Person: Hi, I love it when Georgetown people come here because when I graduated in law school I lived there in Georgetown. Thanks very much for your talk. My question is you’ve mentioned three things in passing about the debt that we are absorbing and that’s only cited by people who get frightened with our [IB] was here and they manipulated the currency to never get out. So what would you say if you were advising Obama about how to approach those two issues? What would you do about the currency manipulation and are we really able in our economic crisis right now to dig ourselves out of this debt or is it something that has to be [IB]

Dr. Sutter: Yeah, that’s a very good question. I think I could advice tactically on how to deal with currency manipulation and I would advice them in doing pretty much what they are doing. In other words that you don’t make that same fundamental issue in US- China relations in the US-China relations, the US China relations are such that the two countries have many, many differences as well as common ground in lots of issues and so but they have to get along, they get along because they…and they want to keep their relationship basically positive with one another because the two governments benefit from the positive collaboration. But if they emphasize the negative with one another, they hurt the other party but they also hurt themselves, they are so interdependent. And the third point is where I alluded alerted to earlier is that Mr. Hu Jin Tao and Mr. Obama are both so busy with so many other issues, they don’t want a problem with one another and so for this reason I’d say don’t make currency a big problem with china at this point and so…and I think that’s what he’s doing, he’s managing this kind of difficulty that we have with china.

What do we do about the debt, now I’m not an economist about that I have experience in Washington over the years, I’ve watched this sort of thing, some people say we could inflate our way out of it, you see they could say we could get away with that, we are the dollar holder, we are the super power, maybe people would still invest here even if we inflated our way out of this thing. And so that’s scary to other countries and it’s probably [abandon] your neighbor type of approach. And I don’t think its good leadership, but you might do something like that. But I think there are many things that I just, not aware of, so I couldn’t give much advice about that. Where it matters in Asia is where does this affect US security presence in Asia? In other words is, are we going to cut the defense budget in significant ways and that affects the [IB] in Asia because of the debt. And that’s something that I’ve been through this, after the Cold War, we had a big recession at that time and there was a big freeze on spending. I was the senior administrator at the Library of Congress and I couldn’t buy anything, nothing. Everything was frozen except the defense budget, defense budget, [appropriation] stayed, stayed from previous years and congress every year would add 10 billion more, maybe 15 billion. And so that’s America. So when foreigners ask me about this I say, “I think the defense budget will be the last thing to be cut”. So if we start cutting things, we’ll probably cut a lot of other things before we start cutting defense [IB]. And so I’m not too worried about the defense posture in Asia, and not being affected by the economic situation, at least for now until…And then we are hopeful about the American resilience, we have this reputation of being a resilient economy, multi-faceted. And so maybe we’ll come back and [IB]. The difficulty I’ve seen from the United States today is so much less than what I saw at the end of the Vietnam War. It was really awful then. And the US wasn’t declining at that time. But I just don’t see it now, I see it’s a very…the economic situation is trouble we are coming out of a big recession, but I don’t see it decline.