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Connor: So in the wake of Bowles Simpson, the debt ceiling, and then the Super Committee: in your mind, where do we go from here?

Gov Daniels: Well, we’re going to Greece if we’re not careful, and if we don’t get busy. I think that, as has been the case often in our history, the United States has some good fortune- you could say God’s looking out for us in a couple ways. We have more time. Here we have an object lesson, several of them, in Europe, sitting right in front of us- in case people couldn’t do the basic arithmetic before, they can see where these debt levels take a nation. And with so much of the rest of the world in difficulty, we have a little more time than we probably deserve.

That and the fact that, for now, the world uses the dollar as its currency, we’ve got a little more protection which means we’ve got a little bit more time, but I stress: a little bit. So the time for action has been here, and mercifully there’s still, I believe, time for the necessary steps if we would only get about it.

Connor: Now do you think there’s a possibility for a solution within the next year,  or is this ultimately just, as some are saying, going to come down to the next election?

Gov. Daniels: I’ve given up wishing that this President would seize his opportunity to truly make history. It is not who he is. He could have, given his position, been a transformative President, he could have protected America’s young people against the incredibly raw deal they’re about to be handed. But he believes in a massive state, and he’s apparently comfortable with second-class status for the United States.

And so, it’s perfectly obvious, he’s done nothing for three years despite the obvious arithmetic, he ignored his own debt commission, he sat out this Super Committee thing, and so I’m sad about it. He could have been the President that did this, again because of who he is and where he comes from, from the Democratic Party. And if he had said to his fellow Democrats and people who agree with him that we’re going to ruin the middle class, we’re going to ruin upward mobility in this country if we don’t square our spending with our means, people like me would have cheered and tried to help if we could. And huge things could have happened. But again, it’s not who he is. I regret to say, it looks like we’ll mark time at least another year, but I hope that next year’s election will clarify the danger in our situation for anybody that hadn’t figured it out already. Now I hope we’ll set the stage for the very, very large changes that we have to have.

Connor: In your mind, though, should this election be the decisive force; should we be bound be it in some ways? If President Obama wins, should Republicans be willing to give some ground in the next Congress, or vice versa, to address this issue?

Gov. Daniels: Well, I’m not sure what you’re asking me. If giving ground means agreeing to the ruin of the nation, I guess I’d have to say no. Can I start this (by saying)- and by the way, I’m not trying to sell books here, Connor, but I wrote a whole book about this- it came out a couple months ago. And one thing I say in every such conversation is this is not an ideological argument- it’s arithmetic. There is simply no way that any enterprise, public or private, large or small, can thrive or perhaps even survive intact, with the debt levels we’ve piled up. And so people on both sides of this argument should stop denying the brute mathematical reality, and in the interest of the future, in the interest of young people more than anyone, take big action now.

And the Bowles-Simpson commission, populated by people from both sides, faced it squarely, but the President has, to my disappointment, made it clear that he just has no intention of doing that. So he might eke through the next election, despite the failure of his policy, and despite the continuing problems in the economy, but if he is elected, whoever’s in Congress and other positions of influence should go ahead and try to make the necessary changes without him. And that means, a totally pro-growth policy in this country- if we don’t start growing at a much faster economic rate, there’s no way to make enough changes in the entitlement programs or enough cuts in the bloated government we have, to prevent catastrophe. You’re going to have to do all those things.

You know, another point I make all the time, Connor, is that I happen to believe in the interests of freedom and upward mobility, for young people and low-income people- I happen to believe that government should be more limited than it is. I think it is choking opportunity and growth. But if I were among those who are comfortable with a large, and meddlesome, and expensive federal government, I would be even more interested in averting a debt catastrophe. And I’d be even more interested in a strong, growing economy. This administration should be breaking every tie in favor of growth in the private sector, because that’s the only place the money to pay for all their government comes from. You know, the Chinese are not going to lend it to us forever.

And so I guess we could hope for some epiphany on the President’s part, that the private sector he seems to despise so much is really the only salvation for all the government he wants, the only place, again, that all the money to pay for it can come from. But absent some blinding flash of revelation like that, then other folks, perhaps some in his own party who have begun to speak up more clearly on this, can combine with people like me or people who see the world as I do to make these changes and present them to him.

Connor: So I suppose what I’m a little unclear on here- obviously some of the problems we’ve had are divided government, rampant partisanship, we’ve had trouble coming to any sort of agreement- I guess I’m having trouble seeing what changes after the 2012 election? Is the hope just that, in your mind, we have a new President? Or if there’s divided government again, is there any hope for a solution here?

Gov. Daniels: Well again, the point of this book I wrote was, I hope the next election will be conducted, at least on one side, on a very bold program. That levels with Americans about how dangerous our situation is, and seeks their authority to make the changes necessary. And again, those changes start with (saying), we’re going to have to have a totally pro-growth policy. We’re going to have to stop impeding private growth and start encouraging it every way we can, so that revenues, tax revenues to government, start growing naturally. Second, we’re going to have to make major changes in the so-called government programs. I lay out my own ideas in the book, but I’m happy to see someone else’s so long as the arithmetic works. Otherwise, people your age are going to be saddled with, you know this, absolutely unaffordable bills to pay for promises made to your elders- made, sort of, by your elders to themselves.

So I hope that in next year’s election, the campaign will not be a timid one by whoever challenges the President, but will be one that has the courage to lay a big, bold program like that in front of the American people. The conventional political thinking is, my gosh, you can’t do that. You’ll get trashed, the President and his allies will allege all sorts of things, and these are just third rails that cannot be touched in politics. But we better find out, because by waiting so long, by shackling the economy as we have, we have necessitated really big changes.

Now the positive side, I said earlier that I think America’s been a fortunate country, and I think we are again. I honestly believe that if we would make some of these changes, even though many of them might not take effect for some time- I’m talking about, for instance, the entitlement programs. The kind of changes I’d like to see would create new programs for younger people, that wouldn’t even kick in for 10-15 years. But simply doing it would say to the world that America’s decided not to go broke- and we’re still a good place for you to invest, we’re still a good place for people with talent to come, and make their lives. So if we would get about it, I’m very optimistic. There’s not a country on earth, including China, for instance, that I would want to trade places with. But if we continue to drift, as we are- at some stage that won’t be the case.

Connor: So you lay out the case for why students and our generation should care a lot about this issue. But at the same time, there are a lot of other issues that concern our generation, from the weak jobs market to student loans to climate change. Do you think that we should be, in some sense, willing to sacrifice on other generational priorities like Pell Grant funding, to deal with this issue? And if so, why?

Gov. Daniels: Well, you started with the weak jobs market, and that is the issue. We have a national government that has broken every tie against jobs. At the very time when we should be encouraging private investment and growth, they’ve taken step after step to strangle it. But I’ll answer your question very directly. It should be a matter of great satisfaction that we have made the environmental improvements that we have over recent decades. Many young people that I meet have no idea how much cleaner- dramatically cleaner- the air and water is than it was even 20, 30, 40 years ago. But at this point, we are keeping people your age out of work, by piling additional requirements, and probably meaningless in terms of health improvement, on top of a growing, staggering national economy. And the cost of doing more has just gone way beyond any benefits. And the human cost, in terms of lost jobs and opportunities, is enormous, beyond just the strict dollars and cents. So nobody, nobody is calling for a retreat from where we are. But yes, absolutely- we should be much more careful before we plow further ahead with -symbolic, really, except for their cost- so-called environmental improvements that penalize the life prospects of young people and poor people.

Connor: Just a couple more questions, Governor. You mentioned timidity earlier, with respect on the Presidential race. I’m curious about your thoughts with respect to this issue in the race for the GOP nomination: do you think the focus on the debt and the solutions proposed have been satisfying?

Gov. Daniels: Well, it’s coming. If you’d asked me that two or three months ago, I would have had to say something more guarded. It is coming along- there has been a lot more vigorous, as far as I can follow- a more vigorous discussion of trying to unleash the private economy and grow. There’s been more forthrightness about the complete train-wreck we’re going to have if we don’t change the entitlement programs. And I thought it was completely significant in this Super Committee thing that you asked me about: that Republicans advanced revenue raises- the kind that by closing loopholes, might help the economy grow a little, or at least will not hurt economic growth. And second, for those who obsess about this, would have raised the contribution even further of wealthier people in the country.

This was a Republican proposal, and the Democrats, I guess under orders from the White House or somebody, turned it down and blocked it. But all those things, I think, represent some real progress in terms of the timidity problem. That is to say that, I think,  (these are) much more candid and constructive suggestions than Republicans had been making a few months back. So I hope that will continue and become even stronger.

Connor: Do you ever rethink your decision not to run?

Gov. Daniels: Well, it was a family decision so I guess the answer is no. I’m looking for other ways to contribute- talking to you, I hope is one. Speaking to groups as I get the opportunity. Writing the book I wrote. I’ll do other things later if I’m asked to do them. But no, I feel very deeply about these things, you can probably tell. But there are other ways a citizen can try to participate other than running for that office.

Connor: And last question, Governor: now that the Super Committee is over, the immediate debate over the next couple weeks and months is whether Congress should extend expiring unemployment benefits and the payroll tax cut. In your mind, should Congress extend those programs?

Gov. Daniels: I’m very uncomfortable with 99 weeks of unemployment. You know, historically, it was 26 weeks, and in the worst cases, 39. Now we’ve gone to 99 weeks, and if they do it, that’s all right with me, but I’ll tell you: we have unquestionable evidence that it delays people returning to the work force. And I’m meeting a lot of young people who I believe are starting out their careers thinking it’s just fine to collect unemployment, maybe a little shadow activity in the cash economy- essentially the gray market. And that would be a very dangerous thing.

So (while) I think the payroll tax reduction might better have been applied at the employer level, making it less expensive to hire people, I’m fine if they want to continue that. I’m less convinced that 99 weeks of unemployment, this incredible increase over anything we ever knew, ought to become a permanent fixture.

Connor: So just to clarify, you would say, ‘don’t extend the unemployment program?”

Gov. Daniels: I personally would not extend it. I would let it come back to something like its historical levels.

Connor: Well, Governor, thank you very much for your time.