. the resolution authority was established. it says it in pretty plain english, if a significant institution is on the brink of failure, the fdic will be an forced to take over that-- the fdic will be enforced to take over that institution. it can provide enough liquidity to keep its operations going, but the institution would have failed in the sense that the stockholders will get nothing. management will be replaced. and maybe secure credit is due,

but unsecured credit will be at risk depending upon what asset value is left. that is pretty plain language. it seems to -- >> nobody believed it. >> nobody believed it. it will be tested at some point, but we hope it's never tested. i do not think people understand how much effort goes into -- and this legitimately takes a couple of years, in figuring out how to apply this. one thing you notice right away that justifies a lot of skepticism, that is great. the fdic, great. these are big, international institutions. you cannot handle it just by the fdic. they have operations all over the place.

one of the most interesting things here is that the bank of england is working hand-in-hand there has been some public the about it -- they are working together to jointly develop a common approach that would satisfy both sides. the european community beyond britain is on the same problem. they are not as far advanced. but the philosophy is consistent. i may be quoting a more up to date figure. when the fdic began looking at this, they said, ok. for these american institutions, how big are their foreign operations? and they found, if you look at all their foreign operations, which are big, by asset size, 85% of the total is in one

jurisdiction -- the u.k.now you have the us and the uk working together. >> are you saying that you would not then recommend authorities taking action to physically break up the banks? >> you mean after they failed? >> right now. before they become a problem. >> i cannot myself, maybe i am an innocent. it is not a $2 trillion institution. it is $750 billion institution. i do not know.how big was lehman's? how big was bear stearns?

you have to carve these big banks up. >> i do not want to call them up at all. [laughter] >> as a practical matter, i would love for them to be individually smaller. there are some limitations that will discourage them from being bigger. i cannot see how in practice you meet the problem by breaking them up. >> if everybody has had their coffee, i want to go onto another topic which you you may need the caffeine for. i actually can remember a time when we were making great progress in uniting in the international accounting standards. it wasn't all that long ago, but then it just seemed to die. what has happened and why is it an issue that people should be thinking about right now? >> thank you for raising the question. in my younger days, i was the chairman of the international

accounting standards committee foundation. that is a mouthful. [indiscernible] in the hopes supported that this could lead to uniform accounting standards and is certainly for the financial world in particular. it sounds like a good idea.let's get to work. this new institution was established in london with a lot of american representation. i do not think i got fired. i got term-the limited. [laughter] a lot of progress is being made. there was a lot of momentum. five years ago, four years ago. it kind of petered out.

it is another example. i would add this to my institutional dysfunction in the united states. partly because nothing has happened. a lot of people who were interested said, let it go. one thing you cannot say but you could say 20 years ago is that the united states clearly had the best and most disciplined accounting system. everybody else ought to adopt u.s. accounting.we were so far superior to everyone else. i cannot think you could say that anymore. i do not think anybody says that. or that the auditing profession has been sacrosanct. none of these things are true. the argument, the basic argument and some great international

uniformity for companies will hopefully lead to better- informed analysis. you are quite right. it has been on a low point. i have not given up hope. with fcc leadership, and this is really an fcc question. it could not be done fairly promptly. if it is not, than i am afraid the chances of ever doing it are a part. >> let's turn a bit. let's get to a subject you like talking about most in public, which is monetary policy. >> i love it. [laughter] i love talking about monetary policy 20 years ago. >>) let's talk about 20 years ago. [laughter]

more than 20 years ago you were chairman of the federal reserve. >> time passes. [laughter] >> oh, to be 80. whatever it was, at that time. could you have imagined -- >> no.>> the amount that was purchased today? >> the answer to that question is clearly no. when i first got involved in the federal reserve in the 1950 loss, the big issue was something you young people, it was something called the

bills-only doctrine. it was that the central bank should only intervene in the money market in short-term securities.namely treasury bill s. thou shall never touch a treasury bond or a mortgage bond.we are a long ways away. >> that you're going to come to we were done. follow-up on that. >> i do not know. you never let me get a word in when i was on your show. [laughter] >> i had a thing in my year. >> blame the producer. i know that story. [laughter] >> exactly right. now i blame the producers. >> you have talked about various areas of instability from accounting in the banking system.

when you look at the financial landscape here, do you see the fed's balance sheet as a potential source of stability? >> it is obviously a potential problem. the way i look at this, they are obviously doing things -- it should be my imagination, some years ago, in response to a very unusual situation. they have a very large balance sheet. a very large amount of excess reserves. it is ok for the moment.we have no inflationary problem at the moment. they want to support growth of the economy and so forth. the crucial question for a central bank any time, but it will come in spades this time,

ok. you had the easy money when you have a recession and unemployment, but at some point when the loan and turns the party is getting underway to use that old analogy, at what point do you begin to retreat? do you retreat decisively enough? you can make a mistake or go too quick. a much more frequent mistake as you go too slow. there is a lots of liquor out there now. [laughter] mechanically, yeah. it can be done.they put it in. they can ;ppull it out. will it be done at a crucial time, and a delicate kind of way without creating expectations in the other direction?

that'll be a big challenge. >> what is your best guess? >> i do not think it is impossible, but it is a real challenge. >> chairman, thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> also from the national association from the business economics conference, congressional budget office director douglas elmendorf. he said putting the debt on a sustainable path would mean raising taxes. this is 40 minutes. >> i am president and ceo of the national retail federation. it is a pleasure to be participating in the conversation today with our next eager doug elmendorf, the

director of the budget congressional office. i am also joined the nrf chief hearin. thank you for all of your great work and thank you for being here. the national retail federation represents businesses of all shapes and sizes. all of those retailers are impacted often first and quite acutely by the kinds of decisions that policymakers in washington make and often don't make about the things that we care most about, like tax policy and spending policy.

in an economy that is driven largely by consumption, retailers to play outside rules and job creation economic output. nearly 42 million jobs in this economy. the jobs are going from the entry-level jobs to jobs that reflect the high technology that is being applied. that is because of the relationship retailers have with their customers. when we talk about tax increases in commodity prices and energy prices, retailers feel that often first and acutely. here we are on the first full business day in the post- sequester era. i do not know if they were simply a cynical and they figured there would be a failure.and this would be a good rogram.have doug on the p maybe they shorter the sequester

deal. either way, this is a terrific day for us to have him here with us. doug is well known in economic circles. he has been in washington and has been influential for many years. he has an impressive biography. he serves in a senior position at the brookings institute.ptirr to that at the cbo and other agencies. i have to say he is an expert on the workings of macroeconomic markets. the thing that i found really telling was the choice for a dissertation board against which he defended his pieces. at an early age he was willing to take on big challenges. he does not shrink from the challenge. he is the right man for the job for us to have a conversation. please join me in a welcome for

the director of the congressional budget office, doug elendorf.[applause] >> thank you very much. it is great to be back here picture the cbo release its latest outlook for the budget and economy a few weeks ago. it showed that the country continues to face very large budget and economic challenges. i would like to briefly summarize the budget outlook to talk about some of the consequences of high and rising federal debt and to present criteria.

how large are projected deficit? under current law this will shrink in 2013 for the fourth year in a row. a $845 billion, this will be the first year with a deficit under $1 trillion. this would be about half as large relative to the size of the economy. you can see in the picture our projection under current law shows deficits continuing to fall for the next few years before turning up again by the end of the decade in totaling about $7 trillion. federal revenues of the lower line are projected to increase relative to the size of the economy in reached 1970 gdp in-- reached 19% of gdp in

2015 and beyond. because of both the expanding economy and schedule changes in rules. a comparison average of about 18% over the past 40 years. at the same time, if current laws remain in place, federal spending will fall relative to the size of the economy and then rise again. the decline can be traced to be discretionary funding. and to a drop off that sense to go up when the economy is weak. -- that tend to go up when the economy is weak.but later in the decade, spending turns up again . part of this is the return of interest rates to more normal levels and our projection that would push up interest payments to nearly their highest share of gdp in did years. another of the decade a significant expansion of federal health-care programs and rising health-care costs per person will push up spending on the largest federal programs, social security, medicare, medicaid. by 2020.-- by 2023,

it reaches 23% a g.d.p. what does this mean for federal debt that we expect that will reach 76% of gdp this year, at the highest since 1950. we protect it will be higher than the 39% average. it will be rising again as part of the economy. there are a few point worth making. the first consequence i want to

list. there is the crowding out of capital investment. second me that lawmakers will have less flexibility to use spending policies to respond to unexpected challenges like a recession or war. debt was about 36% of gdp in 2007. it is not about to be 76% of gdp. we used a tremendous amount of physical space to respond to the financial crisis and for the automatic stabilizers. the options were much more limited its debt is standing above 70% of gdp. a third consequence is a heightened risk of a fiscal crisis. the government would be unable to borrow at affordable interest rates. a fourth point to make is that our projection of debt is a concern in part because that would be even larger if current laws were modified to delay our and do certain scheduled changes. suppose they eliminated the automatic spending cuts but left in place the original spending caps set in motion in 2011.

they also extended all the tax provisions that are supposed to expire in prevented the sharp payment to doctors scheduled to take effect next january. if they make no other policy changes with offsetting budget affects, deficits would be a good deal larger than in our baseline projections. the public would reach 80 7% of gdp by the coming decade and said the 77 term that we project under current law. a fifth source of concern is that even the original would reduce such spending cuts to just 5.8% of gdp in 2023, a smaller share that in any year has only been collecting data on discretionary programs for 50 years. this of be the lowest point of the share of gdp in the entire span.

this is under the original, not even allowing for the effects of the sequestration that would push those lines further down. the allocation is determined by annual appropriations. they cannot decide which ones will be constrained. because they are so low relative to gdp, finding enough acceptable ways to constrain spending might be quite difficult. the sixth point i want to make about those consequences is emphasize the 10-year projections do not fully reflect long-term budget pressures. jacob presented numbers from last summer. we have not yet updated that to take account of development since then. we will be doing that again. in our last long-term budget

outlook, we projected spending on social security would rise by about 5% a g.d.p. over the next 25 years. it led to that shift in the distribution of pie charts that jacobs showed. because of the aging of the population and rising costs per person, a wide gap exists between the future cost of the benefits and services that people are accustomed to receiving and the tax revenues that people are accustomed to sending. what might be done to reduce future deficits and debt? this is a hard but not unsolvable problem. cbo estimates of the effects of many specific changes in policy but i will not try to run through the menu. let me discuss some criteria that might be used for evaluating proposed policy changes. the first criteria is how much would that be reduced over the

current decade relative to our projections under current law. the more that debt is reduced the more that the harms caused by high debt would be afforded. the greater the loss for the burdens on individual businesses of higher taxes. it is not clear how much debt reduction is appropriates. the cbo does not make a recommendation.i want to give you an idea of the reasoning. but of debt or 36%. we estimate it will be about 76% by the end of this year. that is an increase of 40% of gdp. suppose you wanted to bring debt back down to earlier levels. they ought to do it gravelly -- gradually. that would require a reduction.

it will be 68 by the end of the debt it.-- by the end of the decade. we've read these reports a few weeks ago that looked at the economic effects of alternative but to pass their we did not try to specify the combination of those policies. this is a $2 trillion reduction in the primary deficits which would have positive of that in reducing interest payments. that path would bring the debt to gdp ratio down to about 68% of gdp by the end of the coming decade.

it brings it back down to where it was six years ago 50 years from now. there are many alternatives that are available. some had greater reduction deficits. we looked at one that had an increase. this gives you the budget challenge. the second criterion is how quickly would debt be reduced? that is a trade-off. assume the deficit are cuts. the greater drag on economic activity over the next few years. several provisions of current law bring down the deficit and will weaken output and employment this year. let me elaborate. the effects of the housing

crisis appear to be finally gradually fading. we fill an upswing in construction and equity prices and increasing availability of credit will help to spur a virtuous cycle of faster growth in consumer spending in business investment over the next few years. at the same time, the expiration of payroll tax cut in income above certain thresholds have just taken up that. they will restrain both government and private spending. on balance we think that inflation-adjusted gdp will increase by about 1.5% this year but would increase roughly 1.5 faster than that it not for the fiscal tightening. under current law we expect that the unemployment rate will stay above 7.5% through next year. that would make 2014 the sixth consecutive year with unemployment so high.

the output will remain below its potential until 2017, nearly a decade after the recession started at the end of 2007. the third criterion for evaluating the proposed policy changes is how with the resources be allocated. under current policies, we are on track to have a thorough budget that will look very different from the budgets of the past. as population ages and health care costs rise, a much larger share of federal benefits will go to particular programs whose benefits are focused on older americans. the expansion of health care programs will boost spending on those programs. >> you can see on the top part of those bars,

the right-hand bar is only 2023. if we showed a similar bar for 2030, that growth would continue. at the same time, a much smaller share of federal spending would go to other types of conservators. it includes all of the means tested programs, defense, chance petition, research, education, law enforcement, everything else. if additional deficit reduction was done, the country would move even further away from its historical experience. it does not make such an approach will -- such an approach wrong, but understandable very

increasing revenues by raising marginal tax rate will reduce people's incentive to work and reduce the amount of labor supply in the economy where it is increasing revenues by broadening the tax base would probably have a smaller negative act or even a positive effect on the amount of labor supply. alternatively, come -- it could increase future output. to assess the overall economic impact of a deficit reduction plan in the longer term in the way that we tried to do in

quantitative analyses that we give to congress, the favorable effect some less federal borrowing must be combined with the effects with specific changes in taxes and spending in that even if lawmakers reduced federal budget deficits and it trims federal investments, the net impact on the nation's long-term output in income would ultimately probably be positive. a fifth and final criterion i will discuss is who will bear the burden of those changes. they would affect how the tax burden and government benefits and services are distributed among evil at different income levels. in addition, many such changes would affect the relative ordinance of taxes or benefits received by people with similar income but differ in other ways. policy changes might also influence the distribution of tax spending amongst

generations. in addition to the considerations i discussed the four, -- i discussed before, about allocation, what we want government to do, the of x and policy changes, the effective change on the dissolution of the slices of that part aren't important consideration on policymakers minds. -- are unimportant consideration on policymakers minds. given the magnitude of the imbalance between revenues and's ending that will result under current policies, leading the debt unsustainable path will ultimately require increases in taxes or cuts in government spending and services for people to consider themselves in the middle class. thank you. i would be happy to take any questions that you have. [applause]

>> i have a couple to start with. and then we will get some from the audience. people can write the questions down on the cards. what you were thinking about those, let me start with one about simpson-bowles and what could have been or what might yet be in terms of a deal related to simpson-bowles or something like that. have you done any modeling or did you at the time to see what the implications would be had simpson-bowles been adopted? there is simpson-bowles ii now. >> we never did an analysis of the simpson-bowles proposal. it was never brought to us by the chairman or ranking members

of the committee's. for us to do an official estimate. the work they did drew on a lot of informal estimates that we provided to the congressional committees overtime. in the course of the past few years, as the congressional leadership and the ministration have worked on proposals, grand bargains, we have provided tremendous amounts of the estimates and analysis behind- the-scenes. the way cbo works, if the proposal is in the public domain, if someone has introduced a bill, our estimates of that bill are always public. in order to give the committees a chance to work on developing proposals, when people are developing proposals confidentially, i work for them in confidential.

we have filled notebooks full of estimates over the past few years that are not in the public domain because the proposals were largely private as well. what one can take from the process is that there are a wide range of policy changes that can be made, but it will take a fair number of them and a fair number of significant changes in policy to add up to something like a trillion or $2 trillion or more dollars of the next 10 years. that is especially true today relative to a couple of years ago now that caps have been imposed on discretionary spending. those caps are pushing discretionary spending down. now that tax rates have

increased, some of the first places that the congress has gone over the past couple of decades, they have already gone. they have gone to a higher tax rates and hire people. they have gone to cutbacks in payments to providers and medicare. both of the places of those deals tended to get to the money. now that those pieces have been used, the difficulty of achieving a reduction is harder because policy makers are more likely to look at more substantial changes in government benefits or can taxes that apply to broad cross- section of americans.

>> one of the -- several of these relate to your last slide. it is the $64 question. several of these asked about whether you might elaborate on that. the basic question, i think, is whether policymakers are being honest -- maybe i should not put it in terms of honesty. [laughter] are they speaking realistically it when they suggest to there is a path forward that does not include some of the best potential pain for the middle- class? >> it is difficult to see how we can put the debt on a sustainable path without cutting government services or raising taxes.

that does not mean that one cannot take action to reduce the deficit. one can raise taxes for higher- income people. one can cut benefits for lower income people. the magnitude of the deficit reduction needed, the magnitude of a deficit-reduction needed is very difficult to see how that can be achieved without making changes in those benefits. i would go back to the earlier slide about the distribution of government spending. but government spending is higher today than it has been on average. in 2012, government spending was about 2% of gdp higher than it

was on average over the past 40 years. that 2% can be more than explained by an increase in cost. everything else the government has put together is a smaller share of gdp in 2012 that it is been on average in the past 40 years. everything together is a smaller share of gdp. the thing that has grown in the social security, medicare, and medicaid. social security and medicare provide benefits to older americans. about two-thirds of the money that one out of medicaid in 2012 was for the care of older or blind or disabled americans. those are people who have run out of the income or wealth. many of them are not poor.-- not

poor in younger parts of their lives. they have become poor in old age or through high medical expenses. it is hard to see how the debt cash can be on a sustainable path without raising taxes on a broad group of americans. >> if this were a room full of business economists that represent a lot of organizations, most of us believe that the problems we face would be addressed more comfortably if we could get the economy growing at something higher than the rate at which it is growing now. some of these questions relate to whether recent changes showed the near-term outlook has improved. and whether you might elaborate on some of the so-called fiscal

multipliers that might have a positive impact of what these projections could look like if we were growing. >> our forecast for 2013 is rosier than it was last august. opposite forecast has to follow current fiscal policy. last august, there was a tremendous fiscal cliff that would occur. as you know, congress and the president did agree to take away substantial parts of that cliff. that improved our forecast for 2013. they left in place a number of pieces of significant fiscal tightening, which is having a substantial effect on growth this year. if the economy grew more rapidly, that would be a very good thing for the budget and for everybody in many other ways as well.

it is hard to see -- our forecast could be way wrong either by being too pessimistic or optimistic. the range of uncertainty is extremely large, what my previous roles was working -- economic forecasting at the federal reserve. that is a hard task. if you look at our historical record of accuracy, we have been way wrong a lot. how one gets there, i think, is not obvious. we have over the past several years offered a number quantity of estimates of the number of fiscal policy options cutting taxes that we think will be good for the economy.

if one does extra borrowing and does not implement other policies to pay off that debt, one is making the longer term worse. we have offered policymakers a set of those changes. some policies have been put in place. the temporary cuts in the payroll tax. i would not speak at length about monetary policy. the other tool that federal policy makers have is federal regulatory policy -- the rules of the impact of those roles are coming out slowly. we think that has created some uncertainty that is restraining economic activity. how we quantified bad, i think,

quantified that, i think. there are a set of options that would spur growth over the medium-term and long-term. the demographic point is really crucial. we expect even after the economy is back up to potential comment that potential will grow about 2.25% a year.that is good deal below that past 50 years. the difference in our projection is very largely in the growth of the labor force. with the retirement of the baby boomer generation and an end to the longstanding increase and women's labor work participation, we believe that

labor force growth will be much slower in the future. that can be affected a little bit by changes in policy.but probably can't be undone. the economy is likely to grow much more slowly. what happens to technology? all the other factors that affect how labor and capital are put together. federal policy can make some difference is there as well. those things are not likely to matter a lot in the near term. >> you just referenced some of the references -- he did a number of slides for us.

folks on the health care cost, due to the demographic changes, and there are a number of questions here about health care costs and cost curve. and whether the affordable health care act has started to bend the cost curve, whether that is in your projections and whether that will have a positive impact of how we go forward. >> help cost growth in the country has been much slower over the past half -- we can sit back and the private sector, medicaid, medicare. we see its in medicare in part a, part b, and in d. the slowdown is fairly broadbased. it has been going on for several years.

we are frantically trying to figure out why and what that portends for future growth. our view is that part of that slowdown is due to the recession and a loss of wealth and slow income growth. a substantial part of the slowdown is due to structural changes. that leaves those -- whether the structural changes will be transitory or persistent. in the mid-1990's, health care costs slowed and then pick up again. we may be at a similar point now, we just do not know. in the spring of 2010, leaving aside the effects of the affordable care act, medicare and medicaid spending came in about five% less in 2012. we have extrapolated some of

that slower growth because we think part of what is going on the structural changes. if you talk to people in the health-care business, they are very focused on ways to provide care more efficiently and ways to give providers and patients incentives to use the health care efficiently. we are still not sure i'm not before some time how and during the changes will be. we're also not sure on what role the affordable care at maybe playing in this. the slowdown, the beginning of the slowdown proceeds the affordable care act. the affordable care at the sets

-- the affordable care act sets in motion a number of changes in a way providers will be paid. it focused the light of national attention on the problems of cost growth. it is very difficult for us to untangle. >> you alluded to this in your slides. about the trade-off between aggressive deficit reduction now and the impact that has that economic growth. could you speak at all about the austerity and other programs that have been adopted in europe and lessons there are from that experience for this economy? >> we do not study individual european economies very carefully. we have limited resources and focus our energy on the united states. i do not want to speak to individual countries. the experiences in europe of the countries that have tried to reduce their budget deficits quickly and have experienced

weak economic performance in the wake of that, those experiences are very consistent.-- consistent with the analysis we have done in the last 40 years. in the short term, traditional expansionary fiscal policy tends to have expansionary affects on the economy. that is not true everywhere all the time, but there is a significant body of research about the ways anticipations of fiscal contractions, anticipation of deficits and debt by government been put under control can spur economic growth in the short term. most of the cases were that policy has been successful, where the policy of future austerity has been successful, most of those cases the london

-- most of those cases relied on economic circumstances that we do not have in this country -- today. we are a large enough economy that we cannot simply have the exchange rate decline. we are an economy with a number of weak economies so that demand for products is not likely to provide a tremendous support for the domestic economic activity. i do not want to speak to individual countries. they have a range of situations and experiences. i would emphasize, the european countries have had little choice

but to proceed with top austerity programs because they have a level of debt, they face a fiscal crisis in which they were unable to borrow. that is a very important lesson for us in this country and considering how long we feel as prudent to proceed with debt exceeding 70% of gdp. particularly in light of the fact that interest rates will certainly rise over the coming decade. >> let me finish with this -- let me combine a couple. we'd already heard from the source on monetary policy earlier this morning. everyone understands that the tv program has to end at some

point. -- qe program has to end at some point. what assumptions do you make in your projections about how that will happen? i guess, in your assumptions about interest rate changes. >> our forecast expects the federal reserve to raise interest rates and start selling assets out of its portfolio in 2016. that is an expectation that is conditional on our forecast and on current policy. it is not a pure expectation. it's conditional on the other aspects of our forecast.

we think the interest rates will rise fairly rapidly to around 4- 5%. the longer-term treasury rates will be about 5.25%. those are slightly higher real rates than we have had over the past several decades. because of the higher debt that will be out there. with federal debt so high, fairly small differences between our forecast and actual interest rates make a huge difference for the budget. interest rates that are a percentage point lower, that would take off about a $1 trillion.

we certainly see risks of rights -- risks of rates being higher or lower than we projected.>> coming up, congressman tim murphy talking of bridging gaps in federal until health programs. later, robert levinson, senior defense analyst for lumber government examines defense contract ending by congressional districts. "washington journal" takes your calls live at 7 a.m. eastern on c-span. >> c-span2, created by america's cable companies in 1979, brought

to you as a public service by your television provider. >> coming up next, the second installment of c-span.org's "first ladies" series looks at abigail adams. then the three people who have served as homeland security secretary mark the department's 10th anniversary. the vice chair of the federal reserve defense efforts to assist the u.s. economy. ♪ > she would grow to be the equal of john adams as confidante and dearest friend. >>she revealed herself as an 18th-century woman, but her concerns sound very modern to us today. >> john and abigail adams have become so prominent because of these collection of papers.

>> the story of abigail adams and the revolutionary war is the story of sacrifice, commitment to country. she rose to the occasion. >> she was opposed to slavery. >> she was quiet behind-the- scenes, she said cannot rule without including what women want. >> the backdrop to the occupancy of the white house is one of personal tragedy. >> she is worried about her husband. she is concerned about her children, their upbringing, their education. >> she could hold her own with anybody. she was her husband's equal. >> born in 1744, abigail smith married john adams at age 19.

they had five children together, including a future president. ahead of her time in many ways, she pinned this to her husband during the american revolution -- good evening and welcome to "first ladies." we will be learning more about abigail adams, the second first lady of the united states. we have two guests, authors of numerous books. jim taylor is the editor-in- chief of the "adams papers." thank you to both of you.

abigail adams as the wife of the second president and a mother of another president earned her place in history. you say that she is an historical figure in her own right. >> she left us letters and we have a record of her life. the letters are not ordinary. they are extraordinary. they are wonderfully written and there are many of them. abigail was a letter writer at a time when women could not publish for publication. her letters became her outlet and they are the best record we have of women's role in the american revolution. >> last week, we learned that martha washington burned all of

her letters. only two of them remain. we have the opposite here. thousands of them. explain the scope of the trove of materials that you have to work with as scholars to the writings of the adams family. >> the adams family gave to the massachusetts historical society of collection. we have never counted them individually, but probably 70,000 plus documents. for abigail and john, there are about 1170 letters they exchanged over the years. >> how frequently did they write to one another? >> depended. when they were together, we do not have any letters after 1801. after john leaves the white house, they're together almost all the time.

they wrote at least once a week and sometimes twice a week. >> this program is an interactive one, which makes it more enjoyable. in about 50 minutes, we will be taking your telephone calls. we will put the numbers on the screen. if you go to twitter, we will include some of your tweets. you can also go to facebook and we posted a spot where you can send questions. i will start with a facebook comment. "she looks like a tough cookie." was she a tough cookie? >> oh, my goodness. yes and no. one of the things that is

important to understand is that she started out as a naive young woman whose expectations were to have a normal life like her mother did. the revolution disrupted that. she used the opportunities of this disruption in her life to grow as a person. she begins as a naive young woman and she does become a very sophisticated worldly opinionated woman. >> this is one of the things that makes her the most attractive. a good character in a novel develops over time. she develops. >> what were her roots? where was she born? what was her upbringing such

that she became a woman of letters? >> she was the daughter of a minister, reverend william smith. her mother attended the political world of new england. her mother's family were nortons and quincys. she grew up in a household that was quite middle-class for that time and had two sisters and one brother. she was educated at home by her mother. she read at random in her father's library. >> when did she become

political? >> i am trying to think. very early on when john is at the continental congress, she wants the newspapers. she wants pamphlets when they are published. one of the things -- she is consuming the news at that time. she begins -- by the mid 1770s, she is on board. >> what was her political thinking? >> she was a revolutionary, she was very supportive. the fact that john was participating, they were partners. at some point, he writes to her

thanking her for being a partner. later on, i think she is more conservative than john in some ways when it came to national politics. >> we will be looking at some of her letters throughout the program. a very famous one was remember the ladies. that is a letter that is of particular interest to you. why is that letter significant in understanding abigail adams? >> the letter does many things. she wrote at night and she would enter a kind of revelry in which she followed her thought pattern wherever she went. she changes topics in her

letters. it starts out with a political statement about why the southerners favored slavery and are still doing a rebellion against the tyranny. and she questions that. and then she goes on and in the middle of a paragraph, remember the ladies. and then goes on further to suggest that if john did not like this idea, it was a remarkable thing because he was in a position to do something. he was on the committee that was drafting a declaration of independence. he could have made a move for women's rights. it is remarkable that she did suggest that. >> give us a sense of the role women have in society. they could not vote.

how could women be influential? >> it is much more subtle. in the same way -- many times, a decision is made, people think that the husband makes the decision. there is a kitchen table discussion that goes on before that. in the adams household, there were a lot of kitchen table discussions between john and abigail. abigail may not have been the most obvious in making the decisions. we know much later after the revolution that she is very influential. >> i want to tell you a little bit about what the country looks like in 1800. we have some statistics we will put on screen to give you some of the scope.

by that point, john marshall went on to the supreme court. the population was 5.3 million across 16 states. they are around 990,000 blacks. 5.3 million was a 35% growth in the country. the average life expectancy was 39 years. the largest cities were new york, philadelphia, baltimore. what are some of the things we should take away from those statistics? >> one of the things is there is an expansion going on.

this is one of the things that is very difficult for the adams because politics are changing and changing politics means they are new englanders. as time goes by, as the population moved south and west, makes it more difficult for politics they believe in. >> we will invite your telephone calls. i am told you want to read a passage. >> i would like to remark on the 39-year life span. that is not exactly accurate to the extent that children died much more rapidly. if a child survived to 12, the life span was much longer. >> the five children, how many of them survived to adulthood? >> four. >> you wanted to read from the

letter we talked about earlier? >> in this particular letter, she was ruminating about conditions in her life and what was going on in her world. i would like to hear that you have declared independence. by the way, i desire you would remember the ladies and be more generous and favorable to them than your ancestors. which is a bold and remarkable statement for a woman to have made in that era. >> the relationship we have seen, would it have been a surprising thing for her to say? >> we're back to the kitchen table. i am sure that before he rode off to philadelphia, she filled his ear with a lot of ideas along the way. john knows that there are

several groups of people, servants, slaves, also moved during this time to think about their rights and their independence. >> what was her viewpoint on slavery? >> she was opposed to slavery. she had a servant, a black servant, who had been a slave of her fathers. i think the woman -- what was the story? did she have the right to be free after -- i cannot remember. >> abigail cared for her for the rest of her life. she lived in their house. >> how did they manage to work

the farm? what kind of labor did they use? >> they did have hired labor. it became very problematic for abigail. i want to go back to the letter. responseoned john's and what she does in this letter in addition to saying, why is it that southerners can support our revolution when they keep people in slavery? remember the ladies -- and then she says, if you do not pay attention to this, rebellion. and then it goes on further to say that you should treat us the same way that god treats people. in this one letter, she brings up so many ideas.

i would suggest that her threat is indicative of one of the ways the adams related to each other. his response to her was a tease also. one of the ways in which they related, it seems to me. jokes are a a way of deescalating an argument. >> how did they meet each other? >> they met at her father's house. he went as a dinner guest with a lifelong friend. he then married the elder sister. abigail was not yet 15. at that time john was not enthusiastic about her at first.

apparently, things changed over the years. he was 9 years older than her. >> he had a girlfriend at the time. >> he was about to propose to this woman and one of his friends burst in and broke the mood and she went off and married somebody else. >> he was a lawyer. would that have been a profession that her family would have appreciated? >> the family lore suggested that it was not. her family disapproved of her marrying a lawyer.

she was also very young. >> was john political at that point? >> no one knew about the revolution. all of this is happening when there is no revolution. there is no revolution on the horizon. he was interested in politics. >> his trajectory was to be a lawyer in massachusetts. he was following that line. >> it is important to know because these two were married for 54 years. they were great partners. even though it was not a love match in the beginning, it grew to become one. >> we will show this to you next. >> what is so appealing about

the family series is the intimacy that the letters reveal. the earliest letter we have dates to october 1762. we call it the miss adorable letter. it was john writing to abigail. i hereby order you to give him as many kisses and as many hours of your company after 9:00 at she shall please to demand. and charge them to my account. i presume i have good right to draw upon you for the kisses as i had given two or three millions at least. the account between us is immensely in favor of yours. very teasing affectionate tones.

wonderful moments. >> fun to bring these founding fathers, people that we see in these two-dimensional poses, come to life and have real personalities. these people enjoyed one another. >> this is one of the most appealing things about john and abigail. they have a life that you can follow because of the documents. you see them in good times and in bad. you see death in the family, you see triumph. it is like "downton abbey." >> brenda elliott on twitter wants to know -

was she the mother of women's rights? >> one of the things that we know is that women were aware of their subordinate role in the 18th century. because we have those letters, we know that she was not exemplary. her good friend was agreeing with her and a colleague. i think that one of the things we have learned in the women's movement is that we can trace the movement for women's rights back further and further in history. she happens to be an outstanding example because she

left us letters that say these things. she was also very eloquent. she was a wonderful writer. >> this telephone call comes from new york city. >> good evening. she certainly was one of the first great american female writers, she was also a poor mother. another son committed suicide. >> what she a good mother? >> yes, a very good mother. we live in a post-freudian world in which when something goes wrong inside of a family, the mother gets the blame. the children were living through a revolution. their father was not at home for 25 years.

she was doing it all by herself. she was coping in a situation which was extraordinary. i think that applying 21st century standards to mothering and even the psychology that has developed in the early 20th century does not fly for the 18th century. >> mary is up next from california. >> thank you for taking my call. i am interesting in finding out the relationship between abigail and thomas jefferson. did they correspond during john's year of not speaking to each other? i've also heard that abigail had an intimate relationship with him as far as correspondence went. >> they were very good friends

at one time. the highest point of the relationship was when abigail was in france and then in england and thomas jefferson was a diplomat abroad at that time. for a while, while jefferson was in paris and she was in london, they kept accounts for one another. at one point, one of jefferson's daughters came from virginia and stopped in london and abigail took care of her during that time. after the election of 1800, the relationship really fell apart. it was over politics. during that time, abigail was very disappointed with jefferson. >> next up is matt in wisconsin.

>> i was wondering what some of the intellectual influences on her writing was. >> thank you. did she have influences? >> she was a great reader. she read the bible. >> when we do the research on her letters, if she is quoting somebody or citing somebody, we want to identify who is. she does not use quotation marks. i would say the things she quoted most often were things that she referenced with

shakespeare, the bible, the classics. >> this next call is from quincy, massachusetts. >> hello. congratulations on having this wonderful series on the first ladies. i live in quincy, massachusetts, and we are very lucky see and experience the adams life up close every day. my comment would be about abigail's sentiment about remembering the ladies. i think she pretty much -- women can change destinies, of nations and the world if they set their mind to it. it is very important because women are the primary factors

in bringing up the children. she was instrumental in the constitution and the forming of this nation. quincy is actually called the birthplace of the american dream. she may not be formally recognized, but she definitely had a very important role in shaping women's place in this country and in history. >> thank you. the caller was from quincy. we will taking you next to the

quincy home as they prepare to tell you the story of the revolutionary times. >> the story of abigail adams is a story of sacrifice and commitment to country. for the first 10 years, they lived in this home, from 1764- 1774. it is where they raise their four children. this is the birthplace of their second child, john quincy adams, who went on to become president of the united states. the primary link between she and john adams would be letter writing. it was from this house that he was provided a window into what was happening back here in the colony of massachusetts. she would report to john about the militia in boston.

during the battle of bunker hill, she took her son and she would watch the battle of bunker hill with her son and report about the fires and smoke. she was the eyes of the revolution to john adams and the second continental congress in philadelphia. we are in the hub of the household. this room in particular could be considered the classroom for abigail the schoolmistress and hurt corporate children. one must remember the schools were closed down. the children cannot benefit from a formal education. it was up to abigail to teach them the lessons. not only arithmetic and french, but also morality, literature, and what was going on in the revolutionary war. she was their primary educator here in this home.

this is the room where many of those lessons would have taken place. she reported to john adams at one point, she began to take up the works of ancient history, and she was having john quincy read her at least two pages a day. i do not know if anybody has read that history, but for a seven-year-old, he had a very good instructor in abigail adams. during the occupation of boston, there were many refugees leaving boston and into the country. they needed a place to live. abigail adams wanted to open the home next door, john adams's birthplace, for the refugees. she rented a house out to a farmer and his son. but would provide assistance to abigail on the farm. she reported to john that she met with some ill treatment. she asked mr. hayden and to share his house with refugees, but he refused. by the time she received a response, like many things, she

had solved the problem yourself. she paid mr. hayden to leave the press -- the premises, providing her the opportunity to house refugees. there are troops marching in her yard, practicing their maneuvers and preparation for war. she reports to john that john quincy is out behind the house, marching proudly behind the militia. at one point there were militia's living in the upstairs attic and the second floor. she welcomed these men to her home and support to the revolutionary war with her actions. >> the adams's lights put them in the defense in the founding of our country. we have a timeline of key events in the adams life. 1744, she was born and married john adams 20 years later. soon after that, the stamp act.

then in 1770, the boston massacre. i wanted to ask our guest about how endangered the addams family were living in the midst of this preparation for war. having been sympathizer's against the british government. >> for the first decade of their marriage, abigail and john lived together. it was during this decade that event escalated towards war. there is a simultaneous parallel current -- occuring a personal level and global, a political level. during this period of time, there was no danger. there was danger once, once there was fighting in the massachusetts bay area, yes, there was danger. more than that, they did not

know that there would be dangerous. they never knew where the next troop deployment was going to happen. she was ready at any minute to move away from the house, to move inland, to take her children to safety. >> how much time was she alone while john adams was off working on the foundation of the government? >> my goodness, from 1774-1784, they were apart most of the time. he came home a couple of times for a couple of months. during that time, she worked alone on the farm by herself or raising the children. >> she was writing these letters explaining the situation -- a concern was he about his family? >> he was very concerned. there is one heart wrenching moment in which she is pregnant and she is writing right up until the time that she begins labor, and because of the time and distance -- which is so hard

for us to understand now, with our instant communication -- he is writing hoping that she will have a daughter and that everything will be fine. in the meantime, the infant is born dead. she had a premonition that this was going to happen. while he is writing happily, joyfully, she has buried this child. he knows that she is capable of doing almost anything that a woman or man could do during that time, but there is a certain helplessness on his part. he is so consumed by what he is doing their, but then reflex -- he will send letters, kiss tommy and johnny. a lot of it is very emotional. >> when war broke out, i read that she was so supportive that

she would do things like how the effort by melting down a cuter housewares said they could be made into bullets. was that common? >> sure, people were doing that altogether. i'm going to pass on that. up -- a couplet more calls as we learn more about the revolutionary years of the adams family. next is a call from denise in michigan. >> hello. i would like to know if the series from hbo was reflected in any way of how things really work, in the sense of family. i know they did not go too deep into that. i would also like to know, when you talk about five kids, was that the baby who died? was it correct about the sun drinking? -- the son drinking? >> first, the hbo mini series.

>> it was good history. it was drawn up also, so you have to understand in order to make it appealing, a little license was taken. generally, it was pretty good history. >> there was this tweet -- the caller asked about the five children and didn't include the child who died? >> the child who died was the third child, born before charles. there was abigail jr., then john quincy, then a third child named susana who lived only one year, and there is very little reference to this child in their correspondence. we know very little about it.

abigail was pregnant at the time of the death of susana. her third child charles was born. at the end of life, when her daughter in log lost a child and the daughter-in-law was in st. petersburg, abigail wrote to her, and for the first time i have seen, she made reference to having lost a baby daughter. it was a closed topic. >> the caller also wanted to know about the son who was an alcoholic and died. >> charles -- people did not know about alcoholism in those days. it was considered simple. it was not considered a disease. charles is throughout the correspondent's treated as a person -- correspondence treated as a person who was sensitive. he went to europe with his father in 1779, and he had to

come back because he was home sick. he was a sweet child, a pleasant child. but also fragile, and he may have got into trouble when he was in hartford. >> you know from the letters between abigail and her sisters and that they kept an eye on him, that there was a problem. it is never fully discussed. one of the things that was difficult for abigail was that her brother was an all collect. -- an alcoholic. >> on twitter -- if she had been born at a different age, would she have been like eleanor roosevelt? >> that is hard to do. she certainly would, she had all the attributes of a very dynamic woman who was opinionated and would have had her own goals to

pursue. she would have been very influential. she was very influential in the presidency. >> a lot of historians -- there have been a four surveys of historians over the past decades -- abigail adams always comes in the number two or number three position as most influential. why? >> who would be number one? >> eleanor roosevelt, i think. why does she end up in the number two spot? >> there is a distant in time. people have other images. people that knew -- people are still alive and that no eleanor roosevelt. she is modern. if you did a survey now, jacqueline kennedy would probably rate much higher because people know and like her at that time. the only thing we have from

abigail are the letters. >> and she is still in the number two spot. not bad. she seemed to route this to hundred years being the second most influential first ladies based on the letters you have been spending your career on. >> also, if you see her influence on her husband, i do not know there have been many first ladies that have had that kind of influence. >> a specific example of an important policy that you see she worked on him? >> i do not know of a particular policy. it is that he consults her all the time. her letters at a certain point are divided into two things, this is what is happening with the children, this is what is happening on the farm, here are my thoughts about politics. she shared all the time. by the time he got to be president, and he was not

popular with his party, she was his major adviser. >> here is another in a video piece of a letter, add if to john, focus on virginia. [video clip] >> everybody knows this letter and associates it with abigail adams. what is lessening -- lesser- known and what is fascinating is that the remember the ladies comment comes quite far down in the letter. the first section of her letter to john is questioning and voicing her concerns about virginia's role in the revolutionary war. she writes, what sort of defense virginia can make against our common enemy, whether it is so situated as to make an able defense, are not the gentry lords and the common people of

vassals? are they not like the uncivilized natives? she continues, and one of her probably most pointed comments on slavery -- i am sometimes ready to think that the passion for liberty cannot be equally strong in the breast of those who have been accustomed to deprive their fellow creatures of their spirit of this i am certain, that it is not founded upon that generous and christian principle of doing to others as we would that others should do unto us. >> how influential was this opinion about enslaved people on john adams's thinking? >> he had to be more practical. he is in congress. he is dealing with these people. he cannot alienate them. he had to help pull this together. it is easy to be a critic when you're not there. throughout the first 60 years of

the country, people had to tread softly in order to keep the union together. >> we are going to fast forward. the country is formed. the washingtons are elected president and serving in new york, than philadelphia. john adams is vice-president. how does he and abigail decide their household? did she move to new york, or philadelphia? >> john was vice-president for eight years. she moved to new york for one year, the first year, because the capital was new york for the first-year. she loved it. she had a beautiful house on the hudson river overlooking the city of manhattan and overlooking new jersey's sore. she loved it -- shore.

she loved it. then she moved to philadelphia and she spent the entire year ill. her health was always precarious. she decided after that year in philadelphia, they decided together that she would stay at home. there was no precedent for the first lady and the second lady to be living with the men. it was by choice that martha did it. abigail had the liberty to choose to go home. she did for the next six years. >> we learned last week that the city of philadelphia was decimated at the start of the second washington term with yellow fever. paul% of the population died. did she have an illness related to that? -- 12% of the population died. did she have an illness related to that?

>> it is hard to put a name on it, but no. she did have rheumatism. beyond that, the symptoms she describes are very hard to diagnose. >> there was no role model for being the second lady at the time. on twitter -- >> i am not sure about that. >> was she a national figure? >> no, not at all. she was known because she had been -- of the problems they had is that people thought they were monarchical, they had been tainted by their time in europe. i think this is one other interesting things about abbot rell -- abigail, she grew up

minister's daughter, and then she sat beside -- is at versailles, so she is a much more sophisticated person. abigail was international. >> what is the relationship between martha washington and abigail adams? >> it was wonderful. abigail loved martha. she met her once -- when she was the mother of the vice- president. whenever they had a social event, there were very close. whenever she wrote about martha, which was not much, but when she did write about martha, it was in the most glowing terms. >> one of the things she did was just after she knew that john was going to be elected, she rode to martha washington, asking her about how to be the first lady, how she would carry

the role. >> martha wrote back and said, you know inside yourself how to behave. >> we know that is a tradition that continues today for new incoming first ladies, reach out to the people that served before, to understand the enormity of the task. here is a call. >> good evening. thank you for the program. i read one of your guests books and some earlier works on john adams. i still think the most comprehensive biography, technically of john adams, but really of them both, was one done more than half a century ago, two volumes by page smith -- paige smith. i think that stands out. >> nobody writes about john

adams without consulting paige smith. he is a foundation for writing about it. what is remarkable to me was that the adams papers had just been opened to the public at a time when he started writing his book, and yet, they were so thoroughly researched. >> it was the first thing i read in graduate school. it was my introduction. >> the caller was nice to mention your books. i want to show some of them. we're hoping people be intrigued enough to read more. "abigail adams: a writing life." "my dearest friend: the letters of abigail and john adams." can you dive right in and get a sense of the person? >> yes, you might need a little bit of historical context, the

letters are personal. in some ways, they are timeless. the talk about problems that people have today, concerns that people have today. but the political context, but the intimacy. but your book is excellent because of the footnotes and you take people into it. abigail's letters had been in print and she has been read since 1840 when her grandson's first published an edition of her letters. she was a best seller through the 19th century, people knew her. she has always been famous. >> i am not able to find a tweet as quickly as i need to. somebody asked a question, did the adams to think about their letters being published? >> as early as 1776, don is telling her to keep the letters.

at a certain point, there is a consciousness in some, particularly his letters. they know at a certain point, and i'm not sure when the cross the threshold, that they are important. that is one of the reasons the family saves the letters. early on, it is the motion with the mists of four letter. later on, their letters extend from 1762 -- the miss adorable letter. later on, their letters extend from 1762 onward. >> this is a tweet-- >> i do not know that is true. >> what we said is that abigail

and martha's friendship help facilitate the relationship between washington and adams, when they were trying to understand what a president and vice-president might do. is there any evidence of that? >> i think john and george washington got along pretty well all the time. john adams was extraordinarily supportive of washington and was personally injured when some of the press turned on washington, could not believe it. martha and george were a hard act to follow. they knew they would be difficult. >> we will move into the years of their one-term presidency. before that video, there's a time in one of your books, you call it a splendid missouri being in the white house. explain what that phrase meant. >> it was blended in that they

were at the pinnacle of his political career and her career. they had risen to the top. it was nothing but trouble, agonizing trouble from the very beginning. at very first, john was very enthusiastic about becoming president. abigail said, i'm going to stay here in quincy. she said, i will not be there until october. he said, that's fine, you do not come until october. once he was in the presidency, he discovered it was the loneliest place in the world. he started writing letters, drop everything that you're doing, come here, i need you immediately. she did. >> one of the interesting things, one of the reasons she was hesitant was she said, i like to be outspoken. she knew that in that context, she cannot. when she was in quincy, she could.

>> when she was in quincy, there was a house they built another called peace field. >> in 1787, adel realized that outgrew their cottage. she began to negotiate through her cousin to purchase a house we're standing in front of right now. john adams enjoyed a lot of peace and tranquility at this time, as did abigail. he called it peacefield. there were two rooms on the first floor, to go on the second, and smaller bedrooms on the third floor. there were about seven and half rooms to this home -- to this home. this was their home base. before becoming first lady, abigail would spend nine years in this house. the first year, she was setting up the house after returning from europe. she had remembered this house as one of the grand houses in quincy. her perception of grant had changed after living in europe. she began making plans to

enlarge the house. she wanted to improve on the size and height of the ceilings and the space. she would write to her daughter, warning her not to wear any of her large the other hats because the ceilings were too low. she began working with an architect to enlarge the home. they added a long haul and along entertainment room where she would receive her guests. with sensitivity to the architecture on the outside and the flow of the home, she had the builder did down so they could lower the floors and get the high ceilings that she desired without disrupting the architecture. you step down two steps and you're in a whole different world. a typical day for abigail would be to rise at 5:00 in the morning. she had many chores to do much for time was spent in the farm, taking care of the orchard, taking care of the house.

she also liked the early morning hours to spend by herself, preparing herself for the day. most of portly, having a chance to indulge in one of her novels. although this was a presidential home, it is the home of a family. abigail, instead of having servants do all the work, even as a first lady, she would also be contributing to the kitchen and running of the household. this is something she continued throughout her life no matter what her position was. she was very involved. she had children and grandchildren visiting. it was an active and lively household. she spent a great deal of time writing. again, their misfortune was our fortune. in one letter when he is asking her to come to philadelphia, abigail would write of the room that she was in and the view that she saw. the beauty that unfolds outside the window thames' me to forget the past. this is an indication that while

abigail was back here, she was on a new beginning as the first lady of the united states, as the wife of the president, and still a mother. she would describe life. so romantically that john adams would reply in one of his letters, all my sweet little farm, what i would do to enjoy the without interruption. >> of the four years of his presidency, how much time did she spend their vs. the capitol? >> she had to stay there for an extended time. dejon actually followed her and he stayed there -- john actually followed her and stayed there, too long according to his cabinet. she tried to stay there for as much time as she could. again, her health caused her to be at home. she was quite ill.

she was possibly close to death during that time. >> how did he serve as chief executive from afar? >> this also happened during the vice presidency. when congress was needed, the vice president would go back to where he lived. especially during the summer, they would usually lead in the spring and come back in the fall. it was a seasonal thing. although he did overdo it a little bit during this time. it was not unusual for the president to be away. >> these were very trying and tent -- tempestuous years for a brand new nation. can you give us a sense of the history, what was happening during the adams administration, icypolicy issues -- key polc issues? >> the major problems were international. you had a political tiffs. you had the completion of

political parties -- creation of political parties. we had problems with the french, the british. american political parties were divided, pro-french, pro- british. one of the problems john had was keeping the country out of war. he was successful. i think that is probably the thing that he should be most recognized for during the period. >> i also find it ironic that he is one of president who kept us out of four -- war. the u.s. would have collapsed in a second war with britain. it supported his career. -- subverted his career. the politicians of the time were like politicians