Melissa heres what is money tonight. Professor and student reunite. I have wanted marty, my former economics professor since day one. He is finally here to talk about the g. O. P. Plan to balance the budget in ten years. Heres the question, why so long . We get to the bottom of it. Im getting an a. Feels like the arctic tundra outside. Theres mammoths walking down 6th avenue. Now heating your home burns a hole in your wallet. A match not made in heaven. A woman finds a guy on match. Com, and then he tries to kill her. Now shes suing match for 10 million. Could this take down the Online Dating business even when they say its not, its always about money. All right, the top story, the new plan by republicans to balance the budget within the next ten years, what a novel idea. I would be floored except i cannot understand why its going to take ten years to get it done. It doesnt take an economics degree from harvard to know you shouldnt spend more money than you make. Here to break it down is the most fabulous, yes, in the universe, my harvard economics professor. I dont know how you live up to that, but you were my favorite professor. Thank you so much for joining us today. Thats very nice to hear. Nice to be with you again. Melissa excellent. Iwant to balance the budget in ten years, go to washington and help them with the math. That seems like a long time horizon to me. What do you think . Well, it is a long time horizon, but the budget is way out of balance now. You know, five years ago, the deficit was less than 2 of gdp, and its now 7 , and according to the congressional budget office, ten years from now, we dont make some further progress, were still going to be looking at a deficit of 5 of gdp so the challenge is how do you turn that 5 into a 0 . Melissa what difference does it make . People make the argument that balancing the books at home is not the same as the government balancing the books. Deficit spending is fine. Why does it matter, and when does it start to matter . It already matters. It matters because it drives up the national debt, and that creates problems. Let me explain. Five years ago, we had a national debt, which was relatively modest in comparison to our gdp. It was about 35 . Its now more than 70 , and its heading towards 100 . Whats the effect of having a large debt . Well, first of all, you got to pay the interest on it. Right now, Interest Rates are low, but thats not going to last. When Interest Rates rise, our taxes are going to have to be higher to pay that debt. Now, not all of that debt is held in the United States so its not a question of just having to pay taxes in order to pay the american holders of that debt. About half the debt is now held outside the United States. Chinese, middle east, others. Were going to have to raise taxes in the u. S. , produce goods and services in the u. S. , and ship them to the chinese, to the middle east, and others. The bigger the debt is, the more of that were going to have to do, so its a serious problem, and it also means that things could get out of really out of whack as they have in europe if suddenly foreigners or others just dont want to go on holding that debt. Melissa do you think that happens . Theres a lot of people that say, you know, they dont want to stop buying our debt because were the best game in town no matter how bad it gets, but that would be the Tipping Point when they come in and dont buy our debt. People say that would never happen. You honestly believe that would happen . It certainly could. Its not that they wouldnt buy it. Its that the Interest Rates require them to hold it would be higher. If you go back to the early 180s, we were paying about 10 on ten year bonds. Now were paying about 2 . A combination of an unwillingness of foreigners to hold it or desire on their part not to hold it and perhaps increasing inflation, and, boy, we could be paying a lot. Melissa a lot of that has to do with the fed, in control of that, holding Interest Rates down. Its unclear how long they can keep that going. You know, the feds said today this is the slowest, worst recovery ever. They were looking quantitatively at growth of gdp from the low point, which was the Second Quarter of 2009. When you look at every recovery after a recession, you know, the best, the worst, and the average were below the worst ever. This is just why . Why . Why is this the worst recovery . What have we done wrong, and what can we change . Well, two things. First, the recession was different from previous recession. A typical recession in the past was caused when the Federal Reserve raised Interest Rates to deal with inflation. Once they felt they have done that, they lowered rates, and the economy bounced back. This time, thats not why we got into a recession. We got into a recession because of bad Investment Decisions made all across the board. Mispricing of risk, everything from Bank Investors to people buying homes that they couldnt afford so the fed couldnt turn it around, and that was an important thing. The other thing is that when the government stepped in with fiscal policy, it was really badly designed. It was not powerful at increasing spending. All of that talk about shovelready projects didnt melissa didnt materialize. Thats right. Theres a lot of transfer of payments to states and individuals that didnt end up doing much for the pace of the recovery. Youre absolutely right. Gdp has just not come back. Melissa a terrible recovery. Professor, thanks so much for coming on. Would you mind going back to the transcript and give me an aplus. You know, we can talk about it later. I dont think i could do that. Melissa bet you could. All right, byebye. Melissa thanks for coming on. I had to try. Senator mike lee is proposing a constitutional amendment to balance the budget. Like its not enough for lawmakers to understand the dire circumstances in, we need an amendment to the constitution to force them to only spend the money we send to washington and no more. Heres what senator lee told me earlier. We need to do this because we need permanent structural spending reform so that we dont find ourselves back in the same position every six to 18 months raising the debt limit. Melissa i love it. Why not get the house in order . Bring in todays money power panel. James friedman, editor of the wall street journal, and gretchen, executive director of public notice, and the president of better markets. Welcome back to the show, everyone. Gretchen, starting with you, what do you think about this . This help a lot . Go ahead. Its a noble idea and should strive for it. Theres things to take care of first. Actually look at having a budget. Its been 1300 days since we had a budgetment find ways to cut spending and get the fiscal house in order, and a balanced Budget Amendment would be a great idea, but if we put it in place now, they would be forced to raise taxes rather than cutting spending, and so i think we need to take care of cutting spending before we go about doing this constitutional amendment. Under the particular lee plan, they dont have to raise taxes. The best part of the plan is limiting spending and taxes to 18 of gdp. Thats the debate in america right now is are we going to go with barack obama plan of 25 or more of gdp consumed by government or go back to a reasonable, historical 18 that mr. Lee proposed. Melissa dennis, what do you think of that . Automatically limit spending to 18 of gdp, currently, 23 , a billion dollars to shave off. We dont need gimmicks. We need guts. We dont need politicians claiming things are meaningful when they are not. 18 of gdp, you cut over a trillion dollars a year from the budget for ten years. Melissa right. Rather than filing a bill saying someone else should do this, put out a budget, if youre a senator, budget that cuts a trail dollars from this years budget. Cut it from defense, discretionary, medicare, Social Security, step up, lay out your actual cuts. The problem we have isnt that we dont have enough gimmicks like the Budget Amendment. We got plenty of gimmicks. We dont have guts. Are you going to cut medicare by that amount, or Social Security or defense . Where are you going to cut . Makes me hopeless as ever. Nobody has guts in washington. If we need, i mean, we cant rely on gimmicks, need guts. You know, were screwed. We do. Thats where this comes, this balanced Budget Amendment comes in. Can we get it done. If they cant cut spending on take on cuts in Social Security and medicare and prioritize what we have to do in the nation do you think theyll have the guts to have a constitutional amendment and agree on that . You have to wonder that. Its a agreed with the. I think its a worthy one, but realistically, i dont know that it happens. Melissa we have not solved the sequestering problem. I dont know if people realize that. On mar of 1st. On march 1st, we have the automatic cuts. You like it. Its a start to fiscal sanity. Melissa i like it more and more. Ill tell you that. Its cuts. Amazing. News flash that washington is going to restrain spending. Melissa dennis, what do you think . James is going to coanchor the show with me in the future. Cutting spending in theory, everybody agrees on, focus on real things. This spending is money is spent on very important things. Social security, the average recipient of Social Security, their average income per year is less than 20,000 melissa stop there, this is where we are bog down every time because we try to talk about whats fair, where can you cut, where cant you, and everybody has a dog in the fight. I mean, it almost makes sense to go on a percentage basis to everything. Fair is fair, across the board except, if you put your except in and james, and, well, no, he wont melissa, if people really do that and spell it out what it means to do across the board cuts, thats fine if they would spell it out and agree to do it. Remember, the spending is done on important things that people want to spend money on. They dont want to pay for it, but they want to receive it. Melissa i dont know. I dont want to receive anything. Give some credit to republicans, like paul ryan, mike lee who have spelled out cuts that have been attacked by the white house. Every time they come out with it, medicare, you know, an untouchable thing, nobodyyments it touched, they talk of reforming it. Theres no appetite to reform it. Its not just the white house too. The senate has to agent. Also, lets not forget the house talks a big game and paul ryan talks big, but they need a majority. We have not seen the majority come through on deals like this. Melissa great point. Do you think anyone really wants to cut spending . Democrat, republicans, . Im not sure anyonements to tackle the problem. Its a tough job ahead. They have no choice. Its the issue of our time. Melissa dennis, go ahead. Spending and revenue in balance. Not all by spending cuts, have revenue nrkzs, programs that people in the United States want. Melissa james . Mike leements to cut it, johnson, its not hopeless. Theres votes. Melissa okay. Guys, thank you so much. Appreciate your insight. Good stuff. Thanks, melissa. Thank you. Melissa todays market moment. The shares of apple. See this . A slow down on profit Revenue Growth shook investors falling 12 , taking 50 billion off its market cap. Hammered. Apple shares trading at the lowest level since january 30th of last year, and the noise dive weigh on the nasdaq sinking 23 points, but there was a new five year high in the s p up fractionally. Okay, next on money, it is so cold, thinking of lighting a fire in the studio to be warm. You know, theres penguins and polar bears looking for coffee in the green room . That big freeze could melt cash in your wallet. Well explain. We had a bad date, but the other person probably never tried to kill you. Just saying. A woman sues match. Com for 10 million after her date tries to murder her. Is it matchs fault . Thats what we are wondering. More money coming up. I have obligations. Cute obligations, but obligations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. 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Jake heroically escorting victims okay, its a clip from day after tomorrow. There is a cold snap and your heating bill is going through the roof. On average, paying 450 more for heating oil this year than last year, a huge increase. We go to phil flynn joining us from balmy chicago with the temperature 21 degrees. Is it really . Its 12 here. Its a beautiful day. Get the bathing suit out here. Comparted to this morning, that is, we were like 7 degrees this morning, and it was chilly cold. I didnt want to get out of bed. I came here, you know, this, you know, the only thing good about this weather is it takes 20 degrees feels like heaven compared to this morning. Melissa i love the coat, very macho. Thank you very much. Melissa it looks like a bonnet, but do what you got to do to stay warm, and youre a good sport to be outside in the cold weather for us. This could be my revenge because i was a local reporter in the past, and i had to stand outside, and i was told how stupid i looked in the snow. Great, thanks. The topic of the day which i think is heating oil and natural gas prices. Were going to get absolutely burned this winter, no doubt about; right . Wallet burnt to a crisp . Well, getting burned is not a bad thing, the country is cold. Could be a nice alternative, but the truth is, yes, you will. Especially on different parts of the country, you know, especially in the northeast right now. You know, if youre in the new england area, the new york area, everything on the east coast, especially if youre deal heating with natural gas or heating oil, you get hit both ways. Unlike, you know, a lot of rest of the country that benefited from shale gas production, in new york, we dont have the pipelines to get that gas down there, and in new york, today, the cash prices for natural gas hit a nine year high over 30, a million met trick btu. The price is 360, a difference from what youre looking at. Melissa the Energy Administration says on average if you have natural gas, its 200 more this winter, better than heating oil at 450 more. Thats average. People elsewhere, obviously, on the other end of that. On the east coast, you could pay more. I wonder how long does the cold have to last in order for us to feel the pinch . Its winter. Always cold. This is not a big surprise. I mean, we knew this was coming. Right. It is. You know, what happens, i think, with price projections, remember prices for the last few winters have been well below normal when you compare it to the price of oil and natural gas. Natural gas prices are coming off historic lows, and while we are paying more, were paying a lot less than we did, say, you know, five years ago. If you put it in that perspective, its a lot better. You know, the problem, too, i think when you look at the heating fuels, its not only here in the u. S. Having these cold temperatures driving upment prices. If you look at europe, you look at asia, they, also, are having record cold so even if it warms up here, the pressure from those cold temperatures across the pond keep prices high too. Melissa im not sure youre under the coat. I cant see your eyes. What are you talking about . Melissa youssef now you look like howard stern. Youre the best. Thank you, my dear. Melissa ill send you some tequila to warm up. Thank you so much. Ill take it. Cant wait, thank you. Melissa can you believe he did that for us . Hes the best. Oil moved on speculation that the pipeline resumes full capacity in a week. Shipments through the pipeline showed earlier this week. The u. S. China and e. U. Posted strong economic data, all of that news lifted oil futures 72 crepts settling at 95. 95 a barrel. Kerry gave little hints about the pipelines today. He was asked about the initial approval in the confirmation hearing, and he said, quote, ill make the appropriate judgment on the pipeline after the state Department Completes its review. Natural gas output resumes at the site of the hostage crisis in the next few days, but not returning to full capacity for another month. All right. Up next, worst state ever. A woman hooks up with a guy through match. Com, and then he tries to kill her. Now shes suing match for 10 million. Is this a legal game changer for the Online Dating industry which is huge . Weve got details. Plus, some chicago and new york city officials rake in so much overtime pay that is dwarfs their actual salaries. It is so ridiculous its bringing together me and the guy who i disagree with on basically everything. How can it be stopped . Stay there for more money. Look, if you have copd like me, you know it can be hard to breathe, and how that feels. Copd includes chronic bronchitis and emphysema. Spiriva helps control my copd symptoms by keeping my airways open for 24 hours. Plus, it reduces copd flareups. Spiriva is the only oncedaily inhaled copd maintenance treatment that does both. Spiriva handihaler tiotropium bromide inhalation powder does not replace fastacting inhalers for sudden symptoms. Tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. These may worsen with spiriva. Discuss all medicines you take, even eye drops. Stop taki