good evening. i'm erin burnett. "outfront" tonight, america's drug addiction. it's not cocaine. it's not heroin. it's not even bath salts. we're addicted to ben. we want more ben and we want him now. but tonight, the truth. there's not enough ben for america. more ben is bad. i'm talking, of course, about this ben, fed chair ben bernanke. today he announced he'll continue so-called operation twist. the goal is to bring down interest rates. theoretically that would spark borrowing, spending and hiring. it would be a panacea to fix the whole problem. but even ben admits his supply of money is drying up. >> monetary policy is not a panacea, it's not going to solve our economic problems. >> the fed fed's drugs didn't come cheap either. tlfen three rounds of fed stimulus with a total price tag of $2.7 trillion. and that doesn't include the $267 billion extension to operation twist that was announced today. so the question is, were the highs we got worth the price of $2.7 trillion? check this out. when the financial crisis hit, the fed stepped in with an unprecedented plan to lower interest rates. it was called q.e. 1 or quantitative easing, 1.0. over that time, we saw a drop in borrowing rate. the rate did drop. that's a pretty decent high, 6.3% to 5.2%. the cost to get that drop in rates was $1.7 trillion. so when the economy was still dragging after that, ben gave up a little bit more. q.e. 2 in effect from november 2010 until june of the following year was like a bad trip. the 30-year mortgage rate actually went up by the end of q.e. 2. and the cost? $600 billion. and the economy still as we all know didn't get better. so ben gave us a little more, an even more creative cocktail called operation twist. that launched in september of last year and mortgage rates fell but only a little bit from 4.2% to 3.6%. not nearly the buzz of the first hit and the reason rates went down had a whole lot more to do with europe falling apart than the fed spending another $400 billion. the $2.7 trillion total cost of the fed stimulus? another way to add it up is whether it succeeded in the fed's ultimate goal to create jobs. and wow, wow, wow, there it does not add up. for every one job created from the beginning of q.e. 1 until today, the fed has spent $810,810 per job. i don't think those people who got those jobs even including benefits and a whole lot of wishful thinking are earning anything close to that. maybe i spoke incorrectly. it adds up, just not in a good way. ben bernanke knows the good and bad of the fed drug. so today, facing reality and telling america it needs to get off the drug, he could have done what a lot of people wanted today, launched another giant hundreds and hundreds of -- maybe another trillion-dollar round of q.e. but he said, yes, the economy is slowing and things are bad and it doesn't mean we should pay a lot of money to move interest rates any lower. they are low. the fed addicts in this country need to have an intervention. we need someone other than ben to lead. but who? >> investors, i know, would like to see congress take actions that put us on a long-term, sustainable fiscal path. >> congress. it's your turn. robert rice is the former labor secretary under president clinton and steven moore is with "the wall street journal" board. we're saying, give us more. and it does sound like we're a bunch of addicts. but it is a little depressing when you look at the numbers. without q.e. at all, the world economy would have fallen apart. but here we are and what can we do from here? >> well, strictly speaking, erin, the fed is not borrowing money. the fed is not spending money. the fed is actually creating money and there's a danger that if the fed creates too much money, it could generate inflation. that is a danger. and it also, as you said before, wants to keep some reserve in its quiver. the real problem right now is that even though interest rates are low and even though they have gotten lower, it's not stimulating the economy. it's not boosting the economy because i don't know if you've tried to get a -- refinance your home, i tried just a couple of weeks ago. it's very difficult to do it because the banks are sitting on so many bad loans still that they just don't want to, even with very low interest rates. >> steven moore, i have to say i bet you agree with robert rice on this one. >> well, i was going to say, i'll give you an "a" in economics today because i agreed with everything you said and i'll give robert rice a c-minus. >> whoa, whoa, whoa. >> that's the best grade you've ever given me, steve moore. very impressed. >> it's an attitude by robert rice and others of his philosophy that the fed can essentially print money and create growth and create jobs. as you showed, erin, that hasn't worked very well. we've had four years now of very ease, cheap money in this country. and it just hasn't worked in terms of creating jobs and wealth. now, it is true, by the way, that the fed is going to spend some more money. they are going to buy more long-term bonds according to what ben bernanke said. but what i was most happy about, erin, is that ben bernanke said, look, we've injected so much money into the economy with these low interest rates, there's not much left. there was an important declaration. maybe the most important thing he said today, look at that growth forecast for the second half of the year, barely 2%. that's barely treading water. i don't know if that's enough to get barack obama reelected. >> robert, what can be done from this boat? you're saying you agree with ben bernanke, don't do more now, save whatever you have left for if things get even worse. but it seems like at this point it's up to congress. who else is left? do we accept we have a terrible economy? >> we should never have to accept that. but it is up to congress. the president's put several proposals before congress in terms of state and local governments, in terms of tax cuts, even more tax cuts with regard to employers hiring people. and nothing has happened. the republicans say no. congress has to bite the bullet here. steve moore may disagree with what i'm about to say. so still yourself, steve. you can do this. but i do believe we are going to have to have more of a boost, either a spending boost or a middle class tax boost that gets the economy going. then when we hit an inflection point, 3% growth and 5% unemployment, that's the trigger for serious debt reduction. we don't want to do it before that. >> the reason it's not going to happen youshgs explained all spending, that's exactly what barack obama did in 2009 and it didn't work. >> it's not going to happen because republicans don't want it to happen because they don't want the president to be reelected. they're not going to do it even if that's the right thing to do. >> i believe they're not doing it because they don't think more spending is what is the right thing to do. that's what got republicans elected in 2010, is to stop the spending. but one thing that could help the economy and actually help barack obama a lot as well is to maybe call off the big tax increase in january for everybody. let's just not -- you and i probably could agree on that right now. this is not the time to be announcing that we're going to have this major tax increase on anybody when the smi economy is fragile. >> i don't understand why for a republican or a conservative who is os stenably worried about the long-term budget deficit that you want to extend the tax cuts for the rich. they should be extended for average working people, people all the way up to $250,000. even for the rich up to the first $250,000 that they earn. but beyond that, why not go back to the clinton rate? it was not that onerous. we had a wonderful economy. >> we'll have to hit pause there. thanks very much to both of you. still "outfront," is eric holder an albatross on the neck of the president and did it just get a whole lot worse? and are these disciples fleeing? and jerry sandusky didn't take the stand. will that flip-flop cost jerry sandusky his freedom? you inspired a ron howard production. with your photographs. 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this is big news. now our second story out front, it would be unprecedented. eric holder, a sitting attorney general, held in contempt of congress. today, a republican-led house committee recommended that holder be cited for contempt after an 18-month showdown with the department of justice over the fast and furious gun trafficking operation. now, we throw around those words so often, i thought it was worth explaining it again. fast and furious was an operation launched to track weapons purchases by mexican drug cartels. the bureau of alcohol, tobacco and firearms lost track of some of the guns. they were purposely selling them to these guys. they wanted to arrest them. but guns got in the wrong hands and killed a border agent. republican darrell issa went forward with the contempt vote on holder even after president obama raised the stakes today, playing his first-ever executive privilege card. a lot of lawyers not using their degrees in their day-to-day jobs. isn't that what law is about? let me start with you, michael, putting on your constitutional law hat. >> we lawyers don't always charge by the hour. we'll try. when congress asks for a document or a court asks for documents, sometimes the executive branch says, wait a minute, this is not appropriate for your branch of government to be asking us. that's when they claim executive privilege. the supreme court said under limited circumstances, executive privilege is okay. but the fact is, and congress can try to hold an executive branch official in contempt, which means that they bring legal proceedings. the reality is, the committee brought a contempt action. then it has to go to the full house. and guess who it gets referred to eventually if it gets voted on? the justice department. so the one thing we know, this is about something very real but it's also kind of washington make-believe because it looks to me more like a kind of classic, let's harass the guy in the office thing than -- i don't think this will end up with very meaningful solution. >> this is contempt kabuki. when the republicans have the white house, i love executive privilege. when the democrats were doing an inquiry and they invoked the same sort of a measure against harriet myers, john boehner led republicans off the floor calling it a partisan fishing expedition. the same rules apply. and the party vote in the house underscored that today. >> doesn't democrats use this more against than republicans than the other way around? david, i want to ask you something that then senator barack obama said about a president invoking executive privilege back in 2007. here he is. >> there's been a tendency on the part of this administration to try to hide behind executive privilege every time there's something a little shaky that's taking place. >> as john said, where you stand depends on where you sit. maybe that's the most obvious example. but there could be real confidential information in here about other raids, plans, ways at getting at these drug cartels that may be fair or it could be that the president is hiding something, that somebody's been lying over the past 18 months. which is it? >> i don't know the answer to that question. but what i would say is the president is entitled to get advice and the president is entitled to get bad advice. the president is entitled to get dumb advice. in this case, it seems to be dumb advice. it's not just one border agent. there's a couple of hundred mexicans that are the real victims of this carnage. i'm simp thet toik the execut e i'm sympathetic to the executive branch's decision here. but i don't know why the obama people are playing the game in this particular way. the republican theory about what's going on here is so outlandish. what they think the administration is hiding is a plot to violate americans' second amendment rights by doing an elaborate project that would discredit gun ownership -- >> this is ridiculous, right? >> it's so outlandish. the idea that that document is waiting in the files, which is the republican theory of the case -- i don't know that -- you don't want to let people have a lot of access. i don't know when you want to fight this on the executive privilege round. fight it on the merits. >> it almost looks to me like both sides are taking hostages at the end of something. this is going to end up with a negotiation in the end. but david's exactly right. there's kind of a controversy without an underlying scandal from anything we've heard about it. and this is something where it feels like this time of year they're looking to throw a brush-back pitch at eric holder. he's enforcing the voting rights laws. the republicans want to make him a controversial figure. >> i have to say, the bottom line, imagine the government to be that smart, to have this whole plan on a backdoor way -- they wish they were that smart. >> and no one was fired and no one's resigned. it was a fiasco and people should be accountable. ahead, breaking news from sanford, florida, where trayvon martin was killed. someone's been fired. and two parents charged with murder, the victim, the man they said was using their daughter as a prostitute. does it add up? 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[ heart rate increases ] woman #2: but i don't even live near the water. what you don't know about flood insurance may shock you -- including the fact that a preferred risk policy starts as low as $129 a year. for an agent, call the number that appears on your screen. we have breaking news right now. bill lee has been terminated. he was the police chief in sanford, florida. sanford city manager bonapart has decided to terminate his contract with lee as of today. details are still being worked out. then-police chief lee was the man who was the police chief the night that george zimmerman shot trayvon martin. as we all now know, george zimmerman went into the police department for questioning and chief lee decided not to arrest him. a key, key element in what happened in this case seasoned paul callan is with me now, what do you make of this? obviously there's been an interim police chief. it had been unclear what bill lee's status was. but now terminates, this is fired. this is not amicably -- >> i find it very interesting for a couple of reasons. first, the city council voted 3 to 2 in favor of keeping him on when he was first kind of being forced out after the controversy about not arresting zimmerman. now all of a sudden he's being fired. we don't know the details of why he's being fired. but the second thing, i wonder if it's related to, the mystery of why the original prosecutor on the case was forced off the case? because now you have prosecutor originally decides not to prosecute, forced off the case. police chief decides not to prosecute, fired. what's the back story here? what's the misconduct? you don't usually fire somebody unless they've done something wrong. and two major law enforcement officials are terminated for some reason. >> right, because then of course you had angela corey replace the prosecutor and go around the grand jury. some say she was worried the grand jury wouldn't move to charge. >> that's right. and i should say the prior prosecutor hasn't been terminated. he's still around but he was taken off the zimmerman case. corey decides not to use a grand jury, which is her right. and now two key officials are gone. and we don't know why. there's going to be an interesting back story to this. >> bill lee has been terminated. "outfront" next, new evidence from iran, new satellite information. is there a cover-up? and grover norquist going to congress to put his anti-tax pledge. but things have really changed for grover. now count the number of buttons on your tablet. isn't it time the automobile advanced? introducing cue in the all-new cadillac xts. the simplicity of a tablet has come to your car. ♪ the all-new cadillac xts has arrived. and it's bringing the future forward. your doctor will say get smart about your weight. i tried weight loss plans... but their shakes aren't always made for people with diabetes. that's why there's glucerna hunger smart shakes. they have carb steady, with carbs that digest slowly to help minimize blood sugar spikes. and they have six grams of sugars. with fifteen grams of protein to help manage hunger... look who's getting smart about her weight. 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