OBAMA: If government can't access phones 'everybody is walking around with a Swiss Bank account in their pocket'

In the light of the brewing war between Apple and the FBI, President Barack Obama cautioned in his keynote at SXSW that no one should take an absolutist position on the debate between privacy and public safety.

His key argument centered on the trade-offs Americans already make to guarantee their safety and well-being, whether it's going through TSA security screening at airports (something Obama joked he hadn't done in awhile but heard it's awful) or being searched at a drunk driving stop.

"This notion that somehow our data is different and can be walled off from those other trade-offs we make, I believe is incorrect," Obama told the crowd.

Yet, access to smartphones by government should be limited so that it can't "willlie-nilly" get into anyone's phones.

Obama declined to comment on the Apple case specifically, but he did deliver an impassioned address on both sides.

Here's what he had to say:

All of us value our privacy, and this is a society that is built on a constitution and a bill of rights and a healthy skepticism about overreaching government power.

Before smartphones were invented and to this day, if there is probably cause to think you have abducted a child or you are engaging in a terrorist plot or you are guilty of some serious crime, law enforcement can appear at your doorstep and say we have a warrant to search your home and they can go into your bedroom and into your drawers and rifle through your underwear to see if there's any evidence of wrong doing.

And we agree on that because we realize that just like all of our other rights, freedom of speech, freedom of religion, etc, there are some constraints we impose in order to make sure we are safe secure and living in a civilized society.

Now, technology is evolving so rapidly that new questions are being asked, and I am of the view that there are very real reasons why we want to make sure that the government can not just willie nilly get into everybody's iPhones, or smartphones, that are full of very personal information and very personal data.

Obama acknowledged that Edward Snowden's leaks about the NSA certainly served to increase mistrust in the government, but that this debate is about making encryption as strong as possible, because both sides need it. He also warned against "fetishizing" our phones over the values that the country was founded on:

What makes it even more complicated is that we also want strong encryption is because part of us preventing terrorism or preventing people from disrupting the financial system or our air traffic control system or a whole other set of systems that are increasingly digitized is that hackers, state or non-stage, can't get in there and mess them up.

So now we have two values that we say are important. And the question we now have to ask technologically is if it is possible to make an impenetrable device or system where the encryption is so strong that there is no key, there is no door at all. Then how do we apprehend the child pornographer? how do we solve or disrupt a terrorist plot? What mechanisms do we have available to do even simple things like tax enforcement? If in fact you can't crack that all, if the government can't get in, then everybody is walking around with a Swiss Bank account in their pocket. There has to be some concession to the need to be able to get into that information somehow.

Now, what folks who are on the encryption side will argue is that any key whatsoever even if it starts off being directed at one device, could end up being used on every device. That's just the nature of these systems. That is a technical question. I am not a software engineer.

It is I think technically true, but I think it can be overstated.

The question now becomes we as a society, setting aside the specific case between the FBI and Apple, setting aside the commercial interests, concerns about what could the Chinese government do with this even if we trust the US government, setting aside those questions, we're going to have to make some decisions about how do we balance these respective risks? And I've got a bunch of smart people sitting there talking about it, thinking about it. We have engaged the tech community aggressively. My conclusion so far is that you cannot take an absolutist view on this. So if your argument is strong encryption no matter what and we can and should in fact create black boxes, that that I think does not strike the kind of balance that we have lived with for 200-300 years and it's fetishizing our phones above every other value. And that can't be the right answer.

I suspect the answer is going to come down to how do we create a system where the encryption is as strong as possible, the key is as secure as possible, it is accessible by the smallest number of people possible for a subset of issues that we agree are important.

Obama returned to the example of the TSA searches and drunk checkpoint as the trade-offs Americans make all the time. Treating our data differently as a black box that doesn't need to compromise is a bad stance to take, he argued.

"So I would just caution against making an absolute view point on this because we make compromises all the time," Obama concluded.