 I saw muscles from my last trip and I'm sure was referring to the exercise in the Olympic training No, the thing that I'm boasting about today is that yesterday at the graduation at the Air Force Academy. I stood and shook 993 hands The largest largest graduating class in the history of the Academy Well, no they embraced me they Not all of them there were but there were a few and it it was a kind of a welcome break Representative from the host country. It's been left to me to bowl the first bowl The London Economic Summit is taking place under a number of clouds. One is the international debt crisis So far Western creditor nations have dealt with this problem on a case-by-case basis However, I'd like to ask you in light of the growing hostility of detonations. First of all whether a Coordinated long-term solution is now essential and second what the US can do to guarantee confidence of its banking system well first of all to be answered that by saying that I believe the five-point system or Program that we all agreed to at the summit meeting last year at Williamsburg Has been working And I'm sure there is unhappiness here and there with some but I believe that Since it is working and it's working on a case-by-case basis that we should continue that and that the greatest thing we can contribute now to helping them in their problems is to do everything we can to Ensure and increase if possible the economic recovery that is presently taking place Well now we had The Continental of Illinois. Are you referring to the Well that turned out to be quite a rumor that Seemed to be believed only on Wall Street in the stock market for 24 hours and caused quite a panic but developed that there was not a Not the same kind of crisis involved there Last few days you said that the world Feels a little bit more secure because of the strengthening in the American strategic and conventional posture as Paradoxical as it may seem and considering the reported widespread violations of soul to by the Soviet Union Do you feel that the world can continue to feel a little bit more secure for an extended period of time in the absence of a Agreement with the Soviet Union limiting nuclear war nuclear arms. Well, I think the at the ultimate of what we want Of course is for them to come back to the table and join us in Not a limitation as salt was that was simply Legalizing an arms race in that the limitation was only a limit on how many more You could continue to build as a matter of fact It's interesting to note that from the time of the Signing by both parties to the salt treaty the Soviet Union added three thousand nine hundred and fifty more warheads When I say more secure I believe that the United States basically in recent decades went all out in various efforts at detente and In which we unilaterally disarmed With the idea that maybe if we did this and showed our good faith They would reciprocate by reducing their own well, they didn't they've engaged in the good most massive military build-up The world has ever seen and therefore the reason I believe that There is more security today is the redressing that we've done of our own military strength the strength of the Alliance and The unity that we have and the and the reliance resisted all that propaganda of the Soviets With regard to the intermediate range placement and their efforts to divide us failed so I Think there's an article that could call to your attention in the Economist called May hibernation and I It's it was an idea hadn't occurred to me But I think it makes a great deal of sense that they are not Deviously planning something or having a great plan going forward the author of this article said that They don't have any answers right now. So they've just hunkered down and they're hibernating Waiting until they they have an answer Sure they're unhappy and all this talk about great strain and in the relations well the unhappiness is because They're not having their way Freely as they did a short time ago This in the connection with this problem of the United States Soviet relations east west relations, which My Italian calling just mentioned. I'd like to ask the this question many observers suggest that United States and The Soviet Union has a common national interest in Calming down the present Gulf crisis Persian Gulf crisis us and Soviet Union has a common interest Do you agree with this view if so would you consider taking this crisis as an opportunity? To be open the US Soviet dialogue which so many people Is anxious to have well, I don't see that particular issue is one Blending itself to that we are not out of touch with the Soviet Union. We have continued to Negotiate with them on other matters other than the arms treaties that were of concern to them And there's been some progress made in those so we've made it very plain that The door is open for negotiations on the Gulf I think The the idea none of us want to see this spread into a major conflict And I think the fact that the Gulf nations themselves Have not asked for help other than Wanting more weaponry for their own defense Here and there and and which we've provided And I believe that that is the course to follow If it ever If it ever goes beyond that then I think that the major nations it would begin with us and our allies getting together because Basically our allies Including your own country have a greater stake in if that energy supply was was cut off but No, I don't I don't believe that that That really Offers a Kind of opening we're talking about But you had the you had a direct talk with the Soviet oh, yes. Yes So then this is a forward application of what the initiative if any do you plan to take at the London summit on this? Gulf crisis on this subject that what? On the Gulf of this Persian Gulf crisis in the summit meeting Oh, I'm quite sure what kind of initial I'm quite sure we'll be discussing that the the summit meetings I'm proud and happy to say since Williamsburg are kind of planned on a more informal basis They used to be very programmed and with subjects in advanced determined on and so forth and We didn't think when we had the Williamsburg summit we didn't think that that really opened the door to What everyone would like to talk about so it's more or less a an informal get-together and Whatever subject is on anyone's mind they can bring up that they think is of interest to it, and I'm quite sure that we'll We'll be discussing that If I can come back to the economic Problem and to the president the latest figures on the US export performance The painter rather grim picture It is understood that the US trade deficit trade imbalance will reach a staggering $126 billion this year Compounding it seems the deficit problem that already exists. How can interest rates really come down under such auspices and What will you tell your partners at London who are worried stiff already about interest rates and about the high dollar that is created And the capital that comes out of their economies into banks in this country What is what are you going to tell your Well the trade imbalance, I don't think has anything to do with the interest rates the trade imbalance that you've mentioned there as a matter of fact Is due to the Value of the dollar in comparison to other currencies and this is part of the worldwide recession that's been going on but our our imports have actually Are actually responsible for about a third of the recovery of our trading partners now and There is another element that we We don't consider in in the balance of trade, but that is capital investment From outside the United States in our country and yet that is that is a kind of balance to this imbalance we would we'd like very much to be exporting more than we are but we realize that we Our recovery started earlier and has been faster than it has in the other countries And so the result is they have been less able to buy and the very fact as I say that we're Continuing to import is helping that recovery and I think that this will Move to change that now we get to the the deficit which is Every country has one right now the spending Over and above revenues in government functions We have a program right now that is in conference committee before the house and Senate to work out the differences And there are two versions of what I have called a down payment and that is a three-year program to Certain some revenue increases But both domestic spending and some reductions in defense spending that will not set us back too much in our program But this down payment will amount to about a hundred and forty or a hundred and fifty billion dollars Over the three-year period in the reduction of our deficit, but that's only part of it we recognize that we have a long way to go in Reducing the share of the gross national product that the government is taking in Taxes and in his spending and We had a Commission From the private sector. I asked a man named Peter Grace a business man to form task forces and Go into every agency and department of our government. I Had done this in California when I was governor for the state and it worked and some two thousand American leaders in the private sector spent Several months doing this and they have left us with two thousand I think four hundred and seventy eight specific recommendations as to how government can be made more efficient and more economical By simply implementing modern-day business practices For example when they could find that in one area of our government It was costing us four dollars in something every time we wrote a paycheck for an employee And out in the business world that process takes less than a dollar Well, there's no reason why government shouldn't take less than a dollar in processing a paycheck Well this kind of thing and we now have a task force that is working on Those recommendations many of them will require legislation by the Congress some of them only required executive order by me and We have already in our our planning right now and in this Down payment we have already included some of their recommendations that are going forward with them so We think that That actually the interest rates However that I'm dealing with the deficit part now are not that closely linked to the deficit as a matter of fact the deficit of some of our allies as a proportion of gross national product is Not too out of line as a percentage of GNP as Any more than ours is but What I stand on is evidence that it isn't the deficit that is causing The interest rates the high interest rates Is the fact that we brought those high interest rates down from 21 and a half percent down to Little more than half that at the same time that our deficit was increasing Vastly over what it had been Now how could that be that interest rates were coming down while the deficit was going up and now the deficit is Responsible for interest rates not coming down any farther or maybe as they have going going up a point or so recently We think that out there in the money market in our own country After some Nearly half a century of deficit spending in this country That and a growing inflation that has been worldwide for a longer period than ever in the world's history That the money market is not yet convinced that we have control of Inflation and every move by the Federal Reserve system They always look to see what does this mean that suddenly inflation is going to start remember that in 1979 and 80 Before we came here inflation in this country Went up to double digits and for two years in a row It was a double digit and one time it was running a 17 percent And since we've been here it has come down to where for the last two years Inflation has been less than four percent but I Believe we're sound in thinking that it is just the lack of confidence now if we pass if the Senate and the House come together and this down payment is made and then as we begin to put together the 1985 budget which we will shortly be doing and We begin to show in that budget the effect of the grace commission Reports and so forth. I think we will see a little more confidence out there in the business community And I think we'll see interest rates come down a little further Mr.. Mr.. President first of all let me send this a point you haven't offered us any of those jelly beans, but Pass them around help yourselves good. They always sit there My question our Prime Minister mr.. Trudeau set out on a personal disarmament quest last year based on the assumption that the Superpowers were deadlocked that the world was becoming more dangerous and that smaller powers might help to break that deadlock And you got the support and endorsement of the Commonwealth now we came to see you in December you Cooled them out with a non-committal goodwill you thanked them for suggestions You wished them Godspeed as I recall and in effect you trivialized his whole undertaking So my question is why did you not pick up on this initiative and give it momentum as a new run for arms control? well, I suppose because we were convinced that It has to be the Warsaw Pact and the NATO. I won't just say the United States and the Soviet Union Here is where the issue lies Here's where the threat if there is one to the world comes from and We were busily trying To show the Soviet Union that we hadn't made any demands in which we said it's this or nothing We tried to show them our flexibility for example my first proposal about the intermediate range weapons was Why not? Zero zero why not leave that European area free of any intermediate range weapons? Well, the Soviets refused to discuss that so we said all right then Whatever figure you have in mind or whatever we have in mind let's sit down then and see how much we can reduce the numbers of weapons and We told them frankly we would always keep in mind that someday we'd still like to have zero zero But we were willing to talk a lesser number now they walked away on the The line that it was that when deployment started with a request for the NATO You're reviewing you're reviewing a disarmament But this is not as far as I can tell nothing to do with the peace initiative. Maybe I misunderstood Well, I was asking about Prime Minister Trudeau's peace initiative to try and break the deadlock that the that the two superpowers were in Listen, well, no, we encouraged him and gave him our blessing to go forward with that. I think that too It's awfully easy For us in our relations with the Soviet Union to be the case of death sometimes to these things No, the Prime Minister came here. I'm sorry. I misunderstood What you were asking the I think The world pretty generally Just a few exceptions Is ready for world peace and This is our primary goal But I don't believe that you can really That it was is really on a sound basis unless it is accompanied by a Reduction particularly in the strategic nuclear weapons This is the threat that we cannot the world cannot go on living under that threat and one day if there's any common sense left in the world One day there will be no nuclear weapons our country presented that at a time when we were the only ones who had them 1946 and We suggested an international commission to be given total control over all nuclear material and The Soviets refused Now we knew they were trying to have such a weapon and eventually did but at that time they All they had to do is give in and there there wouldn't be any During his visit to Washington prison Dua day of South Lough Declare that you would never ask American troops to fight in this country and Last week you have stated yourself That you had never had any sort of sending American soldiers to Central America and What would be your reaction if next fall for example the government of Salvador was theriously threatened. I mean the with Collapse by a Gary our offensive me And again, I have problems with those of you who are further out there This don't rule me as terrible acoustics here. I think you're asking about El Salvador and make a raguar Central American Not especially about Nicaragua, but about Salvador. Yeah, if there is next fall for example A guerrilla offensive a guerrilla offensive, yeah threatening and threatening With collapse, yeah, the government of Salvador. What would be your reaction? What would be your reaction our reaction? Well, it would not be military forces because El Salvador has not only never asked for them, but president Duarte on his visit here recently Said no they were not wanted or needed. They will do this with their own forces, but Frankly admit they must have our help with regard to equipment and supplies and The help that we've been to them in training And you know a great many of the Central American countries their militaries over the years have been Kind of garrison troops more concerned with internal problems than in fighting a war and So they have been most open in their request of training and Before we got here my the previous under the previous administration Some of that training consisted of bringing El Salvador and troops up here and training them at our own bases with our own men Well, then as the war heated up They couldn't afford to have the men gone for that long a time. So we have 55 trainers working with their entire army and the guerrillas of course are being supplied by way of Nicaragua, but Through Nicaragua by but by Cuba and the Soviet Union Not only with weapons, but with replacements with personnel and now the guerrillas are resorting to kidnapping They're rounding up going into villages and rounding up Even just youngsters off the streets and simply taking them forcing them to be guerrillas and As would happen the law of averages every once in a while some of those youngsters escape And get away and so we know that this is the practice and what they're doing But no if this fall offensive comes I believe we have confidence in the El Salvadoran army We think that the the guerrillas could make things very Unpleasant and we think that they are building up the possibility of such a thing But now the election has taken place the election of the president Duarte is very definitely dedicated to continuing to move toward democracy in El Salvador certainly has the support of the people and I am optimistic that we're on the right path and our Congress has voted now to Give us the appropriation we asked for further aid to El Salvador President I'm going to ask you specifically Irish question if you're going to be first country want to touch down and I'm familiar with what you said about Irish unity in the question of not becoming involved As between Ireland and England, but are there any circumstances which might change that if for instance Ireland were to join NATO or such a question were mooted Would that make it more attractive for instance for America to support the idea of Irish unity? I really believe that that isn't That is an internal problem to be worked out First of all because there are two governments involved And the other government is already a member of NATO. I have been impressed with the the forum and some of its recommendations and the as prime minister your prime minister said the That the recent finding of the form of recommendation certainly provided an agenda for serious thinking But there's any way in which Without being An interferer in things going on there, but in which The people of Ireland felt that we could in any way be helpful with anything that we might Do we'd be very pleased to do it in order in asking supplementary and on the question of these Unprecedented protests which are unheard of in terms of an American president visiting Ireland One of the factors in this is that there is a certain alienation between the Irish at home and the Irish here Because the quota of emigration has cut down the numbers of Irish with the day-to-day knowledge of America Do you think that there is any likelihood that the Irish emigration quota might be increased? Well now the truth is and I will me just recently heard about any problem of that the truth is that Ireland's quota is 20,000 and based on Worldwide quotas It is It's certainly equal to and proportionate to all the the others but also a Quota has not been fully used So there isn't a waiting line there that says there's no more room for us that they haven't used this The waiting line in Ireland and what it might have the right qualifications or so on Just to get it might be that or it might just be the slow turning of bureaucratic wheels But it's my understanding that the quota has not yet been filled Mr. President you said the other day at your press conference you didn't expect any real progress to take place on Nuclear arms talks this year. Do you think if you're reelected in November and The Soviet Union sees they're gonna have to deal with you for another four years that we could expect a fairly early return to the Negotiating table either on INF or start or both. Well, I know many people who are students of Soviet history and Soviet methods feel that that there's a better chance of them Deciding to join us in negotiations and things after the election is over but They're not going to do anything in the meantime to help me get reelected Now I hope I am reelected and not look forward to dealing with them We we have to live in the world together And we have to seek peace together, but right now if the Soviet Union And the men running the Soviet Union truly want peace Then there can be peace tomorrow Because none of the rest of us want war