0:00:01.509,0:00:03.825 So a friend of mine who's a political scientist, 0:00:03.825,0:00:05.428 he told me several months ago 0:00:05.428,0:00:07.496 exactly what this month would be like. 0:00:07.496,0:00:10.410 He said, you know, there's this fiscal cliff coming, 0:00:10.410,0:00:14.016 it's going to come at the beginning of 2013. 0:00:14.016,0:00:16.776 Both parties absolutely need to resolve it, 0:00:16.776,0:00:19.601 but neither party wants to be seen as the first to resolve it. 0:00:19.601,0:00:23.818 Neither party has any incentive to solve it a second before it's due, 0:00:23.818,0:00:26.438 so he said, December, you're just going to see lots of 0:00:26.438,0:00:29.658 angry negotiations, negotiations breaking apart, 0:00:29.658,0:00:32.407 reports of phone calls that aren't going well, 0:00:32.407,0:00:34.569 people saying nothing's happening at all, 0:00:34.569,0:00:37.115 and then sometime around Christmas or New Year's, 0:00:37.115,0:00:39.723 we're going to hear, "Okay, they resolved everything." 0:00:39.723,0:00:44.311 He told me that a few months ago. He said he's 98 percent positive they're going to resolve it, 0:00:44.311,0:00:46.745 and I got an email from him today saying, all right, 0:00:46.745,0:00:50.724 we're basically on track, but now I'm 80 percent positive 0:00:50.724,0:00:52.400 that they're going to resolve it. 0:00:52.400,0:00:54.944 And it made me think. I love studying 0:00:54.944,0:00:56.937 these moments in American history 0:00:56.937,0:01:00.837 when there was this frenzy of partisan anger, 0:01:00.837,0:01:03.978 that the economy was on the verge of total collapse. 0:01:03.978,0:01:08.218 The most famous early battle was Alexander Hamilton 0:01:08.218,0:01:11.779 and Thomas Jefferson over what the dollar would be 0:01:11.779,0:01:14.100 and how it would be backed up, with Alexander Hamilton 0:01:14.100,0:01:17.344 saying, "We need a central bank, the First Bank of the United States, 0:01:17.344,0:01:19.143 or else the dollar will have no value. 0:01:19.143,0:01:20.768 This economy won't work," 0:01:20.768,0:01:23.177 and Thomas Jefferson saying, "The people won't trust that. 0:01:23.177,0:01:26.965 They just fought off a king. They're not going to accept some central authority." 0:01:26.965,0:01:32.487 This battle defined the first 150 years of the U.S. economy, 0:01:32.487,0:01:36.137 and at every moment, different partisans saying, 0:01:36.137,0:01:38.325 "Oh my God, the economy's about to collapse," 0:01:38.325,0:01:40.474 and the rest of us just going about, spending our bucks 0:01:40.474,0:01:43.698 on whatever it is we wanted to buy. 0:01:43.698,0:01:46.431 To give you a quick primer on where we are, 0:01:46.431,0:01:48.210 a quick refresher on where we are. 0:01:48.210,0:01:50.774 So the fiscal cliff, I was told 0:01:50.774,0:01:53.240 that that's too partisan a thing to say, 0:01:53.240,0:01:56.662 although I can't remember which party it's supporting or attacking. 0:01:56.662,0:01:59.023 People say we should call it the fiscal slope, 0:01:59.023,0:02:01.069 or we should call it an austerity crisis, 0:02:01.069,0:02:03.455 but then other people say, no, that's even more partisan. 0:02:03.455,0:02:06.232 So I just call it the self-imposed, self-destructive 0:02:06.232,0:02:10.929 arbitrary deadline about resolving an inevitable problem. 0:02:10.929,0:02:14.556 And this is what the inevitable problem looks like. 0:02:14.556,0:02:18.914 So this is a projection of U.S. debt as a percentage 0:02:18.914,0:02:21.276 of our overall economy, of GDP. 0:02:21.276,0:02:24.644 The light blue dotted line represents 0:02:24.644,0:02:26.773 the Congressional Budget Office's best guess 0:02:26.773,0:02:30.848 of what will happen if Congress really doesn't do anything, 0:02:30.848,0:02:34.364 and as you can see, sometime around 2027, 0:02:34.364,0:02:36.652 we reach Greek levels of debt, 0:02:36.652,0:02:39.540 somewhere around 130 percent of GDP, 0:02:39.540,0:02:42.900 which tells you that some time in the next 20 years, 0:02:42.900,0:02:45.270 if Congress does absolutely nothing, 0:02:45.270,0:02:48.944 we're going to hit a moment where the world's investors, 0:02:48.944,0:02:50.545 the world's bond buyers, are going to say, 0:02:50.545,0:02:53.335 "We don't trust America anymore. We're not going to lend them any money, 0:02:53.335,0:02:55.374 except at really high interest rates." 0:02:55.374,0:02:58.240 And at that moment our economy collapses. 0:02:58.240,0:03:00.089 But remember, Greece is there today. 0:03:00.089,0:03:03.991 We're there in 20 years. We have lots and lots of time 0:03:03.991,0:03:06.212 to avoid that crisis, 0:03:06.212,0:03:09.907 and the fiscal cliff was just one more attempt 0:03:09.907,0:03:13.444 at trying to force the two sides to resolve the crisis. 0:03:13.444,0:03:16.852 Here's another way to look at exactly the same problem. 0:03:16.852,0:03:19.796 The dark blue line is how much the government spends. 0:03:19.796,0:03:23.253 The light blue line is how much the government gets in. 0:03:23.253,0:03:26.013 And as you can see, for most of recent history, 0:03:26.013,0:03:29.645 except for a brief period, we have consistently spent 0:03:29.645,0:03:32.845 more than we take in. Thus the national debt. 0:03:32.845,0:03:36.724 But as you can also see, projected going forward, 0:03:36.724,0:03:39.740 the gap widens a bit and raises a bit, 0:03:39.740,0:03:41.789 and this graph is only through 2021. 0:03:41.789,0:03:45.452 It gets really, really ugly out towards 2030. 0:03:45.452,0:03:49.577 And this graph sort of sums up what the problem is. 0:03:49.577,0:03:52.666 The Democrats, they say, well, this isn't a big deal. 0:03:52.666,0:03:56.784 We can just raise taxes a bit and close that gap, 0:03:56.784,0:03:59.040 especially if we raise taxes on the rich. 0:03:59.040,0:04:01.663 The Republicans say, hey, no, no, we've got a better idea. 0:04:01.663,0:04:03.102 Why don't we lower both lines? 0:04:03.102,0:04:07.057 Why don't we lower government spending and lower government taxes, 0:04:07.057,0:04:10.506 and then we'll be on an even more favorable 0:04:10.506,0:04:12.985 long-term deficit trajectory? 0:04:12.985,0:04:17.564 And behind this powerful disagreement between 0:04:17.564,0:04:19.344 how to close that gap, 0:04:19.344,0:04:22.729 there's the worst kind of cynical party politics, 0:04:22.729,0:04:28.102 the worst kind of insider baseball, lobbying, all of that stuff, 0:04:28.102,0:04:32.363 but there's also this powerfully interesting, 0:04:32.363,0:04:34.796 respectful disagreement between 0:04:34.796,0:04:38.323 two fundamentally different economic philosophies. 0:04:38.323,0:04:43.146 And I like to think, when I picture how Republicans 0:04:43.146,0:04:48.277 see the economy, what I picture is just some amazingly 0:04:48.277,0:04:51.588 well-engineered machine, some perfect machine. 0:04:51.588,0:04:56.066 Unfortunately, I picture it made in Germany or Japan, 0:04:56.066,0:04:58.919 but this amazing machine that's constantly scouring 0:04:58.919,0:05:04.015 every bit of human endeavor and taking resources, 0:05:04.015,0:05:06.364 money, labor, capital, machinery, 0:05:06.364,0:05:10.614 away from the least productive parts and towards the more productive parts, 0:05:10.614,0:05:12.210 and while this might cause temporary dislocation, 0:05:12.210,0:05:15.704 what it does is it builds up the more productive areas 0:05:15.704,0:05:18.334 and lets the less productive areas fade away and die, 0:05:18.334,0:05:21.110 and as a result the whole system is so much more efficient, 0:05:21.110,0:05:23.448 so much richer for everybody. 0:05:23.448,0:05:27.361 And this view generally believes that there is a role for government, 0:05:27.361,0:05:30.181 a small role, to set the rules so people aren't lying 0:05:30.181,0:05:32.430 and cheating and hurting each other, 0:05:32.430,0:05:35.734 maybe, you know, have a police force and a fire department 0:05:35.734,0:05:38.734 and an army, but to have a very limited reach 0:05:38.734,0:05:41.734 into the mechanisms of this machinery. 0:05:41.734,0:05:45.910 And when I picture how Democrats and Democratic-leaning 0:05:45.910,0:05:48.878 economists picture this economy, 0:05:48.878,0:05:51.434 most Democratic economists are, you know, they're capitalists, 0:05:51.434,0:05:54.174 they believe, yes, that's a good system a lot of the time. 0:05:54.174,0:05:58.294 It's good to let markets move resources to their more productive use. 0:05:58.294,0:06:02.210 But that system has tons of problems. 0:06:02.210,0:06:04.539 Wealth piles up in the wrong places. 0:06:04.539,0:06:08.813 Wealth is ripped away from people who shouldn't be called unproductive. 0:06:08.813,0:06:11.681 That's not going to create an equitable, fair society. 0:06:11.681,0:06:14.553 That machine doesn't care about the environment, 0:06:14.553,0:06:16.619 about racism, about all these issues 0:06:16.619,0:06:19.417 that make this life worse for all of us, 0:06:19.417,0:06:22.496 and so the government does have a role to take resources 0:06:22.496,0:06:25.777 from more productive uses, or from richer sources, 0:06:25.777,0:06:28.445 and give them to other sources. 0:06:28.445,0:06:33.500 And when you think about the economy through these two different lenses, 0:06:33.500,0:06:37.558 you understand why this crisis is so hard to solve, 0:06:37.558,0:06:41.547 because the worse the crisis gets, the higher the stakes are, 0:06:41.547,0:06:44.315 the more each side thinks they know the answer 0:06:44.315,0:06:47.668 and the other side is just going to ruin everything. 0:06:47.668,0:06:50.803 And I can get really despairing. I've spent a lot 0:06:50.803,0:06:53.866 of the last few years really depressed about this, 0:06:53.866,0:06:56.915 until this year, I learned something that 0:06:56.915,0:07:00.395 I felt really excited about. I feel like it's really good news, 0:07:00.395,0:07:03.256 and it's so shocking, I don't like saying it, because I think 0:07:03.256,0:07:04.761 people won't believe me. 0:07:04.761,0:07:06.079 But here's what I learned. 0:07:06.079,0:07:08.499 The American people, taken as a whole, 0:07:08.499,0:07:11.699 when it comes to these issues, to fiscal issues, 0:07:11.699,0:07:15.422 are moderate, pragmatic centrists. 0:07:15.422,0:07:17.687 And I know that's hard to believe, that the American people 0:07:17.687,0:07:19.120 are moderate, pragmatic centrists. 0:07:19.120,0:07:21.701 But let me explain what I'm thinking. 0:07:21.701,0:07:24.998 When you look at how the federal government spends money, 0:07:24.998,0:07:27.572 so this is the battle right here, 0:07:27.572,0:07:30.265 55 percent, more than half, is on Social Security, 0:07:30.265,0:07:32.633 Medicare, Medicaid, a few other health programs, 0:07:32.633,0:07:35.652 20 percent defense, 19 percent discretionary, 0:07:35.652,0:07:37.558 and six percent interest. 0:07:37.558,0:07:42.276 So when we're talking about cutting government spending, 0:07:42.276,0:07:44.282 this is the pie we're talking about, 0:07:44.282,0:07:47.869 and Americans overwhelmingly, and it doesn't matter 0:07:47.869,0:07:51.402 what party they're in, overwhelmingly like 0:07:51.402,0:07:53.841 that big 55 percent chunk. 0:07:53.841,0:07:55.833 They like Social Security. They like Medicare. 0:07:55.833,0:07:59.361 They even like Medicaid, even though that goes to the poor and indigent, 0:07:59.361,0:08:01.785 which you might think would have less support. 0:08:01.785,0:08:05.736 And they do not want it fundamentally touched, 0:08:05.736,0:08:09.927 although the American people are remarkably comfortable, 0:08:09.927,0:08:12.839 and Democrats roughly equal to Republicans, 0:08:12.839,0:08:17.604 with some minor tweaks to make the system more stable. 0:08:17.604,0:08:20.365 Social Security is fairly easy to fix. 0:08:20.365,0:08:24.149 The rumors of its demise are always greatly exaggerated. 0:08:24.149,0:08:26.443 So gradually raise Social Security retirement age, 0:08:26.443,0:08:28.816 maybe only on people not yet born. 0:08:28.816,0:08:31.241 Americans are about 50/50, 0:08:31.241,0:08:33.237 whether they're Democrats or Republicans. 0:08:33.237,0:08:35.589 Reduce Medicare for very wealthy seniors, 0:08:35.589,0:08:38.910 seniors who make a lot of money. Don't even eliminate it. Just reduce it. 0:08:38.910,0:08:43.925 People generally are comfortable with it, Democrats and Republicans. 0:08:43.925,0:08:46.232 Raise medical health care contributions? 0:08:46.232,0:08:48.661 Everyone hates that equally, but Republicans 0:08:48.661,0:08:51.333 and Democrats hate that together. 0:08:51.333,0:08:54.447 And so what this tells me is, when you look at 0:08:54.447,0:08:58.277 the discussion of how to resolve our fiscal problems, 0:08:58.277,0:09:05.662 we are not a nation that's powerfully divided on the major, major issue. 0:09:05.662,0:09:08.943 We're comfortable with it needing some tweaks, but we want to keep it. 0:09:08.943,0:09:11.738 We're not open to a discussion of eliminating it. 0:09:11.738,0:09:16.024 Now there is one issue that is hyper-partisan, 0:09:16.024,0:09:19.506 and where there is one party that is just spend, spend, spend, 0:09:19.506,0:09:21.389 we don't care, spend some more, 0:09:21.389,0:09:23.295 and that of course is Republicans 0:09:23.295,0:09:25.275 when it comes to military defense spending. 0:09:25.275,0:09:27.770 They way outweigh Democrats. 0:09:27.770,0:09:32.565 The vast majority want to protect military defense spending. 0:09:32.565,0:09:34.786 That's 20 percent of the budget, 0:09:34.786,0:09:38.469 and that presents a more difficult issue. 0:09:38.469,0:09:41.394 I should also note that the [discretionary] spending, 0:09:41.394,0:09:43.528 which is about 19 percent of the budget, 0:09:43.528,0:09:45.898 that is Democratic and Republican issues, 0:09:45.898,0:09:48.266 so you do have welfare, food stamps, other programs 0:09:48.266,0:09:50.300 that tend to be popular among Democrats, 0:09:50.300,0:09:53.265 but you also have the farm bill and all sorts of Department of Interior 0:09:53.265,0:09:56.210 inducements for oil drilling and other things, 0:09:56.210,0:09:59.825 which tend to be popular among Republicans. 0:09:59.825,0:10:03.149 Now when it comes to taxes, there is more disagreement. 0:10:03.149,0:10:05.013 That's a more partisan area. 0:10:05.013,0:10:08.407 You have Democrats overwhelmingly supportive 0:10:08.407,0:10:12.456 of raising the income tax on people who make 250,000 dollars a year, 0:10:12.456,0:10:17.696 Republicans sort of against it, although if you break it out by income, 0:10:17.696,0:10:22.389 Republicans who make less than 75,000 dollars a year like this idea. 0:10:22.389,0:10:26.744 So basically Republicans who make more than 250,000 dollars a year don't want to be taxed. 0:10:26.744,0:10:30.000 Raising taxes on investment income, you also see 0:10:30.000,0:10:32.864 about two thirds of Democrats but only one third of Republicans 0:10:32.864,0:10:36.663 are comfortable with that idea. 0:10:36.663,0:10:39.688 This brings up a really important point, which is that 0:10:39.688,0:10:42.304 we tend in this country to talk about Democrats 0:10:42.304,0:10:44.115 and Republicans and think there's this little group 0:10:44.115,0:10:46.480 over there called independents that's, what, two percent? 0:10:46.480,0:10:48.592 If you add Democrats, you add Republicans, 0:10:48.592,0:10:50.086 you've got the American people. 0:10:50.086,0:10:53.032 But that is not the case at all. 0:10:53.032,0:10:58.177 And it has not been the case for most of modern American history. 0:10:58.177,0:11:01.994 Roughly a third of Americans say that they are Democrats. 0:11:01.994,0:11:04.843 Around a quarter say that they are Republicans. 0:11:04.843,0:11:09.323 A tiny little sliver call themselves libertarians, or socialists, 0:11:09.323,0:11:12.010 or some other small third party, 0:11:12.010,0:11:17.217 and the largest block, 40 percent, say they're independents. 0:11:17.217,0:11:20.138 So most Americans are not partisan, 0:11:20.138,0:11:22.306 and most of the people in the independent camp 0:11:22.306,0:11:25.997 fall somewhere in between, so even though we have 0:11:25.997,0:11:29.557 tremendous overlap between the views on these fiscal issues 0:11:29.557,0:11:31.853 of Democrats and Republicans, 0:11:31.853,0:11:35.645 we have even more overlap when you add in the independents. 0:11:35.645,0:11:38.885 Now we get to fight about all sorts of other issues. 0:11:38.885,0:11:40.998 We get to hate each other on gun control 0:11:40.998,0:11:43.278 and abortion and the environment, 0:11:43.278,0:11:46.150 but on these fiscal issues, these important fiscal issues, 0:11:46.150,0:11:49.982 we just are not anywhere nearly as divided as people say. 0:11:49.982,0:11:52.014 And in fact, there's this other group of people 0:11:52.014,0:11:55.352 who are not as divided as people might think, 0:11:55.352,0:11:57.365 and that group is economists. 0:11:57.365,0:12:02.668 I talk to a lot of economists, and back in the '70s 0:12:02.668,0:12:05.766 and '80s it was ugly being an economist. 0:12:05.766,0:12:08.941 You were in what they called the saltwater camp, 0:12:08.941,0:12:13.555 meaning Harvard, Princeton, MIT, Stanford, Berkeley, 0:12:13.555,0:12:16.523 or you were in the freshwater camp, University of Chicago, 0:12:16.523,0:12:17.975 University of Rochester. 0:12:17.975,0:12:20.971 You were a free market capitalist economist 0:12:20.971,0:12:23.104 or you were a Keynesian liberal economist, 0:12:23.104,0:12:25.279 and these people didn't go to each other's weddings, 0:12:25.279,0:12:27.171 they snubbed each other at conferences. 0:12:27.171,0:12:30.180 It's still ugly to this day, but in my experience, 0:12:30.180,0:12:33.781 it is really, really hard to find an economist under 40 0:12:33.781,0:12:37.805 who still has that kind of way of seeing the world. 0:12:37.805,0:12:40.757 The vast majority of economists -- it is so uncool 0:12:40.757,0:12:43.598 to call yourself an ideologue of either camp. 0:12:43.598,0:12:46.119 The phrase that you want, if you're a graduate student 0:12:46.119,0:12:48.646 or a postdoc or you're a professor, 0:12:48.646,0:12:51.623 a 38-year-old economics professor, is, "I'm an empiricist. 0:12:51.623,0:12:53.167 I go by the data." 0:12:53.167,0:12:55.571 And the data is very clear. 0:12:55.571,0:12:59.592 None of these major theories have been completely successful. 0:12:59.592,0:13:01.240 The 20th century, the last hundred years, 0:13:01.240,0:13:04.191 is riddled with disastrous examples 0:13:04.191,0:13:07.863 of times that one school or the other tried to explain 0:13:07.863,0:13:10.183 the past or predict the future 0:13:10.183,0:13:12.069 and just did an awful, awful job, 0:13:12.069,0:13:17.258 so the economics profession has acquired some degree of modesty. 0:13:17.258,0:13:20.852 They still are an awfully arrogant group of people, I will assure you, 0:13:20.852,0:13:23.729 but they're now arrogant about their impartiality, 0:13:23.729,0:13:30.520 and they, too, see a tremendous range of potential outcomes. 0:13:30.520,0:13:35.620 And this nonpartisanship is something that exists, 0:13:35.620,0:13:37.359 that has existed in secret 0:13:37.359,0:13:39.075 in America for years and years and years. 0:13:39.075,0:13:43.039 I've spent a lot of the fall talking to the three major 0:13:43.039,0:13:46.935 organizations that survey American political attitudes: 0:13:46.935,0:13:48.489 Pew Research, 0:13:48.489,0:13:52.137 the University of Chicago's National Opinion Research Center, 0:13:52.137,0:13:54.985 and the most important but the least known 0:13:54.985,0:13:57.960 is the American National Election Studies group 0:13:57.960,0:14:02.306 that is the world's longest, most respected poll of political attitudes. 0:14:02.306,0:14:04.268 They've been doing it since 1948, 0:14:04.268,0:14:07.755 and what they show consistently throughout 0:14:07.755,0:14:12.202 is that it's almost impossible to find Americans 0:14:12.202,0:14:15.363 who are consistent ideologically, 0:14:15.363,0:14:19.099 who consistently support, "No we mustn't tax, 0:14:19.099,0:14:21.779 and we must limit the size of government," 0:14:21.779,0:14:25.479 or, "No, we must encourage government to play a larger role 0:14:25.479,0:14:29.475 in redistribution and correcting the ills of capitalism." 0:14:29.475,0:14:31.353 Those groups are very, very small. 0:14:31.353,0:14:34.349 The vast majority of people, they pick and choose, 0:14:34.349,0:14:36.913 they see compromise and they change over time 0:14:36.913,0:14:39.446 when they hear a better argument or a worse argument. 0:14:39.446,0:14:42.807 And that part of it has not changed. 0:14:42.807,0:14:46.760 What has changed is how people respond to vague questions. 0:14:46.760,0:14:49.358 If you ask people vague questions, like, 0:14:49.358,0:14:52.350 "Do you think there should be more government or less government?" 0:14:52.350,0:14:56.664 "Do you think government should" — especially if you use loaded language -- 0:14:56.664,0:14:59.143 "Do you think the government should provide handouts?" 0:14:59.143,0:15:01.072 Or, "Do you think the government should redistribute?" 0:15:01.072,0:15:03.673 Then you can see radical partisan change. 0:15:03.673,0:15:06.367 But when you get specific, when you actually ask 0:15:06.367,0:15:10.407 about the actual taxing and spending issues under consideration, 0:15:10.407,0:15:13.015 people are remarkably centrist, 0:15:13.015,0:15:15.880 they're remarkably open to compromise. 0:15:15.880,0:15:19.665 So what we have, then, when you think about the fiscal cliff, 0:15:19.665,0:15:24.191 don't think of it as the American people fundamentally 0:15:24.191,0:15:26.367 can't stand each other on these issues 0:15:26.367,0:15:27.922 and that we must be ripped apart 0:15:27.922,0:15:30.244 into two separate warring nations. 0:15:30.244,0:15:36.170 Think of it as a tiny, tiny number of ancient economists 0:15:36.170,0:15:40.016 and misrepresentative ideologues have captured the process. 0:15:40.016,0:15:42.592 And they've captured the process through familiar ways, 0:15:42.592,0:15:45.544 through a primary system which encourages 0:15:45.544,0:15:47.776 that small group of people's voices, 0:15:47.776,0:15:49.881 because that small group of people, 0:15:49.881,0:15:52.953 the people who answer all yeses or all noes 0:15:52.953,0:15:55.360 on those ideological questions, 0:15:55.360,0:15:57.967 they might be small but every one of them has a blog, 0:15:57.967,0:16:01.721 every one of them has been on Fox or MSNBC in the last week. 0:16:01.721,0:16:04.874 Every one of them becomes a louder and louder voice, 0:16:04.874,0:16:07.006 but they don't represent us. 0:16:07.006,0:16:10.107 They don't represent what our views are. 0:16:10.107,0:16:11.913 And that gets me back to the dollar, 0:16:11.913,0:16:15.138 and it gets me back to reminding myself that 0:16:15.138,0:16:17.148 we know this experience. 0:16:17.148,0:16:18.793 We know what it's like 0:16:18.793,0:16:24.148 to have these people on TV, in Congress, 0:16:24.148,0:16:26.875 yelling about how the end of the world is coming 0:16:26.875,0:16:30.101 if we don't adopt their view completely, 0:16:30.101,0:16:32.095 because it's happened about the dollar 0:16:32.095,0:16:34.098 ever since there's been a dollar. 0:16:34.098,0:16:37.992 We had the battle between Jefferson and Hamilton. 0:16:37.992,0:16:42.662 In 1913, we had this ugly battle over the Federal Reserve, 0:16:42.662,0:16:46.536 when it was created, with vicious, angry arguments 0:16:46.536,0:16:48.408 over how it would be constituted, 0:16:48.408,0:16:50.185 and a general agreement that the way it was constituted 0:16:50.185,0:16:53.092 was the worst possible compromise, 0:16:53.092,0:16:56.452 a compromise guaranteed to destroy this valuable thing, 0:16:56.452,0:16:58.809 this dollar, but then everyone agreeing, okay, 0:16:58.809,0:17:01.320 so long as we're on the gold standard, it should be okay. 0:17:01.320,0:17:03.370 The Fed can't mess it up so badly. 0:17:03.370,0:17:07.507 But then we got off the gold standard for individuals 0:17:07.507,0:17:09.921 during the Depression and we got off the gold standard 0:17:09.921,0:17:14.019 as a source of international currency coordination 0:17:14.019,0:17:16.251 during Richard Nixon's presidency. 0:17:16.251,0:17:20.224 Each of those times, we were on the verge of complete collapse. 0:17:20.224,0:17:22.378 And nothing happened at all. 0:17:22.378,0:17:24.316 Throughout it all, the dollar has been 0:17:24.316,0:17:26.624 one of the most long-standing, 0:17:26.624,0:17:28.759 stable, reasonable currencies, 0:17:28.759,0:17:30.926 and we all use it every single day, 0:17:30.926,0:17:33.951 no matter what the people screaming about tell us, 0:17:33.951,0:17:36.995 no matter how scared we're supposed to be. 0:17:36.995,0:17:40.940 And this long-term fiscal picture that we're in right now, 0:17:40.940,0:17:44.869 I think what is most maddening about it is, 0:17:44.869,0:17:48.808 if Congress were simply able 0:17:48.808,0:17:51.181 to show not that they agree with each other, 0:17:51.181,0:17:54.461 not that they're able to come up with the best possible compromise, 0:17:54.461,0:17:57.543 but that they are able to just begin the process 0:17:57.543,0:18:02.024 towards compromise, we all instantly are better off. 0:18:02.024,0:18:06.158 The fear is that the world is watching. 0:18:06.158,0:18:09.615 The fear is that the longer we delay any solution, 0:18:09.615,0:18:11.403 the more the world will look to the U.S. 0:18:11.403,0:18:15.023 not as the bedrock of stability in the global economy, 0:18:15.023,0:18:18.598 but as a place that can't resolve its own fights, 0:18:18.598,0:18:22.424 and the longer we put that off, the more we make the world nervous, 0:18:22.424,0:18:24.207 the higher interest rates are going to be, 0:18:24.207,0:18:26.911 the quicker we're going to have to face a day 0:18:26.911,0:18:29.018 of horrible calamity. 0:18:29.018,0:18:32.582 And so just the act of compromise itself, 0:18:32.582,0:18:34.483 and sustained, real compromise, 0:18:34.483,0:18:36.297 would give us even more time, 0:18:36.297,0:18:39.259 would allow both sides even longer to spread out the pain 0:18:39.259,0:18:41.894 and reach even more compromise down the road. 0:18:41.894,0:18:45.006 So I'm in the media. I feel like my job to make this happen 0:18:45.006,0:18:49.299 is to help foster the things that seem to lead to compromise, 0:18:49.299,0:18:53.411 to not talk about this in those vague and scary terms 0:18:53.411,0:18:54.972 that do polarize us, 0:18:54.972,0:18:57.581 but to just talk about it like what it is, 0:18:57.581,0:18:59.524 not an existential crisis, 0:18:59.524,0:19:04.497 not some battle between two fundamentally different religious views, 0:19:04.497,0:19:07.099 but a math problem, a really solvable math problem, 0:19:07.099,0:19:09.175 one where we're not all going to get what we want 0:19:09.175,0:19:13.130 and one where, you know, there's going to be a little pain to spread around. 0:19:13.130,0:19:16.645 But the more we address it as a practical concern, 0:19:16.645,0:19:18.156 the sooner we can resolve it, 0:19:18.156,0:19:21.623 and the more time we have to resolve it, paradoxically. 0:19:21.623,0:19:26.607 Thank you. (Applause)