REMARKS BY AL GORE
                       ECONOMIC CLUB OF DETROIT

                       For those who doubted that American industry could lead the
                       world again -- come to Detroit: the city where hope has
                       defeated fear. Come to Detroit and see why opening markets
                       is good for growth, and good for our workers. Come to Wayne
                       County and see how we are competing and beating the whole
                       world with a unionized workforce. Come to Southeast Michigan
                       and see how business is lighting up our central cities and
                       surrounding communities. Come to this Great Lakes region and
                       see how we can lead the world in commerce, and have
                       sparkling rivers and lakes at the same time. 

                       When President Clinton and I brought about change toward a
                       "new economy," some worried that it would work only for
                       high-tech start-ups -- not for the region they wrote off as the
                       "Rust Belt." Well, thanks to you, our new economy is also a
                       renewed economy -- in which our core industries are more
                       competitive, more innovative, and are themselves more
                       high-tech and high-skilled. Thanks to you, the Rust Belt is now
                       the Renewal Belt. 

                       In the early 90's, this state was losing more than 18,000
                       manufacturing jobs each year. Now, you are creating more than
                       12,000 a year. Six years ago, America's economy was rated
                       fifth in the world. Now, we're number one. 

                       Just this morning, we received the newest evidence of our
                       economic renaissance: our Labor Department reports this
                       morning that unemployment has fallen to 4.3 percent -- the
                       lowest in 28 years. In April alone, our economy added 262,000
                       new jobs, wages continued to rise, and inflation remains low
                       and stable. Since January, 1993, our economy has created 15.2
                       million new jobs. America's economic engine is truly humming.
                       It feels so good to be able to say: thank you, Detroit -- for
                       keeping America growing. 

                       Our economic success is about more than balance sheets and
                       bottom lines. It's about empowering individuals, through the
                       jobs and opportunities that are the heart of the American
                       dream. It's about strengthening families, by helping them have
                       the means to raise strong children. It's about empowering
                       communities, by bringing private investment to untapped
                       markets in our own backyards. It's about uniting our nation --
                       by ensuring that we all grow together instead of growing apart.
                       It's about leading the world -- because we must engage the
                       world beyond our borders to guard the prosperity we cherish
                       here at home. 

                       Here in Motor City, we recognize that cars have done more
                       than fuel our commerce. Cars have freed the American spirit,
                       and given us the chance to chase our dreams. To quote E.B.
                       White, "everything in life is somewhere else, and you get there
                       in a car." 

                       I have great admiration for what many of you and your workers
                       have done to turn the auto industry around. After fourteen
                       years of trailing Japan, America has led the world in car and
                       truck production four years in a row. 

                       On this very day 119 years ago, the application was filed for
                       the first automotive patent. Now, the industry that
                       revolutionized the 20th Century is poised to revolutionize the
                       next century as well. Once, Detroit built America's first mile of
                       paved road. Now, Detroit is leading America down the
                       Information Superhighway. 

                       If you look at today's products, it's no wonder that, of all the
                       private R&D in America, three-quarters is done by the
                       manufacturing sector. Using 3-D models and computers, U.S.
                       automakers have shortened production cycles from six years to
                       30 months. Through a massive "Extranet" computer network,
                       linking thousands of suppliers and manufacturers, automakers
                       are ordering parts, designing new products, saving enormous
                       amounts of time and money. Raw materials are lighter,
                       stronger, better-engineered to get less out of more. It's been
                       estimated that while the physical weight of America's
                       economic output has barely changed in a half century, its value
                       has more than tripled. 

                       Let me be clear: I believe very strongly that American
                       manufacturing -- and Michigan's auto, truck, and high-tech
                       industries -- must be at the center of any successful economic
                       strategy for the 21st Century. That doesn't mean all of us in
                       this room will always see eye to eye, or that we won't have
                       disagreements in the future. But I've learned a lot from the
                       people in this room -- and on so many issues, I hope we will
                       continue to listen to each other, work with each other, to keep
                       an open door and an open mind. 

                       I know that today's American auto industry is committed to
                       building not only the best and most competitive cars, but also
                       the safest and cleanest cars in the world. For example, Ford's
                       1999 line of sports utility vehicles will actually surpass present
                       emissions requirements. 

                       That's not just the right thing to do, it's what consumers and
                       the market are demanding. But I also know that new
                       regulatory or environmental standards don't always come
                       without cost to industry. For all our successful research to find
                       cleaner technology, real progress depends on the industry's
                       ability to make and sell cost-effective, competitive products. 

                       That is why, back in 1993, we tried a new approach. President
                       Clinton and I joined with the Big Three to create a Partnership
                       for a New Generation of Vehicles, to triple fuel-efficiency by
                       2004. Our National Labs, as well as your own researchers and
                       engineers, have brought the industry new insights about
                       technologies that can reduce fuel use; you've certainly brought
                       us considerable insight about what industry needs to say
                       competitive. So far, we've been creative about balancing those
                       goals. Detroit is on the right track -- for our economy, and for
                       our environment. 

                       But the success of industry here should not tempt us into
                       complacency. Times are so good, some are starting to believe
                       prosperity can be self-sustaining. Let me share a quote from
                       Time Magazine: "The amazing U.S. economy may defy even the
                       laws of physics: what goes up need not necessarily come
                       down." 

                       That quote isn't from last week, last month, or even last year
                       -- it's from 1969. The last time unemployment numbers were
                       this low. That was the last time we thought our economy was
                       invincible and the last time we had a budget surplus. That was
                       the year we ended 106 months of unbroken economic growth. 

                       The problems came when America took growth for granted --
                       when our budgets became flabbier; our investments flimsier. A
                       vicious cycle began, with faltering growth leading to bigger
                       deficits, and bigger deficits causing higher interest rates --
                       crowding out the private investment that is the real engine of
                       growth and jobs. By the early 90's, we had deficits at record
                       levels, $300 billion a year, stretching out as far as the eye
                       could see. A quadrupled national debt. Every time businesses
                       tried to invest and expand, the deficit would put pressure on
                       interest rates and the recovery would stall. 

                       For years, Americans heard there were only two choices: tax
                       and spend, or cut and run. We knew there was a third way:
                       invest and grow. 

                       We put together a policy with elements that had never been
                       tried in combination before: cut the deficit, open markets, and
                       invest in our people. We replaced the vicious cycle with a
                       virtuous cycle -- lower interest rates, more investment, more
                       jobs, more growth -- which fuels even greater investment in
                       our future. America's new economic strategy is working. You
                       could call it the law of intended consequences. 

                       But already, there are voices urging us to take growth for
                       granted -- to revive the complacency of the 70's, and once
                       again pursue the misguided policies of the 80's. Even before
                       the first surplus rolls in, some want to dump every dime into
                       risky tax cuts, or new spending we can't afford. I believe we
                       have to use good times to tackle even tougher challenges; to
                       lead the world economy; to provide world-class education and
                       training for a world-class workforce; to make permanent the
                       disciplined, pro-growth policies that have enabled you to
                       create good jobs and raise incomes. And I believe there are
                       five core principles we must uphold: 

                       First, we must maintain our newfound commitment to fiscal
                       discipline. Our economic power comes from a vote of
                       confidence in America, a vote cast in markets around the world
                       that evaluate every government's policies every day, through
                       billions of transactions. Forget the gold standard -- today's
                       economy operates on the information standard. 

                       If investors think you're playing fiscal games, interest rates
                       climb almost instantly. It took a lot of painful decisions, and
                       two herculean battles in Congress. But for the first time in
                       thirty years, we have balanced the federal budget. It was the
                       right thing to do -- right for our national economy, and right for
                       our national spirit. 

                       Our willingness to make hard choices based on real numbers
                       helped us win the faith of financial markets -- and so did our
                       refusal to play politics with America's financial system. Too
                       often in the past, administrations have been willing to bash
                       the Federal Reserve for a quick headline. Let's face it: bashing
                       the Fed is a fool's game. It doesn't lower short-term interest
                       rates, because the Fed doesn't respond to criticism. But it can
                       raise long-term rates -- because the market does respond to
                       Fed-bashing. 

                       I believe in sound fiscal policy. Barring an economic reversal, a
                       national emergency, or a foreign crisis, we should balance the
                       budget this year, next year, and every year. Not through a
                       Constitutional Amendment that would clog up the courts, but
                       through the resolve of our national leaders, and strong
                       pressure from the American people. Our economy will be
                       stronger in the 21st Century if our grandchildren never even
                       learn the words "federal budget deficit." 

                       But to make that dream a reality will take discipline. Already
                       we see some in Congress trying to turn a much-needed
                       highway and transit bill into a vehicle for more wasteful
                       spending, larding it up until it's bursting with pork and far over
                       budget. Let me be clear: America needs a highway bill. But we
                       do not need a road back to the reckless spending of the past. 

                       Second, we must use these good economic times to tackle
                       tough, long-term economic problems -- and that means saving
                       Social Security and Medicare while we have both the means
                       and the will to do it. We've closed the budget deficit -- now we
                       must tackle the generational deficit. I don't believe in waiting
                       for the rain to start fixing the roof. Let's do it now, while the
                       sun is shining. Let's reform Medicare and Social Security in the
                       next few years, long before my generation of baby boomers
                       reaches retirement. 

                       In the next decade, projections show more than $1 trillion in
                       surpluses for Social Security. But by 2013, the deficits open up
                       -- and by 2032, Social Security becomes insolvent. 

                       That's why President Clinton has proposed reserving every
                       penny of any surplus until we have strengthened the Social
                       Security system for the 21st century. 

                       Even in the best of economic times, there aren't easy answers.
                       Social Security is already one of the most efficient insurance
                       programs in the world, in terms of administrative cost.
                       Reforming it is going to take some political courage. But
                       through hard choices, we must make Social Security as strong
                       for our children as it has been for our parents. Social Security
                       is not just a government program; it is a solemn social
                       compact between generations. 

                       Third, we must continue the hard work of reforming and
                       reinventing our government -- so that it costs less, works
                       better, and keeps pace with today's fast-moving economy. Just
                       look at the faltering economies of Asia. Their own rigid
                       regulatory structures are squeezing the life out of industry and
                       preventing those economies from getting back on their feet --
                       and they failed to identify and prevent the abuses and the
                       problems. America needs a common-sense government -- one
                       that's flexible, and keeps up with new markets and technology.

                       That's why we took a long, hard look at the way American
                       industry has reenergized itself in order to bring those lessons
                       to government. So far, we have cut 350,000 federal
                       employees, eliminated more than 200 outdated government
                       programs, cut 16,000 pages of regulations, and 640,000 pages
                       of internal rules. We have saved $137 billion -- which helped
                       us to balance the budget. 

                       We need to redouble our efforts to reform the regulatory
                       system -- so that regulations are more cost-effective, fairer,
                       and don't rely on a "guilty until presumed innocent" mentality.
                       When it comes to all regulation, the best strategy is to pursue
                       public health, environmental, and regulatory policies that grow
                       our economy and improve our society at the same time. But
                       when there are costs and trade-offs, and when we must move
                       forward for the sake of the public interest, we must do so in
                       the least burdensome, most cost-effective ways possible. 

                       This is how we must meet the challenge of global warming.
                       We all recognize the mounting evidence of global warming;
                       many auto industry leaders have spoken eloquently about it. I
                       believe that the consequences are so great, we simply must
                       act. But we must act with common sense and realize that most
                       of the solutions will emerge from industry. Private sector
                       innovation can help us stop global warming -- without
                       economic cooling. We owe it to our children to meet both
                       goals. 

                       Fourth, America must remain engaged with the world, and not
                       pretend we can shut it out. It is in world economic affairs that
                       our fear of complacency should be greatest. For one of the
                       great and tragic ironies of our history is that we are prone to
                       turn inward when our power is greatest; when our economy is
                       strongest; when our interests are most secure. 

                       Today, at the brink of a new American century, we are at a
                       crossroads. Will we lead and shape the world economy, when
                       our power to do so is at its peak? In 1993, with our recovery
                       uncertain and anxiety high, we passed NAFTA, which deepened
                       our ties with our two closest neighbors, and increased our auto
                       exports to Mexico by a factor of nine. It was one of more than
                       240 new trade agreements we have reached. But last year,
                       with growth strong and the economy booming, Congress
                       denied the President the traditional trading authority --
                       commonly referred to as Fast Track -- which every modern
                       President has had to negotiate new trade agreements. And
                       while it may be a controversial view among some here in
                       Detroit -- many of them my dear friends -- I believe Congress
                       was right in 1993 to approve NAFTA, and wrong in 1997 to
                       reject traditional trade authority. Expanding trade has been
                       vital to today's growth and prosperity, and reversing this
                       course will only erode our economic progress. 

                       In the last five years, over one-third of our economic growth
                       has been due to exports. Do we really expect to grow by
                       turning our backs on the world's consumers, by letting their
                       economies grow without us? I believe we must do even more
                       to tear down trade barriers -- and to champion and expand our
                       exports, as I was proud to do for General Motors in China last
                       year. We must fight against the corrupt practices of foreign
                       businesses and governments that tilt the playing field against
                       our businesses. We must make the Internet a global free trade
                       zone, to harness its explosive potential for growth. 

                       Of course we will suffer if we throw up new barriers for our
                       consumers overseas. But we will suffer even more if their own
                       economies collapse -- if foreign customers can't buy our
                       products -- if foreign currencies lose their value, and our
                       competitors try to flood the marketplace with cheap, devalued
                       goods -- hurting our businesses, our farmers, and our families. 

                       That is why we need the IMF -- to work with countries that are
                       at risk, before the risk spreads to us. The IMF needs reform of
                       its own -- of that there is no doubt. But to cut off IMF support
                       now is like shutting down the Fire Department when the house
                       next door is on fire. 

                       With almost a third of our exports going to Asia, we have a lot
                       at stake. But the hardest work must be done by the nations of
                       Southeast Asia themselves. And the place to start is Japan,
                       which must jump-start its economy -- so it can lift up its
                       neighboring economies, and buy more American products
                       again. The Japanese government has put forward a positive
                       proposal to stimulate its economy; they must implement it
                       quickly. But that is not enough to solve Japan's problems.
                       Japan must do more to strengthen its financial system and
                       open and deregulate its economy, in order to build
                       long-lasting, demand-led growth. 

                       With the sun shining here at home, the storm clouds over Asia
                       may seem far away. But a central fact of economic life in the
                       21st Century is this: we must stay engaged abroad if we are to
                       be prosperous at home. 

                       Fifth, and finally, we must continue to make the investments
                       that give us faster growth, and also share our prosperity for
                       the 21st Century. The price of opportunity is responsibility.
                       This is where government, business, and all Americans must
                       play a role. We must make the investments today that are the
                       foundation of prosperity for tomorrow. 

                       That is why we have proposed an aggressive increase in
                       civilian R&D, to stay competitive in the world. We are fighting
                       for lifetime learning for every American -- from pre-school to
                       college to job training -- for the high-skilled workforce that is
                       already in short supply here in Detroit. We are empowering our
                       poorest areas -- because we know they have the most
                       untapped potential. 

                       Industry here has been a leader in supporting these
                       investments. As business leaders, you understand this
                       fundamental bargain. By making our economy work for
                       everyone, we can build and sustain a consensus for open
                       markets, for international engagement, for aggressive
                       leadership in the world. I was proud to stand with the Big
                       Three as they announced a 50% increase in subcontracts to
                       disadvantaged businesses. I applaud industry's leadership in
                       building up Detroit's distressed communities. All of American
                       business should follow your example. 

                       Every American citizen has a bargain to live up to as well. In
                       exchange for a strong economy, in exchange for education, and
                       training, and the tools to succeed, we are right to demand
                       responsibility -- through strong families and communities,
                       through work instead of welfare, and by making the most of
                       the opportunities good times bring. 

                       There is another shared bargain we must all uphold. In
                       exchange for sustained and sustainable economic growth -- in
                       exchange for good jobs and rising incomes -- we must all seek
                       to perfect our union, to reach across the lines that divide us,
                       and to pass on our values to the next generation. No nation
                       can achieve its full promise if unemployment is low, but child
                       poverty is high -- if interest rates are low, but hunger rates are
                       high. Let us seek growth that lifts up those who have been left
                       out. Let us open closed markets around the world, but also
                       around the corner. Let us use the power of markets to grow
                       together, instead of growing apart. 

                       I believe this must be our blueprint for growth in the 21st
                       Century -- the means by which we empower individuals,
                       strengthen our families and communities, unite our nation and
                       lead the world. But that is not a record to rest on; it is a
                       record to build on. We must fight the impulse to inaction, the
                       temptation to withdraw from the world, the tendency to shrink
                       from hard choices. To those who would unravel our fiscal
                       discipline, derail our investments in education, and roll back
                       our leadership in the world, I say: that's not a plan to extend
                       our prosperity, that's a plan to end it. 

                       Prosperity, after all, is not a destination, it is a never-ending
                       journey. We must be even more focussed, even more
                       aggressive, to keep it going. Not just for the sake of business,
                       but for the young families entering the workforce, eager to
                       build a better future. For the children hungering for the tools
                       and skills to revolutionize the workplace of tomorrow. For a
                       21st Century of even greater promise and prosperity, for all our
                       people. Detroit and Michigan have been at the center of that
                       promise for so much of this century. Let's keep it that way for
                       the next century. Thank you.


