from washington, "the mclaughlin group," the american original. for over two decades, the

issue one, down under. >> thank you, madam prime minister, for your generous welcome, your friendship and urbe down under. >> president obama traveled this week to the australian military base in darwin, on australia's northern coast. the president met there with australia's prime minister, julia gillard, to salute the 60th anniversary of anzus, the

australian, new zealand, united states security treaty. anzus came into being in 1951 as a mutual defense pact. an attack on one nation would trigger a retaliation by all three countries. the anzus commemoration came on top of a new military agreement between the u.s. and australia. that agreement will deploy 2500 u.s. marines and u.s. naval ships to darwin. the move is intended to counter the growing military presence of china. question, was china's reaction to our announcement of the marine base in darwin, was it too strident a reaction for china, a putative friendly trading partner to have made, pat? >> john, the chinese provoked our reaction by their stupidity and their belligerence.

they have said that the american fleet must get out of the south china sea, the east china sea, the straits of taiwan, the yellow sea. they have frightened all these countries in southeast asia p even japan and others who are now deciding maybe we don't want the americans to go home, so obama is marching into this opening and this base in australia as part of it. and what you've got is sort of a low-key cold-war beginning. but i will say this, the ecclesiastes communists are themselves responsible for their stupidity. they're alienating virtually every neighbor they have. >> how far away is china from australia? >> you got three, 4,000 miles. >> how long would that take for one of our long distance bombs -- >> they've got a new bomb -- you can get -- >> never mind the bomb. if you want -- >> anywhere in -- >> you remember lou upset we became with the russian fleet off the coast of the south america? >> well, look, john -- we've

had a 7 fleet in the far east since the cold war began! what are you talking about? >> eleanor? >> pat is right. the u.s. presence is welcome there in part because of china's growing power and the nervousness of everybody in that neighborhood. but i thought the chinese statement was actually quite restrained. if china had brought 2500 of its military personnel to south america, we would go ballistic in this country. so i think they appropriately had to say something. and i don't think either country wants a cold war. so i think the trading relationship between these two countries has to continue. china is a huge market. and i don't think the president intends to embark on a cold war here. but he's asserting himself as first pacific president after a string of presidents came from europe. 21st century will be very different. >> the chinese have a presence in south america today and in

the caribbean? >> oh, yeah. they're there looking for resources, and they're everywhere. >> friendly with chavez? >> they're friendly with whoever will give them natural resources. they have a huge population they've got to support. >> i was in bogota about three months ago sniffing around the chinese, and talking to people who know the whole part of the world. >> how were they -- >> you don't see that many chinese. i are. >> the brazilians are unhappy with them too because the ecclesiastes are getting very demanding of people are. >> i wonder when the empire gets to stop expanding. in other words, we keep putting soldiers in new places. we've had the people in japan since world war ii. we've had 30,000 in north korea. germany, we're not shrinking our bases there. we keep adding new bases, and if this because the geoo

political world is realigning, why don't we ever build down other places? we bring home when there's a war, but we just keep expanding and expanding and expanding. and the word is imperial overstretch. i don't know that australia is a mistake, but i do know we expand and never contract. >> you think that causes an equal and opposite reaction on the part of the chinese? that we are the expanding entity in the world. or all over? >> we're always said that. but they too are are expanding, looking for opportunities. >> so what they're in africa too. >> absolutely. they've been in africa, i ran them in the 70s. the fact is, china even we call them communists but they're really state sponsored capitalism. they are -- it's state-run enterprise, so they operate around the world -- [everyone talking at once] >> it's a point well taken. the chinese embassy in town, and other chinese around the country, you ask them about what kind of philosophy, how

would they describe it today? they call it market socialism. market socialism! >> john, john, where they made a mistake -- >> do not use the word communism? they acknowledged. >> they don't use capitalism or communism and they're trying to find something -- >> market associationism. >> where kim is right is this -- the chinese with this you get out of this order, get out of our territorial waters, they've given obama and the americans an opportunity to reup and get back into asia full speed, and united states was -- which was withdrawing is probably going to stop withdrawing. i agree with him. i think we've got to downsize it and tell the countries, you take care of yourselves. the chinese are your problem, in the south china sea. you negotiate with them, and if they take over the whole sea, that is your problem, not ours. >> you want to solve this problem by a de factor acquiescence to what the

chinese are telling us to do? >> no, would you senn the fleet in and maintain our rights. but what i wouldn't do is start building up new bases. >> exit question -- he turned on us! >> having your cake and eat it too! >> yes. that's right. >> you can't let them throw you out of international waters. >> arguing against himself. >> kissinger face. exit question -- a to f to obama's asian summitry. >> i'm going to give him a b+ for what he wants to do, but i'm not sure it's the right thing for what america should do. >> it's an a+ for his summitry and for u.s. national interests. we've been a pacific power since 1942, and we shouldn't be turning around and going home now. >> did you have a preliminary agenda? >> he has a preliminary agenda, job creation. these are huge markets over there as well.

>> de he set if in advance? >> yes. >> yes, he did. >> he's been trance parent about what he wants. >> was the summit full of successes? >> you've just named two of them. what do you give him? >> a b. he also handed out a big subsidy to boeing when he was out there and bali, so they could sell our jets to bali. he don't like that sort of thing so he loses points. >> wait a minute. bali -- boeing is -- >> boeing is selling -- >> state of washington and also setting up a plan in mississippi. and it's bad for obama to give an award to bali? >> i believe in the free market and not in subsidies. >> okay. so this has nothing to do with the chinese? >> no, it has to do with obama. he handed out a subsidy. >> he gets an a. obama has done very well in foreign policy. he's made so few headlines lately. and his headache is that his foreign policy successes are having almost no impact on his

approvals, farce going in the next election. >> he obviously gets an a for all of the reasons that were issue two, super committee showdown! >> the clock is running out, but it hasn't run out yet. we still have time, but we have no time to waste. >> pennsylvania republican senator pat toomey is a member of the debt reduction super committee. the super committee was created by congress in august with one task -- cut the u.s. national debt now at $15 trillion over the next 10 years by at least $1.2 trillion. 12 members sit on the murray.

house democrats becerra, kleberg, van hollen. a circle. majority of this 12-member super committee, seven out of 12, must vote yes on the super- committee bill by november 23rd, this coming wednesday! so it can reach the full congress for a final vote. but even if congress fails to pass the bill, get this, it makes no difference because an automatic trigger will will go effect. that means if congress votes no, the national debt will still be reduced to automatic cuts worth $1.2 trillion. half of those cuts would come from defense, half from domestic programs, including medicare. many believincluding medicare. many believe the super- committee will not reach its thanksgiving eve deadline. why? taxes. democrats don't want to deal that doesn't include tax increases. they want to boost government

revenues. republicans don't want a deal that includes tax increases. they argue that corporate taxes suck capital away from businesses that would otherwise hire new workers. question, how much has the national debt risen since president obama took office in -- three years ago? >> onjohn, my guess is it's about $4 trillion, and by the time he runs for re-election it will be 5 trillion. >> billion? >> no, i said -- 1.3 trillion average deficit for three years, is about 4 billion -- trillion dollars. and and it also one trillion more? >> what's the percentage increase under obama? >> almost 50. >> almost 50%. >> it was about 10 trillion. now it's -- >> 40%? >> he got a pretty good head start with george w. bush, with two wars that weren't paid for, prescription drug plan that wasn't paid for and huge tax cuts that we couldn't afford

and we certainly can't afford them now. so let's put that in context. >> when bush took office in the national -- public debt was $5.7 trillion. >> public debt? >> public debt. >> that's different from the national debt. >> the national debt. the national debt. you don't permit the interchange but everybody else does. >> they're different. >> 5.7 trillion. >> the national debt was 10 trillion. it's now 15 trillion. the 50% increase is exactly right, john. the public debt is what is held by corporations, foreign countries, sovereign funds, individuals, guys like clarence who have it in retirement accounts. >> and bush's -- stake is the debt increase almost doubled? did it not? >> yes, probably from 5 trillion to 10 trillion. >> that's correct. >> yes. and now it's up from 10 to about 15 trillion. >> and one term. >> of the super committee talk of 1.2 trillion over a decade is less than 10%. what is that? 8% of over the course of a

decade. >> republicans arguing among themselves as to whether they can break this no-tax pledge put out in the mid-90s by grover norquist, and pat toomey, who was former president of the club for growth and anti-tax guy who on the super committee, put forth a plan that volunteered $300 billion in increased tax revenues. and everybody said, ooh, he crossed some of the lines they wasn't supposed tom but if you look at the plan closely, he puts the 300 billion on the table, then he takes back more by reducing the top rate to 28%. and ought other deficit committees started out by elum nateing the bush tax cuts to the very rich. so we're back again to a fight over the bush tax cuts. >> is the problem a bipartisan problem? that is, it was created by the two parties. >> yes. >> yes. >> it's a bipartisan, is it not? >> yes. >> doesn't that tell you something from in the word go -- we are spendthrift. we have a spendthrift nation and congress. we can only blame ourselves.

>> yes, but we're going to have our credit rating down gridded, and borrowing money will be a lot motion, pensionive. this is courting disaster if they don't come up with an agreement. >> we're heading for a day of reckoning, no doubt. i don't think it will go through the congress. the decision will come in the iraqis of 20 between, and if obama is reelected, i think we're italy. we'll have another dead lock for four years! >> newt nicked! 92 when they walked in to me eck we're now making loans to people with no credit history and have to record of paying back anything but that's what the government wants to do, i said this is a bubble. this is insane. >> republican presidential contender newt gingrich bale embroiled this week in a controversy involving the federal home loan mortgage

corporation, aka freddie mac. freddie mac buys mortgages from banks, and sells them to investors as security. that frees up capital for banks to issue more mortgages, namely, long-term fixed- interest rate mortgages. what is the connection with gingrich? gingrich worked for six years with high level officials at freddie mac. gingrich was paid to coach freddie mac officials on how to talk to conservative lawmakers, to garner their support to keep freddie mac alive. gingrich's total compensation for his services to freddie ranged between 1.6 and $1.8 million. gingrich says he acted as an advisor to freddie mack, but never lobbied lawmakers on freddie mac's baffle. >> advice over long period of time. someone aimed at how to you explain what you're doing? i did no lobby of any kind.

>> critics accuse gingrich of political hypocrisy. but taking money from freddie mac as a private citizen and then blaming freddie mac for causing the housing crisis, when he was a presidential candidate. others accuse gingrich of using his political experience, namely four years as speaker of the u.s. house of representatives, to cash in. so says washington examiner columnist tim carney. >> are you prepared to live by your statement there. >> absolutely. and newt's statement that he never did lobbying doesn't hold up to any normal definition of

the world lobby. i've been talk to republican hill staffers who were will in 2003 which while newell was being paid by drug companies, saying he was rallying rubs republicans to vote for the bill they supported some he didn't register as a lobbyist but what he did was lobbying. and he was lobbying for corporate welfare. and freddie mac and the drug stuff and ethanol and that's one reason -- >> they didn't do anything illegal, i'm sure. and he stayed on the opposite side of being a registered lobbyist. but the problem is that freddie mac has -- and fannie mae have been turned intoand it turns ou that he has been in bed with them. he wants chris dodd and barney frank, who chaired the banking committee in the senate and house, he says they should go to jail for being in bed with freddie mac. well, it was a crowded bed, because -- they were there as

well! >> led me say something about this. >> is there any legal wrap that would stand up in court against newt? >> no. it's not -- >> are you saying that? >> the only -- >> violated -- >> if he spent more than 20% of his time lobbying, yes. i don't think that's the issue. >> ill lead not to register as a lobbyist if are you in fact lobbying? >> you have to spends 20% or more of your time on lobbying activities. >> was he able to deny that? >> so much, he was teaching history classes i'm sure in. >> as a cover? >> you're missing the point. newt anticipated want the payroll to do strict lobbying. he was mainly there to help ease the way towards contacts on capitol hill and fannie -- fannie and freddie's image. >> is that okay? >> that's what democrats have done too. >> john, when you put one -- >> without the -- declaring themselves to be lobbyists? >> you make a better criminal case welcome have a political

campaign. that's the point. and until this is right. they have made a law out of them and this is not new. this is the thing. you see, because cain's campaign suddenly collapsed, now a lot of his supporters are looking -- figure out where to go, and they forgot why they didn't go for newt in the first place. and now -- >> john -- [everyone talking at once] >> we're going to clear something up. and that is the judicial aspect that is the legal aspect -- >> there isn't any criminal -- there's no criminal! [everyone talking at once] >> is it a civil problem? can you go to jail? >> no. >> you're not buying strategic advice, you're buying newt. and that's exactly what they did, john. i don't think there's any criminal liability. i agree with the lobbying law. >> they wanted to buy off newt? >> they wanted to buy newt. we want a guy to give us entree to all these other guys to make our case. >> give conservative. >> get conservatives to go along with big government. >> what about the theory that?

does that work in fact? >> it worked -- definitely worked on medicare. it won over lots of reluctant conservatives on the medicare drug bill. >> he's doing what a lot of people in washington do, what the rest of the country hates -- so he becomes a symbol of -- allege issue four -- [speaking italian] >> italy ace prime minister silvio berlusconi resigned this week, bringing to an end an historic 17-year political career. for lever of those 17 years, berlusconi served three terms as italy's prime minister. he agreed to step down if the italian legislature passed

measures to bring down italy's $2.6 trillion public debt. that trillion dollar debt is larger than the total italian gdp. 2.1trillion. but the 75-year-old former prime minister is still italy's prime media mogul, with three national television stations, a publishing house, an advertising agency, at least two newspapers. forbes magazine sits hess net wealth at $8 billion. his critics fault the former prime minister on several counts. item, media dominance. berlni was accused of using his media to inflate his bio. item, business corruption. berlusconi has been accused of tax crowd, false accounting and bribery. item, liaison dangerous. mr. berlusconi is currently on trial for allegedly paying for sex with an sex with an underaged woman who

denies any such arrangement. but supporters of berlusconi say he has brought one major benefits to italian politics -- political civility. berlusconi was the nation's longest serving prime minister, after world war ii. before berlusconi came to power, the average life span of less than a year. sovereign deb berlusconi' political legacy? i ask you, tim? >> i think the debt crisis is amazing as we saw in the numbers, but as was his record with the women, probably what people will remember long after that. unless it is rome that fittingly brings down europe. if europe collapses, i think berlusconi could become a curse word. if it's just italy collapsing, it would be a different story. >> the lady involved, she denies the legitimacy -- >> but there are many other

ladies on the screen. that was the -- >> scandal will define his legacy but almost with a smile because he's been amazingly popular in italy. and he survived a no-confidence vote and tell leads the largest party in parliament. so he can still play a role if they go forward. and the irony is that he was brought down by the markets, who he has had such faith in. the ultimate capitalist. >> between -- this was not continuous service on berlusconi' part, these multiple terms. there was space in between. so the italians had the opportunity to think it through again. but they kept putting him back and taking him out of retirement, and reinstalling him into office. does that carry any meaning? very good point, john. >> is it a good point? why, pat? >> because the people had him in there and saw what he was

doing and knew had he was 3 put him back in there, it speaks to the stark of the italian nation. he's going to be a disaster for this reason. this 120% of gdp debt will bring italy down, the secureo zone down, i don't know and the eu itself. but in that and the women and all in other -- it's a metaphor for the corruption of west, john. [everyone talking at once] >> is italy on the brink of an economic precipice? >> it will bring back the eurozone and we'll get become to italian lira. >> they turn against him in hard times. berlusconi built up nice coalitions, helped by media magnate of the country but even the catholic church turned against him here and the money crisis some sex is one thing, the money is another. >> you're telling me the catholic church follows the money? >> new york they saw the money crisis, so everybody turned against berlusconi, including

the church, because he had been on -- he had pressed for the social conservative issues the church wants. >> do you think in combination with the -- greek disaster? >> italy could come apart. you're got the northern alliance over there, which is trying to break away. you have this whole thing collapsed, his country could come apart. >> what is the impact of that region, including greece and the problems in germany and elsewhere having on the u.s. economy? >> prediction, pat? >> major foreign policy issue of the 2012 campaign will be should we go to war with iran? >> el tore? >> newt gingrich won't win iowa, but he will get one of the three tickets to go on to new hampshire coming out of iowa. >> tim? >> i think ron paul will get one of three tickets outs of new hampshire, out of iowa into new hampshire. >> new insider trading ban on congress for issue that will come awake in the next year. >> vladimir putin is prime minister of russia now, had he

will run for to become president in march and he will win, and it's a six-year term. bye-bye!