Just got again knocked off that horse, get back on again imus, imus, imus in the morning less money in your wallet . A record amount spent on food stamps and spending, three big numbers that tell the stewart. Good morning, stuart is going to be back tomorrow, today here is the big story. 200 billion dollars, how much spending power the fiscal cliff bill takes out of our pockets accord to go Goldman Sachs. The combination of payroll tax cuts exspiring and higher rates on the wealthy hitting the economy hard. The second number, 80. 4 billion, now, thats a record amount of your money the feds spent on food stamps in the last fiscal year and the final number, thats zero. Thats how much in spending cuts president obama and democrats are willing to give in the next round of debt talks. But wait, theres more. Cash for clunkers, the grand plan to get the Auto Industry on track. Its not only bad for the economy, but hurt the environment as well. Varney company is about to begin. Karen anjeremiah. They dont know it yet, but they gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, theyll find some retirement people who are paid on salary, not commission. Theyll get straightforward guidance and be able to focus on other things, like each other, which isnt rocket science. Its just common sense. From td ameritrade. Good morning, varney company, viewers. Today is monday, january 7th and Gerard Depardieu, well, hes welcomed to russia with open arms and here, were going to welcome with you open arms, with sandra smith and on the floor of the new york stock exchange, of course, nicole petallides. Hey, you remember the cash for clunkers, that 2009 Government Program that gave people money, a the lot of money to buy more fuel efficient cars if they traded in the old gas guzzlers, as it turns out the program was actually bad, im saying bad for the environment. Those engines from the gas guzzlers had to be shredded instead of recycled and the process was not very green. Sandra, can you say youre surprised for this. It forced people to turn in cars in some cases had perfectly good engines and perfectly good running cars and charles, this goes to every story weve seen the government try to intervene and push something that actually isnt needed in this country. Cash for clunkers, it turns out, was horribly bad for the economy, because these cars were never recycled in the first place. Charles and we should let the audience know. The way it works, when you rehe cycle, theres a residue, a sludge thats a result and in this case, they think it equals 24 Million Barrels of oil. And imagine if we had an oil tanker that crashed and 24 Million Barrels of oil leaked out. What kind after story it would be. This would be headline stuff. Add to this, sandra the fact that used car prices have gone up since 2007, 33 and youve got tepeople sitting out there, cant buy a used car and now theyve got to buy a 30,000 new car. 100 of most vehicles are recycleable and in this case they were trashed and now its more expensive just a buy a used car. Listen, a lot more on the story with the judge, its going to be good in the next hour. And just a few minutes, former reagan economics advisor, art laffer is going to join the company. Nearly every working american paying more in taxes and still, democrats refuse to cut spending. We get his take at the opening bell. And grover norquist, tax reform is going to be here and senator Mitch Mcconnell drew the line on the debt ceiling, are the republicans ready to take a stand on debt . 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Well, were 30 seconds away from the opening bell. Remember last week, the market came out with gang busters, just with a lot of gusto and people were saying aalot of that doesnt count. Everyone is back and everyone is attending and nervous. What are they nervous about . The fiscal cliff thing might have been the opening part of this saga. Maybe a lot of things to go. We know the debt ceiling is up for play, sequestration, continuing resolutions up for play. And earnings season is going to start as well. The market is going to open with anxiety and side ways movement. [bell ringing] i can hear the opening bell and the stock market is open for trading. Lets go to the big board. Relatively unchanged as i said. Okay, more people now are listening to Internet RadioService Pandora we know and seeing a big jump in listeners, so, nicole, what is that doing for the stock . Well, the stock is not really moving significantly wee. Were seeing that down right now, but they did see their december listening hours was up 54 . The share of total u. S. Radio listening, that was also higher. That was higher to 7 up from 4. 7 , all their numbers are higher. The stock lower. So, theyre really not correlating this morning, but this is good news, i mean, obviously, its better to have all their numbers growing than pulling back. I guess so, i guess if you name your company pandora, you might be braced for problems here and there. You have to wonder what they have to do to get the stock moving and youre following yahoo as well and i think its downgraded . Yeah, and just one thought on pandora at the end. Yahoo downgraded to a market perform from an outperform over at bernstein this morning. Youre seeing the stock down 2. 3 , its had a nice run, up almost 30 the last 52week. Now to my point on pandora, right, so yahoo is up almost 20 weeks and pandora, 4 , didnt really participate in the rally and run and theyre having listeners, thats a good sign. Charles the interesting thing, wall street is so young low at the new ceo over at yahoo and nothing changed and pandora is putting up good numbers and tells you why the market can be frustrating for a lot of people. Thanks a lot. Congress averted the fiscal cliff by letting the payroll tax cut expire and agreeing to tax hikes on higher income americans, but according to Goldman Sachs chief u. S. Economy costs the u. S. 200 billion in spending with no spending cuts in sight and Speaker Boehner is quoted as saying president obama admitted during closed door negotiations the president said, quote, we dont have a spending problem in this country. Joining us is art laffer, former advisor to president reagan. Its almost hard to know where to start with this, but lets start with the notion, if the democrats sincerely believe theres no spending problem in this country, this is going to make any sort of resolution that much more difficult. Yeah, i dont think its all the democrats by any means, charles. Its clearly president obama, thats clearly true. And steve moores piece was excellent. It went through a lot of logic and im a huge fan of boehner, i think that Speaker Boehner is really great and did a good job. He had no choice, but to let the upper rates go higher. Thats the killer in this economy and now the democrats own it and have to live with it. Charles art, the killer, also, everyone watching the show got a check over the weekend and they saw their checks dinged and the payroll tax cuts expiring. I kind of thought that fell under the president s pledge not to tax the middle class. Thats what he pledged. Of all the taxes there are and all taxes are bad. But the payroll tax is the least bad of all the taxes we have. If you cut the payroll tax that will hurt the economy not help it. Raising it where it should be is the correct thing to do and for economics as well my view of the world. Cutting Government Spending is the real tax problem we have and payroll tax is not. Charles where are we going . Goldman sachs says this fiscal cliff deal will take 200 billion in disposable income out of the economy, 200 billion, thats the holiday season, thats the, you know. Yeah, it is. Charles post black friday season. 200 billion, what kind of an impact. Remember while you take 200 billion out of the economy with the payroll tax hike coming back up, but also do remember that you have 200 billion more in bonds available that can be used for capital investment, et cetera. Remember, the world is double entry accounting. You cant bail someone out of trouble without putting someone else into trouble. The problem here is Government Spending and the way i like to explain it and i think its clear is if you have two people in the world, thats it, only two people, farmer a and farmer b. If farmer b gets Unemployment Benefits, who do you think pays for them . Farmer a. You know, just giving that person Unemployment Benefits doesnt stimulate the economy, it hurts the economy. Lowering that payroll tax, i believe, hurts the economy, raising it back up is what should be done. Charles okay, but what about the fact that the economy is going to be slower . We already have a very sluggish recovery. We have a horrible recovery. As it stands, where do we go from here, art . You know this better than anyone. Whats the scenario . If democrats stick to their guns here and they dont, listen, and they dont do anything with respect to real honest to goodness spending cuts, where are we going to go . Theyre going to melt in the next year and a half, charles. You know, theyre in a very untenable position. They tone this economy, the worst recovery ever. Theyve just pushed tax hikes on the people who make all the decisions which is really silly. The highest income earners not only pay the taxes themselves, they employ everyone else. Why would they want to employ other people if theyre the not going to be able to profit from it . So the silliest thing was raising tax rates from the highest income earners and the democrats forced that issue in place. And now they own this economy and frankly, i think its going to perform poorly. Jan is correct on that not because the payroll tax, but because the highest income tax rates and capital tax rates and as we get down closer and closer to 2014, i think the democrats are going to be hammered because they made bad moves now. Charles of the three, hey, listen, and by the way, its obvious they dont agree with you. Theyve got the media on their side and almost anything that goes wrong with this economy. Charles, my side and the president has a teflon skin that seems to be working pretty well. Of the three potential battle grounds for the republicans to take a stand now, debt ceiling, sequestration or the continuing resolution, which ones should they use as their sort of battlefield, the buck stops here. All three, all three. One thing they shouldnt do, shouldnt take a stand in stone and not allow negotiations to take place, they cannot appear to be obstructionist, but other than that, they can use these tools. Charles art, art, listen to what youre saying, youre saying use all three of the battle grounds and dont be obstructionist, they are going to appear to be obstructionist, if they use any of them, let alone all three. If you use the debt ceiling and let it go through, its a pretty nuclear bomb to be honest with you, it didnt work well with clinton, didnt work well with obama earlier, i mean, its not a good tool to litt eerally hold on to, theyll get great concessions from democrats, all sorts of wonderful things, should do it. Charles i want to you stay right there. I want to bring thank you news alert and get your reaction to this. Now, last year the u. S. Government spent a record amount on food stamps, 80. 4 billion dollars, increase of 2. 7 billion dollars from 2011, total federal spending on food stamps now has increased every year since president obama has taken office. Before i get to you. I want to bring in sandra on this. I mean, this is just its no stopping. And thats as if the Food Stamp Program, if you look at full, total government assistance when it comes to food in this country, over 100 billion dollars, spent in 2011. Charles, theres absolutely a necessary component to the Food Stamp Program and only about 18 billion of these dollars were spent on child food care programs, and there seems to be constant abuse, you dont have to look far to find abuse, a woman tried to buy an ipad using food stamps and just looking at these numbers, journal of american medical association, a report attributing the high obesity rate in lower income areas to the Food Stamp Program. Ive seen that firsthand. Art, i want to get back to you on this, this never ending, 80 billion, eventually 100 billion dollars. You talked about farmer a and farmer b, where does this work out in the equation. What youre doing here is the thing using food stamps, yes, these families are going to be treated like civilized human. Let them have income supplements and choose what they do with their money. I have no problem with a negative income tax whatsoever, but when the government says you have to spends on that, this, the other, all the specific programs and this paternalistic passion youre going to of course get things like this and they become political footballs. We should have a good negative income tax and let it go at that. Charles art laffer, we appreciate your wisdom this early in the morning. Thank you, charles. Charles more developments on the National Debate on gun control, two of the Biggest Hotels facing protests because they offered discounts to n. R. A. Members and in connecticut pushed the publicly disclosed every handgun owner in that state. Those stories and what the president said about gun control before he was president. All that new at 10. Bank of america, well, theyre paying 3. 6 billion dollars cash to fannie mae as part of a settlement to resolve claims related to residents on mortgage loans, nicole, thats a lot of money, the bank of america shares. Thats a lot of money, but it takes out the guesswork, and so we actually saw the stock hit ago new 52week high and right now seems unchanged at the moment and as we know, paying 3. 6 billion over to fannie mae and this is just all the claims for Residential Mortgage and theyll repurchase 6. 75 billion dollars worth of Residential Mortgage loans that were sold to fannie mae. So, theyll be doing that as well. And right now, the stock at 12. 08. Back to you. Charles thanks, now i have seven early movers for you, lets start with harmon, an upgrade this morning at robert baird to outperform. The target 63, previous target 53. I love this stock. Amazon rated in overweight at Morgan Stanley even though earnings estimates have gone down by the street. Wall street definitely warming up to this stock. And walgreens got an upgrade this morning also by robert baird to outperform rating, that stock up a little built this morning. Nation star mortgage, oh, boy, they just bought, got bank of americas 215 billion dollar service mortgaging, took over my mortgage, sock is up. Buy what you know, i miss add good chance to help mortgage. And this is taken over, 7. 75. Huge percentage gain and some think that Athena Health should be taken over one day. And krispy kreme could be up for a target, and finally vivus, their new obesity drug, as a matter of fact, december orders up 67 from november orders. Thats a huge move for that stock. The Real Estate Market one of the bright spots in the economy. Could 2013 be a breakout year for housing . After the break, well challenge the one who actually says yes. Im making my money do more. Im consolidati my assets. Im not paying hidden fees or high commissions. Im making the most of my money. And sevendollar trades are just the start. Im with scottrade. Im with scottrade. Im with scottrade. And im loving every minute of it. 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Other side effects include dry mouth and constipation. Nothing can reverse copd spiriva helps me breathe better. blowing sou ask your doctor about spiriva. Nothing. Are you stealing our Daughters School supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. All right, i suggested a different open, that lasted for a second. The Dow Jones Industrial average getting whacked pretty good, down 64 points. Well, our next guest says that 2013 is going to be the year of the real estate boom.