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Question: How can we remedy America’s financial habits?

Newt Gingrich: Well, the most important single political slogan in the next quarter century is 2 + 2 = 4.  I got that frankly from the Polish people who used it in their 10-year long struggle with the Polish dictatorship when Callista and I were doing the movie on John Paul II called, “Nine Days that Changed the World.” 

Starting in 1979, the Polish people were in constant rebellion against the Soviet dictatorship.  And they would say – they would put signs in their windows that said 2 + 2 = 4.  Partly it came from George Orwell, who wrote in his novel, 1984, that the state torturer when he was torturing the innocent citizen said that, “If we tell you 2 + 2 = 5, it equals 5, and if we tell you 2 + 2 = 3, it equals 3.”  And the citizen’s thinking, yeah, but what if it really equals 4?  It also comes from Camus’ novel The Plague, in which he says, “There are times when a man can be killed for saying 2 + 2 = 4 because the authorities can’t stand the truth.” 

And what I tell audiences is very simple. Here’s an American version of 2 + 2 = 4.  I give them half of a sentence.  If you can’t afford to buy a house – and then I stop, and they start giggling, and then someone else will say, “Rent,” or somebody else will say, “Don’t buy it.”  And finally I’ll say, “How many of you agree that if you can’t afford to buy a house, don’t buy one?”  Every hand goes up.  And then I simply point out, for 25 years we’ve lied.  For 25 years the official policy of the United States Government has been, if you can’t afford to buy a house, well you don’t need credit, you don’t need a down payment, you don’t need to pay on principal, we’ll give you a sub par interest, and guess what.  If you do it to one individual and they go broke, it’s a personal tragedy, if you do it to a million people; It’s a bubble which collapses with national consequence.  We had an IT bubble in 1999, we had a housing bubble in 2007, we had a Wall Street bubble in 2008.  The fourth bubble is going to be big government.  We have more government than we can afford, it is going to collapse, the sooner we start cutting it and the sooner we start replacing it, the better off we’re going to be.  We need to get to a smaller, more effective, more modern government as rapidly as possible and every year that we delay, we give more debt to China and more debt to Saudi Arabia, and we guarantee that our children and grandchildren will be paying more taxes to pay interest to Riyadh and Beijing and less money to take home for their own pay.

Question: What are the implications of being in such massive debt to foreign countries?

Newt Gingrich: Well, that is enormously dangerous to have American debt held in huge volume by China and Saudi Arabia.  It’s dangerous with the Saudi’s because you’re going to have more and more influence on behalf of a version of Islam which is very alien to the American system.  It is dangerous with China because the legitimate interest of the Chinese government is very different than ours.  And what are we going to do one morning in a diplomatic crisis if the Chinese announce they’re going to dump $2 Trillion of debt on the world market?  So I think there are very profound reasons for us to be very concerned about a system in which we have Increasing American irresponsibility leading to massive deficits which end up with foreigners owning huge volumes of American debt which also means that the carrying capacity – If you try to pay for the interest on the debt, there are projections that by 2017, we will be paying more taxes for interest on the debt than for all of our national security costs combined.  Now that is an irrational destructive and irresponsible position to be in.


Camus, Orwell, and the Next...

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