putowski and steve murphy. ed, is the cbo right. are we headed for another recession? >> without question. not only are they right. i think they are a little late to it. i don't think there is anything they can do to keep us from going into a recession. i think we are already in one right now. >> but steve, isn't the threat of the debt and the deficit just as dangerous? >> i think it is more dangerous than the threat of going back into recession. i think the long-term threat posed by the deficit and the debt it is bordering on a national crisis. i'm not fearful of this so-called train wreck happening. i think we needed big spending cuts. i think we are going to have to have tax increases. i don't think congress is going to come to any kind of agreement if in the absence of an agreement that has big cuts and tax increases in it i'm fine with this going into effect the way it is now.

>> what is that going to do to the economy? what is that going to do to us? to americans? >> first off this is the cboe making and estimate. if they say seven months we probably started three months guy based on their track record. we are at sort of the marginal return point here where because of slowing where you do the double whammy of tax them again and have 6 or $8 billion sucked out of a $15 trillion economy we don't have the bandwidth and we will be in a recession. >> and it was the cbo of course, the cockial budget office. >> i'm sorry. >> that's okay. jonas, are you worried the tax hikes we are talking about were meant to be temporary. it was president bush who brought them in but now they have been kind of thought of as

permanent. >> temporary permanent. i have in fear of any temperature pear tax cut going away when we are in a recession which we are not now. amt is more of a thing we would have to fix that is being mixed for. >> that is the alternative minimum tax which now hits middle income. also the spending cuts are very sin mall and we need more if anything. i'm not fearful of of that. i'm more fearful of everyone being scared of this day happening and it all coming to an end. it is the first step towards a balanced budget. i would like it to be red over a couple of years the tax increases not all of a id isen on day one there is all these new taxes. i don't think we will have a recession. i think the cbo is wrong. >> $100 billion in spending cuts but that is spread out over years is what you are saying, it is not a big hit. >> it is like $50 billion in

spending cuts in one year. not that huge a restraint to government spending that we will instantly go into recession. the tax is more essential especially if we don't fix the a.m.t. >> gary b. i wanted to save you for last because i know you have specific viewpoints on both of these issues. >> as usual, i'm such a moderate. i understand one half of the cbo argument. the taxmageddon as it is now referred to would result in a $3,800 increase for every taxpayer in the u.s. would be horrific. what i don't understand and jonas alluded to is a decrease in the spending of $100 billion. spread out over a number of years. the cbo thing will have a dramatic effect on theky

economy. we just spent seven times that with the stimulus and it didn't budge the needle in a positive direction. i would like to see the tax cuts stay and the spending go away. that would be great. then we would have smaller government. why should the government be spending the $100 billion when we could keep it in our own pockets? that would be a win-win. >> we have kicked the can down 8 miles down a 2-mile road. now, you are to the point it going to go down to the choir and be the same b.s. we have seen every time. and then tell you what, let's just defer it for another two years. what does that tell you about it? >> i don't think they will cut another deal. i don't think another deal is possible. >> come on, this is washington. >> not going to happen. >> that is a del frisco steak dinner bet right there. >> you're on. you're on. >> go ahead. >> the cbo normally doesn't

know that we actually have come out of a recession when we have come out of it. they are usually seven months behind on any economic data. when i say we are in a recession. im' telling you we are going deeper into a recession. you said you are okay with the tax hikes. that is wrong. we need to reduce the wet blanket on the economy and cut the spending. raising taxes and going along with the tax ar arm armageddone wrong thing. >> i think if you woke lord caines today we he wouldn't be a caineian. we never went into surplus and balanced the budget in the good years. we don't have the bandwidth any longer to continue this deficit funding. paul is dead wrong on this. these folks that have a

depression nostalgia are wrong. >> canes is the economist who says if government spends money you will spend your way out of recession. >> these guys are like biowired to spend oh call votes, votes ecalls more money. what we are going to see. i'm it willing you, steve, first off we will have the december 28 we will be sitting here saying see, i told you so. run that tape from memorial day. >> no matter who wins i want in on that. okay. all right. from the financial cliff in d.c. to the fiscal fallout in wisconsin. the state's governor scott walker fighting for his spending cuts in the upcoming recall race. it is shelling attacks tour be the most watched race ahead of november. and neil cavuto is on it like nobody else. he is live in wisconsin one

week from monday, june 4, 4:00 p.m. eastern time here on fnc and 6:00 p.m. on fbn. can't miss it. be there. and stay here for this. college grads crying out. not for a job. but for a handout. entitlement nation running amuck? every time a local business opens its doors or creates another laptop bag or hires another employee, it's not just good for business, it's good for the entire community. at bank of america, we know the impact that local businesses have on communities. that's why we extended $6.4 billion in needit to small businesses across the country last year. because the more we help them, the more we help make opportunity possible.

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a fox extreme weather alert for you now. the memorial day weekend beginning with a tropical storm warning for the east coast from northern, florida, to south carolina. cluster of thunderstorms gaining strength right now. forecasters expect it to become a tropical storm over the weekend. preedicting itle move southwest along the georgia coast packing winds and heavy rains. hundreds of firefighters

battling a massive wildfire in new mexico right now. high winds spreading the flames at this hour and creating dangerous smoke conditions as far away as arizona. officials there advising people to limit outdoor activities and to stay indoors with the windows closed. the flames destroying dozens of cab bins and scorching more than 130 miles so far. now, back to it bulls and bears. for the latest headlines, log on to fox news .com. >> college grads and students protesting outside sally mae's shareholder meeting demanding the lender forgive their student loan debt. you say you are not surprised about this. why? >> we have become an

entitlement nation. it it is not occupy wall street it is this debacle here. i like many on the panel took out a student loan when i went to college. i didn't like paying it back. it was hard. i wasn't making much money when i was done with school. that was the deal. hopefully the students went through a cost benefit analysis saying if i go to podunk university is it going to be worth $40,000 to pay off. they said yes and got a low interest loan. now, they have to pay it back. why they are protesting, brenda, it is just the age unfortunately that we are living in right now. >> interesting because back when you were paying off the student loans probably your interest rates were much higher than they are now but tuition was probably a little lower. >> as was unemployment. >> jonas let me ask you. we give a lot of forgiveness to people, say, who can't pay back their mortgages or whatever.

on this one issue, you cannot get rid of this through bankruptcy, nothing. for going to school. for going to college. >> when you compare how students are treated by the federal government compared to home owners they are getting a raw deal. i'm not saying they don't get stuff and grants and loans. on almost every layer a home buyer gets treat the with more kid gloves. for example you can't deduct the interest whe if you make to much money when you graduate. there is caps on low interest student loans. you can't walk away from the debt very easily. homeowners, the home goes down and you are like i'm walking. in my opinion the students have a a decent beef that the home owner is getting a better deal than they are and education is

more important to the economy than buying mcmansions. >> you say you take a look at the contract and sign it and you know you are getting this loan, you got to pay it back. >> i don't understand any this of. the mentality of these young people right now is somebody owes me something. somehow they were done wrong. they signed the contract and they know exactly what the rate was when they signed it. they made a commitment. what am i going to do, go home and march in front of neiman marcus or mayy's? >> they are not protesting the interest rate. they are protesting the entire loan. >> you think this could have consequences far beyond helping out students. if we did forgive the loans it could have a major impact. >> it is no you a trillion dollars.

this is base eckally the new subprime deal and if you look at the entitlement perspective. they want them wiped out and absolved. we don't have a trillion dollars to give away here and this idea that somehow we are going to resolve the loans becomes another one of the little downward spirals for the people who actually made the loans and we can't afford it. >> steve, how do you weigh in on this? >> let's not tar all young people, everybody with student loans saying they feel entitled. this is a small percentage of people out here demonstrating. there is a lot more students going to college on the gi bill who served in iraq and afghanistan than the demonstrators. we do have a problem with too much student loan debt. it is a big drag on the economy. we need to reform the college system so students don't have to borrow as much and come out so laden with debt. >> the students should be protesting the schools that are

raising the tuitions faster than inflation for years and years. the students should be going offsideline and online. some of thes you can pick from stanford and the university of michigan those would be better courses and they doll the willm for 100 bucks a course. >> gary b.? >> homeowners should not be treated better. but at least in the case of the homeowner they get a house back. >> the collateral, right. >> in this case the loans are forgiven, there is nothing there. maybe show should be treated a little better because there is a hard asset. >> it homeowners aren't treated that well. >> don't we need an educated workforce. >> but a lot of the student loans are for $40,000 a year to learn about procolombian art or tapestries. we will lend you 100 grand if you are stupid enough to do that.

>> but the government cut back on the support to it state schools. at the same time the federal government has increased the backing of homebuyers to higher fha limits. handed more to homeowners and take away from the students so they have to borrow more. >> knowable just like housing you are right. >> you are not going to have your kids majoring in basket weaving, i guess? >> it worked for me. not all american students are looking for a handout. lots are looking to jobs. so why is the government hiring foreign stu dents instead? ♪ i'm making my money do more. i'm consolidating my assets. i'm not paying hidden fees or high commissions. i'm making the most of my money. and seven-dollar trades are just the start. i'm with scottrade. i'm with scottrade. i'm with scottrade.

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one in six young americans still out of work and it looks like they may be out of luck this summer too. the u.s. government is sponsoring around 100,000 foreign students to come to america for summer jobs. and uncle sam is even adding extra job protections for them. toby, should we belooking after our own kids first during these tough times? >> that is a rhetorical question. we should. what are we back in the '90s here. this may have made sense in -9d '5 when we had a low unemployment rate with kids. we give all the benefits to the employers to do that. we don't we give the benefits to our kids.

>> steve you say bring them on in, huh? >> absolutely. one are the stupidest economic policies we have in this country is bringing students over here to go go to our colleges and they graduate from college and then we send them back to their own country even though they. >> the this is temporary work being life guards. these aren't astro physicists. i saw folks working in computers and i would rather have them being computer programmers here than in india and sending jobs overseas. >> a lot of our students of our teenagers could be computer programmers as well. >> absolutely. but in this case i think steve is wrong. and they are not computer programmers. >> he is wrong. >> what happens is the employers that participate in the program, this is a whole tax break political agenda kind of thing where they don't have to pay social security. they get a tax break and pay the kids $7.25 an hour. try to find a computer

programmer for $7.25 an hour. if i was an employer i would be looking to hire them, it is cheap labor. they wouldn't want to hire the local kids because it costs too much. >> yes. >> jonas you are the closest to being a teenager. what do you think about the whole deal? >> can we just stop this whole line right now. >> we are just preparing these kids for labor as well. look at it like in a bubble like they are taking jobs from our children. don't we have young people to go abroad and work. i'm sure we have a balance of trade in labor where we have students that go to school abroad. they get jobs abroad sometimes. i think labor flowing is a good thing. you live in a day where a lot of people who want to work in america, period. >> right. >> that includes the high end which we should look at for the killed workers. >> and also people. >> hey, i got to get the other

teenager in here! go ahead. >> these are kids and these are not big labor forces. these are not skilled laborers. what we are doing is in given the situation in with our employment. this is what we should be doing to help the kids in tour this country. we need, we have a real tragedy going on with these kids. they can't find jobs. we need to help them develop their skills and if we are going to be paying any money to northbound right now it should be our own kids. >> our kids are not solar panels. >> it has to be an f. thanks to steve for joining us. we appreciate it. facebook shares losing more face this week amid a mess of problems but a friend is on the way. and talk about a barbecue bummer. americans getting grilled at the grill this holiday weekend. now, you can fight back with the one name ready to serve your some sizzling profits.

en . i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.

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start at just $699. predictions. toby you are up. >> facebook a failure but linked in is not. because linked in people want to do business. up another 25 about percent since the last time. >> jonas, friend orono foe? >> cheaper later. >> the olympics are right around the corner which means one thing an onslaught of nike ads. i think the stock pops on all of the exposure. up 10% by the end of the olympics. >> bull or bear? >> i'm a bear. overexposed at this point. >> ed your prediction? >> fuse io. doubles in 365 days. >> gary b. bull or bear on that. >> he has the two right. put a one over it and that is what i think the stock will do. >> high food gas prices and high gas prices turned home grilling into a growth

industry. good for kingsford owned by clorox up a lot by next memorial day. >> everybody uses ma skeet my friend. >> all right, cavuto on business, next. >> neil: hello, everyone. i'm charles payne in for neal cavuto.neil leaders looking for a fix for financial crisis. saying what is happening over there hurting them right here and cutting sales outlook for the rest of the year. the latest company to sound a warning now. time for the rest of us to start worrying right now. to ben stein and charlie ga