search box and follow the prompts. you have until tuesday, january 11. here's a look at what's ahead at 4:00 eastern time. for anyone who has ever texted or tweeted under the influence and lived to regret it there's a new social media sobriety tech. it locks you out of your devices if your tipsy like your vehicle. no joke. 5:00 eastern time we'll have a few jokes from the comedian known as the new more vegas, george wallace. he'll give us his take on this weeks news. "your money" starts right now. the government you want versus the government you're willing to pay for. i'm ali velshi, christine romans joins me. first chief national correspondent john king who hosts "john king, usa," the

proposal calls for $4 trillion, $4 trillion in cuts to the deficit. this cnn national exit poll shows voters felt reducing the deficit was the highest priority for the next congress. higher than creating jobs, higher than cutting taxes. does it mean a politician could get away with raising taxes and cutting programs if it means a serious reduction in the deficit and the debt. >> my friend, welcome to washington. yes, we wish that were the case. already, you saw the initial reaction. from the left it was dead on arrival because it touches medicare and social security. from the right it was dead on arrival because of tax increases. we have instant polarization, which is why we haven't dealt with these issues for a quarter of a century. president clinton tried, george bush, they couldn't get it done. both party has immediately retreat to their special

interest bunkers. it's like a base commission. you have to have an up or down vote in the congress. they won't get a majority. we'll see going forward but the early reaction tells you quite a bit. >> at least the discussion is happening and hopefully continues to happen. let me just give our viewers a sense of the debt. the deficit is the yearly shortfall between how much revenue the government comes in and how much they spent. the accumulation of those deficits is the national debt. here we are right now. debt is about 60%. u.s. debt is about 60% of the gdp, the size of the whole economy. that's particularly high. it's not double our normal historical levels but pretty high. look what happens under current law. if nothing changes, follow the red line with me. you'll see that our deficit -- our debt will continue to grow all the way out to 2040. we're going to be crossing 80% of gdp. current law is changing.

things are changing. if it did change based on policies we're expecting, follow the light blue line with me, we cross, we're getting to 200% gdp. can you imagine if the debt were double the size of your economy. at 100% you're looking at bankruptcy. the deficit commission we're talking about. take a look at this. this is the dark blue line, under their proposals, if the proposals they suggest go through you will see the debt dropping to under 40% of gdp by 2040. david walker, you've seen him on our show. david walker, the founder and ceo of the come back america initiative, also former u.s. controller general and a deficit hawk. david, for all the complaining about this thing, by 2040 if you enacted all the proposals in this commission you'd be at 40% of gdp for the national debt which is higher than people think it should be. >> that's right, ali. in fact, when you look at truth in accounting, we're already over 60% of gdp with public debt you mentioned.

that's only the second time in the history of the united states we've been that high. the only other time was world war ii. if you count social security and medicare we're 90% of gdp already. we're only three years away from where greece was when they had their crisis. we have a problem. the fact the far right and left have a problem with the proposal is good news because the answer is in the sensible center. >> christine, a lot of cuts here. this is why john was saying everybody into ideological bunkers. to bring military savings up to $100 billion in 2015, here is what the panel is recommending. freezing pay, including noncombat, cutting procurements, the military actually ends up buying less. closing overseas military bases by a third. that's the pentagon side of things. take a look at domestic spending. panel recommending freezing government pay by -- freezing government pay and cutting the workforce, the government workforce, also eliminating all

earmarks. this is what the critics called pork. as we know, earmarks don't amount to a whole lot of difference in the federal budget. then there's the issue of taxes. the panel says to reform and simplify, cut tax rates into rates, cut important deductions including for many people with big mortgages the mortgage interest deduction. always proposal to raise the gas tax by $0.15 a gallon. christine, the president asked for tough cuts. everything had to be on the table. this is going to be a hard sale and it's alienated people with interests. >> it has. i agree so many people are alienated. it shows they struck a nerve here. how does the president sell it? in one way gives the congress cover, if you can get this commission the tough cuts, we've got to do it. here is what budget analysts say, if you don't do this now,

take the gas tax, for example, you won't have a job to drive to in 25 years where you're putting gas in your car or you won't be able to afford the car to put the gas in. these are the things that happen now so we can have a vibrant economy down the road. we have to pay now, make sure it doesn't hurt economy and recovery now. the time has come. that's what the president and congress have to sell to american people. >> diane swonk with mesereau financial. with we want to make sure where the commission doesn't end up like the 9/11 commission where nobody does anything. that danger really does exist. they were told do what you have to do to figure out an answer to the debt and deficit question. did they overreach to the point, as john suggests, it might be dead on arrival. >> i think no matter what they did was going to be dead on arrival. i think john points out something important, what the american people think they want and the reality for their lives are two different things. the gap in bridging that is difficult.

i agree with david i think the commission fell short in terms of what they could have done. they didn't want to overkill and go where they needed to go to deal with the structural deficit. this doesn't have much on entitlements. on the other side they were trying not to go so far they wouldn't get negotiation. at the end of the day, background research says we need new budget accords, new rules that congress has to act. that's what is lacking in all this. we can have all the commissions in the world and point out the commissions to advise us but if we don't have rules to get congress to be disciplined to have a discussion, they are going to continue to act like children. i really am kind of ready to give the whole congress a time-out. >> a time-out. if you could somehow so when they overspent they have automatic tax increases. right, diane? automatic triggers. >> spending freezes. >> so they had to -- that would give them the political cover as well. they say to the constituents,

look, these are the rules. nobody wants to take the blame at the voting booth for actually doing things the people at the voting booth say they want done. >> one of the things going on here, a proposed increase in the retirement age from 67 to 69. we saw what's going on in europe, england. >> come on, how much lower can you do it. >> people affected by this will have 30 or 40 years to plan for it. >> yeah. >> john, who carries this ball and tries to get it through congress? >> the president says he will carry the ball and will try to get both sides to listen. this is a town dictated by the politics of the moment. something happened in the midterm elections that is a significant obstacle to having a grown-up conversation on the issues you're talking about. for the first time the republicans won the elderly vote. the senior vet by a big margin.

huge shift toward the republicans. will those that say reforming social security and medicare be willing to take the risk off alienating those they won over. if you're democrats who lost the vote, said you wouldn't do this, stand up and fight it, the way to get them back, no, we will not raise retirement age, no short-term taxation. short-term politics are right in the middle, a giant speed bump if not a road block. >> hold the thought. we're going to take a quick break, continue with all of you here. let's continue this discussion. we know we have to cut the deficit but why? what would change in your life if we did not do anything about this? i know david walker has thoughts on this so does christine. we'll talk about that in a moment. [ male announcer ] montgomery and abigail haggins

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the economy is issue number one for americans. it has been for about three years now. here is something interesting. the deficit has overtaken jobs as the number one concern for americans who voted in the election. i want to ask david walker a question. david, let's look at projections about the national debt in the united states. if we do nothing, it stays online. by 2035 or 2040, we're at 80% of our gdp.

80% of what we create economically as a nation, our debt will be at that level. if things continue the way they are going and current policies are enacted, which are going to cost us more money, look at where that line goes way up above 200%. here is my question for you, david. i know what joblessness is all about. i know people who lost jobs. what happens? tell me what it feels like to have deficits and debts going the way of this line chart. what does that actually mean? how do i feel it? with what happens to me as a person in this country? >> what it means over time, not now, but over time if we don't correct our course is much higher interest rates, much higher inflation, a dramatic decline on the value of the dollar, higher unemployment, lower economic growth, lower standard of living for our children and grandchildren. look, ali, american people get it. washington is a lag indicator. these surveys about social security and taxes are incredibly superficial.

i've been to 440 states, hundreds of thousands people talking. i'm in chicago today. people get it. they want leadership. they want truth. they want tough choices and it's time they got it. >> diane, let me ask you this. how much debt should a country have? should we have no debt at all? is there a certain amount that's okay as a result of gdp? where should it be. >> that's the million dollar question no one has the exact answer to. we have too much debt now and on the wrong trajectory. that said we have reserve currency as well. we've been given extraordinary privileges in the world with the u.s. dollar being a reserve currency. so not only does rising debt cause all of the things, and i agree 100% what david is saying, a debt crisis may be sooner rather than later as some on the commission were quoted saying could have been news on an other

wise slow news day to cause a crisis in the financial markets in the next two to three years. >> john, the issue is here we know this is what people are concerned about. someone is going to have to have an answer. is this going to become the biggest issue of the presidential election. >> i think it will be for the next two years and into the next presidential election. david walker is dead right. they are ahead of the politicians on this. you know this. over the past few years every family in america has had to make incredibly difficult choices and do things they didn't want to do. they look at washington and say why don't you do things you don't want to do, break your rules and do something. be grown ups. >> john, the bottom line is we've had sacred cows, things that were never going to be touched. people in their own homes have had to deal with sacred cows. i guess it's time the government does, too. >> the politicians don't trust each other. they often don't trust the very voters that sent them here to washington. the trust deficit between the democrats and republicans is what gets in the way here. they think they will go into a room and cut a deal.

in the next campaign somebody will run an ad that says ali velshi raised your taxes, make grandma work until 70, froze military pay for our heroes overseas. they see attack ads. they won't make grown-up decisions. american people say we have to do that, why can't you. perfect environment for perot like independent party. the one thing the two parties agree on is making it hard for a third-party. >> we can sit here and let congress drive us into a ditch. it makes me feel very powerless if so many people and american people say they are so worried about this but you can't change the dna of washington. >> even after a midterm election like the one we just had. >> it is why the president tried to set this up so you force congress to have an up or down vote. everybody has to do it together. essentially you all walk the plank together. if they can't get the votes for this one report, there will be a couple of others, when that doesn't happen, the new republican house does not trust the president of the united

states. many republicans think their best ever is to carry the debate over into the next presidential election where they think they can win the white house and have a more favorable political climate. politically they might be right. as to the structural, everybody knows the sooner we deal with this, the sooner the better, but this town does not seem capable of doing bigs things. >> your show right here on cnn, jk usa, thanks for joining us. the health care battle is over, right? no, it isn't. republicans want to repeal the health care bill. that might not be possible. they have another plan and i'll tell you when we come back. unlock the doors, and turn on the hazards. or get a car that does it for you. ♪

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the results of the midterm elections could bring changes to your health care coverage because republicans are trying to dismantle president obama's health care reform. dana bash, senior health care correspondent, dana, while repealing legislation is not likely, given republicans only have control of the house, they can fight health care reform in other ways by passing legislation or blocking funding. what are they planning to do? >> that's exactly right. i just got off the phone with a senior republican source that used this term, death by a thousands cuts. they know they don't have the votes to repeal their campaign promise to fully repeal. one thing they do have in congress is the power of the purse. for example, there is money required to put forward this legislation.

for example, hiring irs agents to do that. they can try to block that funding. they can try to block funding to implement specific regulations. they are going to try to do that one by one. still having said they can't pass it, i will tell you they are doing to try. in fact i was told the very first month republicans have the majority they are at least going to push that repeal bill forward to say politically we can do it and did it in the house. >> christine, put aside the politics, although one can rarely do that, we've been talking about the rise in the deficit and curbing spending, is health care on the table for cuts, if i continue that analogy. >> if you look at the deficit reduction plan that came forward this week, yes, health care is in there, because the government is a huge consumer of health care. here are some things on the table for discussion how to get down the budget on health care. how much are you going to pay doctors?

are you going to pay doctors for defensive medicine. health care in the military. tri-care, health care system was kept out of health care reform. it's right there in that draft proposal for trying to cut the deficit, moving more of the cost of health care onto military retirees. all of these talked about. not all popular at all, i will tell you. that's where politics come in. >> andrew, vp of affairs, host of sirius xm doctor radio, what are benefits available now as a result of health care reform that was passed. those could be at stake depending how republicans move forward. >> they can be at stake. the american public likes a lot of things that kicked in. covering dependent children up to age 26. tax care to small businesses to provide insurance for employees when they have fewer than 50 employees. closing the doughnut hole, the portion of drug expense seniors pay themselves out of pocket this year. elimination of lifetime caps on insurance payouts.

these are big things the public really likes. >> dana was just talking about how the republicans can try and cut funding or not let new initiatives that haven't been put in place not fund them. how much of the debate comes from how to pay for the protections. is the law put into place funded? >> health care reform is paid for. insurance reform is paid for but paid for by unpopular items easy to go after. quite frankly i'm not sure everybody understands it. taxes on high income individuals and families. tax on cadillac plans, insurance plans, forcing corporations to provide insurance for their employees or make them pay a penalty. there's a lot of easy targets for any party to go after if you don't like health care reform. >> dana, this health care reform, it was a signature policy of this administration, this democratic congress that was just defeated.

how do democrats who like health care, how do americans who like the benefits andrew was just talking about, how do they fight back against republicans who want to dismantle it. >> they are going to have to do what andrew was saying, this will help you, this is what you should like about it. it's not just big bad government as republicans pointed out taking over the health care system. that's the big challenge. if they didn't do it with the bully pulpit, get the message out there, it's hard to understand how they will do it with republican rhetoric to battle against. >> we remember the town meetings, white house lost control from the beginning. round two might be more successful. dana, good to see you, good to see you as well. showdown in seoul. did they make any decisions after the long trek to south

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gsz the g-20 economic summit this week in seoul korea, the group of 20, includes these countries you see in red. they are 20 countries, the fastest growing economies in the world and together 24r5e789% of the world's economic output. 85% of the world's gdp. we always talk about that. china and the u.s. and their currencies are particularly in the spotlight this year. the chinese yuan, america dollar competing currencies. chinese are accusing the u.s. and, by the way, vice versa, of driving each other's currency down. why would a country want to keep its currency low. when the chinese currency is worth less, chinese products can be sold for less abroad. last month alone, china sold $27

billion more to the world, it exported $27 billion more than it actually imported. for years in the united states it's been the other way around. the u.s. has imported far more than it sold to other countries. in september that difference was $44 billion. the u.s. imported $44 billion more than it exported. the federal reserve decided last week to pump more money into the u.s. economy by buying up treasury bills. we described that as qe 2, quantitative easing. that has lowered the value of the u.s. dollar as expected. when you take all that money and put it into the economy, it makes that u.s. dollar worth less money. most people only think about currency when it affects their ability to take vacation. this currency battle, war, whatever you want to call it, how does it trickle down? >> currency effects jobs. that's the fundamental battle now. a weaker currency allows you to export your stuff. when you export stuff, that

means salaries are going, mines are going, industrial output is up and you're shipping things around the world and that's helping you. the question is here are all these countries around the world trying to drive down their currency sos they can give export machines an edge and who does that hurt in the process. that is what they are squabbling about. >> richard quest joins me from abu dhabi, which is only halfway to seoul because i suspect he didn't think g-20 was worth the trip. president obama said in seoul the best thing that the united states can do for the world economy is to grow because the u.s. is a huge engine for other country's growth. is that true? >> absolutely. the u.s. president's words were completely and utterly accurate. there is no doubt as the consumer of last resort when the going gets tough the americans go shopping.

until now, of course, in this recovery that has not happened. but the reality is the u.s. economy is in no structural position to enjoy the fast recovery the president talks about. hence, the need to massage it with other things, currencies, and qe 2. this is the communique. it is three pages long. frankly, you and i, christine, we've all plowed through more than enough of these. i've never read a more irrelevant and frankly more pathetic description for a communique. >> bottom line is they punted on decisions. christine you were at g-20 in pittsburgh last year. there was a strong feeling then. we were in the midst of the crisis. we still felt like the crisis, the world had come together. they were going to be coordinated in propping up economy. central bankers were making deals with each other.

feels like this year it's everyone for themselves. >> i completely agree. you're absolutely right. in the anals of communique speak they tried very hard not say what everybody wanted to hear. do you talk about currencies or fixing global imbalances that are still there in spades or do you say we agree to agree on something down the road. things happen slowly in diplomacy. i think that after last year in pittsburgh i thought that you would have had the world talking with more in one voice. >> they weren't doing that, richard. >> the problem is, there have been these great moments in history like bretton woods after the second world war when nations have come together, g-20

in washington, in london and philadelphia -- sorry, pittsburgh, when they came together to try to solve the problems. what they are now doing is they are tinkering at the edges. the house isn't burning but there's smoldering embers somewhere in the basement. the real risk is if they don't start dealing with these imbalances as the president of the world bank has said, more and more people are saying, eventually those embers will be set afire again. >> let's be clear china saves to much exports to much. america spends to much. europe needs to invest more. that's what happened before the crisis. many people said the huge -- magnetism of these big structural imbalances created the whole problem in the first place that allowed the housing crisis to erupt and it's all still there. >> richard, good to see you. try to bring a little more energy next time you join us. we'll take a break.

bacon, cereal, coffee, sounds like a great way to start your day if you can afford it. rising commodity prices are taking a big bite out of your breakfast. i'll talk about that next. from the world of finance to styling pets. stephanie elam has the story of a wall street veteran who turned his career upside down in this week's turnaround. >> reporter: after two decades on wall street, eric diaz traded his suit and tie for tails and paws and couldn't be happier. >> you're a good girl. >> i woke up one morning and said, i don't want anything to do with the financial business anymore. i want to do something different that's totally unrelated to money. >> eric took an early retirement package from merrill lynch. after equal parts researching and soul searching he took the career leap from being a corporate employee to a franchise owner of aussie pet

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from what you eat to what

you wear, your cost of living is increasing. an agriculture economist at global insight, coffee, wheat, sugar, cotton, why are we paying more for these things? >> i think part of it is a function of the weakening of the dollar. for all this to be happening all at once, i do think there's a correlation that these commodities are being used as a hedge really more against a weakening dollar as much as a hedge against inflation. >> christine, how much of it is plain old supply and demand. i know in some cases we've seen with the recession ending more people buying cotton. we've had less cotton production. >> some is. you have china as a huge consumer, india is a huge consumer. we're talking about oil, always a factor there. looking in the u.s., gas demand is down a little bit. you do have this rush into these commodities. you also have i think a drought in russia. you've got cold, wet weather for coffee. all kinds of different things coming together.

the usual supply and demand things against this new backdrop of a weak dollar. boom, you get an explosion in commodities. >> seen this play out with oil in the past. let's bring in jeff reuben. we've talked to him a lot. author of why your world is about to get a whole lot smaller. oil prices moving higher. tell me the story there. is this global demand because economies are getting better? is it a hedge because money can be made in oil? what's going on? >> well, i think we're going to find, ali, that the same consumers that drove oil to triple digit prices in the last cycle are going to do it again. that's not going to be the u.s. consumer or, indeed, any of the oecd economies. china is already at 9 million barrels a day. in the next couple of years, we're going to see what happened in coal 10 years ago happen in oil, which is the developing world now consuming more than the developed world. in a world where the oil supply

is hardly growing consuming oil becomes a zero sum gain. that means if china is going to consume more, countries like america will have to consume less. >> if you're sitting home and thinking gas prices are going to go up, commodity prices going up, ultimately that doesn't mean inflation for the whole economy, jeff, it ultimately does mean inflation for the whole economy. if food prices are going up and energy prices are going up that works its way through to almost everything we spend money on. >> that's exactly what happened last cycle, ali, when inflation went from 1% to 5.5% and the feds fund rate had to rise and blew up subprime mortgage market virtually all that inflation was coming from two components of cpi, oil and food, just like we're seeing again. >> tom, what happens when commodity prices for food increase? do we find people backing off a little bit, buying less of it, or are we talking about things people can't really choose to get out of their lives.

>> i think you see some adjustment in consumer behavior, especially in the current environment. really this time around it's not the u.s. consumer that's driving these higher prices that much. margins have been squeezed an awful lot between the wholesale and retail level already. that's going to be the big tug-of-war especially in 2011 is who is going to win that battle. certainly consumers are fighting back. a lot more than they did. >> someone is going to have to absorb any of these increases. it's a good discussion. guys, thanks very much. let's talk gold. three questions. one, did you miss your chance to get in? two, are high prices of gold here to stay. three, what can you do with gold you own? we'll have answers to those questions coming up next. [ female announcer ] imagine skin so healthy, it never gets dry again.

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this could significantly reduce emissions when it comes to investing, no one person has all the answers. so td ameritrade doesn't give me just one person. questions about retirement? i talk to their retirement account specialists. bonds? grab the phone. fixed-income specialist. td ameritrade knows investors sometimes need real, live help. not just one broker... a whole team there to help... to help me decide what's right for me. people with answers at td ameritrade. get up to $500 when you open an account. welcome back to your money. take a look at the blue line on the chart. this is a s&p 500 a broad based

stock index that you may have mutual fund that mimic those in your 401(k). if you go back to 2005 the s&p 500 is down roughly 1.75%. take a look at the red line. that's gold. if you put your money in a fund that tracks the price of gold over the same time per your return would be in substantially higher, about 200%. you might look at this gold seems like a sure bet. this is always the question we have. gold topping $1400 an ounce this week. does it mean it's too late? should you get in? what should do you? let's bring in the author of "game over" what happen steven, what do you do now? should you start now? >> i would go in now. what i would look to do is buy some now and by more if you get

a correction of 5% 120%. aim to get 20% of your assets into gold. >> for me, christine, if you would have asked me 15 years ago i would have said what do you mean by gold? they're all nuts. i am not a gold man by nature. this is what the world is giving you now. when you see chart like you just presented, that's not an accident. gold is a major reflection of economic trends happening in the world and that are not really changing, and you just have to face reality. maybe some day, and i hope some day soon, i'll be able to say, it changed. we have growth. we have real substantial economic growth and get out of all your gold. i would love to be able to say that. >> right, but you don't think now? >> no, i don't. >> you also say you need to have a portion of your portfolio as a hedge against whatever's happening elsewhere. one thing i worry about is people getting in now when the real smart people who've made a lot of money over the past year, year and a half are getting out.

you could get slaughter if there was a pullback in gold and you put too much of your non-risk money into it. >> right. first of all, that's absolutely true. i mean, gold unlike stocks are more -- more than stocks are volatile. any investment, virtually any investment is volatile and gold more than most. virtually any investment is volatile, and gold is more than most. what i'd be surprised if gold went down 15% to 1200? not at all. >> you would buy that? >> i would absolutely buy it. >> unless i saw something really fundamentally changing in this country. unless i saw that dip, not so much a dip. a natural correction. but really a reflection of an underlying fundamental change, and then i'd be glad to say i misled you. you shouldn't have bought it at 1400. don't buy more. get out of what you did. go back into the stock market. and you know, look forward to wonderful times. >> one of the things we talk about is if gold -- people hold

it because it's easy to get rid of and easy to exchange and a hard currency. a whole lot of people are going to stores popping up across america with their jewelry and trinkets and getting a have you poor return on it when they sell it. if you have gold and you wanted to sell it, what are you supposed to do? >> first of all, i mean, you've got to shop around. i mean, if you have jewelry, if that's what you're talking about. zin >> coins. >> a wedding ring or something like that. i would do a lot of research on the internet. just common sense. i would not go to your typical guy on this street or that street. i would really look on the internet, find -- there must be some -- it is out of my area of expertise, but there must be agencies or organizations that endorse particular people that say, yes, they can buy it. if you're buying gold at tiffany's, that's a bad mistake, unless you want that little blue

box, et cetera, whatever. it's not a good -- it's being marked up 300, 400%. if you want to buy gold, the reverse of it, you want the same thing. go to the internet and find credible gold dealers and make sure it's not marked up. if you want to sell gold, credible people with out there. you can absolutely get murdered doing something like that. just don't do it willy-nilly. it's a terrible mistake. do a lot of research. >> if you hock your wedding ring, make sure you get a good price. $88,000 in debt and all of a sudden debt-free. it took three years to do it. smart is the new rich. we'll tell you how, next. [ male announcer ] in the event of a collision,

the smartest thing you could do is cut the fuel supply, unlock the doors, and turn on the hazards. or get a car that does it for you. ♪ one month, five years after you do retire? ♪ client comes in and they have a box. and inside that box is their financial life. people wake up and realize i better start doing something. we open up that box. we organize it. and we make decisions.

we really are here to help you. they look back and think, "wow. i never thought i could do this." but we've actually done it. [ male announcer ] visit ameriprise.com and put a confident retirement more within reach. from $88,000 in debt to debt-free in three years. sounds unrealistic, right? christine, it's a very, very real story. >> it's an amazing story. this couple had $88,000 in credit card debt, all kinds of debt. they made a decision they were going to cut down that debt. they had a five-year plan and got out of it in three years. it's possible. >> there are more than a dozen

accounts here that you would to close off. >> oh, yeah. >> three years ago carol and don carroll were $88,000 in debt. today they're debt-free. >> all it takes is one hiccup to start this horrible, horrible snowball effect going downhill. >> they spent every penny and then some on credit cards, gas cards, and medical bills, even though they had health insurance. then don lost his job. >> you were literally near a nervous breakdown over the bills. >> when you can't sleep, it's just -- it gets to you. >> yeah. >> and that was the straw that broke the camel's back. i stopped sleeping. >> they did not want to file four bankruptcy. >> we made the debt. we should pay for it. >> a nonprofit credit counselor put the carrolls on a five-year payment plan. they finished in just over three. >> i think if there is a silver lining to the recession, it is that it has refocused people's

attention on their own personal finances. i think they are ready to move back over into the driver's seat. >> so how did the carrolls do it? >> you have to get organized. i don't know if you call it having less. it's just not having it immediately. you learn to live with what you need, not with what you want. >> what is your message for people who might see your story and think, wow. i have 40, 50, $60,000 in credit card, i will never get out from under this. >> never say never. >> it's totally fixable, but you have to take the steps to say, i need help. >> the carrolls used a nonprofit credit counselor who helped them with a pretty elaborate payment plan, and they really stuck to it on following each one of these lines, a real flowchart of all of the debts and whittling them down. the bottom line is for everyday items, the carrolls buy

something if they absolutely need it and have the cash on hand to pay for it. 4 million americans sought debt counseling. that's a lot of folks out there in this boat and others are not sleeping at night who haven't sought help yet. the average income was $38,800. the average debt was $27,000. talk about america's debt-to-income load, 70% of total household income, the average number of credit cards in these households, 5.7 credit cards. these people were amazing. >> i love that story. >> they never wanted to file for bankruptcy. she said we made the debt. we went out to dinner and ordered thai food and went on vacation. >> he said it's organization, and it's that feeling of overwhelmed. we hear it all the time, but tackling it sitting down, understanding it, there are resources available. get the credit counseling. that is fantastic. you have a full chapter on this in your book. >> this debt-free in three. do you think you can do it? lots of people can