been immunized by obama were sacred -- secret surveillance and torture. the only two people investigated and prosecuted and indicted and convicted of torture in surveillance are myself and one other person. he is currently serving 30 months in a federal penitentiary in pennsylvania. why? blew thee actually whistle as a former cia agent regarding state-sponsored torture. torturename of a tortur or. he is in prison. those who authorized the program, those who approve the program, those who implement the program, those who manage the world torture program have immunity. secret surveillance.

i am the only one prosecuted, indicted, and convicted. i had nothing to do with surveillance. i resisted with everything i had. who authorize surveillance and approve surveillance -- they all have immunity. in fact, if i had committed surveillance -- if i had engaged in surveillance, i would not have been prosecuted. john kiriakou, if he had tortured he would not be in , prison today. what does that tell you? the press has been complicit in the war crimes any wrongdoing and the suspension of the constitution since 9/11. it is high time. you are faced with the stark reality that you are going to be in this. you need to question this. question authority. you need to question everything. especially question authority.

how else do we know what is going on without being informed? this is a fundamental and some suggest, the fatal flaw, of any democracy, no matter what form it takes. including a constitutional republic. it is ultimately about keeping the public informed. the public has the responsibility to inform themselves. what is the primary means by which we do that? the press. the ultimate question that we have to face and that must be asked is what is the future, given that there is no guarantee, what future do we want to keep? >> we will end, but i do not have the courage not to call my wife. [laughter] i want to call her, as she started the book festival and she did an important book with the mother of pat tillman. why don't you talk about that? >> how much time do you have? >> i watched you for two years reading those documents.

>> i read 3000 pages of investigative documents. they were so full of holes. government documents that were so full of holes, you can drive a humvee through it. we came away with no satisfaction at all about how pat tillman was killed and what the circumstances were. to this day, i still talk to her every week. i see what else we can do. it has been very frustrating. i have two quick things. one is that first of all, you have inspired so many young people. you have inspired me and i was a lifelong journalist. you have inspired a lot of young people. before we go, i hope that you can tell the 99% of the people how to do encryption. my real question, how to do encryption -- my real question is, how can you actually put the genie back in the bottle? i remember a few years ago,

dennis kucinich was in congress and it was before edward snowden, before any of these revelations. he was part of a group of congress members trying to get the nsa abolished. to be duplicative -- you have the cia, the fbi, why do you need this renegade agency jacob is it possible to accomplish that now with these regulations? hope, i still believe it is the nationalein in security surveillance state that we are becoming. if i do not believe that, i would not be on the lecture circuit every weekend talking to students like you. i would have given up. so i guess i still believe that we can recover our democracy from the police state it is the calming. in terms of encryption, i am not a technologist. pgp, i learned how to use

"pretty good privacy." you can install it on your phone and your computer. that is one of many in christian -- when it -- that is one of many encryption activism. others get more sophisticated. pgp is pretty basic that is not too difficult to learn and does not take that long. ties wherecrypto par people can teach you this. seriously, that is what they do in other countries. i believe every journalist should know how to use basic encryption. >> i am on the board with edward snowden of a group called the freedom of the press foundation. if you look at press freedom trevor andorg, others have made available

encryption methods for journalists like those at wikileaks. they can be picked up free and used. >> they will walk you through it and they have secured jobs so to blow- secure drops the whistle in a secure way. tech can help. >> while you are doing that, get the wording of the fourth amendment. carry it in your pocket and pass it out. we have other means of protecting our privacy. sandy was instrumental. i want to thank the government accountability project. a lot of people really helped, great annenberg support. the school is really great having this conference. you have some closing remarks? ask one question. i want to echo what she just said. we thank you all for coming it

has been a remarkable evening. it is going to go on tomorrow with the institute of politics at the tudor center at 11:30. room 227. i wanted to ask one question. there was a piece a few months ago in the new york review of by david cole. he made a distinction that all leakers aret all not the same. he defended snowden that was and critical of assange especially manning. this is what he said. he said some specific cables might have revealed a legal conduct without disproportionate harm to public safety, manning's documents were not narrowly tailored. state department cables out of many individuals

who put themselves at considerable risk. i just want to ask you do you think there are distinctions to be made. either times when leaks should not be made? all secretsthink should be out there. troopk sources, methods, things like that. the argument that cole made, a lot of whistleblowers are disclosed of -- a lot of whistleblowers are accused of over disclosing or under disclosing. chelsea manning gave way too much information. legally, the law does not turn on the quantum of how much information you disclose. it turns on whether or not the disclosure had a reasonable belief that what he or she saw evidenced illegality.

the point by trying to make the analysis turn on that. i think we can all agree that it is the collateral murder video alone that was definitely whistle. a lot of the other stuff --in terms of all the phantom harm the government talks about. as one of the few people who did go to the parts of the court marshall. the government cried damage and harm. the judge gave them numerous opportunities and they could produce not a single damage assessment. >> funny when you mentioned the distinction earlier about leakers and whistleblowers. i used to be called a leaker, my wife hated that and thought it

may be sound and comment -- incontinent. [laughter] it is better than traitor. --heir secrets that legitimate secrets that should not be told. givingioned earlier .alerie's name it was not just whistleblowing, that's not the only thing. it was wrong and should not have been leaked. i cannot imagine doing that. i don't think i knew anyone who would give the name of a covert agent doing something worthwhile. that is not true of all cia covert agents. she was running anti-proliferation efforts in danger by putting out bad name. this.ant to object to we get into this great argument,

what whistleblowers should or should not do and is this dangerous? raises that argument about the 99.9% of information leaked by people in power, rather it is the deputy sheriff for the defense department. inteled at my own profile, there was really nasty stuff. i could have lost jobs and so forth. you look at what they try to do to martin luther king. the fbi, look at that whole record of destroying people. no one ever throws the argument back. let's hold bradley manning, who told us we were killing civilians in our name and we made a game of it. in iraq, let's question him or her. let's challenge that. been trying toe

call attention to is that the normal way news is covered about national security and foreign policy is by the government telling you their side of the story. classified until they leak it to you. it is unattributed will sources. and they shape the debate. that is what has been the reality. i would welcome -- let's have a standard. greenwald pointed this out the other day. you look at what is routinely said right now. and thero dark 30," question of torture. finally, dianne feinstein admitted that the study shows safere did not make us in any way. there was no defense of torture. you had a movie made with selective leaks from the government. look at the story of how that was made. how they were brought in. they were in a meeting where

they honored caa people with the most secret meeting to talk about their missions. the secret thing to get bin laden. movie producers making a move that will make that cia look good and are given information and are lied to and pass on allies. this has been going on ever since -- and pass on the lies. this has been going on ever since we have had wars. the whole thing about china. they do all this cyber stuff and bad stuff. putin now, he is evil. >> russia, so much propaganda. >> all these governments use the same argument -- national security. they'll say they are making their people safer. the otheray people on side are traitors or bad people. what you have got to get back into is the basic idea from the founders. i know they were flawed, but

they were an incredible group of people. what was incredible about them is they knew basic truths. you cannot have an empire in a republic at the same moment. the whole idea of limited government is if you are going to conquer the world and have power, you are going to lie. you will engage in messing around with peoples lives and become irresponsible. and you will have to torture. the way to do that is have a nor a notion ofve limited government, restraint, the right of the individual. thing isition to this not liberal or conservative or democrat or republican. i have been told snowden is a libertarian. what i see in snowden and the people on this panel are unique individuals that care about individual freedom and the integrity of the individual some paying allegiance to notion of state power. that is the core of the u.s.

constitution at it is something we should honor. let me close this evening by thanking you for being here. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> a couple live events today. at about 2:00 eastern, the center for strategic and international studies will host a discussion on iraq's upcoming elections. is barak'speakers

ambassador to the u.s. at 2:00 eastern. at 5:00, the foreign policy strategy of vladimir putin. focusing on his dealings with ukraine. among the speakers will be russia's opposition leader and former prime minister. see that 5:00 eastern. e passage of the underlying role and going health with the insurance on behalf of of my constituents under the age of 65 because they are uninsured. they are too young to qualify for medicare or too little class middle class to qualify for medicaid. oration, or eulogy could more eloquently honor his memory than the earliest possible passage of this bill

for which he fought so long, his heart and his soul are in this bill." while the above quote could andly refer to my father, the context could easily describe this health care debate , these words were in fact spoken by my father as he rose on the senate floor to honor his brother, president kennedy, during the debate of the 1964 civil rights act. the parallels between the struggle for civil rights and the fight to make quality, affordable health care accessible to all americans, are significant. was dr. martin luther king, junior who said of all forms of , injustice in health care is the most shocking and inhumane. is not only a civil rights, it is a moral issue. fork you, madam speaker

your political and moral leadership for helping those to secure a more advanced ,rotection and benefit especially in the area of mental health and addiction. thank you, president obama for delivering on your promise of providing the politics of hope rather than the politics of fear. i yield back the balance of my time. yearse highlights from 35 of house floor coverage on our facebook page. c-span, created by america's cable companies 35 years ago and brought to you today as a public service by your local cable or satellite provider. up next, silicon valley venture capitalist tom perkins, who wrote a controversial letter to the editor of "the wall street journal" in january about income inequality. he later apologized for a holocaust analogy in his letter. here is his discussion with adam

lashinsky about what he calls the demonization of the one percent. this is just over one hour, from san francisco. [applause] >> this truly is my favorite part of the evening. [laughter] >> it's never as loud as i'd like it to be. good evening and welcome to tonight's meeting of the commonwealth club's inforum, "connect to your intellect." you can find inforum online at inforumsf.org. i'm adam lashinsky, that's @adamlashinsky on twitter, senior editor-at-large for "fortune" and your moderator for the evening. tonight, we're here for inforum's event, tom perkin's "the war on the 1%." tom perkins, seated next to me, is co-founder of a venture capital firm kleiner, perkins, caufield & byers. an alumnus of harvard and mit, he's a renowned businessman and, as everyone in this room knows, an outspoken capitalist. in january of this year, shortly

after his 82nd birthday, is that correct, tom? >> yeah. >> he wrote a controversial letter to the editor, which was published in "the wall street journal." the letter has since gained notoriety for the parallels it makes between jews in nazi germany and the current 1%. here in the bay area, tom's comments on income inequality feel particularly relevant, given the current tensions brewing among san franciscans and what it is known as the "techie" community. without any further introduction, please join me in welcoming tom perkins. [applause] >> tom, i want to start at the very top, which is to ask you what the catalyst was for your writing this short letter to "the wall street journal?" >> well, i think frustrations had been building up for a long time about what i see as the

demonization of the rich. it was a particularly nasty attack on my ex-wife, which triggered my response. i thought, being a norwegian knight, i should ride to her defense. i spilled a little more blood than i had planned, but i'm not sorry i did it. >> i should point out that your ex-wife, danielle steel, is in the front row of the auditorium this evening. she came to hear you speak. you refer to an attack on her. explain. where was this attack? whose attack was it? what was the attack? >> i don't want to spend a lot of time on this. >> nor do i. >> over the years, the "san francisco chronicle" has had a series of attacks on her. i won't go into all of them, but there have been a lot of them. among one of the attacks is she's number-one bestseller usually on every book. "new york times," number one. obviously, her books are being read in san francisco, but they're never reported in the

"chronicle," ever. anyway, that is what started it all. >> you decided to write a letter. you were angry about an attack in the "san francisco chronicle," so you wanted to write about income inequality. tell everybody briefly what you said in the letter and what your goal was. >> well, it turned out to be the most widely read letter in the history of "the wall street journal," which of course is surprising. it's because i used a forbidden word. i used the word kristallnacht, which shouldn't be used ever, i suppose. you shouldn't compare anything to the holocaust, for example, because it's incomparable, and the same with kristallnacht. anyway, i said, "is there a progressive war on the 1% that

could be like the kristallnacht?" that got everybody's attention. i made the point that in germany, 1% of the population was jewish. a mad, fiendish dictator used incredible political skills to focus hatred on that 1% and used it as a steppingstone to power. i saw a parallel between our 1%, here in america, and that 1%. that's the parallel i drew. >> you've subsequently apologized for having used the nazi reference. you quickly follow that up by saying you are not apologizing for suggesting that victimizing a small minority is a bad idea, period, and that was your point. correct? >> that was my point. i just would like to talk about this word for a minute. "the wall street journal" on

february 4th ran a rather long op-ed piece, which i have extracted to be very short. it's by a professor at harvard, ruth wisse. she's a professor of yiddish and comparative languages. she has written a couple of books about the nazis and the holocaust. the headline is "the dark side of the war on the 1%." two phenomena, anti-semitism and the american class conflict, is there any connection between them? in a letter to 'the wall street journal,' the noted venture capitalist tom perkins called attention to certain parallels, as he saw them, between nazi germany jews and american progressives' war on the 1%." "for comparing two such historically disparate societies, mr. perkins was promptly and heatedly denounced, but there is something to be said for his comparison of the politics at work in the two situations." then this is, "are you unemployed?

the jews have your jobs. is your family mired in poverty? the rothchilds have your money"" "the parallel that tom perkins drew in his letter was especially irksome to his respondents on the left, many of whom are supporters of president obama's allies against wall street and the 1%. the ranks of those harping on unfairly high earners are playing with fire. anyone seeking to understand the inner workings of such a campaign will find much food for thought in mr. perkins' parallel." >> i think our overall goal for the evening is to explore as much as we can the subject of inequality, and why inequality is such a hot-button issue. on the subject of her academic point, it was written in a very academic way. it's clear that's her profession. you must see the difference between, on the one hand, a 1%,

a small minority that was essentially powerless being persecuted by a majority, and on the other hand, a small minority that is extremely powerful. that has all the resources of modern society and wealth being persecuted, i'll grant you, by a majority, namely the other 99%. although, the group you're actually referring to is, at various times, several hundred protestors who are angry. >> no, i think the parallel holds. the typical german had never met a jew, but some of the jews were extremely wealthy. they owned the large department stores, and so forth and so forth. they were very prominent. i think it's a very good parallel and it holds. >> you're saying that the average occupy wall street protester has never met a rich person, or somebody who rides a google bus.

is that your point? >> probably, i think so. >> do you concede the point that -- now, you've chosen to speak for the 1%. i admire you. not only do you have the courage of your convictions, but you have them repeatedly. this isn't the first time you've stepped up to defend yourself. the 1% has certain advantages and ways of defending itself that an ethnic group that is being persecuted, that is small, does not. i bring this up to ask you -- >> i think i've answered that already. i think if germany had had american gun laws, there would have never been a hitler. now, that's controversial. >> if nazi germany had gun laws? >> if germany had america's gun laws. >> america's gun laws, making guns widely available to the public.

>> to anyone who wants them, yes. >> that the jews then would have been able to defend themselves? >> hitler would have never come to power. >> interesting. >> so there. >> we're really straying off topic, and we won't dwell on it, but you're a fan of our current gun laws? >> no, not particularly, but it's in our constitution. i'm a fan of that. i don't have any guns. >> ok. [laughter] >> we will agree to disagree. we will agree that we won't illuminate your thinking anymore on the comparison of the rich 1% with the jews in nazi germany. >> i'd like to talk about the nature of the persecution of the 1%, here in america, right now. >> sure. >> i'd like to start with some facts, which are always useful. >> they may or may not be useful, but go ahead. >> well, we'll see. first of all, i don't think

anybody has any idea what the 1% is actually contributing to america. let me just get into that very quickly. i've got it here somewhere. let me talk a little bit, before i do that, about the persecution of the rich. i'd like to take the koch brothers. there are three of them. i know one of them, bill, who has nothing to do with the other two that are highly political. they're all big contributors to charities and so forth. david koch was on the board of new york presbyterian hospital. the hospital was going bankrupt, so david gave $100 million to the hospital. that was interpreted as koch buying the hospital for the purposes of firing the nurses and destroying the nurses' union.

there was a big rally and all kinds of important people showed up. the nurses said, "the koch brothers have a plantation mentality, anti-union to the core." harry belafonte called them white supremacists. then, let's see, letitia james, who was head of the union, said, "right-wing, anti-union profiteers like david koch should not be meddling with health care in new york city. all have to stand together against the koch brothers coming to new york city." >> tom, so far, these aren't facts, other than the $100 million. >> the rally and what people said are facts. >> oh, i see, the facts are what people said, but you wanted to talk about the contribution that rich people make, which i think is an interesting line of discussion. >> let's just start with simple arithmetic. let's say you're a successful author.

your income is taxed at a little over 50% if you live in california. on your death will be another roughly 50% tax. out of the dollar you originally made, you kept 25%, 25 cents. you gave 75% of your lifetime's work in the form of taxes, not including property and other taxes. that's on an individual basis. i just learned something today that i suspect nobody in the audience is familiar with, maybe you are. if you sell your home and you're making more than $250,000 as a family, there is a capital gain on the home. let's say you sell it. you want to buy a retirement home or something. obamacare has added a 3.8% tax

on your gain. how many of you knew that? oh, quite a few, all right. i didn't know. finally, let me get to the actual statistics. i'll make this brief. the top 1% -- i got this from the tax foundation. these are facts. the top 1% of taxpayers pays a greater share of the income tax burden than the bottom 90% combined, which totals more than 120 million taxpayers. in 2010, the top 1% of taxpayers, which totals roughly 1.4 million taxpayers, paid about 37% of all income taxes. this is a big jump from 1985, when the top 1% paid a quarter of all income taxes. indeed, the income tax burden on

the bottom 90% has dropped. the bottom 50% pays only 2.4% of the total taxes. the top 10% of taxpayers, the top 10%, pays 70.6%. the argument of the rich are not paying their share, as obama likes to say, and they could do more, and so forth and so forth >> let's be clear about what we're talking about. the argument is that there is a war against the rich and that the rich are being persecuted. we're not having a conversation about whether or not the rich are doing enough.

>> well, of course. i think that taxation, i wouldn't say it's a form of persecution, but the extreme progressivity of the tax rate is a form of persecution. >> the extreme progressivity is not new. secondly, it's -- >> it's getting worse. >> first, it got better, to use your terminology. now, it's getting worse, to use your terminology, but it's not unprecedented. the republic thrived and withstood high taxes before, and likely will again. i'm trying to put this in the scope of history to ask you where is the persecution in that? >> i think if you've paid 75% of your life's earnings to the government, you've been persecuted. let's just sum it up that way. meanwhile, let's get back to the 99% for a minute and talk about them. they are not doing very well. they're doing extremely badly. their income, i've got data on it.

in 1985, the average family making $250,000 a year paid 40% income tax. today, they pay 47% income tax. about half of that increase is obamacare. >> i think we can all agree. >> nobody is having a wonderful time with taxes. >> well, it's an interesting point. i think everyone in the room would agree. it's part of the reason why people came out to hear this conversation. the 99%, for lack of a better expression, because it's an inelegant and imprecise measure of those who are not super wealthy, are hurting, to make a generalization. there is income inequality. you are agreeing with that. >> i am totally agreeing with that. >> the question is what to do about it, first of all. secondly, there is a perception that you ought to address. there is a perception in the country, in san francisco

specifically, that the people who are making this great wealth essentially don't give a damn. >> well, i give a damn and i'm concerned about what's happening to the non-1%. san francisco doesn't like the experience of becoming a suburb of the silicon valley. that's what's happening. >> explain. i feel like san francisco, relatively speaking, especially in the technology community, is thriving as a center of job creation, of wealth creation. >> that isn't what i said. >> how is it becoming a suburb? >> because the people in silicon valley are living in san francisco, more and more and more. this is a trend that will continue. why not? it's a great city. it has wonderful restaurants, great culture, a beautiful bay and everything, but an effect of that has been to drive up rents about 30%.

what to do about that? i don't think there's much you can do about that. that's inevitable. as silicon valley thrives, which it is, more and more people will want to live in san francisco. then we have the phenomenon of google buses, which i just find it almost incomprehensible to get angry about google buses. we started google and if they want buses, that's fine with me. to break the windows in them and rough people up, i think is preposterous. now, we have google boats. are they going to be out there shooting at the boats? >> the specific issue is -- i certainly don't mind stating mind my opinion that boorish behavior is boorish behavior. everyone should say that breaking windows in buses is a bad idea.

the question is a philosophical question. number one, should the city specifically be reimbursed handsomely for the use of its facilities, namely the bus stops? number two, if we encourage companies like google -- and google is not the only one -- if we encourage them and their employees to opt out of the public transit system, is it only going to make the public transit system work? again, do we care? do we care about a good transit system? >> is there a question in there? >> yes, do you care about, do you have an opinion on using city resources? do you agree with a philosophical point that, for example, public transit, public infrastructure is a good thing? >> of course, of course it is. it's available for everybody. google is paying a fee for using the bus stops. >> belatedly. >> well, but they're paying it. now, is google responsible for the rising rents in san

francisco? indirectly, yes. what can they do about it? nothing. >> now, we started down the path of what can be done about income inequality. >> i'd like to get on to that point, actually. i think that income inequality has been with us for a while and it's caused by policy failures. i think there's been a huge failure of social policy, fiscal policy, and monetary policy. i hope i don't put you all to sleep as i touch on those points. let's start with social policy. fifty years ago, lyndon johnson did two major things. he did the civil rights act, which is marvelous, magnificent, and i think without criticism.

he also did the war on poverty, which had wonderful aspirations, but which has been an absolute and total failure. it has caused all kinds of problems. first of all, there's more poverty more now than there ever has been. when johnson started out, the government was spending roughly 1% of its gross domestic product taking care of the poor. now, that's closer to 5%. that's a huge increase. there's 77 million americans on food stamps. i think the biggest problem that johnson unknowingly created was the destruction of the lower end of families in america. now, back in the 1960's and early 1970's, the divorce between whites, blacks and hispanics was about equal. it was about 12% across all those sectors.

the war on poverty made it possible to have single mothers supporting their children without a working man in the household. the numbers have just changed radically. the divorce rates have skyrocketed. to use a victorian term, the birthrate out of wedlock has gone from 12%, which is pretty much uniform across all races in america, to 40% now for whites and over 70% for blacks. >> so i'm clear, you're drawing a straight line between the failed war on poverty and income inequality today. >> i'm drawing a straight line between the failed war on poverty and the increase of poverty, yes.

>> you started by talking about social spending. i think, as i've read and listened to comments that you've made, you generally would subscribe to the theory that we have more government than we need, that we spend too much on government. first of all, the government spends too much generally, is that a fair point. >> government is a giant beast that has to be feld. it isy to feed taxes. obamacare will go up and up and up. >> the question i asked is, in your opinion, does the government generally spend too much? >> yes, it spends more than it takes in. it takes in $3 trillion a year in taxes and it spends closer to $4 trillion. >> don't forget, we were talking about a tax policy earlier. you're against higher taxes. other people are for higher taxes. presumably, we could raise taxes to pay for these things, which gets me back to the question of do we spend too much?

>> well, we do spend too much. there are so many examples of that. i don't think i need to -- taxes will rise. now, there's been discussion by nancy pelosi. you're familiar with her? >> our congresswoman. >> our congresswoman. >> your congresswoman. >> of a wealth tax, it would be 2% per year on your wealth. somebody said, "well, let's say you're retired and your wealth is in your house and it's worth a million dollars." she said, "well that's no problem, the government will just take a 2% mortgage per year and that's how we'll get the money." she has also talked about a value-added tax and much higher taxes on the wealthy. the beast will be fed, taxes will go up. maybe all of these things will

happen. the irony is if you took 100 % of the 1%'s income and wealth, we're only talking about a 1.4 million people. that total would run the government for about a month. >> other than social spending, where would you cut? >> i think that we're getting into an area where my bona fides are stretched very thin. we really should have a panel of experts but of course, they wouldn't agree with each other. you might as well go with what i have to say. [laughter] >> well, you are the man of the hour. we have no alternative. >> i don't know, i think entitlements are the obvious place that the cuts have to be made, but they're built into the law so that's extremely difficult. i'd like to skip on. >> excuse me, before you do, i

ask this line of questioning to try to flesh out a point. which is, for example, one of your greatest successes in your illustrious venture capitalist career was genentech. genentech was one of the first and most successful biotech companies. did genentech, and does genentech benefit from basic medical research that the national institutes of health does? >> yes, more at the university research, but yes. >> this is good use of the federal government? >> i'm all for the federal government funding basic research. i'm for a strong military, and so on and so on. we could go down the list. entitlements are what is eating up the budget. >> so to be clear, companies like tandem and compaq, which you invested in and made a lot of money in, and helped and create a lot of jobs, also benefited from military and other basic research by the united states government into the internet. without which, none of this industry, none of the silicon valley today would exist.

>> you're wrong on that. tandem did no military business, at all. >> no, not directly, but the infrastructure that was established by computing. >> adam, you're barking up the wrong tree. i'm not going to go there. the squirrel is in a different tree. [laughter] >> i want to get back to the policy problems. it's the social policy, number one problem. fiscal policy, let's talk about that. >> well, we spend too much. [laughter] >> yes, we spend too much. incredible are just and our debt is astronomical. the official debt is $17.2 trillion today. that includes social security.

that's roughly 105% of our gross national product. if you were an individual earning $100,000 a year and you have no5,000, other assets, you would be in trouble. it's worse than that. the unfunded liabilities of medicare, medicaid, fannie and freddie, and so forth, adds up to $68 trillion, on top of the $17 trillion. we really have a debt-to-gdp ratio of pretty close to 400%. now, many european countries have that, but many countries in the world don't have that at all. australia has a ratio of 20%. norway has zero. norway has the largest sovereign wealth fund in the world of over

$1 trillion. policy matters, fiscal policy matters. it seems to me that the debt will not be paid back. there's no way to pay the debt -- >> weight. -- wait. >> let me finish. wait, adam. >> i want to ask you, briefly, how those factors that you're discussing contribute to income inequality? >> well, it contributes to being so far in debt that you can't spend in things you should spend on because you're so hopelessly committed. inevitably, the taxes will just rise, and rise, and rise, which i don't think does anybody any good, 99%, or 1% or whatever. my point is, we're, i think, on a knife-edge, with this incredible debt, which can't be paid back. i mean it just can't be. it's supported by faith in the

dollar. now, churchill took the uk off the gold standard in his second administration. do you know who took us off the gold standard? >> nixon, i assume. >> yes, nixon. after that, it was just print money. if you have a recession, print money. stimulate the economy. have inflation? print money. devalue the dollar. $1 in 1970 was worth $1. today, it's worth 17 cents. >> let me make an observation as a way of moving on to other subjects, which is -- >> i don't want to move on. >> i have a few more we need to cover before we go to the audience. is there a dissonance here? this horrible situation you describe is coexisting with this great period of wealth creation and job creation, and the formation of great new companies like twitter, facebook, linkedin, and google, that are in turn causing the

consternation that we've come here to talk about tonight. >> yes, and that gets me -- thank you -- directly to monetary policy. >> you're welcome, but briefly on monetary policy, because it's the evening time and nobody wants to hear about monetary policy. >> all right, let's hear about it for a minute. we've had low interest rates for a couple of decades, a little more. very low. historically low for a long, long time. now, investors with capital are seeking return on their capital. these low interest rates, the rate on a 10-year treasury is 2.3%, i think, today. very low, so investors are seeking returns of 7%, 8%, 10%. an incredible amount of money, to get directly to your point, has flowed into venture capital. now, when eugene kleiner and i, the late eugene kleiner, my dear friend -- >> your co-founder of kleiner perkins. >> co-founder. when we started kleiner perkins, we tried to raise $10 million and we couldn't. we raised $8 million, and that was the largest venture capital

fund in the world. everybody said, "what are you going to do with it?" well, it turned out, we had to start our own companies and so forth to make it work, but that's a different story. now, we have, i don't think anybody knows how many hundreds of billions of dollars in venture capital. the amount is immense, and that is causing the boom in san francisco. >> ok. >> within a mile of here, there are probably 1,000 startups. >> in your opinion, these are good things. >> no, not necessarily. >> why not? >> why not? because these startups -- students are dropping out of mit in their junior year to go to san francisco and do a startup, but they're not starting companies. they're writing software applications, which are products. there's a huge difference between a product and a company. their only route to liquidity is

to sell it to google, apple, whatever. most of them will fail. that's fine because there's so much money around, they can fail and then fail again. they'll keep getting financed. it's not good for them. they're not getting the education at mit they should have gotten. they dropped out. they're not learning how to be entrepreneurs. they're just writing software and applications. there are so many millions. somebody probably knows how many millions of applications there are already are, but there's no great shortage of them. i see the building boom, the housing boom, and all of this as a result of terrible monetary policy for 20 years. >> i grant your point on monetary policy. this situation you described of

a flood of venture capital, flooding essentially what, to paraphrase you, are a bunch of bad ideas or insufficient ideas, ideas that won't be real companies. isn't this the great capitalist free-for-all? isn't this just the market at work? >> yes, it is. when the interest rate goes back up to 3%, it will stop. or, no, 7%. excuse me, i misspoke. >> it's a fascinating line of argumentation you're making, i think. >> some successes will come out of this. it's like a petri dish. some of them may bloom and blossom. kleiner perkins has been pretty good at picking them. >> wasn't it like that in your days as an active venture capitalist as well, maybe at a smaller scale? you invested in young companies. maybe they had a hair-brained idea. maybe they had a great idea. maybe they were going to make money. maybe they were going to have to go get a real job. right? >> well, i could give a speech

on venture capital in my sleep, which would put you all there, too. [laughter] >> i think that the unique thing about kleiner perkins, and sequoia, and i think the other great venture capital firms is the management skills that they brought to the ventures. typically, they would help the entrepreneur build his team. they wouldn't expect to find a team already built. who's going to become the vice president of marketing of a startup number 780? >> i understand. fill that role, provide all that -- >> the venture capitalists can fill that role, provide all that help, and get the thing going. that's the difference between an angel investor, who just sprinkles gold over everything, and a venture capital investor. i'm not slamming around conway, because i think he's very good, but not all are.

>> you've referred to, in this conversation, about the 1%. you've referred to this 1% as the most creative part of our society. would you explain that? because the war on the rich as been framed initially as the richest 1%, not the most creative 1%. >> well, there's a high correlation. look, i guess kleiner and i were in the business of creating billionaires. we didn't do so for ourselves. well, we did all right, but 20, 30 billionaires that i could name that we've created. look at google. >> i'm confused. is there a correlation? >> there is a correlation. >> couldn't there be a creative poet or a creative artist who is among the most creative 1% in the country? why would you correlate creativity with wealth?

>> you are jumping into a completely different philosophical universe. you're talking about value, not wealth. i am talking strictly about the wealthiest 1%, not the brightest, not the best poets, etc. >> creative, though, was your word. >> well, yes. the wealthy 1% creates jobs. that's where they come from, not the government. god, the government can't create a job to save its soul. it spends millions and you get nothing. or, i must say, the government is right now the biggest venture capitalist. look at solyndra, which has been beat to death. even kleiner perkins, we have an automobile company that borrowed money from the government. not on my watch, but -- >> you're talking about fisker? >> i'm talking about fisker. anyway, the government is in the

venture capital business. everybody is in the venture capital business. you're bound to get some good out of all that. >> you mentioned to me earlier that you've been involved in controversy, all your career. in your current controversy, you seemed surprised that the current partners of kleiner perkins are not on your side on this debate. >> i don't really want to talk about that. i think basically, they didn't have to say anything. instead, they threw me under the bus, but i'm a big boy. i have had a lot of controversy in my life. for a long time, i was the world's foremost misogynist for firing patty dunn and carly fiorina of hewlett packard. then, when i was involved in genentech, i was going to destroy the world by releasing

frankenstein bacteria, as new forms of life. there was a journalist in the "chronicle" maybe some of you remember, charles mccabe, who just castigated me every day on that. when i started my laser company in the 1960's, the rioters in berkeley thought it was a death ray. [laughter] >> yeah. the year i ran the san francisco valley effectively was a year of extreme controversy. herb caen called me, essentially, an idiot in charge, doing something he has no qualifications whatsoever to do, which was true. [laughter] the guy i hired, helgi tomasson, was still there 27 years later. >> it's almost time for audience questions. you mentioned herb caen. you started your comments by mentioning the "san francisco chronicle." are you surprised that the "san

francisco chronicle" has a populist tone in its pages? [laughter] >> i think there's only one newspaper in the united states that doesn't have a populist tone, and it's the only newspaper in the united states that's making any money. that's "the wall street journal." >> point of fact, other newspapers make money. it's not the only one. i believe "usa today" makes money. "the new york times" makes money. >> that's not a newspaper. [laughter] >> and "the new york times" does not make money. >> i'm not sure, but it's a public company, so we could go check afterwards. >> we could go check. >> anyway, the question that i asked is, are you surprised? you've made comments suggesting that you are surprised, shocked, upset, or something by the "chronicle's" tone. >> well, i read the "chronicle" every day. i want to know what's going on in town. i never read the editorial

page. i could predict the editorial page. i don't need to read it. i read "the new york times" every day, and "the wall street journal." i don't get my information off the internet, like everybody else does. i think i know a lot more than people who do get it off the internet, but that's a matter of ersonal opinion. >> you also mentioned to me earlier that you've noticed a difference in the reaction you've gotten in the last handful of weeks, between people who email you on the one hand and people who comment about you on twitter on the other hand. would you share that with everybody? >> it's very interesting. i've received a huge number of letters and emails, all very supportive of my position, 100%. the twitters are all pretty negative, and it's an age difference. older people use email and younger people twitter. >> my last question for you tom. you were asked --

>> when they're not playing video games. >> you were asked recently in a television interview if you feel you're connected to reality. during that interview, you talked about your expensive watch and the yacht that you used to own. your response to the question of whether or not you're connected to reality was, i'm paraphrasing, "i give a lot of money to charity." >> well, i do give a lot of money to charity, but that has nothing to do with my connection o reality. i think, philosophically, probably no one can prove that they are connected to reality. >> i'm in the same boat with everybody else. how about you, adam? you're a celebrated interviewer. are you attached to reality? >> my guess would be that one of the ways you answered the question was also that, although your immediate family is doing fine, you have relatives who live in trailer parks.

i think the point you were making was you know poor people. >> well, i wasn't born into the %. i used to be a paperboy, which is now of course illegal because of child labor and minimum wages. >> i used to bag groceries and babysit, etc. that's outlawed, but so it goes. >> we have a wonderful, vibrant audience here with a wonderfully vibrant interview subject tonight. i want to invite you to stand up and go to the microphone to ask questions. i'll remind you that these need to be questions. if they aren't questions, i will apologize in advance for being rude to you, to remind you to ask a question. sir, please, go ahead. >> yeah, thank you for coming tonight. i appreciate you visiting this audience. with socioeconomic disparity or dis-inclusion, however you want to say it, particularly in cities, being really the civil rights issue of our time, and you being so connected, too,

you're a brahmin of financial value creation. you being connected to people like google founders, not to mention the vc community that you run in. would you be willing to be part of, say, a fund in which you give 1% of your money to, and help manage that fund and the use of that fund that harnesses the entrepreneurial talent of san francisco, to address urban poverty issues that the tech economy or the emerging economy at large is exacerbating? >> i think i heard most of that. i'm not part of such of thing, but such a thing is being organized by ron conway and marc benowitz. >> benioff. >> benioff, excuse me. i'm not familiar with the details of it, but they are trying to do exactly what you have said for the benefit of san francisco.

>> i don't know if you caught it. at the very end of it, the tail end of his question, he injected the premise that the tech community is exacerbating the problems of poverty in san francisco specifically. >> well, they're not. they're just making enough to pay higher rents, but i don't see that as exacerbating the problems of poverty. >> thank you. i wanted to say as a reminder to our radio audience, this program is presented by the commonwealth club's inforum "connect your intellect." for more about inforum and its upcoming events, please visit us on facebook or follow us @inforumsf on twitter. tonight, we're hosting tom perkins, "the war on the 1%," and we have another question in the audience. please. >> hi, mr. perkins. i'm a student at stanford law school, and in my free time from playing video games, two of the things i do are -- >> well, we started electronic arts. hat's great.

>> one of the things i do is work in the community law clinic, mostly with spanish-speaking people from east palo alto. the other thing i do is i teach a class on california's finances. from these different contexts, i've gleaned, first of all -- >> we need to have your question. i'm sorry. this is a question for tom perkins. >> what do i tell the people i work with in east palo alto? if you could speak to them, what would you say? >> thank you. >> i feel very sorry for them. i wish that the war on poverty had not been such a fiasco, and then they wouldn't have the problem that they now have. the solution will take a very long time. it depends a lot on education, which is getting worse because of, frankly, the teacher's union. it's making it impossible to have quality schools in the inner cities, and so on and on. there are no quick answers to these kinds of questions, i'm afraid, at least not from e.

from barack obama, yes, they low. >> over here, please. >> hi, hello. well, good evening. thank you very much for coming and sharing. you made a lot of statements about pointing fingers, but one of the things you didn't address was the role of financial literacy, the role of access, and the role race plays in a lot of these things. if you could, just highlight maybe your thoughts. how are you bringing financial literacy to a lot of these communities? what are your thoughts on some of the ways you've contributed to that, or just opportunities to do that? >> yeah, i think i got most of that. silicon valley is a meritocracy. it is simply a meritocracy. race has nothing whatsoever to do with it, but blacks are underrepresented in silicon valley, unfortunately.

now, there's a group here in san francisco. they're successful black businessmen of all kinds. they've formed something called wall street wizards. what they're trying to do is teach young blacks about business and how to succeed in hat. last year, during nation black awareness week -- that may be the wrong title -- i agreed to speak to that group. all of the mentors showed up, and not a single student, not one. it must come from the individuals. it can't all come from the government or a program. if the individuals don't want to learn, they won't. >> please?

> yes. you cited johnson's war on poverty as a disaster that led to more poverty and increased the number of children born out of wedlock. what should have been done back then that would have had a different outcome? >> i think the answer to that is very, very long, and i'm not sure i have all those answers. we certainly did the wrong thing. what the right thing would have been, i'm not so sure. >> i would encourage you -- i have learned that you are able to form an opinion on almost anything, tom. it is your opinion that the war on poverty has been a failure, but that is not accepted fact. >> oh, wait a minute. now, come on. >> no, you don't know that there are not factors, that things

would have been even worse without the things that were done. >> that's conceivable, but -- >> i think he's asking a fair question, which is broadly speaking, what would have been the better policy route than the policy route that was taken in the johnson administration? >> well, i think johnson had absolutely no idea that what he was doing was wrong. it looked good and everybody approved it, but it had the result of destroying families. it just did. then that destroyed the education of the children in those families and so forth, so it had a cascading effect. the rate of poverty is higher now than it ever has been in history. there are 77 million americans on food stamps. there's no way -- i don't know how bad it could have gotten. i don't know. >> i'll take a shot for you. instead of the programs that the johnson administration did put into place, if the johnson administration and the nixon administration instead had focused on deregulation and

making government smaller, that we would have less poverty today. >> that's a trap and i'm not going to go into it. i think if money had been spent on improving the educational standards -- let's face it. e are, i don't know, 64th or something among the nations badly educated. we've totally underinvested in education. we've made it very, very hard to get a good education in the united states. if i had to pick a single thing, that's what i would pick that should have been done differently. >> please? >> could you comment on the fact hat your own example of fiscal responsibility, norway, is a social democracy? are you advocating social democracy for the united tates?

>> i'm a knight of norway. i've got to defend it. there are no tall no tall poppies in norway. >> no tall what? >> no tall poppies. well, it's the old adage, the tall poppy gets cut first. everybody is pretty much the same. there's no poverty. there are no rich. they've left norway because they didn't want to pay the taxes. it's not an ideal example. i just threw it in because they've been so extraordinarily well in husbanding their resources, namely their oil. norway has been the number-two oil exporter for decades, next to saudi arabia. they've saved the money. some day the oil will be gone, but they've got the money.

look, if i were 20 years old, of course, i think i'm in my idlife crisis now, anyway. >> if i were 20 years old, i'd try to go to with australia. australia is, to me, i've spent a lot of time there, the way california was, when i came here in 1957. it was upbeat, positive, can do, unaware of all kinds of problems. that's the way australia is now, and all we do is worry about our problems. >> when you do go down to mountain view, you don't think of that, or when you walk around market street, you don't think of that as an upbeat, can-do environment? >> well, not seventh and market. that's a good place to -- >> we're getting too local on this conversation. go ahead. >> hi.

i work at genentech. i'd first like to thank you for creating my job. >> secondly, knowing a little bit about genentech, i know a huge chunk of our revenue comes from medicare payments. you had mentioned earlier cutting entitlements. that would significantly cut our revenue. that's one example of a public-private revenue partnership or whatever. there's also construction, infrastructure, and education you mentioned. if this revenue that is being spent by the government isn't going to create jobs, what is it doing, if it's not helping keeping people employed at genentech? >> hang on. i think medicare is great. great. >> it's one of the biggest entitlement programs there is. >> it is. it's just underfunded. >> you want to make this entitlement program bigger? >> no, i want to make sure it doesn't go bankrupt. there's a difference. >> i don't understand. >> you don't understand? >> if we need to cut entitlement

programs, then we need to cut ntitlement programs. >> adam, medicare will go bankrupt. it's inevitable, so taxes have to be spent on medicare. i am for that. >> the entitlements that you're against are? >> i didn't say i was against entitlements. i never said that. >> you said they needed to be cut. >> yes, because that's the bulk of the budget. there's very little discretionary cutting you can do. the military and a handful of this and that, but entitlements represent most of the budget. if you're going to cut the budget, which we have to do because we're so deeply in debt, you've got to start there. there are good ones and there are bad ones. >> the bad ones are? >> i doubt that 77 million eople need to be on food stamps. >> food stamps, ok. next question, please? >> hi. i have a speech impediment, so in case you don't understand,

i'll be happy to repeat yself. i'm part of the 99% that aspires to be the 1% some day. i work 70, 90 hours a week to make sure that some day, hopefully, i'll become the 1%. do you think this could be potentially an image problem for the 1%? there are billionaires out there who we love, like steve jobs, musk, bill gates. do you think that instead of calling this "the war on the 1%," if we could actually address it as the race to the 1%, things would be a lot better for everybody? >> i think that's a brilliant re-branding. i totally subscribe to it, but my message is the demonization of the 1%. i think that's true, and it's new. it's, frankly, new with the bama administration.

we never used to have a demonization of the 1%. we wanted to be in the 1%. we admired them. i can remember when i was a little kid, john d. rockefeller would go around and give dimes to the little children. i thought, "how wonderful. i'd like to be john d. rockefeller and give dimes. this whole tone has changed in the last very recent years under this administration, i think. >> do you think it's because of obama or is it because of the 1% not being philanthropic enough? >> not being philanthropic enough, is that what you're asking? >> right. >> i've discussed the taxes. the 1% is carrying the government. at least the top 10% is carrying the government. we've talked about that. it's not bad to be in the 1%, obviously. i think people, like yourself, still aspire to it and should. hard work and so on can get you there, plus the right venture apitalist.

>> over here, please? >> the president has proposed a lot of commonsense ideas around immigration reform, around infrastructure spending, but at every turn, he's been road blocked by the republicans in congress failing to want to agree with him on moving a policy agenda forward. what are your thoughts on simply the politics of no, as opposed to proposing an alternative agenda? >> i'm neither a republican, nor a democrat. i've gone both ways. i voted for jerry brown, which then he raised my taxes 30%. >> president obama made an immense political mistake. he's not a politician. he's a brilliant leader in a

certain direction. the mistake was to push through obamacare without a single republican vote. no other president would have done that, because it just wiped out any hope of cooperation with the other party. in spite of all his talk about reaching across the aisle and so forth, nothing has happened. you can blame it on the republicans, but i blame it on a huge strategic political mistake. >> it's the president's obstinacy in wanting his agenda passed that is to blame for the other party's intransigence? >> i think it's what you get when you elect an amateur president. >> tom, is that really fair? >> he's a politician who was elected by the people of the united states, not once, but twice, so why the name-calling? >> i've looked at his resume. >> you've never met an entrepreneur who had never been an entrepreneur before, or a venture capitalist who had never made an investment before? >> i wouldn't make him president of the united states. >> over here, please? >> hi.

you just said that it's not bad being in the 1%, but you're also talking about the demonization of the 1%. we do know exactly what happened to the jews in europe, so i'm actually curious what the fear is. it can't possibly be ghetto-ization, or deportation or extermination. >> i get your question, but we're almost out -- >> i do want to understand what the actual fear is? >> the fear is wealth tax, higher taxes, higher death taxes, just more taxes, until there is no more 1%. then that will creep down to the 5% and then the 10%. the money is in the middle. that's where the money in america is. to pay for this government, it's going to have to come from the 99%, not the 1%, in the form of taxes, value-added taxes. i promise you, higher taxes, everybody.

>> to be fair, i'm sorry to tell you that this is tom's penultimate word and he will get the last word. your point is, to her question, that your concern is a decrease in the overall quality of life in the united states, including for rich people, but not only for rich people. >> no, that's right. >> as opposed to ghetto-ization, extermination, and other horrible things. > i'm talking about economic >> what is your 60-second idea to change the world? >> ok. and i've been thinking about this as i was listening to you ramble on. [laughter]

and i've got it and it's going to make you more angry than my letters through the "wall street ournal." thomas jefferson, at the beginning of this country thought that to vote, you had to be a land owner. that didn't last very long and the vote was given to everyone. but the basic idea was you had to be a taxpayer or a person of property to vote. that went by the boards. margaret thatcher tried to change that in england in what became called a poll tax. the idea was that every single citizen of the u.k. had to pay something in taxes, even if they got it back in subsidies elsewhere. and if you didn't pay something in taxes, you couldn't vote. and she was thrown under the bus by her own party for trying to

push that through. but i really think it should be like a cooperation. [laughter] >> you're right that i don't agree with you and you're wrong that i'm angry. since everybody pay sales tax and anyone who drives a car and pays taxes for that, then we are right back to where we've started. the wonderful place where we've evolved since thomas jefferson that everybody has the vote. >> but not income taxes. >> and i have enjoyed this conversation immensely despite my rambling. tom, thank you. please, everyone, in the room, join me in giving a big round of applause to tom perkins. [applause] inforum this meeting of

is adjourned. >> you did a great job. you did a great job. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] ♪ >> in just over 30 minute, we'll go live the international studies for a discussion on iraq's parliamentary elections. today's discussion will feature iraq's ambassador to the u.s. live coverage will get underway p.m. eastern on c-span. later, starting at 5:00, we'll be live at the atlantic council as they look at the foreign policy of russian president

vladimir putin looking especially towards ukraine with russian -- russia's opposite leader and the prime minister will be part of that discussion from the atlantic council. >> for more than a year, there have been allegations and insinuations that i knew about the planning of the watergate break-in and i was involved in an extensive plot to cover it up. the house judiciary committee is now investigating these charges. on march 6, i ordered all materials that i had previously furnitured to the special prosecutor turned over to -- today. these include tape recordings of the 19 presidential conversations and more than 700 documents from private white house files. on april 11, the judiciary committee issued a subpoena for 42 additional tapes of conversation which is it

contended were necessary for its investigation. i agreed to respond to that subpoena by tomorrow. >> 40 years ago on april 29, president nixon responded to a house judiciary committee subpoena for watergate tape. his responds and reflections from carl burn bernstein sunday night at 8:00 eastern, part of merican history tv on c-span3. up next, new jersey governor chris christie's remarks from last night on the state's retiree obligations. the governor spoke here in washington during an event hosted by the new jersey chamber of commerce and talked about his economic record and the new legislation on state property taxes. [applause] >> thank you.

>> thank you. thank you all very much. thank you. i thank all very much. thank you for the introduction and welcome to new jersey. i hope that we won't be having nearly as much interaction as i had with your predecessor. it would be much better for me if we didn't have to do i know of that -- any of that at all. and thank you for the introduction. and tom, thank you for arranging the renewal of this trip, despite the wonderful winter we had. i appreciate the efforts and i want to welcome the members of congress who are here as well. and of course, i want to add my

congratulations to governor burn . to see a former governor who served two terms through some tumultuous political times still be here at 90 because great things -- does great things for me. you're an inaccountable example, governor. [applause] and i know that the governor loves to come here every year. and the reason he does is the reason why all of us comes. it's to renew relationships. it's to hear from the business leaders of our state, what's going on in their particular business and the overall business climate that they see in our state. and it's to make sure that we stay in touch with each other. because new jersey's future is

dependent in large measure upon the people in this room and those you represent and employ. and so i'm proud to continue a long tradition of governor who is come here and take the opportunity to address the business community on both the challenges and the opportunities that we see before us over the course of the next year. now, i also understand that these remarks are being broadcast live by c-span tonight. what that will tell you is this must be the quietest of political night in america in months. [laughter] [applause] so we're going to do the best we can for the 15 people who are out there watching c-span. [laughter] to bring them as much entertainment as we possibly can over the course to the next number of minutes. i said there's challenges and opportunities facing this state and there always are. and in this particular time, i see the challenges and the

opportunities melding together. you know, when we think back on what's gone on in our state over now in nearly the last five years, the recovery that we have made has truly been exceptional. it's not complete, but it's been exceptional. i want to remind you of just a few of the things that we've confronted a little more than four years ago where we all gathered here in 2010. we were confronting a budget crisis in the middle of a fiscal year that only had less than four months remaining where we had to reduce spending by over $2 billion between the beginning of february and the middle of march where the state of new jersey would not have met payroll for the second pay period in march. we would have run out of cash and not met payroll. we had declining state tax

revenue. we had declining employment with an unemployment rate over 10%. and we had a business community at was stymied by a troubled national economy and burdened by the wet blanket of years and of tax increases in the state of new jersey on those businesses and their employees. we confronted a situation where we had to decide very clearly which path we were taking. there were two paths. the path we took for the last decade, which was to once again increase taxes, not do anything about spending, and continue to burden even further the business community and the citizens of our state. there were those who proposed

this despite the fact that they had already seen in independent study done by boston college that said in the four years prior to 2009, $70 billion in wealth had left our state. not diminished wealth. departed wealth. it went to states like florida, north carolina, delaware. even pennsylvania. despite that, there were voices that still called and still call today for increasing the tax burden on the people of our state and its businesses that employ the people of our state. we chose to take a different path. which was to make the pledge we would reduce the size and scope of government. to make a promise to the people and businesses that we would not increase taxes given the volume that they had endured over the

course of the last decade. how have we done? if you look at the budget we proposed just this past february for fiscal year 15, if you take up the entitlement programs that we have, pension payments, payments for health benefits, and debt service, take those items out, spending on every other item in the state budget is $2.2 billion lower, fy15, and we spent in fiscal year 2008. we have 6000 fewer employees on the state government payroll today than when we stood here four years ago in 2010. we made the pledge to make government smaller and less to expensive because we knew it was the only way to avoid what had been the inevitability of ever-increasing taxes on their businesses, income, and items

they purchased. for businesses, they knew there were ever-increasing taxes as well. we decreased business taxes by $2.3 billion. taxes.orate business two economic incentive bills which are leading to more businesses staying in new jersey and more businesses coming to new jersey and creating jobs. 130 thousand new private sector jobs since we took office in 2010. all these things are things that were hard-earned victories. ultimately, bipartisan victories. during my entire time, we have had a democratic legislature.

none of this would have gotten done without our colleagues in the legislature and their support. people ask me what it is like to be a conservative republican governor in a blue state working with a democratic legislature. i have said, these are the people of new jersey. these are my people. understand, they have an enormous since of humor. [applause] [laughter] they have decided to elect me twice. and give me a liberal democratic legislature. the people of new jersey are really like 13-year-old middle school students in a science class. they take that experiment into the basement. they mix things together. they say, let's see how this will work. what will happen if i mix these two things together? the prediction would be there was nothing but combustibility.

combining me, a soft-spoken thoughtful guy, with the shy retiring soft-spoken thoughtful senate president, would lead to nothing but an academic atmosphere that would lead to the state house, the second oldest one in operating, to be blown up and sent to rubble. it has not led to that. that natural skepticism and cynicism that many new jerseyans have has been undercut. in large measure by the fact that we have decided to work

together to solve problems. we decided to compromise with each other. it does not mean i was get what i want. i wake up every morning security knowledge i will not get nearly everything i want. the good news is, so the steve. that partnership, the most consistent i have had over the last four years, with leaders in the democratic legislature, has led to the economic growth we are seeing in new jersey and an atmosphere that has convinced people there are times when government can work for them. we have had these for years and this progress and made difficult decisions. now, as we look forward to the next four years, are we going to go forward or backward? we see examples of this being not hypothetical questions, but actual questions. in issues we are confronting as we speak. first, people have complained in new jersey for as long as i have lived about property taxes.

in the 10 years before i became governor, property taxes increased 70% in 10 years. this trend is so obvious, even patrick murray's polls can get this right. just wanted you to know i knew you were here, patrick. the fact is that now in the last three years, we have seen three years in a row of property tax growth of less than two percent. [applause] why is that? it is because for the first time in a long time, we are actually honest with people and each other. we passed the two percent cap that did not have 15 exceptions. after we passed the cap, we did the next that you needed to do to make the cap real. so taxes would not increase. services would not be decreased. that is to cap the celery to

to public sector workers at two percent. we sunsetted it for april 1 of this year. i can't tell you, when i was back negotiating that, why we picked april fools' day. i think i am beginning to understand. as you watch what has been happening in trenton, property taxes have averaged a 1.7% increase over three years. public-sector employee wages average 1.86%. in a climate where inflation is 1.1%. the system is working. this year, we propose the renewal of that cap. the legislature sent me a bill unfortunately was riddled

with many of the sins of the past. i use that subtle device that governor byrne used many times, the conditional veto, to send it back what i thought was appropriate to keep the progress going. on property taxes. behold, the new jersey state senate agreed with that conditional veto by a vote of 33-1. we stand here tonight without an interest arbitration cap because the assembly has failed to act. this is one of the moments where that question is being asked. are we going to go forward or backwards? if we do not pass the cap, let me tell you what will happen. one of two choices will have to be made by mayors, county executives, all across the state. either to go or to ask permission to raise taxes. all of us know in the current climate that is not an election

you would want to be on the wrong side of. the alternative, if the voters refuse to increase taxes beyond two percent, it is broad and massive cuts and layoffs. municipalities across this state. anyone who tells you differently is not telling you the truth. there are only two choices. increase revenue, decrease spending. that is it. in this context, we have the assembly failing to act. it it is one of the key questions for new jersey's economic growth and vitality. as many of you already know, and i hope you will continue to say out loud, property tax growth that goes back to the seven percent per year range will squash economic growth in the

state will deter people from coming to her state to live and work. cannot affordply it. that is a fact. the fact that we have to live with and deal with directly. we will continue to work with our partners. partners on both sides of the aisle, a 33-1 vote in the senate, 120 mayors and other county leaders who came with me and the lieutenant governor to urge the assembly to act. done. get it the next a vital issue we need to deal with, again, is pensions and public-sector health benefits. let me give you a statistic that should startle you. for fiscal year 16. for the first time in new jersey's history, we will spend more money on retiree health

benefits than on health benefits for active employees. think about that. we will spend more money for the health benefits of people who were doing nothing than for people who are doing something. for our state. now, if that does not convince you, along with an over $50 billion underfunding of our pension system, that this is a course that is bound to careen us into economic distress and disaster, i would commend for your review the case study of the city of detroit. the city of detroit which in the 1960's was the wealthiest city in america. who today declared bankruptcy. they have declared bankruptcy.

why? $11 billion in debt. $2 billion in cash. i was no math major, but i know that is a problem. of the $11 billion in debt, $9.5 billion was retiree health benefits and pensions. but for those crushing burdens, detroit would not have declared angrily. in the same way we saw general motors and others have to declare bankruptcy based on the same type of crushing burdens. now i have heard folks in the legislature say, the governor is overdramatizing this. it is not a problem. we will grow out of it. i have to tell you, i have been

around for a while. i used to hear democrats kill republicans for saying we would grow out of federal budget deficits. now in new jersey, we have democrats telling republicans we will grow out of this problem. is there anybody who really believes we will grow out of the $50 billion underfunding of our pension system? let me tell you what it is doing. forbid, to actually cut taxes. here is what it is doing. in the next year's budget, of every new dollar in spending, $.94 of every dollar is to pay for pension, health benefits, and death services. that leaves six cents for college education, k-12

education, health care institutions. drug rehabilitation. it leaves nothing to cut taxes and make our state more affordable for the people who live and work there. this is not a problem we will grow out of, everybody. let me be clear to you. this is not about politics for me. i'm never running it in the state again. i am done. i can muddle through the next couple of budgets and make do. and leave this mess for the next person. that has been none too many times in the state. too many new governors who, and with hopes and aspirations and plans. of their own, that they have

sold to the peolple of new jersey in good faith, only to what they have sold to the people of new jersey in good faith, only to find the bag they are left is significantly heavier than anybody told them. remember, in the 2009 election year, the people of new jersey were told that the fiscal year 2011 budget had a $6.5 billion deficit. of course, that deficit turned out to be $11 billion. not $6.5 billion. that gift was left on my desk on 2010. this is not about me. this is about the next person, wherever he or she is. what we are going to leave them to deal with. so we can ignore it, if you

like. but it is not going away. it will impact each and every one of you and your businesses and employees. i probably will be the least affected person of the bunch. you will see me leaving, waving, smiling, relieved. [laughter] the one who was walking in should be the one who is going to be nervous. let's not do that. we know how to fix these problems. they are fixable. but it means looking people in the eye and telling them they are getting less. they are getting less for a good reason. a happy reason. one that should bring them joy. they are living longer than any actuary anticipated when they set up the systems. that is good news, not bad news.

right, governor? [laughter] new. good good news. [applause] but the fact is this is not a static game we play. businesses like yours change and adjust to different social and economic conditions. if you do not adjust, you will become a dinosaur and to become extinct. every day, the challenge for the leaders in this room is to read the markets. we be social situation in our society. to adjust your business model to new conditions. you can't say, i set up this business model and adopted it. i don't care about the change conditions. you promised me i could do this.

that is not the way it works. why should we believe that government has the entitlement to work that way with other people's money? we are making a $2.25 billion payment to the pension. the largest payment ever made by any governor in the history of new jersey. in fact, that payment, the single payment for fiscal year 15, is more than any governor did. in their entire term. it is not that we are walking away from the obligation. we are stepping up to the obligation. we are not ignoring what needs to be done. despite that, $.94 of every dollar next year will be spent on those three items.

that is not a business that is growing. that is a business that is burying itself under obligations it can no longer step up to. are we going to go forward or backward? standard & poor's has told us we are going backwards because we are not dealing with the issue. they commend us for the changes we made in 2011, but they have told us what folks in the legislature are telling you is wrong. you don't have to take it from me. take it from them. they say what we have done is good but not nearly enough. we are not going to grow out of this. we are going to have to be adults. we are going to have to actually fix it. we are going to to look people in the eye and tell them, cannot do this anymore. the same thing the federal government refuses to do, we need to set an example to do in new jersey. if we expect the people in washington dc to finally step up to the plate and meet their

obligations, tell us the truth on both sides of the aisle, then we better do it ourselves in our own state. or we are nothing but hypocrites. are things better in new jersey than they were four years ago? of course. they are. they are significantly better. revenue in the state budget is higher. businesses are looking to grow and expand. new businesses are coming into new jersey. they are better. this can be turned around in the blink of an eye. i would much rather be a governor who had revenue flying in over the transom and my biggest problem was trying to figure out how much to cut taxes, how much to increase programmatic spending on things we care about, investing in our childrens' future, and not be

the guy standing here telling you we have to make hard choices and decisions. we need to do that now. and that we need to do them together. i'd much rather be the other guy. but this is what i have been given. when you accept a position of leadership, it doesn't come with a guarantee of sunshine and rainbows. what it comes with the is to doty for something great everyday if you have the guts to do it. i believe i have partners in the legislature who know and understand this and will do this.

regardless of party. but we have set up a political system that doesn't reward the people all the time. what is happening in the legislature, they are scared. they are scared to have to say this out loud. it is unpleasant. it is difficult. but it is necessary. what we will confront and 2-3 years if we do not do this is a state with declining economic circumstances. more people departing the state. businesses that are wondering if the investments they made were the smartest and for them to do. we don't want to do that. we don't have to do that. our citizens deserve better than that. much better than that. and so i will continue to talk about this. not as i love to, but because i have to. not because it will bring people

out of their seats, applauding wildly, but because i hope it will keep you in your seat thinking about whether or not we want to be the generation who leaves this place better for our children and grandchildren than it was for us. our country over the last 238 years has been built on freedom, liberty, prosperity, and each of us feeling that solemn obligation. it is not good enough for us to use up the great resources of our state and this country for our own creature comforts and benefits.

and say, the kids are smart. they will figure it out. no one did that to us. they gave us a leg up. they gave us an opportunity. to inherit a greater country and state than the one we were given. we are now at that crossroads. those problems get bigger, not smaller. we have to decide, all of us, about whether or not we will meet that solemn obligation. i can tell you this. i don't want to be part of the generation that is ultimately judged to have failed the first next to generation of americans. i don't want to be part of the generation that will be judged that way. believe me, we will be judged.

we will be judged by how we conduct ourselves in these decisions. when we bury our heads in the sand and assuage our guilt with the creature comforts we have gotten because of our efforts, but more partly because of the efforts of our ancestors. it is an easy choice to me. it is time to make a few people unhappy so the greater good can be achieved. [applause] i don't know who started the applause, but i was hoping to go through the entire thing without any applause at all. you disappoint me a little. this speech is not about me coming here and patting you on the back and telling you how great you are. i am not here for you to tell me that, either.

that is not what friends owe to friends. ist friends owe to friends the honest truth. i came down here tonight to let you all know that despite the fact that the easy route for me would be to cruise through a second term and not confront the problems and leave be bad for the next person, i will not do that. at least not willingly. not willingly. [applause] the good news of tonight. these problems are fixable. because of the greatness of the people in this room, they are not only fixable, but they can be conquered. kids ask me all the time, i was at a school in long beach island. i got two great question.

was one kid said to me, does your job come with perks, and is one of them a cell choice?ee of your i don't know where kids come up with these questions. the second question was, what is the best part of being governor? i want to end tonight telling you the way i answer that. the vest thing about being governor is every morning when i get up, i know i have a chance to do something great. i don't do something great everyday. i am human. but i wake up every morning knowing the people of new jersey have blessed me twice with a job that gives me the chance to do something great everyday. if that doesn't get you out of bed, i don't know what will.

despite these challenges, the challenges have molded with the opportunities. this is an enormous challenge we confront. the opportunity is to make new jersey both actually and symbolically an example of civic mindedness, self-sacrifice, and american greatness that can lead an example for our entire country. we have done it before. we can do it again. if we do, i suspect that many of the people in this room will be at the forefront of that fight. if you choose to be, i thank you in advance for it. if you are undecided, i ask you to consider the alternative. the alternative is a weaker america.

that is unthinkable. not just for our children, but for the citizens of the world who need america to be a strong, successful, constant beacon of hope for what their lives can be. so, let us resolve together to confront these problems with honesty, integrity, and with the spirit of togetherness. if we do that, i believe in my heart that the citizens of our state will reward us economic ,rowth, opportunity, freedom and prosperity like we have never seen before, and then, when we put our heads on the pillow at night, we'll be able to say we have done our jobs, and when our time on the earth is over we will