>> and former south carolina governor mark stanford will be here and he has insight what's going on in that state and tune in for tt and the after the show show. >> dave: and saints at the 9ers and broncos at patriots, won't sleep, forgive the bags upped our eyes, ali will be awake. >> i'll try to stay sober. >> brenda: one week from now there will be voting in south carolina and neil cavuto will be live here at this time covering it. but last night, the ratings agency casting what could be a vote, downgrading a slew of european nations, etly, spain, austria and portugal. and u.s. banks feeling the pain. will u.s. jobs be next? hi, everyone, i'm brenda buttner, this is bulls and bears, let's get right to it. the bulls and bears this week, gary b smith, tobin smith.

is jonas max ferris, and christian, and amelia. toby, you say we need to do something right now to stave off the threat. what is it? >> read my lips, cut corporate taxes and every one of the republican candidates, agreed on one thing. cut corporate taxes and let's go to the history books. look at my old country. 15% went to a flat rate 15% versus the euro at 30, 35% and they grew their economy four times faster and their gdp kicked butt for 22, 23 years, we've seen it in every other country that's done this, astona, blah, blah, blah, it's time to do it now and get ahead of this thing. if we don't we will have job issues here because europe is going to be negative for the next six months. >> brenda: in fact, we have the second highest corporate tax rate in the world, second only to japan. christian, is that the way to go? >> look, if all you're interested in it increasing corporate profits, sure, cut the tax rates and if you're

interested in creating jobs. >> brenda: let him talk. >> you need to do more. the reason that businesses are not hiring right now is less to do with their tax rates, but more to do with the lack of aggregate demand out there in the economy. and even if you increase profits by cutting taxes, you're still not creating a market for those goods and services. that's the real key issue. what's going on in europe right now has been priced in, and factored into the markets for the last six months. so, this is not a surprise. what we really need to do to increase employment at home is to improve employment situation getting more people back to work and seeing their wages rising again. >> gary b, answer for that? >> first of all, i thought toby's home country was scotland and not ireland. last week i was sure it was scotland. >> brenda: depends what he's drinking, okay? >> that's not withstanding-- i appreciate christian towing

the liberal line, but doesn't back up with the facts. one, you mentioned brenda that we have amongst the highest if not the highest corporate tax rate of all the countries. even if we lowered to 25% look what would happen? toby's brought up some examples of overseas, but in 1997, a joint task force in congress studied the whole issue and what did they find? they found that when no less a person than president kennedy lowered tax rates across the board, what happened? employment went up. and revenues went up, also, the same thing happened under president reagan's tax cuts, employment, unmroit, in fact-- unemployment dropped and revenue went up. case by case,ed' have a hard time arguing the other side where lowering taxes both individual and corporate doesn't lead to higher employment and higher revenues. i don't see why we don't do it. it makes perfect sense. >> brenda: well, there are a lot of different tax rates and jonas, does lowering the corporate tax rate help sta

startups which do a lot of hiring? >> no, when you start the business you're not paying a high corporate tax rate for the first year, second year, i don't want to say it's punishing success, but investing money for investing for profits and you want the corporate tax rates low. the carpet tax rates when you look at deductions, pay an average rate of 18, 19%, don't pay the 35% rate. we have more deductions than other countries. does that mean we shouldn't get rid of the deduction and lower the rate? of course we could. when you're comparing jobs and the comparing the payroll tax cut. every employer has to pay. every person you have to pay the payroll tax rate. he wh i started i'd rather have a higher tax rate and paying the lower payroll tax rate. i wasn't making any money. you with a nt to lead to hiring, lower the cost of hiring, the payroll tax rate,

know the even the size that the worker had to pay if you had to choose between the two. >> brenda: and you're a business owner, what do you prefer? >> again, if it was that easy that there was one solution and this problem would go away we'd already be doing it. the reality, it's not just the corporate taxes. small business owners which is 100 million and less, have said over and over again, these things incongruent is what we need to be able to put and start hiring people. so, yes, this is one issue that we actually need, because again, it's just too high and when you talk with the deductions, i hear you, that's for the big companies, for small business owners we don't get the deductions and we need the lower rate and we also need the payroll taxen access to funding. we need the epa and others causing havoc on our trucking industry and the price of diesel going back and forth and-- >> hold on. >> don't you need customers, most of all. >> brenda: just a moment, christian, it's the one thing that all the g.o.p. candidates

in south carolina agree upon, that we should have a cut in the corporate tax rate. tobin, is it the one thing-- we agree there may be. >> sure. >> brenda: a whole panoply of things that could help, but is it one thing that might help us? >> well, it is if you combine it with the other side with work, is that the corporations when they make a profit overseas, rp allowed to bring that profit back to the united states. again, why does google run all their business out of ireland? because other european business gets taxed at 15%. that income stays there, it gets invested there, it doesn't get invested here, if you come boo -- combined and you an allow the american corporations, large 500 guys are responsible for hiring in the united states and big way for high paying jobs, you will see the double combination of huge, trillions of dollars to be repatriated to the united states and investments made to the united states and that lower rate means, by the way, we probably

have a dow 15,000 by the time we're done with it, and increases the pie and increases demand. >> brenda: so you've heard this other, this side. you think that lowering the corporate tax rate would be a mistake? >> well, you know, it's not. it's not a mistake in the sense that, it shouldn't be done. i agree with jonas, that the corporate tax rate there is room to lower it provided that you get rid of a lot of leakages that we have currently through deductions and other sorts of things, so i have no problem with that, but to describe lowering the corporate tax rate as the tour for are-- the real issue we're going to disagree about, many of the things that were discussed. the real issue we don't have suitable enough demand. until you get that issue you're not going to improve our employment. >> i don't know if you saw the screens that we were showing before. if this is disingenuous, what happened to the 25 years of growth in ireland and hong kong and 25% all over the

world. >> ireland happens to be the poster child for the first european-- the banks taken over, it's a disaster. >> and i don't know if the model of success you want to mimic and secondly look at the economies that failed. if tomorrow we lowered our corporate tax rate and didn't get rid of the deduction until it was a net loss to the ref into you and the irs, we would be already seeing cuts in addition to the cuts we had last year because we have a problem and the countries have a problem of not being able to pay their bills and you can't just wholesale cut taxes without removing deductions from the equation and taking even less money. that's the only thing we've got going over half of europe. we're a little more likely to pay people back than most of europe. >> brenda: it will make money more fluid. toby is 100% correct. it will make money more fluid and bring it back in and reinvest it people complain so much money overseas, true, there is, and the reason why, because that. i'd rather hold it over there at a lower rate than bring it

back here and get smacked with it. >> brenda: okay, that's got to be the last word. thanks, guys. from capitalism itself to cutting our debt. presidential candidates in the grand old party accused of grand old hypocrisy. neil's gang is on it. here, first, the volt running on empty, gm saying it might pull plug on the plug-in if it doesn't see a spark in sales by this summer. proof, the governor is still in the driver's seat? the big ♪ ♪ side by side, e, two, three ♪ ♪ counthe birds in the big o tree ♪ ♪ la la la [ male announcer ] the inspiring story of how shipping giant can befriend a forest may seem like the stuff of fairy tales. ♪ ♪ you and me and the g old tree side by side ♪ butyou take away the faces on the trees... take away the pixie dust. take away the singing animals,

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>> live from america's news headquarters, i'm patti ann browne. the u.s. military releasing brand new video this morning of aryanion navy speed boats harassing u.s. ships in the straits of hormuz. the incident occurred in early january. the strait is one of the most important. and it happens at they were wrapping up navel exercises. iran has been threatening to

shut it down as a result of sanctions imposed by the u.s. 69 passengers are missing after the cruiseship ran aground. the luxury cruise ship is flat on its side. the ship ran aground off tuscany sending water pouring in through a gash in the hull. three people are dead and more than 4200 people were on board including americans. i'm patti ann browne, now back to bull and bears. >> brenda: the chevy volt may be running out of juice. until this summer get a jolt in demand or they're going to pull the plug. why not pull the plug. . please pull the plug, we told you before you started this, i don't know who is actually running the show over there other than the government. they can't force people to do it. one, it's a bad investment and what it costs you to get into

it versus how long the payoff is. have you looked at the size of us, we don't fit in it. i couldn't put my family in it. >> stand up, i don't believe you. >> look as what's happening. we're moving farther away from the city because we're streamlining incomes, this they think doesn't go there aen back and maybe i'll squish myself in it and push all the way home. it's bad all the way and turn around, i'm going to close this down months-- >> doesn't it run on like double a batteries or something? >> oh. >> brenda: christian, you get a spark from the volt. >> the volt may not be the answer to the electric vehicle wave of the future, but you need to have a necessary first step. do you remember the apple newton? probably not, because it was a flop. without the newton we wouldn't have the iphone today. you have to start somewhere. and the fact that the volt is going to be, you know the first salvo in this wave of the electric vehicle future, i think, is important for us to

really hope that it succeeds or to recognize that even if it's not everything we want now, it's going to set the stage for future electric vehicles that are. >> gary b? >> i'm just laughing about the newton. the newton was the precursor to the iphone and the ipad, huh? in any event, i guess the ed sell was the precursor to the volt, just as big a flop. amelia pointed out the problems and chevy is struggling with this. they could have put a second shift on to meet demand and of course they didn't. the other thing, i'm surprised christian, you, a man of the middle america, the populous person, hasn't come out against the chevy volt because basically this is a car for the 1 about percenters and everyone one of us is subsidize, this is a rich person's car and doesn't do one iota, you know as well as i do, to reduce carbon

emissions. we could reduce all the gas guzzling cars off the road and it wouldn't make a .1% difference in our car upon footprint. i'm with amelia, this has got to go. >> brenda: i've got to get everyone in here. this car actually can drive for hundreds of miles a unique again rater system. unlike the leaf nissan. it does not have the government behind it and they're selling it, even though it's kind of ooh loser, only 10,000 in america, too, the bottom line prius, was not a huge success immediately and can take a little time and gm made plenty of flops that were costly without the government and aztec comes to mind among many others, and it has the potential to-- but not going to have to say they won't have to kill it, it might be ahead of its time. and oil prices may have to go

higher. >> brenda: what do you drive, jonas. >> looking to get into electric of some kind. >> range issue and you how far can it drive? that's not the point. we know from the documents, et cetera, they were going to cancel the car until we came in and bailed them out. and all of a sudden, it was a chip. a bargaining chip to get you know. 15 billion or 25 billion dollars in cash and that was how it played. guess what, they'll play it and put on a kabuki theater it's going to sell well. it's a rotten car, overpriced, not going to sell. >> brenda: christian, the last word. well, look, first of all. the volt you can say a lot of things about it, you can't say it's a rich person' car, not for everyone, but at $40,000, subsidized down to 33,000, it's not a car for the 1%. and secondly, you know, if we're going to expect that a car is going to come out in its first model year, new technology, and all of a sudden, beat world records and

that's an unreasonable expectation. this is going to take time, and it may not be the volt that sets the market afire, but it will be a successor to the volt. >> no pun intended because the volt catch on fire. >> brenda: all right. >> bad points. >> you beat me too it. >> brenda: well, did you catch this? this? >> creativity and ingenuity. >> powerful ap positive vision. >> and very, very-- >> get excited, so excited. >> brenda: oh, the candidates excited about none other than our neil cavuto and his coverage of the south carolina primary one week from today. first on fox news, for a special cost of freedom at 10 a.m. eastern, and then on fox business, when the results roll in at 7 p.m. eastern. only neil covers the ballot counts and what it means to your bottom line. watch it and profit from it. up next here, the president unveiling a plan he says will shrink government.

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>> coming up, president obama wants to thin the fat in government for merging agencies into one. some are warning this will cost taxpayers more money and

>> scaling back government by merging government? president obama asking congress for the power to put six commerce and trade operations under one roof, but gary b, you say forget merging we need purging? >> absolutely, brenda. this is obama's three card monty, i guess. he's moving kind of the shells around. you know what it's going to be like? it's going to be like the same

premise that happened with homeland. we're going to have one big agency that's bigger than the other agencies combined below it. look, we don't need, really, almost any of these agencies under there, the small business administration for one is costing 6.2 billion and what it does is allows a little bit of money to go out so some small companies can battle other small companies and above all the department of commerce, import, export bank, allows the government to pick winners and losers, we need to get out of that business and shut these down entirely and not make one big organization. first of all, i haven't seen them do one thing that has small business do anything, but hurt us. the last people to decide exactly what small business needs. again, not all of them. again shall the f.d.a., i will tell you that the sba has been fundamental for a lot of first line. i got my first business and sba loan put me in business because the banks were hysterical. the first place i went to get resources and understand what

i needed. are they perfect? no, are they antiquated, absolutely. should you throw some of the business people into people who know nothing about business? absolutely not. >> all right. christian, is consolidating a good thing? >> of course it's a good thing. come on, not having services duplicated across many agencies, i don't know how in the world you can criticize this and certainly, if you're going to find any fault with the way that government works, you need to also include gary, the congress, which is the ones who are preventing president obama from actually performing his executive function of providing the leanest possible executive branch, so, the issue really is congress wanting to have oversight over various fiefdoms that have allowed government to get so sprawling and so big. this is actually a great step by the president. >> brenda: toby. >> christian is absolutely dead right and another thing i would cut five out of the six. if you look at the reward. the businesses that serve business are horribly run

businesses and gary is right, i live in washington d.c., amazing to see homeland defense rented 350,000 square feet of new space just because they knew they were going to get bigger. the small business administration if it was run correctly would be a net positive cash flow agency and is vital for franchise companies, retail companies that have no other place to go. thor 0 ones, nice knowing you. >> brenda: jonas. >> every government agency had a friend. boeing would tell you the import, export bank is a tool to only buy airplanes from boeing. >> how about the private sector. >> and that's profitable to government even though it's an artificially low rate extended and delta doesn't like it because they don't have that deal and they have to borrow money at a higher rate and at a disadvantage to an international carrier and international market. so i'm just saying that everyone has a fan in one of the agencies. this one is good because i have a personal-- i don't work at boeing, but i guarantee they want the

import-export bank to have more budget and consolidate and keep it is great. personally i think some of the agencies are making trade bad in a weird way. >> brenda: that's got to be the last word. thanks, guys, and thanks to christian and amelia. the name that will keep iran from blocking an oil route and driving down gas prices in the u.s. how the european down grades could be a huge upgrade for your profit.

>> predictions? jonas is up. >> when s & p downgraded u.s. government debt. they downgraded european debt by i-gov. the international treasury bond fund is going to be-- >> gary b, bull or bear. >> bear. stocks trade too thinly, avoid it. >> what do you like, gary? >> i like bank of america, it's getting smaller, but the stock price won't. i see it up 50% the next two years. >> brenda: toby bull or bear. >> bear, and i remember gare