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Mitt Romney Defends TARP At Debate

GOLDMAN: Thank you.

Governor Romney, it's 2013, and the European debt crisis has worsened. Countries are defaulting. Europe's largest banks are on the verge of bankruptcy. Contagion has spread to the U.S. And the global financial system is on the brink.

What would you do differently than what President Bush, Henry Paulson, and Ben Bernanke did in 2008?

ROMNEY: Well, you're talking about a scenario that's obviously very difficult to imagine. And --

GOLDMAN: But it's not a hypothetical, because more than half --

ROMNEY: It is. I'm afraid it is a hypothetical.

GOLDMAN: Governor, it's not --

ROMNEY: Do you want to explain why it's not a hypothetical?

GOLDMAN: Yes.

ROMNEY: OK.

GOLDMAN: Because more than half the country believes that a financial meltdown is likely in the next several years, and the U.S. banks have at least $700 billion in exposure to Europe. So it's a very real threat, and voters want to know what you would do differently.

ROMNEY: It's still a hypothetical as to what's going to precisely happen in the future. I'm not very good at being omniscient, but I can tell you this, that I am not going to have to call up Timothy Geithner and say, how does the economy work? Because I spent my life in the economy.

I spent my entire career working in the private sector, starting businesses, helping turn around businesses, sometimes successfully and sometimes not. And I know how to make tough decisions and to gather the input from around the country to help make the important decisions that have to be made.

Clearly, if you think the entire financial system is going to collapse, you take action to keep that from happening. In the case of Europe right now, they are looking at what's happening with Greece. Are they going to default on their debt, are they not? That's a decision which I would I would like to have input on if I were president of the United States and try and prevent the kind of contagion that would affect the U.S. banking system and put as at risk.

But I can tell you this -- I'm not interested in bailing out individual institutions that have wealthy people that want to make sure that their shares are worth something. I am interested in making sure that we preserve our financial system, our currency, the banks across the entire country. And I will always put the interest of the American people ahead of the interest of any institution.

GOLDMAN: So would you or would you not be open to another Wall Street bailout?

ROMNEY: No one likes the idea of a Wall Street bailout. I certainly don't.

GOLDMAN: But you said in 2008 that it prevented the collapse of the financial --

(CROSSTALK)

ROMNEY: There is no question but that the action of President Bush and that Secretary Paulson took was designed to keep not just a collapse of individual banking institutions, but to keep the entire currency of the country worth something and to keep all the banks from closing, and to make sure we didn't all lose our jobs. My experience tells me that we were on the precipice, and we could have had a complete meltdown of our entire financial system, wiping out all the savings of the American people. So action had to be taken.

Was it perfect? No. Was it well implemented? No, not particularly.

Were there some institutions that should not have been bailed out? Absolutely.

Should they have used the funds to bail out General Motors and Chrysler? No, that was the wrong source for that funding. But this approach of saying, look, we're going to have to preserve our currency and maintain America -- and our financial system is essential.

ROSE: So do you agree with Speaker Gingrich about Ben Bernanke, the chairman of the Fed?

ROMNEY: I wouldn't keep Ben Bernanke in office. I would choose someone of my own --

ROSE: And who might that be?

ROMNEY: Well, I haven't chosen that person. I haven't even chosen a vice president. I'm not sure I'm the nominee yet.

ROSE: Well, we would like to have -- nor has anyone else, but we would like to have an idea of the kind of people that you would have confidence in, in playing this very important role, although Congressman Paul may differ about how important it is.

ROMNEY: Well, I wish we could find Milton Friedman again, although what Milton said to us was -- he said, you know, "If you took all the economists in America, and you laid them end to end, it would be a good thing." And I have more respect for economists than that.

The people who help guide my economic policy are Greg Mankiw at Harvard --

ROSE: Right.

ROMNEY: -- and Glenn Hutchins (ph) at Columbia. They were both former chairs of the Council of Economic Advisers. And I didn't always agree with them.

I also talk to a number of business leaders. I talked to people who are currently in the economy, in the financial sector, and in the manufacturing sector. And on the basis of these various viewpoints, I make my decisions. And I believe that drawing on the best minds of this country, including economists, is something that's essential to make sure that we preserve our financial system.

Right now, America is in crisis. We don't need to think about a hypothetical of what happens if Europe explodes and pulls us under, although if that does happen, you want to have someone who is smart, who has experience, who knows how the financial services sector works, who knows how to protect American jobs, and I do. I have done it.

ROSE: And as far as you're concerned, there is no institution, no financial institution, that is too big to fail?

ROMNEY: Well, no. You don't want to bail out anybody.

The idea of trying to bail out an institution to protect the shareholders or to protect a certain interest group, that's a terrible idea. And that shouldn't happen.

You do want to make sure that we don't lose the country and we don't lose our financial system and we don't lose American jobs, and that all the banks don't go under. So, you have to take action very carefully to make sure that you preserve our currency and preserve our financial system. But bailouts of individual institutions? No one has interest in that, I don't think.

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