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to be severe. welcome to "your money." i'm ali velshi. august 2nd is the day the treasury department says it will no longer be able to pay all of our nation's bills. and the united states will default on its debt. republicans are going to vote on their own plan this week, complete with spending cuts. but president obama says he won't support deep cuts without increases in taxes. >> if you're trying to get to $2.4 trillion without any revenue, then you are effectively gutting a whole bunch of domestic spending that is going to be too burdensome and is not going to be something that i ...

Policy against a bond default, that makes no sense to me. >> senator dorgan, i'm confused. if you look at the abacus deal at goldman sachs, they created a synthetic bet on whether a bunch of bonds were going to collapse or not. and then, they bought a few billion dollars worth of naked credit default swaps as to whether that would actually happen. and then honestly, because as we know, wall street is all about making the dollars, my man, it's not about investing or lending, it's about getting the money outth and sure enough, the government, god bless them, delivered $13 billion, by way of aig ...

About amending for? >> banning naked credit default swaps. and you ask, how does a credit default swap get naked? well that means that the by far the majority of what are called credit default swaps out there, are instruments that have no insurable interest on anything. a credit default swap is an insurance policy against a bond default. a naked swap is two people deciding, you know what, we don't have any interest in this bond, let's just make a wager on whether that bond fails or not. that's the majority of these. and that's not investing, that's betting. that belongs in las vegas or atlanti...

The rescue of banks of investors, of speculators, not so much when it comes to mom and pop working and struggling to save, to put their kids through college. >> why would that bet be a good bet? is it because of the pensions? is it because of the implied threat of the bond default, todd? is there something that -- these bonds speculators have mom and pop don't have to leverage the government and central banks into bailing them out uniquely? >> speaks to the enormity of this and it's been cumulative, building in the course of the last ten years. and it's been skewed by spending margins, the hav...