the most recent cnn o.r.c. polling says 51% of americans would hold republicans responsible if the debt ceiling is not raised. just 30% would find president obama more responsible. peter moresi joins us. i have to ask you this, you are an economist, you're a well-respected economist and we have spoken together for years. do you have any evidence of what so many conservatives are saying that if we were to increase taxes at all, at all at this point in an economic cycle, that it would actually hurt our economic recovery? >> well, increasing taxes wouldn't hurt anymore than, say, cutting spending. both would decrease the amount of demand in the economy. to say taxes would hurt the economy is kind of code for, cutting spending is okay, but taxes are not. that's simply not true. in fact, raising taxes may be less deleterious than cutting spending. economic theory says so. >> did anything that happened yesterday, friday, have any effect on you when you looked at those gdp number that is came in lower than expected for the second quarter, lower than expected in the first quarter and, in fact, for many, many quarters before that? does that worry you about this idea that we are looking to cut so much spending out of our federal budget at this particular point in time? >> i'm not particularly concerned because the spending cuts that both sides are talking about are fairly modest in the first two years. they really bite in 2014 and 2015. but most economists are assuming that somehow or another the economy is going to grow more rapidly, whether it's in the second half or next year or the following year. and i don't see any reason to assume that. things are broken. and they need a good fix. >> absolutely. jeanne sahadi, you've studied one plan after another. and they all look like bridges to nowhere right now. in the meantime, there exists the possibility that depending on what happens in the next few days, some people who are expecting a check from the government may not get it. you study this had. who gets paid? who doesn't get paid if we don't have enough money on tuesday or beyond? >> we're hoping to hear from treasury perhaps this weekend, maybe by monday, but hopefully before tuesday as to what their contingency plan is. what everybody knows is that treasury will not have enough money coming in this month of august to pay out what it owes. in fact, it might have to cut spending by about 40% or not pay out about half the bills, something like 80 million bills -- >> why do we keep hearing, jian, that we'll be fine -- what i keep hearing is that we'll be able to pay our bondholders, social security, veterans and active military. that's sort of where -- that seems to be the prioritization that some members of congress are putting on this. >> they mean in aggregate, the amount of revenue we get in could cover bond investors and social security payments and maybe a couple of other things. but there's more than a few things on the docket for treasury to pay. so we're looking at government contractors that may not get paid, those are business owners. we are looking at veterans benefits. they may not get paid. active military may not get paid. it's a selfish choice is how white house spokesman carney put it. it's dumb we're being put into the situation to think about it. >> because this is a channel that children might be watching, that's as far as we can go. it is a misinformation campaign, it is wrong for people to be saying that they know how it's going to turn out. it is wrong for people to say that it will not have a detrimental effect. later on in the show, we're going to talk to bill gross, one of the foremost bond investors in the world, to get his take on this. chrystia freeland joining us now. chrystia, between the recent job numbers, the recent gdp numbers and the fact that we are now on the brink of doing something that could cause interest rates to go up, chrystia, are we in a position where we might actually be causing our economy more harm in the effort to do it good? >> yes, absolutely. bob reuben said to me if the debt ceiling is not extended in time, this will be the greatest unforced error in economic history. and i think that's absolutely right. the thing to really remember is this is not an imposed crisis. it's not like lehman where there was an external issue there. this is a manmade, congress-made crisis. and with the weakness of the economy that you rightly pointed out, it is really irresponsible to be playing with this sort of thing. >> it is highly irresponsible. i want to let my control room know that i don't actually have any video of what's on tv. i do have to tell you, there's this issue of the newness of what we're doing. in fact, there's nothing new about raising the debt ceiling. it's been raised 78 times since 1960. it's usually considered a formality. peter, if anyone opposes raising the debt ceiling is going to be brand add lunatic who wants to send the country into financial armageddon, why do we have this debt ceiling? the only other country that has it is denmark and it has it for very different reasons. >> it's really a political construct. the congress thinks it's constraining itself by raising the debt ceiling. i can remember this being discussed when i was a kid in junior high school. it's an absurd situation. to not raise the debt ceiling is like drilling a hole in the bottom of your own boat. >> i want to talk to you about this, chrystia. what is this talk about how we cannot in this kind of economy -- we cannot raise taxes unless you're an economy that's going gangbusters. we would love that if we were growing 3%, 4% a year, we wouldn't have to raise taxes. why do people say something that is not proved to be true as all and yet it's accepted truth in washington, both the republicans and the democrats, putting forth plans that do not deal with any increase in taxes whatsoever? >> i think peter had it exactly right. the truth is right now with the economy being so weak -- and it really is profoundly weak, and it has been weak for two years now, three years. you shouldn't be raising taxes immediately and you shouldn't be cutting spending immediately. what you should be doing is thinking of a medium-term plan to get the deficit under control. and even studies by conservative institutes suggest that the only way you get a deficit under control is by both raising taxes and cutting spending. >> chrystia, let me interrupt you for a second. i want to go to the floor of the senate where harry reid is speaking right now. let's in to what he's got to said. >> my friends on the house side to show how they're gaming the system over there, mr. president. they're going to have a vote on my proposal, on suspension -- this is for naming courthouses and little measures that are of little importance. but yet this important matter, this matter dealing with the debt limit of this country will take a two-thirds vote to pass over there. so they have gamed this system from the very beginning. and as i said, mr. president, earlier from the "new york times" article, it's not complicated. republicans have in effect taken america hostage threatening to disrupt the essential business government. so they're going through the -- as i understand on the house side, an effort to vote on our legislation. setting up a two-thirds standard, get this done, recognizing, of course, mr. president, that i will outline here in a minute, that a filibuster at this late hour here in the senate and when so much is at risk is really irresponsible. and to say it puts our economy at risk is an understatement, that's for sure. majority vote, i repeat was good enough for the speaker's proposal in the house. but republicans believe it isn't good enough for the senate today. rather than filibuster, i ask my republican colleagues to work with democrats to make our proposal better. we've offered a reasonable, rational way for republicans to help us avert default. >> we're going to stay with that. we'll be listening to it. i'll bring you back into that when there's something you need to know. we're going to take a break. i want peter, jian and chrystia to stay there. last night on tv, i made a point. in the last six days, the stock market, american companies have lost $700 billion in market capitalization. i got a nonsense tweet from someone to say, here you go again worrying about america's companies. so for you who missed the point, let me put it a different way. in the last six days, we have lost $700 billion in the stock value of companies that you hold in your 401(k)s, your iras, your retirement, you lost that money. this nonsense in washington cost you $700 billion already, talking about trimming a trillion here and adding a trillion there. $700 billion, poof, gone from the economy. we're going to talk about how much this is really hurting everybody on the ground. and we're giving you a chance to express yourself on twitter. tweet us, our handle. @cnnyourmoney. we are running your tweets across the show. we're going to talk about what you want to talk about. this story changes every hour. we have correspondents at the white house, at capitol hill. we are tracking it all. we'll head to them live next on this special edition of "your money." [oinking] [hissing] [ding] announcer: cook foods to the right temperature using a food thermometer. 3,000 americans will die from food poisoning this year. check your steps at foodsafety.gov. let's stop the bickering. let's stop the show of disrespect between the different parties as well as the parties and the president and get down to business. let's get out of this mess that we're in, regardless of who got us here and how it happened. we've never defaulted on a loan. let's not start now. let's not shipwreck this country. >> mar lean cox, canton, ohio, that was beautifully said. this is a live special edition of "your money" with your voice and your tweets. joe johns and athena jones are all over the debt ceiling debate. they're tracking the latest developments. joe, let's start with you on capitol hill. speaker boehner's bill was tabled by the senate last night. that means it's not going to get voted on. nothing is going to be done with it. so what is happening now? >> reporter: it's a tennis match really. as you know, the senate democratic leader harry reid has a bill he's trying to push through before tuesday. but meanwhile, the house of representatives controlled by republicans has jumped the gun. they've taken harry reid's bill. they're putting it on the floor. they're going to debate in about 40 minutes. and then it's going to be over with and presumably it's going to be down in flames. and so you ask, well, what's the reason for this? i talked to one senate house republican aide who told me, they're doing this to send a message to the senate that their bill can't pass, won't pass and to stop wasting their time on it. so you've got to ask yourself, what would pass? there was one democrat right here just a few hours ago, barney frank, the ranking democrat on the house financial services committee, i asked him to give me an idea of what he thought both republicans and democrats could co ales around and get a bill to the president's desk. >> significant reductions going forward, not immediate in domestic and military spending, deferring the tax issue for when the bush tax cuts expire, and not cutting social security and medicare benefits are things we can look at, including in my point, further taxation of the upper income, social security and medicare benefits. that's a package that could pass. >> reporter: the big question is what's going to happen over here in the united states senate. they have this bill they continue to work on. the big question for them is whether all the adults are going to get in a room, talk about this thing and hash out something that looks like a compromise. we have pictures of republican leader mcconnell on the floor -- >> he's talking right now. >> reporter: and the point with him is that he has actually told democrats he doesn't want to sit down with them unless a representative from the white house is in the room. so the question is, why is that? it's pretty obvious. he says that senate democrats do not have the authority to sign off on anything unless the president agrees to it. so it sounds like he just doesn't want to waste his time. >> in the meantime, they're wasting our time. barney frank talked about the top earners in the country. the top 1% of earners in this country have an effective tax rate on their income of 19%. think about that as we listen in to senate minority leader mitch mcconnell right now. >> in the hopes we can come together behind something that can pass both the senate and the house and be signed into law before tuesday. now, i don't blame anybody for being confused about what's been going on here in congress this week. but i'd like to take a moment to explain what's going on right now. last night, the democrats who control the senate, proposed a bill that would lead to the largest debt ceiling increase in the history of the united states and which completely ignores the root of this crisis. this bill has one goal -- to get the president through this next election without having to have another national debate about the consequences of his policies. the president wants to make sure this kind of debate doesn't happen again even as he gives democrats in congress permission to add trillions more to the debt. that's what the reid bill does. it isn't going anywhere, as i just described. it will not pass the senate, it will not pass the house. it is simply a non-starter. senate republicans refuse to go along with this transparently political and deeply irresponsible ploy to give the president cover to make our debt crisis even worse than it already is. and 43 of us, as i indicated earlier, have now signed a letter to the majority leader saying, we will not -- >> you can see that's senate minority leader mitch mcconnell speaking. we'll continue to listen in to him and bring it back to you. look at the bomb of the screen, we're running your tweets, by the way. tweet @cnnyourmoney. athena jones is at the white house. what is that that joe just told us about that mitch mcconnell says he's not going to negotiate with harry reid and senate democrats unless there is a representative from the white house involved? why and what's the white house got to say about that? >> reporter: well, certainly the white house say there have been discussions, there are ongoing discussions at every level from people at the white house, from the president on down with members of congress and their staffs. those conversations continue. and while there's no meeting on the public schedule today, certainly that could change at any moment. the white house is standing ready to respond. and if congressional leaders believe having a meeting here at the white house would get them to a breakthrough in this compromise, they're going to be willing to meet. but most of the action in front of the cameras is taking place there on the hill. but it doesn't mean that folks here at the white house are sitting idly by or sitting on their hands. the president has used several ways to try to keep the pressure on congress. we saw him come out on monday and give a speech. yesterday he gave a speech. and early this morning, in the weekly address, he tried to explain what the consequences would be if congress fails to reach a deal by tuesday. he says he made the point of saying this money, this vote to raise the debt ceiling is not so that congress can spend more money. it's so the country can continue to pay the bills it already owes, bills that congress has already racked up. so things like social security checks, veterans benefits, checks to pay the military and, of course, payments to debt holders. one more thing that's important to note, the country won't be in default until it actually misses a payment to debt holders. and, of course, treasury -- >> that's a republican talking point that is wrong. ben bernanke and standard & poor's have both said if you miss a payment on anything, you're in default. it's a talking point that republicans continue to like to use that we are going to put an end to on this show. athena, thanks very much. joe johns, thank you very much. america may be on brink of another financial disaster but some members of the tea party insist that now is the time to give in. others have been entirely unreasonable. we found one of those tea party members who we always find to be informed and reasonable about the economy. he's here to explain to us why they will not talk about tax increases after this. uh, i'm in a timeout because apparently riding the dog like it's a small horse is frowned upon in this establishment! luckily though, ya know, i conceal this bad boy underneath my blanket just so i can get on e-trade and check my investment portfolio, research stocks, and set conditional orders. wait, why are you taking... oh, i see. hey max, would it kill you to throw a guy a warning bark? [ dog barks ] you know i wanted a bird. [ male announcer ] e-trade. investing unleashed. ...was it something big? ...or something small? ...something old? ...or something new? ...or maybe, just maybe... it's something you haven't seen yet. the 2nd generation of intel core processors. stunning visuals, intelligent performance. this is visibly smart. the stand-off over how to raise the debt ceiling continues at this hour. but one group of republicans, those influenced by the tea party, do not necessarily see this as a bad thing. mark skoda is the founder and chairman of the memphis tea party. mark, according to a cnn o.r.c. poll, 63% of people do not believe the gop has acted responsibly in talks on the debt ceiling. most americans want a compromise that involves cuts and increases and a small minority -- or i guess a big minority of republicans think we need a compromise solution and yet they are being held back by the tea party and by their promises to grover norquist and the americans for tax reform that say they can't increase taxes. we've lost $700 billion in the stock market in the last six trading days. we've started to see interest rates move up already. why is this better? why is everything we're going through now better and the risk of a default than compromising on taxes? >> well, first, let me say, we're not going to risk a default. moody's late friday put out a note that suggested as long as we arrange to pay our bondholders' interest and principal -- >> ben bernanke said if you default on anything, you're -- >> fitch has already downgraded us. you know that. >> but we have to tell the whole story. if we say that's not going to happen, we have to tell the rest of the story. that's why its dangerous. you're informed about it but a lot of people aren't. >> let's talk about taxes, as you point out. we're going to have $530 billion of new taxes beginning in 2013. so the tax increases for obama are already there. their plan in the obama health care act which has now law, that is first point. we've got half a billion dollars more in taxes being created. we need to have this fight right now about whether or not we're going to pay our bills and how we're going to pay the bills. i've suggested that we need the boehner plan as it was initially proposed. i was supportive of it because it put the onus back on the democrats. it was a two-step process. but as you know, for the past roughly 72 times on average, we have raised the debt ceiling about seven months. now, it is unique in the situation that when we looked at 2010 when this debt ceiling question became about that the president did not wish to have a raise occur on his watch during 2010. as you know, the democrats who held a super majority could have raised it to $20 trillion or a $5 trillion budget and they've do