(MONEY Magazine) – News flash: The Vice President of the U.S. is not nearly as wooden as he seems on TV, at least not when he's talking about economic policies. Relaxed and affable, the private Al Gore can be decidedly down-to-earth and even make sarcastic cracks. While he still sounds a bit preprogrammed and is sadly short on details, his perspective is more enjoyable than you might expect. The Veep so far seems focused on promising four more years of the status quo. Not that the status quo has been bad. The economy's still strong, despite the spring stock market correction and a series of interest-rate hikes by the Federal Reserve. Yet in recent polls Gore is trailing George W. Bush, who's beating the reform drums in such areas as Social Security. Gore may well have his own specific ideas for change, but he has decided to stick with broad themes at this stage of the campaign, which, in my opinion, is a bit like playing prevent defense too early in a tight football game--you're not playing to win, you're playing not to lose.

Insana: Mr. Vice President, when you speak about the economy these days, you say we are enjoying a mountaintop moment. That's an interesting metaphor, because some people might worry that the only place to go is down.

Gore: Well, I think we continue to climb higher--to the next mountaintop--and the way to do that is to continue to get the fundamentals right and continue a fiscally responsible course that builds confidence in the markets and gives the Fed the flexibility it needs to fine-tune monetary policy.

Insana: With respect to fiscal responsibility, you have harshly criticized George W. Bush's budget proposals, especially those dealing with taxes, education and defense. You have called those proposals frauds and illusions. Those are very strong words. Is it really out-and-out fraud that the governor of Texas is perpetrating?

Gore: I've used that word in connection with certain specific suggestions. I think that his overall plan is, at the least, extremely irresponsible. It's a $2.1 trillion tax scheme that not only spends the entire expected surplus for the next 10 years, but a trillion dollars over and above that. Anybody with any kind of sense who has looked at it has said, "This is ridiculous." And then, having proposed a $2 trillion tax scheme, he began a series of large spending proposals without ever saying a single word about the impact on budget policies.

Insana: You've promised to balance the budget every year...

Gore: Yes.

Insana: ...and then pay down the debt every year. But in the last two budgets, the Clinton Administration has gotten around budget caps on discretionary spending and increased such spending. Isn't that a little irresponsible, fiscally?

Gore: It's true that the Congress has bent, if not broken, a few of the caps at times. But the compromises made were relatively tiny, and the overall result was the biggest federal budget surplus in history, so I think it's more than defensible.

Insana: Let's talk about Social Security. Why are you against Gov. Bush's privatization proposal? He wants workers to invest up to 2% of their payroll taxes in the markets, which he says would generate higher returns and maintain the system's solvency.

Gore: The problem with privatizing Social Security is the same problem that led to its creation in the first place: Some will look ahead and some will not. A young couple with bills to pay and children arriving will naturally find it difficult to set aside enough money for their retirement years. Indeed, they're going into debt during those years, typically. Given the discretion to set aside money that would otherwise go into the Social Security Trust Fund, some will do so but most will not. And yet the drain on the fund that would come from even 2% being set aside would result in a bankruptcy by the year 2024. And it would do serious damage to a concept that overall has worked quite well. Social Security is a program that lies at the intersection of economics and the human lifestyle. We slow down and become less productive at the end of our lives; every society with an appreciation of human dignity has in some way recognized this fundamental truth about the human condition and has made arrangements for a secure source of income in the later years of life.

Insana: While Americans have grown increasingly preoccupied with stocks and mutual funds, you have never been active in the markets. [See the box above.] In fact, you haven't invested in the market since you entered Congress in the mid-1970s. You've never felt the euphoria when stocks are good or the pain when the market falls. Do you think you've lost a certain amount of sensitivity for the market environment?

Gore: Well, I actually follow the markets very closely. I spend a lot of time trying to understand what's happening day to day. But I don't get distracted about that.

Insana: You mean you're not watching CNBC all day?

Gore: Oh, well, I don't view that as a distraction. I meant I don't get distracted by the daily fluctuations in the markets. I think it's an interesting novel in serialization, and I enjoy reading it every day. As far as my personal finances are concerned, it's a trade-off. When I first ran for Congress in 1976, I made a decision, for better or for worse, that I would do everything humanly possible to avoid conflicts of interest for as long as I was in public service. I have never been particularly impressed with blind trusts. And so I made the decision that as long as I was in elective office I would not own any stocks--to give myself complete freedom of movement, to examine public policy without having to recuse myself on any issue. I missed the market because of that, but I follow it very, very closely. Believe me, I have very close friends with the kind of emotional attachment to these swings that comes with having a big stake in the market, so I don't find it a mystery at all.

Insana: What are the principal risks to the current economic expansion?

Gore: What I call the politics of illusion in the decade of deficits. It should not be repeated in the decade of surpluses. The direction of fiscal policy is as important as the size of the deficit or surplus in any given year. If the direction is in favor of paying down debt, then the confidence expressed in the markets is likely to remain high and the flexibility available to the Fed is likely to remain large.

Insana: Isn't the trade deficit a threat?

Gore: Trade deficits are not always bad things, and the current spike was enhanced by the run-up in oil prices, which has now started to subside. The trade deficit is no more intractable than the budget deficit was. And the answer, as with the budget deficit, ultimately lies in getting the fundamentals right. Paying down our debt is one of the best long-term strategies for dealing with the trade deficit.

Insana: Do you see any particular threats overseas?

Gore: We've seen skillful responses in the last seven years to a series of crises--the Mexican peso crisis, the Asian financial crisis, the echoes of that crisis in developing countries later on. And with the increasing trend toward higher levels of globalization and the expansion of the world economy overall, we will no doubt face challenges in the future that come from the harmonics or the interaction of various parts of the global economy. But they're all manageable. And they're much more effectively managed if we keep our eyes on the ball here at home. We have been able to ride out a series of problems that would have become crises because we have such a strong economy at home.

Insana: A lot of folks on the economics team in the Clinton Administration say privately that you don't get enough credit for your role in shaping policy. Obviously, it's an election year, and they're prone to say such a thing. But do you feel that your contributions have been missed by outside observers?

Gore: I want to encourage this story line. I think that you're on to something. I think this is actually a very important breakthrough that deserves full treatment.

Insana: That's very funny, Mr. Vice President. Now, which part did you not get enough credit for?

Gore: In the job of Vice President, you accept the fact that you're not in it for the credit. I decided at the beginning of this Administration that I would do everything I could to help the President do the best job he was capable of doing. And I have been as generous as I know how to be with my suggestions and advice. You can talk with those who were there at the key moments when we had to make the decisions to stay with tough economic discipline or not, and they will tell you that I have been on the right side of all these questions consistently, and I'm proud of that. The benefits are in the strength of the economy. I think we got it right. And I think that we should heed the lessons that have piled up along with these surpluses on what works and what doesn't work. Having been an integral part of the team that made those decisions early on, I feel that I have a head start on understanding what is going to best work to continue the prosperity, and use this moment to build a new era of prosperity that's beyond anything we could have dreamed of in the past.

Ron Insana is co-anchor of CNBC's Business Center and author of the forthcoming book The Message of the Markets (HarperBusiness).