When I read Michael Bersin’s transcript of Rep. Vicky Hartzler’s (R-4) recent town hall meeting in Warrensburg, I was struck by a specific aspect of her effort to gin up hysteria about the national debt. If all else fails, trot out a scary picture of the foreign bête noire of the day, currently China, and  you’ll fire up the xenophobes every time:

China owns twenty-nine percent of our foreign debt. That is a real concern to me. I said I’m on the Armed Services Committee and I’ve got to sit in a lot of hearings and I can tell you, I don’t know what China’s doing, but it’s concerning. They are building fourteen nuclear submarines right now. We’re building one. They have been devoting over twelve percent of their budget to national defense. Uh, they just introduced their version of a stealth aircraft fighter plane recently. And they just unveiled a twelve hundred mile aircraft carrier busting bomb. So, it’s a little concerning that they hold this much of our debt. In fact, with the interest that we pay China we would be able to buy three, or they could buy, three joint strike fighters and still have fifty million dollars left over. So, um, there’s a lot of reasons I think that we need to get out of debt. But certainly this obligation, um, to China is a concerning one.

First of all, if you’ll forgive me for a little nitpicking, Rep. Hartzler may be technically correct that China owns somewhere in the neighborhood of 29% of our foreign public debt – but she conveniently leaves out the fact that all foreign investors together, including China, own only 31% of our gross national debt*. China is no longer even the largest investor in that group. China currently owns only 8% of our gross national debt. See how it works –  and how Hartzler is conflating different categories of debt to create a misleading impresion?

Further, as economist Dean Baker notes, “foreign borrowing is determined by the trade deficit, end of story,” and the value of the debt held by foreign entities is tied to the value of the dollar in relation to foreign currencies. This means that it is in China’s interest to prop up the dollar, which it does by buying U.S. Treasury bills, bonds, and notes. Their willingness to hold our marker, so to speak, is not directly affected by our deficit, nor is it likely to be affected by the domestic spending cuts Hartzler and her GOP cohorts advocate.

To be fair, some economists are concerned that if the U.S. is unable to get its debt under control long-term – and the idea of long-term vs. short term is key here – it will affect the confidence of investors like China. Most concede, however that in the case of China, our interests are so conjoined that there is little likelihood that they will do anything to endanger our prosperity. China depends on the U.S. to buy Chinese goods. Without a prosperous, ever-consuming U.S., Chinese growth stalls. As Adam Davidson of NPR’s Planet Money put it in an interview earlier this year:

… the only way China can hurt us is to completely destroy their own economy. China needs the U.S. and the U.S. dollar to stay healthy, to keep growing. What we have is mutually assured economic destruction.

Michael Bersin,  quotes former Secretary of State Richard Armitage who was interviewed during a visit to Warrensburg a couple of years ago, and went so far as to assert that China’s internal stability depends on the United States economic viability.

… If the t-bills, if China withdrew, [i.e. sold off their U.S. debt] they would not be able to keep that economy humming along. They would have instant social upheaval in the countryside and probably in the cities.

So why is Hartzler trying to stoke fears about China, directly implying that China is somehow leveraging American debt to build up its military at the expense of U.S. defenses? As Personman, who was also present at the Warrensburg town hall, observed in the comments to Bersin’s transcript, Hartzler played fast and loose in her comments about the implied Chinese threat, offering:

… no evidence that they’re [i.e. the Chinese] spending the money on this [i.e. military buildup], but just the suggestion that they could be. She also cites China when explaining why we shouldn’t cut defense. She doesn’t mention the fact that we’re outspending them 7 to 1 and have been for so long that her fears about China are probably unfounded

Hartzler, of course, is not the only winger parlaying fear of the Chinese into a tool to cut social spending. She may be silly enough to actually believe the twaddle she’s peddling, but, in the wider context, I think Dean Baker has the right of it:

So, why do all the deficit hawks talk about borrowing money from China? They do it for the same reason that George HW Bush talked about Willie Horton when he was running against Michael Dukakis. It works.

The deficit hawks want the country to agree to take steps that are incredibly unpopular. They want the public to support the gutting of essential support programmes for the middle class like social security and Medicare. Naturally, this is a hard sell. Therefore, if it takes a little China bashing to make the policy go down easier, the deficit hawks are perfectly prepared to go that route. That’s the way politics works in the United States.

* Gross national debt is made up of intragovernmental debt and public debt or net debt; foreign debt is that portion of public debt that is held by foreign entities.

Rep. Pat Toomey (R-Penn.) introduced some legislation last week, S163, the “Full Faith and Credit Act,” that confirms one’s suspicion that some of the folks who have been entrusted with our fiduciary well-being have a very shallow understanding of economics. The legislation would, as TPM’s Brian Beutler describes it:

… force the U.S. government to reroute huge amounts of money to China and other creditors in the event that Congress fails to raise its debt ceiling. …

If passed, Toomey’s plan would require the government to cut large checks to foreign countries, and major financial institutions, before paying off its obligations to Social Security beneficiaries and other citizens owed money by the Treasury — that is, if the U.S. hits its debt ceiling. …

At times Toomey speaks as if attaching such a big stick to the debt ceiling would force Democrats to go along with the outrageous cuts in spending that Republicans are trying to ram down our throats (remember that phrase?).* At other times, he seems to think that this bill would itself put to rest the argument that failure to raise the debt ceiling would cause the U.S. to default.* Go figure. Of course, it would do no such thing:

… his idea is unworkable,” said Deputy Treasury Secretary Neal Wolin in a statement. “It would not actually prevent default, since it would seek to protect only principal and interest payments, and not other legal obligations of the U.S., from non-payment. Adopting a policy that payments to investors should take precedence over other U.S. legal obligations would merely be default by another name, since the world would recognize it as a failure by the U.S. to stand behind its commitments.

And the punch line? Among the 18 co-sponsors in the Senate, we find our own Roy Blunt. The same Roy Blunt whose campaign ads fear-mongered about Medicare cuts. Guess what this bill aims to do? If you guessed cut Medicare you’re right – and you can throw in Social Security, Defense, you name it, for good measure.

HR421, the companion legislation that Rep. Tom McClintock has just filed in the House, counts among its 15 co-sponsors Blunt’s successor in the House, Billy Long, who is the first, and currently the only Missourian to sign on – a situation that, given the general nuttiness factor in our GOP congressional delegation, will probably soon be rectified. Nevertheless, given that the early adopters, so-to-speak, in Missouri represent or have represented the same district in the House, one is tempted to think there might be something in that Ozark water that leads to the kind of foolishness that can justify giving priority to paying the Chinese and Japanese before Americans – or before simply raising the debt ceiling, something Republicans have been more than willing to do when there was a Republican in the White House.

* Edited slightly to clarify meaning.

Our previous coverage of former Deputy Secretary of State Richard Armitage speaking at Missouri Boys State on Monday evening:

Richard Armitage at Missouri Boys State: via Twitter

Richard Armitage at Missouri Boys State: Q and A, part 1

Former Deputy Secretary of State Richard Armitage.

…Question: …I was wondering, you talked about the situation in Asia and Obama’s ‘soft power’. I was wondering what you think is the best source for Obama in regards to foreign policy, especially tensions in Asia?

Richard Armitage: Well I think, uh, you’ll see Mr. Obama go to Asia here shortly. First of all, let’s see what he’s done on Asia so far. He sent Hillary Clinton out there first [audience reaction], her first trip, which as normally for a Secretary of State, going to Europe. She went there and it was excellent signal to our Asian friends. Second, Mr. Obama, who lived in Indonesia for a time, is looking forward to going back, probably at the time of, of the APEC meeting which is held, I think, this year in Singapore. I can’t remember where. But anyway, Mr. Obama will be, will be going. Uh, third, he has dramatically increased our interaction, uh, with Asian societies. In the last two years of Mr. Bush’s administration the Assistant Secretary for East Asia focused almost entirely on North Korea – this is Ambassador Hill who’s now in Iraq – to the exclusion of the others. And there were all kinds of stories in all the Asian press about America is passing over Asia etcetera, etcetera. Now this is one of the reasons that Secretary Gates was sent by Mr. Obama to Singapore to give this speech where he said we’re a resident nation in Asia. So I think he’s doing fantastically well for Asia now that we’re back on track with Japan and South Korea and China on the six party talks. I think Mr. Obama ought to continue his personal interaction but not overlook the tenets of the Hippocratic Oath. You know what the Hippocratic Oath tells you to do? First, do no harm. It’s what doctors are cautioned, first, do no harm. And this is what Mr. Obama should do first. Do no harm. And when he goes to Japan, when he goes to Korea, when he goes to China soon I think you’ll see him do a hell of a lot of good for us. I’m pretty enthusiastic about his Asia team and his own views of Asia, not least of which because he used to live in Indonesia. [applause]…

…Question: …I was wondering, did we have any leader in the United States ever try any diplomatic relationship with Sadam Hussein?

Richard Armitage: Did any leader in the United States do what?

Question:  Uh, try to diplomatically talk with Sadam Hussein.

Richard Armitage: Uh, yeah, uh, I’ll give you any number of instances. First, uh, of course, Secretary Rumsfeld did, nineteen eighty-four. Then I did in nineteen ninety-one, with the Gulf War, first Gulf War. Uh, we sent unbelievably numbers of messages through, like, the United Arab Emirates, Cairo, Egypt to try to talk to Sadam Hussein. Uh, to my knowledge he was uninterested. But if you’re saying did anyone pick up the phone and call him, not to my knowledge. Uh, and of course, we had not had an embassy there for some time. We did during the first Gulf War, not during the second Gulf War. Uh, so, uh, I don’t, I don’t know what I don’t know. As far as I know nobody did talk to him in the final days leading up to the invasion.

Question: …I’d like to ask you, with Obama using a lot softer force when dealing with other nations, and the economy problems, and climate control coming up to head, do you see any possible way of a one world order coming in soon?

Richard Armitage: Question has to do with would there be a possibility of one world order. I don’t see it. Uh, in fact, I think the whole thrust of what we’ve seen, uh, in the last twenty years has been more nationalism around the world. If you look what happened in the former Yugoslavia, now we have Serbia, we have Bosnia, and , uh, Kosovo. Uh, you’ve seen a proliferation, if you will, of nations. So I think actually things are going a different direction. You’re seeing, you’ve got more nations in the United Nations now than you had twenty years ago, so I don’t see a new world order or a one world order on the agenda.

And Mr. Obama is in some ways presenting a much better face to the world. I wouldn’t call it a soft face, I’d call it a smart face. I think he’s using both our soft and hard power in a more intelligent way. Certainly if you’re in Afghanistan you’re not looking at soft power. Uh, Mr. Obama just put twenty-one thousand, [garbled] twenty-one thousand more troops in. so, uh, I think he’s using our power more intelligently. And using all the tools in our kit box now, in our tool box. Uh, Mr. Bush just used sanctions and, and force. Uh, and I think this gives us a better opportunity to prevail. What is soft power? [garbled] It’s the ability to attract. You want to persuade, you want to attract them. Hard power is coercive.  Well, force them to do something. If you can attract people I think it’s always better. It seems to last longer.

Question: …My question for you is, with the current situation in North Korea and the testing of the nuclear weapons, what are, what is the U.S. doing to better our situation and stance with what they’re doing?

Richard Armitage:…I would argue that we put new F-22s in, fighter aircraft, in Okinawa to kind of up the ante a little bit. That is, the North Koreans have to realize their behavior has left them in a slightly less, uh, secure position, number one. Number two, uh, we backed, led the UN vote on the sanctions which if put into effect can be meaningful. Number three, I predict we’ll go back to do some, doing something unilaterally, probably, actually bilaterally with the Japanese. We have the ability to interfere with the money that actually goes to the regime. That was what the big to do a year ago was concerning the Macao bank accounts. This really bothered the Kim Jong-il regime, hence it seems like a supremely good idea for me to go back and do that again. Uh, in fact, if I were in the government I’d be arguing to do just that now, to interfere with the finances of the senior leadership. And we know who they are and we know where the money is. [applause]

Question: …I was just wondering, uh, you have been up here today, said that you have been in support of President Obama. I was wondering if you’d be able to accept the viewpoints of your friend General Powell, not only helping President Obama, but if you were interested in any parts of his administration or any help that you’d be able to assist with the president. And what do believe that, uh, you’d be able to help with the most?

Richard Armitage: Well, first of all Secretary Powell, you may have seen recently, is trying to get the Republican Party to behave itself and actually act as a loyal opposition and actually stand for something for a change. And not just run around like a bunch of knuckleheads. Uh, he’s trying to have a real debate. [applause] If we don’t have that debate and if we can’t have a very functioning, coherent Republican Party which stands for something, then this nation will be ill served. And our friends on the Democratic side will do what any administration would do if they hold the overwhelming majority, they’ll go off the rails. They’ll overreach. So, for no other reason we need a very coherent Republican Party. For the second, the question of assisting Mr. Obama, uh, Secre
tary Powell has, uh, met with him most recently about three weeks ago for an hour. They talked about a full range of things, they talk on the phone a lot. Mr. Obama has called me. I’m sure if, uh, I’ll just speak for me, if my telephone rang the answer would be “yes”. Uh, but it hasn’t rung. And, uh, who knows? Mr. Obama, when I talked with him he said, uh, we’ll want to get together in due course and, uh, we had a good conversation. As I said, Powell’s in to see him all the time. So, I don’t think Secretary Powell at his age wants an official position with the administration, but I, I, it’s quite clear if there was some special mission that the president wanted Secretary Powell to do, he’d do it. Because he’s served over forty years, I suspect he’d continue serving again. [applause]

Question: …I was wondering about what you thought about, uh, the threat that the, Brazil, Russia, India, and China have to U.S. hegemony, when you consider [crosstalk]…

Richard Armitage: The threat, the threat of which, please?

Question: Of Brazil, Russia, India, and China. When you look to the [garbled] proposed thesis about their gross domestic product by mid century, coupled with the post American world.

Richard Armitage: Yeah, [garbled] indicated clearly when we come out of this recession, uh, the [garbled] countries I referred to, Brazil, Russia, India and China, uh, are gonna be in a new place. And we’re gonna find ourself in a new place. And it’s gonna take a lot more nimble diplomacy, a nimble, uh, treasury, uh, work, for us to maintain our dominance. These, nothing here happens overnight. It happens over a long period of time. And those countries you named, Brazil and India, are relatively young. Uh, India’s what, twenty-four point eight years of age? Brazil, I, I think it’s around that. Russia and China are actually quite old. China’s about thirty-seven years median age and Russia is older than that, older than us in terms of median age. Which means for Russia you’ve got a declining empire. For China you’ve got one that around twenty forty is gonna peak out and have a lot of old people. But India will still be in the ascendency. Our close relationship is with India. Uh, so I think that we ought to be able to parlay that, and Brazil, we’re in pretty good shape, into a pretty long lasting partnership, if you will. But when you think about twenty forty, twenty fifty, you also really have to take into consideration demographics because they have a huge impact. Now we are in relatively good shape. Our growth, we haven’t aged very much in the last couple of years because of the influx of, uh, foreign immigrants. And they tend to have a higher birth rate. So what this means is, we’re gonna have workers who can continue to provide to pensioners long after a Russia, a China, or many of these other nations, certainly our European friends who are in a real dilemma right now. So our immigration policy and our relatively high birth rate has kept us in pretty good shape when it comes to twenty forty, twenty fifty, and Social Security. We’ll be straining, but we’ll be all right. [applause]

Question: …With the growing threat of Iran and nuclear weapons what can you suggest in detail as far as a long term solution?

Richard Armitage: Well I think the long term solution in Iran comes from a realization that, look, the Iranians, uh, they don’t dislike the United States rank and file and they don’t want to be just like us. Uh, we’ve got, we’ve about two million Iranian Americans that come and go back and forth all the time, so we know a lot about what’s going on. I think we’ve got to use Russia who has a fair relationship and has made some very fine offers to the Iranians about their fuel cycle. Uh, we’ve got to, uh, make sure that we keep our European friends on side so that Iran cannot put new investments into their dilapidated oil structures. They’re not realizing, uh, the very big percentage of what they should realize out of their oil revenue because they haven’t put any money, because of sanctions, into their oil, uh, infrastructure. So, I think if we’re patient, long term, and steady, keep all our friends on side, we can actually work that one out. I think we can. Uh, North Korea is a much more difficult situation. [applause]

Question: …You spoke of how you had many, uh, mistakes in your career. And many of them were big. What I’d like to know is, what do you do to cope with the stress and, uh, guilt that you had after making those mistakes?

Richard Armitage: Well each one was, was somewhat different. With my family, uh, I need to tell you the worst one. My daughter one day came to me and she said, “Dad, nobody ever wished their tombstone was inscribed, ‘I wish I’d worked another day at the office.'” And she really hit me right between the eyes with that. And I realize that she was saying that I’d ignored my family for my career. You know what? She was right. Uh, so I tried to rectify this. I tried to be more aware, spend more time. My wife and I were very fortunate we were able to adopt six children in addition to two biological children. And at least in my mind I was a much better in that home [garbled] for those six. Now maybe they wished they had it like the other two, and I’d be gone. I’ll let you ask them.

Uh, each one, each problem is sui generis. The one consistency is, always told the truth. This is the most important thing. Didn’t excuse it off on anyone else. It’s my problem and I have to fix it.

In terms of dealing with the stress of it, uh, I have a wife, I could talk to her. I exercised. That’s what I did. And I, I resolved in my mind, and I’m gonna make plenty of mistakes, and by the way, so are you. Each of you. Let’s not make the same one twice. That’s where you really say you screwed up. [applause]

Question: …India and China have disputed territory in northern India…I was wondering what America’s role is in, regarding this conflict, and since the territory’s been with India for fifty plus years, how do you think, with our tenuous relationship with both countries, how do you think America’s role should be in either using diplomacy or other measures in regard to [garbled].

Richard Armitage: Are you talking about the relation between Russia and India [garbled]? Or China, China, India rather?

Question: Northern India conflict.

Richard Armitage: Well China, in, um, two thousand three [garbled] actually negotiated an agreement with India on their disputed border area. The reason is, I mentioned in answering another question, China has such a need for stability they didn’t want to have external instability while they’re trying to maintain internal stability. That’s held pretty much. But I, uh, recently was in Delhi and, uh, the leader of the Congress of Indian Industries told me, he asked me, “How much foreign direct investment from China do you think we have in India?” And I said, “Why, I haven’t a clue.” He said, “Two hundred fifty thousand dollars.” And that’s deliberate. In other words, nothing. Nothing. They’re trying to keep China excluded. I think our role is, although we’ve developed a very close relationship, as is understandable with a democracy, with India, uh, is not to get in between the two. Uh, historically, uh, we have played a role, in nineteen eighty-nine, right after the, the election of George Bush, but before his inauguration, myself and a colleague were sent by Bush forty-one, uh, to China and India. The Chinese actually gave us a message to take to them, Rajiv Ghandi, who was the prime minister of India. We took it and then gave his answer back to the Chinese. And that’s a traditional role to the United States between those two countries. Sort of passing a message we feel we can be a friend to both though we’re not equal friendships. [applause]

Question: …When we imposed the economic sanctions on North Korea and the U.N. imposed them, we allowed China to ignore them and still give Korea the food, the supplies they needed to run the country. Why has the U.S. not taken a sta
nd on this in the U.N. , in general allowed China to do this?

Richard Armitage: Uh, because of the structure of the U.N. Security Council. In order to get, uh,where any permanent member can veto, China being a permanent member and Russia, they both have very strong views on the sanctions regime.  They think to some extent it’s necessary to show the North Koreans we’re all angry, but they don’t want to put too much pressure, they think it’s counterproductive. So they negotiated with us to change the sanctions from being mandatory to being, uh, suggested or whatever is the proper, I forget the word, to get the resolution. We acceded to that because we wanted the unanimous resolution. To veto it would just give sort of aid and comfort to the North Koreans. And I think in diplomatic terms, which is pretty warm beer generally, that’s not bad. That’s not bad. Uh, but when saying why do we let them get away with it, well, what are we going to do about it? They have a border area. We don’t. They, their view is, uh, they need stability in North Korea more than they need nuclear weapons out of North Korea. So they’re gonna do it. We have more influence over South Korea, but as I indicated in answer to the previous question, apparently the two previous governments spent a lot more money in North Korea than we had, we had come to know by a factor of about six. Uh, and that’s where ought to be putting our leverage, on somebody that we can have effect with, rather than China which we have little [garbled]. [applause]

Question: …Earlier you put extreme importance on our military bases in Japan.

Richard Armitage: Yeah.

Question: Um, however, some people, uh, believe that the reason we have so much military influence there, um, is because Japan’s own constitution prohibits, uh, [garbled] of military force. And I was wondering if they were able to amend that and have their own strong, uh, military if you think that our presence would or should, uh, change there.

Richard Armitage: Well, first of all, our presence in Japan hasn’t gotten anything to do with what people used to refer to as the cork in the bottle. That is, if China, excuse me, Japan would remilitarize if we weren’t on those bases. And so we stay at those bases just to cork their military capabilities. We’re there because it allows us to effect security cooperation throughout all of Asia. And we do. From those bases. Second, uh, the debate on what’s called Article Nine in the Constitution of Japan, which prohibits collective self defense, considered to be the antiwar clause, is being chipped away gradually and right now it’s very legitimate to speak publicly about getting rid of the prohibition on collective self defense. Ten years ago you couldn’t have done that. And most recently the lower house of Japan last week voted to allow Japanese maritime self defense force ships to go off the coast of Somalia. And not only to defend Japanese citizens and Japanese ships and Japanese goods, but also to defend foreigners and foreign goods. That’s as close to getting rid of that prohibition as you can imagine. Finally, if you look at the military forces of Japan today, they have more destroyers in their fleet than we have in our Pacific navies. And they’ve got more high performance aircraft in their air fleets than we have in the Pacific. So they’re already a competent military force. In terms of overall military spending we’re number one, they’re number seven, but it’s still pretty considerable. [applause]

Thank you all very much. [applause]

Our previous coverage of former Deputy Secretary of State Richard Armitage speaking at Missouri Boys State last evening:

Richard Armitage at Missouri Boys State: via Twitter

Former Deputy Secretary of State Richard Armitage speaking at Missouri Boys State in Hendricks Hall on the campus of the University of Central Missouri.

….Question: …I have two questions. My first one was, is that, as you know, a lot of what we sell, er, buy comes from China and Japan and the Asian countries. Uh, you can’t really pick up anything without seeing ‘made in China’, Japan, Korea there. Do you think this affects anything at all, like our economy, or do you think this is a good thing or a bad thing? What are your thoughts?

Richard Armitage, former Deputy Secretary of State: That’s the first one, what about the second question?

Question: And the second one was, what is Persepodas? You said that, uh, the Persians, when you cut them and bleed, they bleed Persepodas, or something like that, and we wanted to know what that was.

Richard Armitage: Okay. The question of, when we buy cheap goods from China, it’s, used to be from Japan, not, not much anymore, theirs are kind of high tech goods. Uh, I don’t think it bothers us much. We’re not doing the manufacturing. Uh, we’ve benefited immensely of, uh, of the Chinese products that we were buying here before. Now exports are way down.

What does have a big effect on our economy is the number of treasury bills that China holds. China, Japan hold enormous amounts of our treasury. I think the image that you should have of the three of us is of three people in sort of a circle, each with a gun at the other’s head. If China pulls out their t-bills our economy falters terribly, but their bills are not worth very much. The same is true of Japan. So, they kind of have to keep us rocking along to keep the value in the treasury bills. So, I think at this point in time, uh, we’re still all, in the words of, uh, Ben Franklin, gonna have to hang together or else we’ll hang separately on this…

…On the question of Persepolis and the Iranians, you wanted me to develop it a little more? Is that what it was?

Question: Just to kind of explain what it was. A couple of us had a question about what it was. [crosstalk]

Richard Armitage: Well, uh, twenty-five hundred years ago with the time of Darius and Cyrus the Great, the great kings of Persia, uh, Persia was dominant throughout the whole Arabian Gulf. They were a tremendous power. Uh, they’ve obviously fallen from favor since then. Uh, but none of the Persian interlocutives with whom I worked had anything but that moment in history in their frontal lobes. They remember the glory that was theirs, that was Persia’s. And they wanted to recover, to some extent, that position on the world stage. And I think to some extent, in some minds, having nuclear weapons is one of the keys to get back on that world stage. After all, from their point of view, a third rate nation like North Korea is able to make us dance around pretty well. What about a great, historically great nation like Persia?

Over here.

Question: …I just wanted to ask, like, when we’re leaders of the country, or when we’re in your spot, like after Iran, North Korea, and the Middle East, what do you think are the future national threats to the United States, or challenges we’ll face?

Richard Armitage: Well, look what’s happened in, in my career, the national threats have changed a lot. It used to be, of course, the cold war and all of that. And, uh, that’s all gone. And now the threats are everything from, uh, the terrorist threat from Afghan Pakistan, to nuclear proliferation, to human trafficking, to economic turmoil, to drugs, to cyber attack, uh, climate change, changing environment. So, the threat to our way of life and to us has expanded dramatically. If I had to say what might be the biggest long term threat I’d say it might be climate change. As none of us really understand, I don’t think politicians have the courage to really take dramatic steps. And in this regard, it’s interesting to note that China, it’s much easier for her to take dramatic steps, she just made an announcement that all her cars will be ‘x’ per cent more efficient in three more years. Which for us would be impossible, because of our political system, but they just do it by mandate. So I think that’s the biggest threat in the long run.

From, I’ll tell you this, when we come out of this recession, I’m sure of one thing. And, and I’m not an economist. But I’m sure that everything we’ve known in the past about economies is gonna be changed, because, as, as we come out of this, Brazil will come out of it, India out, and China. And I think it’s, although we’ll still be the most powerful nation and the richest nation in the world our relative dominance will have dropped a lot. And I don’t know if the others, the, the Brazils, the Chinas will start working as a block or not. But that’s something to really, I think, keep an eye on.

Question: …My question was, uh, China holds roughly half of, I guess, I think the number is, U.S. treasury bills. And you talked about trying to escape the, uh, recession faster than, uh, them. What would happen if they tried to recall or have us pay back all of our debt to them and what would kind of be the consequences for us?

Richard Armitage: If, if China did it? Is that what you’re saying?

Question: Yeah.

Richard Armitage: Yeah. Well, uh, our economy, I can’t say it would collapse. It would come close to collapse. They’d fall as well.

Here’s the thing with, with China, ’cause they’re so tied in with us. Unlike us, we, if we have unemployment continue to rise, inflation continue to rise, we’ll have some social demonstrations, right? The Chinese public has made an implicit bargain with their government. And that was that the government would keep the economy humming along about ten per cent, minimum eight, but ten per cent, in exchange for which, the people  will overlook the fact that the government structure in China is basically illegal. It’s not in any way chosen by the people. And would overlook, to some extent, the amount of corruption which is endemic in China. That is if all or most of the citizens could see that tomorrow will be a little bit better than today. If the t-bills, if China withdrew, they would not be able to keep that economy humming along. They would have instant social upheaval in the countryside and probably in the cities. For me, as sort of an Asian student, one of the most interesting ironies of history is that the most modern city historically in China is Shanghai. And Shanghai was the home of the Boxer rebellion, was the home of, of the, the birth of the Chinese communist party. And it’s from these most modern cities that all the troubles have come. Why is that? The cities attract people. People come and the government has not developed the infrastructure, water, medical, uh, etcetera, etcetera to service these people. And they rapidly become hotbeds of dissatisfaction, what you, what a military officer…I saw earlier today, he’d say it’s a strategic center of gravity against the sitting government. So they would be really in a world of hurt if all of a sudden they could not keep their economy at eight to ten per cent. There’d be all kinds of social upheaval. And that’s not something we want because the implication, not only for our economy, but for our friends in the region with refugees and everything else.

Question: …My question, over the past few months, uh, we’ve seen that Vice President, the former Vice President Cheney’s been doing a lot of public criticism of the new Obama administration. Uh, as a former Bush ad
ministration official yourself, do you agree with what the former vice president is saying, and also do you think he’s within his rights to be criticizing him like this, or do you think he should kind of pipe down and stay quiet like, uh, President Bush has?

Richard Armitage: I completely disagree with former Vice President Cheney. I think he should, in your word ‘pipe down’. [applause] I think it’s unseemly. [applause] I think it’s unseemly and very much admire the way President Bush has, has said he owes President Obama his silence. And that’s right. Beyond that, as a citizen, obviously Mr. Cheney has a right to his point of view, but I think the, the burden of being a former vice president trumps it. And it makes him look so mean spirited now as it, it’s, I guess Leon Panetta, uh, the CIA, said it makes Mr. Cheney look as if he’d almost want a terrorist attack to kind of show up Mr. Obama. And look, I’m an out of work Republican right now, but I don’t want our president to fail, I’ll tell you that. And it seems Mr. Cheney’s kind of seen to put a lean in that direction. I don’t like it.

Question: …as a foreign policy expert what are your opinions, if current President Ahmadinejad of Iran were to be reelected, how that, how that would affect the United States?

Richard Armitage:  Well, I, I think, in the first place, either of those two gentlemen having been elected would not grandly affect the United States. Mr. [garbled] Mousavi seems to be pretty benign, nice guy, but here’s a fellow who in his earlier years, very involved in not only the, the revolution in Iran, but the, uh, taking over of our embassy, and very involved in getting birth, giving birth to Hezbollah. So, the relative benign nature of Mousavi  vice, versus Ahmadinejad is, is something that I really question. I think they, it, it’s just a matter of degrees. Second, I , I don’t think there will be any dramatic changes in U.S. Iran relationships. We will, as Mr. Obama said, reach out the hand of friendship. That’s a good thing. They’ll have to make a decision whether to take it or not. I’m not totally hopeless that we can dissuade them from their program. Make sure that they do have nuclear power, but that they don’t, uh, misdirect it toward nuclear weapons. And I think this is gonna be something that proceeds almost a snail’s pace, no matter who is elected.

Question: …My question is a two part question, actually. North Korea was brought up in your speech earlier and the rise to power of Kim Jong-il. Recently, uh, North Korea, uh, they’ve reopened their nuclear power facility. They’ve, uh, collected enough plutonium for six to eight nuclear, uh, bombs. And they’ve sent two, uh, test [garbled] missiles, they launched them. Uh, why hasn’t the U.S. stepped in, um, we play a vital role in, um, financing, well giving them foreign aid. Do you think we could use that to [garbled], to our advantage, of stepping in and shutting down the facilities? And, uh, making, uh, would create less of a threat for world power.

Richard Armitage:  Okay, thank you. Uh, let me roll out the entire facts here. Nineteen ninety-four President Clinton negotiated called the framework agreement. And in exchange for the Yongbyon reactor to be deactivated we, the Japanese, China, south Korea, would provide assistance, primarily fuel oil and food, from the, from the United States. Uh, and for a time that Yongbyon reactor was closed and we’d made an agreement. Many of us, I’m, I’m on record, I testified to U.S, Congress back then and said that I was very happy with the framework agreement, but that it did not address unknown facilities, secret facilities. So, although North Korea could stop the Yongbyon reactor they had many other mechanisms, and if they chose they could use to make, uh, plutonium. Uh, this agreement then, that was the first sale, rather, by North Korea of the Yongbyon reactor. North Korea then started it, as you correctly indicated, sold it to Mr. Bush twice. Right now they’re getting prepared to sell it to Mr. Obama once. For a grand total of selling the same reactor four different, or trying to sell it four different times. In addition, in two thousand two, the North Koreans admitted to the Assistant Secretary of State Jim Kelly that they also had a highly enriched uranium program. It was a secret program. So, what many of us feared back in the nineties turned out to be true, they had these secret facilities. They have not agreed anywhere to stop that program. And it leaves us where the intelligence agencies estimate that they have enough, uh, uranium for, or plutonium rather, for six to ten weapons. These weapons are not mounted on missiles. They haven’t been miniaturized and put on the missiles yet so they, you wouldn’t want to call them really bombs or, uh, certainly they’re not married up to missiles. We have stopped our assistance and have, for some several years. There was a story in the Chosun Ilbo newspaper of south Korea the other day saying that South Korean governments, not the present one but the previous two, had provided between seven and nine billion dollars, dollars, of aid to North Korea in very real way. If that story is true they have funded the development of missiles and weapons which potentially could be used against South Korea. But that was the policy of the two previous governments of South Korea. Uh, right now, as far as I know, all of that has stopped. I’m having lunch with president Lee of Korea on Wednesday. He’s coming to Washington to see the president and I’ll have lunch with him after and we’ll get to the bottom of it. But I suspect that the majority of the assistance has come from China and South Korea, as much as that seems strange. We limited ourselves to NGO with fuel and, and food. You had a second part to your question? Great. Thank you.

Question: …What do you think should be the next course of action for the U.S. in the world as we try to regenerate our educational system?

Richard Armitage:  Well, I, I don’t think it’s, uh, much to do with the world. It has much to do with ourselves. The debate that Mr. Obama is trying to encourage right now about rewarding teachers who actually care about students and actually want them to, to do well. To try to turn ourselves into a, a much more literate society. One of our problems right now, and you’ve heard about this in your schools I’m sure, you cannot find enough qualified engineers. That’s why we’re hiring so many from abroad. The problem with that is many of our high tech industries require security clearances. And some of our foreign friends it’s very difficult for them to get security clearances. So, my own view is we’ve gotta really get hot here domestically. Secondarily, uh, we’re back up to where we were before two thousand one in terms of the amount of foreign students who study at our great universities. Let’s face it, for six, six years at least after nine eleven we exported anger and fear, which is not a traditional export for the United States. We kind of deal with hope and optimism a little better. But we’re back on track I think for that now, in, in better shape. You have a follow up?

Question:  No. Thank you.

Richard Armitage: Thank you.

Question:  …Sir, as I’m sure you know, when John Adams was president the nation as a whole wanted to declare war on France. [crosstalk]

Richard Armitage: Start that. Start that again please.

Question:  When John Adams was president, sir, the [garbled] nation wanted to declare war on France, but Adams [garbled] did not [garbled] what the nation should do. So he thought it was best for the executive branch not to. And my question for you, sir, is how much do you think that the president and the executive branch should respect the will of the people and how much do you think they should just listen to them [garbled] in deciding foreign policy.

Richard Armita
ge: Well that’s a very interesting question because the only truly, uh, the only president who truly did not believe in that the United States had a role in projection of human freedoms and human rights and democracy etcetera was John Quincy Adams. He was very much a, a stay at home, look home type guy. Wanted to really eschew any foreign involvements. Uh, the president’s first duty is to protect you and me. That is his first duty. Beyond that we do like to help the world. We, all post war presidents certainly been very active in the spread of human rights and human freedom. But protection of U.S. citizens properly trumps all the rest of them. Now many of us, and I’m one of them, view the fact that if we hold ourselves and carry ourselves correctly in the world in terms of traditional respect for human freedoms and human rights, we actually lessen the possibility that the president would have to commit force to protect us. On the other hand, go around pissing everybody off all the time then we’ve got a little different problem. [audience reaction] But, uh, but my point of view, the, the men and women who were the fathers of our republic and the great architects, the great builders of our nation, those great presidents and all those [garbled] have shared a view that the world is safer when we’re engaged across the board in the protection of human freedoms and human rights. It is the manner in which we’re engaged which is important. If we try to put democracy on somebody through military force, that’s quite a different proposition. From trying to develop all the institutions, and the parties, and free press, and transparency and good governance that necessarily has to precede a competent and democracy.

Question: …What is the main thing, or the main action that you’ve taken in your whole career that you think has greatly influenced the world and America?

[long pause]

Richard Armitage: I think I’ve got two. Can I have two?

Question:  Yes. [laughter]

Richard Armitage: In two thousand and two, in summer, India and Pakistan were going to war. And Secretary Powell and I stopped it. Stopped it dead. [applause] The other thing is, is quite different. Uh, the day Saigon fell. I had been sent back to Saigon, five days, four and a half days before the fall for a particular mission for the government. I was to destroy some things and I was to make sure certain equipment didn’t fall into the hands of the communists. Well, along the way I developed with the CNO of the Vietnamese Navy a plan to get thirty-one thousand people out, but didn’t tell our government. But I was so mad at my government because I’d thought they cut and run. And I thought we owed this. And so we brought out thirty-one thousand people with, the U.S. government was furious when they found out they had a big, much bigger refugee problem than they, they had thought. But that action actually found pretty good favor in the public and in, in the Congress when it turned out that we eventually ended up taking out hundreds of thousands of refugees. Which, as far as this citizen is concerned, has dramatically helped our country. [applause]….