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Speaker 1: On Wednesday, we woke up to the unexpected news that

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Speaker 1: Fitch had downgraded US sovereign debt and then learned that

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Speaker 1: the treasure we have to borrow yet more money to

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Speaker 1: cover the deficit that we're running, all of which made

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Speaker 1: the meetings at the Aspen Economic Strategy Group even more

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Speaker 1: timely because the subject this year was building a more

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Speaker 1: resilient US economy. So we met with the two chairs

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Speaker 1: of the organization. They are the former Treasury secretaries, Hank

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Speaker 1: Paulson and Tim Geidner, and we got their thoughts about

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Speaker 1: what they're trying to do to help the US get

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Speaker 1: back on the right fiscal track. Tim Geitner Hank Pulson

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Speaker 1: co chairs at the Aspen Economic Strategy Group. So Hank,

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Speaker 1: let me start with you. You've been at Charger a bit longer.

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Speaker 1: What do you have to accomplish this week in these meetings?

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Speaker 2: Well, David, when we set this up, our goal was

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Speaker 2: to create a forum where we had cutting edge economic research,

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Speaker 2: evidence space research, where we could discuss and debate it

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Speaker 2: on a non partisan basis, and a big one of

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Speaker 2: the things we really want to do. There's also a

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Speaker 2: creative forum where we can have economic leaders get to

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Speaker 2: know each other, build bonds, and do it across generations,

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Speaker 2: across sectors, and across parties. And then we want this

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Speaker 2: research to have a real world impact. So that's our goal.

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Speaker 2: And so far over the last six years, I think

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Speaker 2: the group has been coming together and I'm sort of

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Speaker 2: very pleased with the way it's.

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Speaker 1: Developed and tim the subject of the meetings is building

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Speaker 1: fiscal resilience in the US economy. Couldn't be more timely.

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Speaker 1: I want to talk about that even this week which

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Speaker 1: the Fitch ratings is also bought varing more of the treasury.

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Speaker 1: Putting those on one side, what do we need to

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Speaker 1: do to build fyscal resilience?

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Speaker 3: Well, the topic is about economic resilience more broadly, fiscal

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Speaker 3: resilience is one part of those things. And you know,

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Speaker 3: if you look at the economy day, it's a pretty

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Speaker 3: resilient economy. You know, we've been through a lot of

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Speaker 3: challenges and we we look pretty strong today in a

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Speaker 3: relative sense, but we have a lot of long term

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Speaker 3: challenges and the fiscal channels are part of those challenges.

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Speaker 3: And you know, if you think about all the things

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Speaker 3: we face in this more dangerous world, and a country

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Speaker 3: with their high levels of poverty and shoes challenges and innovation.

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Speaker 3: It's important to make sure that we have people focused

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Speaker 3: on research that can help inform better public policy choices

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Speaker 3: at the national level in these things, and that requires

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Speaker 3: bringing people together from all sorts of disciplines, all parts

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Speaker 3: of the economy, both parties, trying to figure out how

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Speaker 3: to build trust and knowledge help shape those outcomes.

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Speaker 1: Thank clocking at the program. One of the issues that

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Speaker 1: can be talked about is how much money we're spending

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Speaker 1: the deficit, and that subject's been around for quite a while.

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Speaker 1: You've dealt with before. What are the prospects of actually

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Speaker 1: coming up with solutions that might be implemented.

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Speaker 2: Well, let me tell you something. I'm an optimist. You

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Speaker 2: need to be an optimist to do what we're doing.

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Speaker 2: And I believe what we're doing here is a major

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Speaker 2: step forward in doing this because if we can have

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Speaker 2: great research and get people together across parties and come

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Speaker 2: up with simprific ideas and get the facts out and

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Speaker 2: think tanks to both political parties and make progress. Now,

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Speaker 2: you're right the trajectory, our fiscal trajectory is concerning. But

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Speaker 2: we are a rich country and we've got time to

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Speaker 2: deal with it. But we need to do some things

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Speaker 2: and in the next few years to change that trajectory,

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Speaker 2: and I think that's gonna be very important. And to

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Speaker 2: do that, it's going to take doing things on both

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Speaker 2: the spending side and the revenue side. We're going to

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Speaker 2: need more revenues and we're gonna need to figure out

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Speaker 2: how to deal with some difficult issues in areas like

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Speaker 2: the entitlements especially.

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Speaker 1: One of the things that two of you share, besides

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Speaker 1: having been the treasure sectors, is being in Washington time

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Speaker 1: where you had a pretty good sense of what needed

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Speaker 1: to get done. But getting it done is harder than

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Speaker 1: figuring out the answer. And I wonder if that might

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Speaker 1: be true when it comes to debt and deficit, entitlements,

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Speaker 1: taxes right now.

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Speaker 3: Yeah, I mean, these long term things that are very hard.

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Speaker 3: You can't do with just one party. You have to

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Speaker 3: do them in a way that commands broader support across

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Speaker 3: the political spectrum, and you have to build that. And

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Speaker 3: you know why are people disappointed with outcomes from this

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Speaker 3: political system. It's partly because people are uncertain about what works.

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Speaker 3: They don't know how to think about the trade offs,

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Speaker 3: and so by giving them a better basis of knowledge

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Speaker 3: for making those trade offs, thinking about the range of

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Speaker 3: outcomes solutions might work. You can improve the odds that

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Speaker 3: we bend the arc of governance closer to something that's competent.

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Speaker 1: Is that's your experience. I mean, you'll come out of

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Speaker 1: this conference with some pretty serious papers, with some very

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Speaker 1: specific proposals to analysis. Is in your experience in Washington

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Speaker 1: that somebody, and even if they have the legislators themselves,

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Speaker 1: they're staffs, people in the executive branch will read those

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Speaker 1: and be influenced by them.

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Speaker 2: Yes, And where we're trying to keep the fires burning,

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Speaker 2: we are not focused on the short term. Okay, we're

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Speaker 2: focused on the longer term. But if we can, as

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Speaker 2: Tim said, if we can put forward some good ideas,

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Speaker 2: show the trade offs, put forward a range of alternative Right,

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Speaker 2: So when we all talk and we use Chatham House rules,

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Speaker 2: very candid conversations, and when we get Democrats and Republicans together,

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Speaker 2: there's really not that much difference between us, right, And

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Speaker 2: that gives me hope. So again, the idea is to

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Speaker 2: get the ideas out, get them out to both parties,

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Speaker 2: get them out for the think tanks, and the time

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Speaker 2: will come when things need to get done, and the

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Speaker 2: sooner the better. But there's no doubt when we are

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Speaker 2: in government. When Tim and I were sitting in the

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Speaker 2: seat at Treasury, we found it difficult and challenging to

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Speaker 2: get things done. We don't have that position now. But

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Speaker 2: what we can do is hopefully bring people together. And

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Speaker 2: I'm really focused on the future leaders, you know, and

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Speaker 2: getting them involved in this process for the AEESG.

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Speaker 1: Tim, It's sought by some outside of Washington. Washington doesn't

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Speaker 1: do the sorts of things that Hank's talking about unless

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Speaker 1: it's a true crisis. There could be a true crisis

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Speaker 1: some point down the road a sank sits it's not yet,

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Speaker 1: could come. We could have trouble borrowing the money we need.

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Speaker 1: Is it fair to say Washington's not going to do

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Speaker 1: anything until there's a true crisis. I hope not.

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Speaker 3: I mean it is true. I think Churchill said famously

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Speaker 3: that the United States, in the end, after trying all

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Speaker 3: the alternatives, usually does the right thing, but you want

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Speaker 3: to move the system to act before it's late and hard.

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Speaker 1: That was former Treasury secretaries Hank Paulson and Tim Geidner