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On the other hand, we´ve got even a greater tool at our disposal, and that is the truth that freedom is universal. I have said it consistently through my administration. There is a God, and a gift of that Almighty, to every man, woman and child, is freedom. And I believe it. And I believe people, when given a taste of freedom; will make the sacrifices necessary to achieve freedom. And that´s what you´re seeing in Iraq, in Afghanistan, and some day will see in the Palestinian Territories. But, obviously, there are still a lot of obstacles toward that day.

You know, I´ve pushed hard with the Israeli and Palestinian leadership to define a state, because there needs to be a competing vision. And so people say, well, you shouldn´t have argued for elections in the Territories. And my answer was, of course, we should argue for elections in the Territories, because it shows how the people feel, it´s the most accurate poll there is. And it should say to people that, okay, you lost; what do I need to do to win? And the answer is not more violence; the answer is more peace, or more education, or more health care, or more business opportunities.

And that is beginning to happen in the West Bank. The prime minister is doing a really good job, along with the president.

Q: I went back and looked at the first interview you gave me shortly after you became president, and among the things you said was that you were not that worried about the deficit — this was in 2001 — because the deficit would seem to control congressional spending. Would you like to revise and extend those remarks?

THE PRESIDENT: Actually, this was before the attacks.

Q: Right.

THE PRESIDENT: The tax cuts had just been implemented to deal with a recession, and we were actually closing the current account deficit through the growth of revenues, as a result of increased economic activities, and at the same time were funding our troops and defending the homeland. And the other thing I kept saying was that the deficit that we truly ought to be focused on is not the current deficit, but the deficit inherent in the unfunded liabilities of Social Security and Medicare. Those were the big deficits.

Now, obviously, there´s going to be a short-term increase in the deficit, as I took actions necessary to prevent this economy from collapsing, from a complete financial meltdown. People have asked me, was there a defining moment? Well, there was an important meeting in the Roosevelt Room when Secretary Paulson and Chairman Bernanke, in essence, said the financial situation is such that if you don´t do something, Mr. President, we could have a depression greater than the Great Depression.

And if you´re the president of the United States, you can sit there and say to yourself, ‘well, I´m going to stick to principle and hope for the best, or I´m going to take the actions necessary to prevent the worst.´ And I took the actions necessary to prevent the worst. And I fully concede that I flew against the principles of free market. In normal circumstances, my response would have been if they had made terrible decisions, let them fail. The problem in this case is the letting them fail scenario would have caused the average working guy immense grief.

Q: So what good are the principles?

THE PRESIDENT: The principles are to make the decision necessary to defend the principle itself. In other words, the whole purpose is to take the actions necessary to be able to have a free market in the future.

People say, well, they were just exaggerating the issue. I don´t have the luxury of listening to my two top economic advisers and saying, ‘well, you may be just exaggerating; we´ll see what happens.´

Now, I readily concede people are concerned about the decisions I made, no question about it. I think that there is a lot of concern that this is the end of free markets as we know it; the free enterprise system, which has been so wonderful for America, will be discarded. I disagree with that, obviously. I think it´s going to be very important for rational voices to continue speaking out as this economy recovers, and it will, and as the assets that will collateralize our positions get redeemed, that we remind people about the wonders of free markets and free enterprise.

One of the reasons why I hosted the international meeting in Washington — and if you look at that statement, it is very clear — it says, yes, we need to take actions to prevent a financial meltdown without destroying the foundations of free markets and free enterprise.

Q: You may be aware of a resolution before the Republican National Committee that says, we can´t be a party of small government, free markets and low taxes, while supporting bailouts and nationalizing industries, which lead to big government, socialism, high taxes at the expense of individual freedoms. They´re calling you — some of them, including James Bopp, the vice chair — calling you a socialist. What do you think of that?

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