worse. >> all right. >> here is the president's message. >> trying to find the camera there. >> i'm here. the president's message falling on deaf ears in washington. "your money" with christine romans starts now. see you at the top of the hour. your government shutdown as of tuesday. is this short-term stupidity or long-term destruction? i'm christine romans. this is "your money." flashback to 2011, lawmakers warn of political doom. >> this could drive unemployment rates higher. >> the first downgrade of u.s. credit in history. fear of what was next. then effort to avert future crisis moments. washington agreed on two so-called poison pills. >> not something that i propose. it is something congress has proposed. it will not happen.

>> remember the fiscal cliff? the majority of tax hikes were avoided at the last minute. then the president changed his tone. >> consequences for the economy would be catastrophic. we fought back from the worst economic crisis in our lifetimes. >> as washington shheaded to a shutdown, fatigue. >> as i said at 2:30 yesterday, i will stand against obama care as long as i'm able to stand. >> frustration. >> we have a great country, a strong economy, a terrific society. all we can do is erode trust and confidence in our government. we should be ashamed. >> where was the fear? >> the senate decided not to work yesterday. well, my goodness, if there is such an emergency, where are they? >> treasury secretary jack lew warns if the debt ceiling is not raised by october 17th, the

congress could not pay its bills. >> you would have a worldwide financial meltdown. that is what we need to head off. that is why we need this constructively. >> the people have seen this movie before. call it crisis fatigue or the chicken little effect. >> the sky is falling. >> the countdown is on. is it the calm before the storm or the storm before the calm? we have john here with us. has washington cried wolf too much to realize the catastrophe on hand if the debt ceiling is not raised? >> that is part of the problem, christine. we seem to have a crisis every couple of months. people don't like to watch a day care center at work now. that is what we have at the white house. you keep hearing the warnings and warnings. that is part of it. there is another part that is very important. if you look at our polling here, you know you hear from the economists and most leading republicans that god forbid we

never go into default. if you look at our poll, a majority of republicans, 52%, say they are okay with not raising the debt ceiling. politicians, republican politicians have focused on the government spending more than it takes in for so long that many people equate that wrongly. >> i want to bring in keith mcculley. we turn to him. keith, the big bank ceos and the president singing the same song. he called them fat cat bankers. >> there is a precedent for a government shutdown. there is no precedent for defau default. ymentsave to go out to people. if money doesn't flow in, then money doesn't flow out. >> the treasury secretary also is telling america that not raising the debt ceiling could be a catastrophe.

is he right? >> i said yesterday shame on lew. he knows better than that, christine. that was a political statement and unfortunately president obama wants that same political statement out there at this juncture. >> you think if we don't raise the debt ceiling, it will not be bad news for the financial system and global economy? >> the president can make that happen whenever he wants. >> stop. how can he make it happen? the view from the administration is that they don't have the legal authority. it is congress with the authority to raise the debt ceiling. >> look, they do. they have and they will. >> how can the president make it happen? >> because he has enough votes to make that happen. at the end of the day, he has actually an unbelievably amount of power. you go back to the 1917 act where it was created for war measures, christine. the president has a tremendous amount of power. he knows it. jack lew knows it. they know we will not default on the debt. i think that is really the

perverse reality here. to john's point, you have a bunch of politicians to scare people for political gain. people don't buy it anymore. you have sources that are debunking that and saying get over yourselves. this is about your political power. >> john, you have been on capitol hill for a long time. there is no one, no one that i'm talking to who really believes the president can raise the debt ceiling. >> there are people who say he has the constitutional authority to so do. the administration does not if we get there. i assume the government would shuffle for a couple of days if we reach that deadline. i will say that, i'll call it an encouraging sign. one sign in recent days has been speaker john boehner making clear to his rank-and-file lawmakers he is not going to be the speaker of the house for the first time when the house goes into default. i think now that the speaker may take heat for this. the speaker may be in the precarious position for this. it is clear he is prepared to

raise the debt ceiling even if it means he does it with a majority of democratic votes and republican votes in the house. what is not clear is what price the speaker will want. the administration says it will not negotiate. you know, you led the show with it, in 2011, the president did negotiate. the budget cuts. the sequester. can they save face? can speaker boehner give the president what he wants and can the president give speaker boehner what he? maybe separately. >> we will continue to talk about this. i'll be honest with you. if the president could raise the debt ceiling, would you not have 75 different times when president goes to congress to raise the debt ceiling. there have been a lot of fights. don't go away, guys. remember when washington united to prevent financial catastrophe? >> there is a spirit of cooperation with democrats and

republicans and congress and this administration. >> imagine that? that was the good old days. i'll show you exactly how a debt ceiling disaster could change your life. that's next. this is your first time missing a payment. and you've got the it card, so we won't hike up your apr for paying late. that's great! it is great! thank you. at discover, we treat you like you'd treat you. get the it card with late payment forgiveness. wout of landfills each year? plastic waste to cover mt. rainier by using one less trash bag each month, we can. and glad forceflex bags stretch until they're full.* so you can take them out less often. we know in the cyber world, threats are always evolving. at first, we were protecting networks. then, we were protecting the transfer of data. and today it's evolved to infrastructure... ♪ ...finance... and military missions. we're constantly innovating to advance the front line in the cyber battle,

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that's health in numbers. unitedhealthcare. the debt ceiling poses the biggest threat to the economy since the recession. that is according to economists. they are using the "d" word as the worst-case scenario. depression. john king is back with me. in a shutdown, part of the government is still funded. part of the money is still flowing here. when you hit the debt ceiling, the money runs out. the treasury loses its ability to borrow money and keep the government going.

we finance this economy. we finance it with borrowed money. it will have to rely on the $30 billion cash on hand in treasury coffers. the daily revenue fluctuates. the treasury will have to make tough decisions about what bills to pay and which ious it will have to issue. imagine, consider you want to make sure seniors get the social security checks. you pay out tens of billions to seniors. you want to pay out veterans benefits. that come due the month after the debt ceiling is hit. medicare and medicaid. crucial because of the lines of credit the banks have with the hospitals. that source of funding is important oxygen in the system. maybe people would not have to get their irs refunds. maybe you furlough more government workers in you had to. you certainly have to pay the interest on your bonds. that is non negotiable or you risk hurting the global system.

john king, they risk paying the chinese bankers. we just don't have the money to do everything. are they getting it? do they get it in washington? the dangerous game? >> the leadership gets it. that is why i'll be crazy and be a quasi speaker here. and the leaders will work it out and the president will get the increase in the debt limit. there is a lot of quick sand in what they are saying today and getting a bill passed. they could go off the rails. at the treasury department, they are running the math to figure out who gets the ious. the reason speaker boehner is warning about the denny hassert rule, you don't pass anything that doesn't have republican support. that is a litmus test. boehner is trying to rally his troops, christine. this is happening in the middle of the shutdown and fight over

obama care complicates it. the speaker is clear to his members that he does not want this to happen on his watch. >> keith, how does it play out for our 401(k) and savings and the nest egg here? congress has a lot of room to mess things up. is that a great year in stocks? the third quarter was very good. the fourth quarter just started. what could happen here? >> the stock market side, of course, there is a risk. there is all this brinksmanship. i agree with john and the bond market. the bond market, christine, does not believe the government will default on its debt. the bond market hasn't moved this week. what is happening here, both jack lew and obama understand it is a political football to use as fear-mongering.

that is the risk to the 401(k). you said year to date we have double digit gains in stocks and home prices. they are creating fear instead of imposing confidence. this is fixable. it will get fixed. stop freaking out. >> they should create jobs, not send people home without a paychecks. we have no jobs report this week. we are focusing on this brinkmanship. john, he seems to think he can fix it and the fear-mongering. >> any democrat watching will say it is the republicans who planted this my way or the highway flag on obama care although the president won re-election and the supreme court upheld the law.

the democrats will say it is the republicans and the democrats will say we never done this before. it is all the republicans. you can make the case and make it passionately. here is where presidential leadership comes in. this is his second term. the first year of his second term has been frittered away because they cannot get anything done. the ceo of the operation has to bring everybody in the room and figure it out. the president tried to do that this week. he should have done that weeks ago. we know when the fiscal year begins. why always wait until the last minute? some of the president's friends say he does sean like that wheeling and dealing. he will pay a price. even if the republicans get all the blame for the shutdown and we had all the default and not raising the debt ceiling, the president is running out of time in his second term. if he wants to get things done, he has to crack the code of dysfunction. >> thanks so much.

they will pay our creditors no matter what. they will not have that. we are not some banana republican. this is not a country that doesn't pay its bills. keith and john, thanks so much. treasury secretary jack lew saying not raising the debt ceiling is a can tatastrophe. donor fatigue alert. >> what do you get for shelling out of $6,000 for a smartphone? a diamond phone and the phone by costs ten times more than the iphone 5s. apple climbed to number one

on the best global brands list followed by google in second place. after 13 years at the top, coca-cola fell to number three. forget playing candy crush. you could soon own it. the owner is preparing for an initial public offering in new york. back to barilla? posting an apology for the remar remarks. he sparked outrage with traditional family. the car's cup holder. kfc is selling five new go cups for $2.49 each. what is the september jobless rate? thanks to the shutdown, i have no idea. that's right. more on the other ways we're feeling the shutdown next.

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there is nothing more urgent in america than creating jobs. congress has been screening for two years about creating jobs and whose fault it is that we don't have them. guess what. we don't know how many jobs were created in september. we don't know the september

unemployment rate. why? because congress shut down. the very people who have been screaming about creating jobs for years. so you can see the shutdown is already here. zain asher is here to tell me other ways americans are feeling the shutdown. >> i want to talk to you specifically about headstart. this is really taking a toll on education specifically. so a lot of head start programs based on their funding run out on september 30th. so when the government shut down october 1, they were shut down for teachers and students. take a listen. >> you can't go today cake every day. >> 3-year-old malika suffers from autism. he's been getting regular funding from this program. all he knows is he can't come

back to class. >> they're punishing us. just requesting what they do? >> this is one of 20 head start programs across the country at risk of closing because their grant expires the same day the shutdown began. those programs won't have access to new federal funds until the government reopens. >> i don't have headstart dollars anymore. >> that means closing the doors to 1,000 children. >> i'm so tired of the bickering and fussing and fighting and blaming obama. and blaming it on obama care. obama care has nothing to do with what we're going through right now. >> with no children to care for, over 300 teachers here very sent home without pay. mom, we have never seen you without a job. what are you going to do? i said, i don't know. head start classrooms are multiplying across the country,

potentially leaving 19,000 children without services. >> these are preschoolers. this is a heck of a way to learn government at 3 and 4 years old. >> the shutdown is yet another blow to the program that has already seen programs slashed by 5%. parents and children protested on capitol hill today, pleading with lawmakers to show them mercy. in the meantime his mother worries without the therapy he receives at head start her son will regress. what is taking so long? why can't they come to an agreement? we're struggling out here, and it's not easy. >> it's so sad. i want to talk more about melanie's story. the one we just saw. she was unemployed for several years. now she's hoping to get a job as a school bus driver.

>> what a story. that child is adorable. and it shows you that shutdowns matter. they matter. are you listening? they matter. up next -- >> for the amount that they're closed i'm not pay my taxing. >> i like sandra bullock's idea but it doesn't work like that. the irs is not doing audits but they are still collecting taxes. as we wait for washington to come to its senses, sometimes all you can do is laugh. waiting for your wrinkle cream to work? clinically proven neutrogena® rapid wrinkle repair. it targets fine lines and wrinkles with the fastest retinol formula available. you'll see younger looking skin in just one week. one week? that's just my speed. rapid wrinkle repair. and for dark spots rapid tone repair. from neutrogena®. you really love, what would you do?"

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legend m.j., michael jordan said he could beat lebron james one on one. he's 50 years old by the way. after practice this week lebron said never going to happen. and this is dante whitner. he just got fined $2,500 for a hard hit and he's tweeting about changing his name to donte whitner to donte hitner. must not mean much to him, but it is a lot of money. it takes the average u.s. household six months to make $21,000. a health care law that has been on the books for three years is standing in the way. nothing funny about that. sometimes you just have to laugh. late night hosts had it easy. >> big government this story, our government had shut down. >> how you doing?

>> or in other words -- >> the same week enrollment in the obama care exchange is open. >> i am so relieved that my dumb, lazy, good for nothing son has full health coverage. we kept telling him. hey, idiot, you have to get a job to earn health care. but mr. obama here, he makes sure my son will never have to lift a fing tore get insurance. >> politicians tried lifting their hand. >> i talked to the president earlier tonight. i'm not going to negotiate. >> nasa doesn't see it as a laughing matter. with funding suspended asteroid strike alerts on twitter were put on hold. we will not be posting a respondg from the account. warren buffett tweeted his third tweet ever. not even the oracle knows what's going to happen tonight.