also, james wolfensohn has many claims to fame. yes, he ran the world bank but he hired paul volcker when he started his own investment firm. i'll talk to him about the global economy and more. later, an inside look at the silicon valley facebook, paypal, facebook, zynga. reid hoffman has been at the ground floor of all of them. and why is one of america's friends, india, friends with one of its sworn enemies, iran? playground politics are at large. i'll explain. but first, here's my take. we're going to hear a lot of polarized rhetoric over the next few months. the republicans and democrats will seem to disagree about everything. but there is one huge and important area where there is a possibility, a possibility of bipartisan action. that's tax reform. most americans, republicans and democrats, dislike the tax code. their right to do so. america has what is arguably the world's most complex tax code. the federal code plus irs rulings is now 70,000 pages long. the code itself is 16,000 pages. the state of france has only 1,909, only 10% of ours. and then there are others that have innovated and moved to a flat tax with considerable success. you have to understand, complexity equals corruption. when john mccain was still a raging reformer, he used to point out that the tax code was the foundation for the tax code of corruption. see, vast amounts of cash for campaigns and in return, they get favorable exemptions or loopholes in the tax code. in other countries, this sort of bribery takes place under bridges and in cash and in brown envelopes. in america, it is institutionalized and legal but it is the same thing. cash to politicians in return for favorable treatment from the government. the u.s. tax system is not simply corrupt. it is corrupt in a deceptive manner that has degraded the entire system of american government. congress is able to funnel money in perpetuity to its favorite funders through the tax code without anyone realizing it. for those who despair at the role of money in government. the simplest way to get it out is to remove the prize that congress gives away, preferential tax treatment. almost no exemptions does that. the simplest fix to our tax code would be to lower the income tax dramatically, and instead raise revenues through a national sales tax or a value-added tax. the u.s. is the only rich country in the world without a national sales tax. germany has one at 19%, britain at 20%, korea at 10%. what's the appeal of the consumption tax? the government loses several hundred billions of dollars a year to tax fraud. this is much harder to pull off with a consumption tax. second, it provides the government with a more stable source of revenue than income taxes. income taxes flux greatly. third, americans consume too much, often using credit and leverage to do so. a consumption tax would moderate this behavior. government will always get less of behavior taxes and more of what it subsidizes. ironically you the heavy reliance on income taxes makes the american system more progressive than those in europe. the federal government gets about 43% of its total tax revenues from taxes on individual incomes and profits compared with only 29% in germany and 22% in france. the balance for france and germany comes from the v.a.t., which is highly regressive. one recent oecd study showed that the top 10% in america pay a larger share of total taxes. 45.1% than do the top 10% in any of the 24 countries examined. in germany, they pay 31% of the taxes and in france, 28%. the best thing about tax reform is that it kills corruption. so if you ask me what kind of tax code i'm in favor of, i'm in favor of any new tax code that fills one requirement, it should fit on two pages. let's get started. if 2011 was the year of revolutionary change, maybe 2012 will be the year of electoral change. 26 nations go to the polls this week to vote for their president, prime minister, punching bag in chief. that includes four of the five u.n. security council members, the united states, of course, and also france and russia where mr. putin, not surprisingly, got the nod and china has a big leadership change coming, too. this represents 40% of the world's gdp. what does all of this potential change mean amidst all of the other challenges in the world? i have a great panel to talk about this. anne-marie slaughter and richard haas are both former members of the state department. on the other side of the story, bruce boinasketa is professor of politics at new york university. welcome. richard, when you were in government, would you find that there was an election? let's say sarkozy loses. will it make a difference? >> actually, it will. mr. sarkozy is running as though he wants to change france into germany and given the situation in europe right now, this might be an election that does matter. mr. hollande would implement 10 or 20% of what he's saying, it would make a difference. it would matter more than an election in a mature democracy would matter. >> anne-marie? >> i think he might want to do all of those things but i'm more worried about friends in german politics. i think the eu depends on france and germany and france and germany depend on the eu continuing. >> the issues you're talking about is hollande is proposing first a very, very large role for the state than france has? >> yes. >> 75% tax rates. and also proposing that the french get out of the business of this partnership with germany in forcing discipline on southern europe? >> yes. >> you think that they will have to continuing doing that but you're worried the germans won't be able to continue to do that? >> yes. the real concern is that germany decides it doesn't want to play the central role it has played in the eu, which has been the banker and the country that often makes sacrifices for greater political union and german voters are tired. it's in germany's economic interest to do that but politically, that's not as sure a thing as it has been. >> bruce, you do a lot of modeling for the cia, for the state department, for other governments. if you were to try to construct a model, do you think that -- about whether the euro is going to survive or collapse through this period of crisis, what would you say? >> i think the euro zone is going to likely survive for at least the next few years. longer term, that's a different story. i think richard is a little optimistic about the possibilities in france. >> you think sarkozy will likely win? >> i think he will likely win and i wouldn't think it will make a big difference who wins. they can move a little. they can't move far. i think we should note, with regard to france, that people thought when president obama was president-elect obama, that he was going to have policies were going to be radically different than george w. bush and on the domestic front he certainly has and in some parts of the foreign policy he has. but mostly, we're still in guantanamo. we're still in afghanistan. there hasn't been this radical shift. >> well, we're pulling out of afghanistan and domestically, hang on. we've had financial reform, we've had health care. not of the scale he proposed, but those have been bigger domestic changes that any other government -- >> there's one place that you have to admit, anne, significant continuity, vladimir putin becoming president -- i assume you don't think there will be much change in russian foreign policy? >> i'm not so sure. putin was elected, everybody knew he was going to be elected. that's not different. >> but he's already running the country. >> yes, he was already running the country and he clearly imagines another possible two terms. i do think he's going to be under different constraints. i think he is going to be facing either having to be much more repressive, really shutting down the opposition in a way to now that he has not done or he's going to have to start reforming in the way he says he wants to do. his own account is, i stabilized the country, i increased the national income, we're now growing, we're now strong. now i can turn to sort of a more orderly transition to democracy. that's his story. that would be a way out with -- given the political pressures, but it's also possible, certainly given his background, that that's all talk, in which case he's really going to have to tighten the screws on opposition and then we might really see a lot of turbulence. >> do you think that putin is a person with whom the united states can continue to deal and that he will be a likely cooperative partner on some issues like iran? because there's this whole idea that the obama administration has, which is we're going to reset relationships with russia, not because we love them but because we need for a bunch of things and we can establish a good working relationship. do you think that's likely? >> i think the administration was right to try the reset. it's probably now necessary to reset the reset. putin is a spoiler. when people face the kinds of choices that anne-marie described, i think likely he goes towards repression rather than opening, the tendency is to use foreign policy a bit to vent and distract and my hunch is that putin will be less of a partner than he will be going forward, which is not much of a partnership. i think this will be a rough relationship. we're not talking about going back to the cold war but essentially the united states is going to have to attack this without much help from russia. it might mean less and less role for the united nations. if china and russia are not there as partners in the u.n., increasingly multilateralism is going to have to be a little narrower without the formality of the u.n. >> well, in broader terms, there is a difference between china and russia. china is a country that wants to modernize. it has a a parochial selfish interest that it wants to guard. the russians, on the other hand, are the only other that is an oil state. russia benefits from national tension. they don't benefit from the international tensions being solved. >> i think that's exactly right. the chinese benefits from tensions being solved because it gives them cheaper oil and they need the oil and energy. the russian benefit from the price being high. and betting on what putin will do, if the price of oil is high, he will oppress because that's the efficient way when he's got money to take people to the streets and bash heads in. then he will become more oppressive. and it the price drops substantially, then probably liberalize because that would be the solution. the likelihood that oil is going to drop is not real. when we come back, we're going to talk about iran. and we are back with anne-marie slaughter and richard haass. russia benefits from crisis, the price of oil goes up and china on the other hand benefits from international tensions being reduced and oil prices going down. but you thought that they don't quite behave that way? >> there's a gap between what you think chinese national interest would dictate and what chinese behavior is. china ought to be there shoulder to shoulder partnering with us to get iran to behave. the last thing china wants is the straits to be closed and a war which would drive the prices to 3, $400 a barrel. they are a major importer. china is not there with us. they are essentially sitting back and they are not putting pressure on iran much with sanctions or anything else or even with north korea. >> do they care if iran gets a nuke? >> well, i'm not sure they care if iran gets a nuke. but, also, this is short-term interests over long-term interests because in the short term they can be cut deal with iran and get cheaper oil and actually benefit from the fact that everybody else is sanctioning iran. >> the longer term could be three or four months. they could find themselves where china has to do a rebalancing, they have a leadership transition and growth is coming down. they've got a lot to deal with on their plate. >> suppose you were to try and construct again using game material. win-win solution that is not a war. is there a negotiated outcome? because we're having negotiations. what i'm struck by is nobody wants to put out what is the solution? what is the kind of inspection regime that would be enough to survive the world but not so humiliating to the iranians that they would accept. >> we have a problem similar to north korea. in the sense that in both cases, we have a very close ally that feels threatened by their neighbor. we have this hostile neighbor that feels threatened and needs to deter. in the case of iran, therefore, i think the solution is for our government to decide, do we care more about the nuclear issue or do we care more about regime change? if there was a constructive regime change, that might solve the nuclear problem. but our pressures on iran may be exacerbating the nuclear danger because of the fears that we are contemplating regime change. >> so you're saying the more you threaten the regime with regime change, the more the regime will say, hey, i need to buy insurance. >> you're right. they need the capability to deter. >> i don't buy that. the iranian nuclear program has been in business a long time. they want to use their nuclear capability to bolster their role in the region. what we want to do -- i think there is a negotiation here. i think potentially there is a negotiation which says there has to be intrusive inspections, legitimately suspect facilities and have to be real ceilings on what it is you're allowed to do and keep based on what you've done in the past. i don't think we try to get iran completely out of the nuclear business. we don't humiliate them. but i think there's a potential deal. but we've only got a couple of months to do it. i think what the israelis are very clearly signaling is that unless there is serious progress and they are persuaded that they are not using that tactically to get stuff done, they are going to either act or they will act unless they have confidence that we will act before our window closes. so i think we've only actually got a few months to show that negotiations are really going to bear fruit. i believe the israelis are more likely to attack. >> most of the conversation is about concessions by them. it seems to me that there is a deal that could be put on the table that would tie their hands to reveal the truth of what their intentions are and that is for us together with our european friends to arrange to deliver the civilian energy that iran claims it needs. they pay for it. they pay the price up to what they are spending on their nuclear program allegedly for civilian purposes, and they are guaranteed the energy. as long as we deliver the energy, they allegedly have no reason to develop the nuclear capability. as long as they don't develop the nuclear capability, we have an incentive to deliver the energy. >> i don't think it's going to work because they obviously want to do some of this themselves. a lot of the conversation today has been about politics. you just recently had elections in iran. the so called principalists around the supreme leader. this can go one of two leaders in april. either against this backdrop where they are willing to show no compromise before their elections, you could see iranian flexibility, maybe they are worried about military attack, they are feeling the heat of these sanctions or just the opposite. they've decided they can brazen it out. they don't think the united states will make good on their threats or they might still be in better shape because they can throw the -- any inspectors out, there will be a rally around the regime effect inside the country. we don't know. but i think this spring is going to be critical because either negotiations are going to show some promise or not. and if not, israel has to decide whether it trusts the united states to act or whether israel is going to act itself. so sometime in 2012, this issue is going to come to a head and it's going to dominate the world, i believe this year. >> all right. the thing i worry about is the point you made, they have to make concessions but we have to make concessions. i only say this because i can't think of any time in history where a regime under pressure has just cried, i surrender. >> i agree. >> they are unlikely, particularly within divisions in their leadership. second of all, this is a hard time for us to make concessions. we have politics, too. and this is going to play out against the backdrop of an election year. >> and obama has space to go right but he has no space to go left on this issue. if he were to start negotiations with iran direct and make some kind of concessions. >> no, but talks are restarting. i think he's made it clear that he's willing to go to war. the country doesn't want war overall and if he can now say, look, we are keeping pressure on, we've kept the military option on the table. we're going to prove that diplomacy can work. i think he's got some room. >> do you think that's possible? >> he's going to be attacked. if he goes in that direction. but he can still do it under our constitution and under our process. no one can stop him. congress can't stop him. the republican candidates can't stop him but he's only got a couple of months. not, again, because of our politics. it's because of the israeli politics. >> and we've got to stop there. thank you very much. up next, the story of a country that seems to be everyone's best friend. its buddies with america and israel just as it is with iran. what country is it? we'll tell you when we come back. ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 let's talk about the cookie-cutter retirement advice ttd#: 1-800-345-2550 you get at some places. ttd#: 1-800-345-2550 they say you have to do this, have that, invest here ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 you know what? ttd#: 1-800-345-2550 you can't create a retirement plan based on ttd#: 1-800-345-2550 a predetermined script. ttd#: 1-800-345-2550 to understand you and your goals... ttd#: 1-800-345-2550 ...so together we can find real-life answers for your ttd#: 1-800-345-2550 real-life retirement. ttd#: 1-800-345-2550 talk to chuck ttd#: 1-800-345-2550 and let's write a script based on your life story. ttd#: 1-800-345-2550 [ kareem ] i was fascinated by balsa wood airplanes since i was a kid. 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[ cheering ] [ tom ] i wanna see that again. ♪ and now for our "what in the world" segment. i have a story for you. it's a story about a country that is america's friend, israeli's friend and yet it is also iran's friend. amid all of the talk of an israeli strike on iran, what is the country that stays friends with everyone? what in the world is going on? the country is india and it's been criticized in america for continuing to trade with iran despite coordinated sanctions on tehran. an article ran in "the wall street journal" that said they are calling it the mullah's last best friend. they have israeli defense is this, happens to be among the world's largest consumers and importers. the type of crude best suited for india's needs happens to be iranian's oil. there have been reports that the two countries reached a trade agreement to circumvent sanctions. iran can't trade in dollars so it is selling oil to india for rupp business and bartered goods instead. but there are also geopolitical concerns. india lives in a rough neighborhood. pakistan has for decades believed that it needed to limit india's influence in the region, particularly in afghanistan. so, islamabad has supported the taliban against the indian-backed northern alliance. they have always sided with india and its northern alliance friends. now outside of what it views as core interests, india is nowadays inactive on foreign policy. india has rarely been a force for good in the region or around the world mainly because it has not been much of a force. when the maldives had a coup, new delhi remained impassive. and so on with other crises in the region in bangladesh and sri lanka and more. compared to the clout it wants to have, new delhi has really only paid minor attention to its policy. india, with a population of 1.2 billion fewer diplomats than the population of new zealand, with the population of just 4 million people. americans stand to believe that all good things go together. india and america will have foreign policies, the friends and enemies. india, of course, is located in a different place. it has different interests. indians think that they can be free writers, exploit the stability of the current setup. but for the world's largest democracy that is an unworthy mission. india does have a tryst with destiny and it isn't just to buy cheap oil from whomever and damn the consequence and we will be back. >> the most important thing that people want in developing countries, like in our country, is a job. they want to be able to support their families. 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>> well, i went to the world bank because when i was there, there were 6 billion people in the world and 5 billion lived in the developing world served by the world bank and it was already clear to me that the future was going to be in the developing world. that the billion people in the rich world, maybe in 40 years, would be 1 billion 400 million. but people in the developing world would grow by several billion. so the waves towards developing countries was very clear and the fact that in those days people would look at them as the poor countries and not give them any great economic importance. and while i was there, in the year 2000, the momentum shifted. and all of a sudden people said, what is china doing, what is brazil doing? and of course, i was there during that period when we saw the leaders in the economic world starting to come from the developing world. but the other aspect of the world bank's work are the people that are left behind. the billions of people that, frankly, don't have enough to eat, have no real future, but who are the weight of the world. and the world bank deals with those two issues. so i thought they couldn't be a more interesting place to go and when i was offered it by president clinton, i said immediately i'd love to do it. >> and what did you find in terms of the aid programs? you know, there's a very standard -- not just conservative lamen,t but a lot of private sector people say, look, all of this foreign aid is wasted. that's not how you get growth. >> well, don't believe that foreign aid necessarily gets you growth. what i think it can get you is education of the local people, it can get infrastructure, it can set a framework in which the private sector can operate, but it was never my belief that something like the world bank could introduce industrial projects and be responsible alone for employment. the most important thing that people want in developing countries, like in our country, is a job. they want to be able to support their families. they want to improve their lifestyle. and that is at the epicenter of what the bank tries to do. >> do you feel as though things are getting better everywhere or are they worse? how do you describe -- you know, good governance, corruption, is africa moving forward, is asia moving forward? >> look, i think there is progress. i started a campaign against what i call the cancer of corruption 15 years ago. and interestingly enough, before i talked about the cancer of corruption, no bank president had ever mentioned corruption because many of the shareholders in the bank came from corrupt countries. i think they are afraid of offending them. but the point is that it is now on the table and i think that there is some improvement. but i think the battle is far from won. i think it will take a generation, it will take more education of young people and then i think you've got a chance on the corruption issue. but i think what you need way beyond that is appropriate education, health care, a chance to develop the human -- the human capital that you have in these countries and it has to start with education and that i think there is some movement forward. >> how do you think obama is doing on the economy in general? >> well, i am not as great a critic as i think some are because i think he inherited a terrible miss. whether he could have done a bit better, i don't know. i think what is needed now is really some clear action and it's unlikely that we will get that action in an electoral year because he can come up with a program. the republicans can come up with a program and we all know what they are talking about is really dreams. they're not going to get them through now and it will be dependent on what happens in the election. but i think it's important for the nation to understand that we've borrowed too much and i think neither party disagrees that we've spent too much in recent years. and i think the simpson-bowles report, which came out and didn't have a lot of presence yet, first of all, is a very fine analysis and came up with what i thought was a pragmatic approach. i which we could get a debate on that but it's unlikely between now and the election. >> you've been a democrat but independent-minded. >> uh-huh. >> will you support president obama in his re-election? >> if you come into the voting booth with me, fareed, i will show you my voting slip. but at this moment i think i probably would. but i'd like to see who the republican candidate is and i'd like to listen to them. i think this period between now and the end of the year, particularly between now and the debate, between the president and the candidate, will be very important, certainly in the past i've been democratic. >> but you must know mitt romney. you know everyone. >> i barely know him. i barely know him. >> all right. final question. you are almost 80 years old. you are an olympic fencer. you taught yourself how to play the cello. what is the secret to managing a life in which you are able to do so many things with such distinction? do you take a special protein powder? >> i do that. but i also have for years, at the beginning of every year, since i was 15, written down things i'd like to do. >> that year? >> that year. >> and, you know, if i've wanted to be president of the united states, that wasn't possible, but i thought i can could be chief justice of australia. i would write these things down and i'd have this two days of dreaming about what i wanted to do. i must tell you at 78, the options are a lot less. now it's about health and it's about some of the things that i might be able to do. but i'm looking forward, i hope, to a few more years of active life. >> but you still write it down? >> it's gotten very short. >> it's been a pleasure to have you on. >> thank you very much, fareed. >> and we'll be right back. >> do you feel there's a shortage of people with the kind of skills? >> absolutely. critically so. 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[ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ nynex guest has made his name by being ahead of the curve. reid hoffman is the co-founder of linkedin and founding owner of paypal and silicon famous startups, before anyone heard of them. his new book is titled "the start up of you." welcome, reid. >> great to be here. >> now, you talk about in this book, really you think of yourself as an entrepreneur. what do you think is different? >> two things. the first thing is everyone should think of themselves as the interpreter of their own life, as the ceo of their own all the things that apply to businesses, you should apply to yourself. career. not just brand but how do you infest in yourself and how do you use business intelligence in order to navigate? what this means in terms of technology is you should be deploying technologies and study using the internet, using linkedin to try to figure out how to invest yourself, build your skills, the connections with people, learn what is going on in industries, and be able to navigate the new world of work. it's changing. globalization and technology is disrupting industries. how do you navigate that to protect the downside, not get laid off in a bad industry and how to get upside in terms of how to break up the opportunities. since technology is the driving force, both behind globalization and behind industry disruption, attuning yourself to what technology change means for you is i think very important. >> so you found in your life that sort of this constantly meeting new people and learning new things, this was crucial? >> yes. i think it's critical for everyone. for example, one of the things that we advocate in the book is think about who you're going out to lunch with and occasionally go out to lunch with someone who is presumably smart, accomplished, maybe two degrees away from you, i think how we first met, and then have a conversation with them where you're learning from each other. like what's going to change in the world? where is the world going? how is technology changing? because then that helps you have the skillset and knowledge to be adaptable and inventive to what you're doing. >> when you look at the competition that the silicon valley faces, do you think the united states can retainits edge in technology? >> generally speaking, the answer is yes. i think that silicon valley continues to be a global leader in the kinds of technology it does. there are a number of policies that we need to be intelligent about, like high immigration, every silicon person beats that drum. because it's really important. you're either going to import the talent or export the job. you know, it's very simple. if you keep the job here, that person then employs restaurants, dry cleaners, accountants, you know, auto mechanics, the whole thing. now, i do think that one of the things is we need to work a little more on some technologies, like manufacturing technology and other kinds of areas. i think we're world class at software but we still have a ways to go -- i think we may not be competitively at the leading edge but i think there's a set of technologies we should be investing in. >> do you think that when you look at the young people who come out today, are they, in terms of, you know, science, technology, energy, dynamism still world class? >> i think there is a group that is world class, which is really good. i think we could happily 10-x that number and be where we want to be. >> you feel there's a shortage of people with the kind of skills needed? >> absolutely. critically so. and in fact, actually, given the technology as part of what sets the drumbeat for the future, i think many more people with their hands on, how they participate in building and understanding, deploying technology. one of the things that i've come to realize is every organization should have a technology strategy. technology is disrupting industry. it's not just, oh, what am i doing to i.t. and what system do i use? it's how is technology changing the game that gets played in my industry, changing the nature of products and the nature of how we can deploy a service? if we use data, how do we use data to be a good business? and so part of that is coding and part of that is understanding how does that fit into a business strategy, into market, into product design? it's all aspects of it in terms of being competent in the modern world. world. >> do you think that all these new changes are moving so fast from the mobile to big data to cloud computing, that it's conceivable that ten years from now that the top technology companies in america and the world will be a totally different set of companies? >> i think that the transformational speed, right, for example, i think in the 20s and 30s, the average ten-year in the s&p 500 was 65 years and the '90s was 10 years. i think that applies to organizations and to individuals. and i think it's personal possible that the transition happens, even at an accelerated rate. what that means for individuals and organizations is that you need to keep investing and reinvesting yourself. in the book, we referred to that as permanent beta. which is, never think of yourself as a complete product. by the way, that should be a company as well as an individual. and always be thinking, how do i invest in the future? how do i invest in the next generation, the next wave? >> when you apply the lessons of the book to yourself, at some level, you're, you know, incredibly successful, fabulously rich, are you done? or do you think of yourself as very much still -- >> i still think of myself as a work in progress. >> what happens next? >> i think part of the modern world is being a curist. i always ask people, what should i know? what questions should i be asking? that's part of how you then adapt to the future. >> reid, a pleasure to have you on. >> thank you. >> and we will be back. [ car braking ] [ male announcer ] brake problems? stop in to meineke today for a free brake inspection and you'll say... my money. my choice. my meineke. april 15th is just three weeks away. that's tax filing day in the u.s. hopefully our american viewers have already filed. but it brings me to my question of the week from the gps challenge, which is what percentage of the u.s. federal budget goes to foreign aid? how many cents out of your dollars? it is, a, 0.5%, b, 1%, c, 10%, or d, 25%? go to cnn.com/fareed for more of the gps challenge and lots of insight and analysis. also, follow us on twitter and facebook. and remember, if you business a show, go to itunes, you can get the audio podcast for free or you can now buy the video version. go directly there by typing itunes.com/fareed into your browser. this week's book of the week is called "paper promises: debt, money, and the new world order." it's by phillip coggan. coggan says our debt addiction will cause governments to fall and will bring about a new world order in which china and the middle east, the lenders have great sway. it's a wonderful, intelligent look at this important subject. now for the last look. the questions have flown across the pacific for years. was china working on its first aircraft carrier or with respect they? was with it a direct challenge to american naval superiority or wasn't it? it turns out china bought three carriers from russia a decade and a half ago with plans to retrofit them. there's the one that's being militarized but what about the other? we don't have to worry about them so much. take the former russian tanker "kiev." it is now filled with software, very soft ware. beds, pillows, comfy chaise lounges and sofas. see, it is now a hotel. and it looks like the kind of place elvis presley might have called home, complete with round beds and mirrored ceilings. there are five suites in all, all of them presidential suites, according to the management. for entertainment, a restaurant serving mostly russian dishes, naturally. and if you peek outside your window, you might see the reenactment of a naval battle. after all the carrier is now the centerpiece of a military theme park, extolling the powers of china's navy. the correct answer to our gps challenge question was, b, around 1% of the united states' federal budget is dedicated to foreign aid. one cent of your dollar. if you answered "d," don't be shamed, you're not alone. the average american thinks that about 25% of the u.s. budget goes to foreign aid. thanks for being part of my program. i'll see you next week. hello, everyone. i'm fredricka whitfield with a check of your top stories. while in south korea, president obama delivers a strong message to pyongyang. if it moves forward with its plan to test fire a long-range missile. >> north korea will achieve nothing but threats or by provocations. north korea knows its obligations and it must take irreversible steps to meet those obligations. on this, the united states and the public of korea are absolutely united. >> north korea says it's planning to launch a rocket-powered satellite next month, not a missile. south korea says, regardless, the technology being used is the violation of a u.n. security council resolution. and two weeks after a u.s. soldier allegedly kills at least 16 afghans, the united states government makes a payment of $10,000 to each of the afghan families. a u.s. official says the money is not compensation, but is meant to help the victims. sergeant robert bales is charged in the kandahar killing. all of them civilians, most of the victims children. i just want to say to the people of louisiana, thank you