it makes me begin to wonder, is that rally based on tax cuts, or earnings or steady stable growth, and the federal reserve seems to be doing its job. goldilocks economy, what? >> here is the good news, i saw a picture of big three central bankers in jackson hole. they matter the most, keeping rates negative in parts of the globe and that's big stuff i have to tell you longer term, we cannot continue on this trajectory of massively higher debt and deficits. neil: we have for decades. >> something's going to give, it's going to be a bad wall. neil: tell me when that was? >> i wish i knew. they have been able to control interest rates. when debt goes up, interest rates are supposed to go up with it. if they lose control of interest rates with the money printing, katie bar the door on that bad boy. neil: and one of the arguments,

how soon, how quickly they begin to move on raising the debt ceiling. there's a fight back and forth what do they do about that thing. what do you think? >> it's a fight back and forth and this is where we start looking at in-fighting within the republican party, right? but i think that what he said is very important. neil: don't encourage him. >> (laughte (laughter) no, but when he's right, he's right. >> encourage me, wendy. >> they need to come to consensus, this is going to be a big issue when it comes to 2018 and the mid-terms. the dems want to take over the house, which i know they will, i think this is a place where-- >> no, wendy, yu good-- you were good at first and now backtracked. neil: you're not buying what she's saying. >> say it again. neil: you're not buying what she's saying. >> the dems are going to take over the house? absolutely not. not even close to being

possible. the republicans-- actually democrats in the senate are going to have to defend eight seats and probably take more seats. neil: it could be a dramatic shift, we'll see. we are going to be hearing from texas governor gregg abbott. the latest. that's it? yeah. ♪ everybody two seconds! ♪ "dear sebastian, after careful consideration of your application, it is with great pleasure that we offer our congratulations on your acceptance..." through the tuition assistance program, every day mcdonald's helps more people go to college. it's part of our commitment to being america's best first job. ♪

>> all right. harvey, category 1 storm right now. it's a doozy and it will stick around the neighborhood for a while, maybe a few days, dumping a lot of rain. i know it seems in biblical proportions, in some areas 50 inches, that's what some meteorologists are saying. and texas state commissioner says better than 300,000 texans are without power and no doubt more will follow. and the biggest headaches of anyone, the texas governor greg abbott from austin. how are you holding up, first of all? >> good to be here, neil.

listen, this is something we work on around the clock, the good news, we were prepared for this for more than a week in advance. also, we've gotten terrific cooperation from the white house, from the president on down. and so the state of texas, as a team, is responding to this very swiftly, very strongly, doing everything we can to first and foremost protect all human life in the state of texas. neil: what i think is smart you did, early on activate 700 national guard troops, maybe nor since we chatted, declaring an early state of emergency. not everyone heeded your call to evacuate. and the houston mayor says that might have caused difficulty en masse. were there difficulties with him? >> no, the way it works in the state of texas, it's the local officials who have the authority to declare an evacuation. there were some that made that declaration closer to where the

hurricane hit. in houston, there's not been a need for it. in harris county, which houston is located there have been certain localized mayors that have declared evacuations, voluntary evacuations, but this is a matter to be determined at the local level. what i insisted upon is that if local officials have declared a need to evacuate, i urge citizens to listen to that warning and to act upon that warning because, first and foremost, we want to make sure no texan loses their life in this challenge. neil: there was no bad blood there. i want to be clear about that. >> no, we're all-- >> go ahead. >> we're all working on the same page, neil, and that is we all agree that we need to respond adequately and we need to respond in ways to protect human life and that's exactly what we're doing. neil: and one of the things i want to put to bed. he said please think twice before trying to leave houston en masse and the thought it would cause more panic.

at this junction, houston will be looking at a lot of rain, a lot of water, a lot of flooding. if you had to recommend anything regardless of what local officials are saying in any area of your big state, what would you tell them? >> well, several things. first, let's put in context what you just said, because it will be the most important things happening over the next few days. we will have incredible flooding, taking place all the way from corpus christi all the way up to the houston area. so, it is very important for citizens to listen to their local officials and heed all warnings they provide. second, anyone who's out driving around, be very cautious because there could be rapidly rising water. don't drive into rising water. you don't know how deep it is. theres' a hold phrase that you need to heed, turn around, don't drown. do everything you can to keep yourself safe and typically that might mean staying off the

roadways as flood waters rise. neil: governor, going forward, you also oversee one of the most impressive economic juggernauts, that is texas itself and the refining and energy capacity just off your shores in the gulf and that accounts for a quarter of our energy production, i will include natural gas and oil and what have you, and it could be stymied for a while. some are saying that some of the facilities might have gotten a direct hit when the storm was a category 4 and that prices for energy and energy related contracts could rise substantially. is it your understanding that those earlier predictions might prove true? >> well, first, as you pointed out, the texas economy is going strong. we're once again number one in the nation for job creation, and part of that is because of our energy facilities. i've spoken to leaders of these energy companies, listen, this is something they're very

accustomed to because they've dealt with hurricanes and storms so often. they were prepared for this. they took adequate measures to contain if not limit any possible damage and be prepared to gear back up as soon as possible. neil: and the reason i mentioned it not to be crass mentioning economic matters shall you've been personally successful, as was your predecessor rick perry, wooing people from california to texas. and they say, boy, we forget texas could get doozy storms like this. and what do you say. >> hurricanes have been coming to texas for decades and more frequently, companies have been coming to the state of texas because of the business environment. the business environment will remain the same, it's low taxes, reason regulations, right to work laws, litigation reform. those are the dynamics that

attract companies to the state of texas. that will continue. hurricanes come and go, but it's the business climate in the state of texas that will remain. neil: all right, now, you mentioned that the help you're getting from president trump, of course, monitoring and no doubt talking to you at camp david. he tweeted earlier we're leaving nothing to chance. city, state, governors are working together. is that your understanding, that's correct? >> yes, i've spoken to the president and his entire team, whether it's the head of homeland security, fema, the head of health and human services, from top to bottom, from the white house they've been working very collaboratively with the state of it extext in advance. one reason we've been able it respond so effect telephone is because of the good working relationship with the federal government. the way that the president authorized my disaster declaration has already triggered the involvement of fema. what will that do is help our fellow texans rebuild more

swiftly, whether it be at the individual level, or the city or county level. neil: all right, now, 700 guard troops out there now, governor, are you looking at putting more in place? working with the white house to get more? >> well, these are people under my control and they are already in place. and it is more than that who are involved right now, in addition to what's called texas task force one and texas task force two. what they're involved in right now is the search and rescue process. we are actively engaged today, as we speak, in deploying these troops to go in and begin the process for searching for those who may be trapped and try to rescue them and that will be an ongoing process in the days to come. neil: governor, you said at the outset as well. i want to be clear, some of the damage that's going on, the fires unaddressed because better part of safety rather than risk

their lives. do you agree with that? >> that depends where the particular situation where it occurs and i would defer to either the firefighters or the first responders in the best way to handle that. the main thing we're doing is making sure that whatever type of challenge arises because of this, these are typically things that occurred before and we have professionals who know best how to respond to those challenges. neil: governor abbott, i know you've gotten very, very sleep, you were very coherent in this interview, i understood everything you said. thank you. >> thank you, neil. neil: governor greg abbott, the texas governor handling obviously one of the more severe hurricanes in the history. and judged not necessarily by the number of deaths or injuries, but the severity and economic impact that $40 billion it would already go down as one of the most expensive storms in american history. we'll have more right after this. ♪ it's me and my best friend only new tena intimates has pro-skin technology

designed to quickly wick away moisture to help maintain your skin's natural balance. for a free sample, call 1-877-get-tena.

when you think of saving money, what comes to mind? your next getaway? connecting with family and friends? a big night out? or maybe your everyday shopping. whatever it is, aarp member advantages can help save you time and money along the way. so when you get there, you can enjoy it all the more. for less. surround yourself with savings at aarpadvantages.com

>> all right. remember, just last week, the read from the white house was that the north koreans were at least behaving better. take a look. >> kim jong-un, i respect the fact that i believe he is starting to respect us. >> we've had no missile launches or provocative acts on the part of north korea since the unanimous adoption of the u.n. security council resolution. neil: well, they might have spoken too soon because obviously in the last 24 hours we've gotten word that the north koreans have launched projectiles into the south china sea and that's gotten folks worried all over again. bryan might be among them. what do you make of what's going on? update us. >> look, neil, initially the u.s. pacific command says the missiles launched by north korea saturday failed, but now they say two of the short-range ballistic missiles fired

launched successfully and the failed missile blew up almost immediately at launch. the two missiles that flew, they flew about 155 miles landing in the sea of japan. they did not pose a throat to north america or to guam, which you remember north korea warned it would fire missiles towards. the missile test is the first since july and comes amid an annual exercise between the united states and south korea. experts say this launch could be a response to the ongoing 10-day military exercise which began on monday. this angers north korea, they believe it's an invasion rehearsal. the u.s. says it's defensive. today, north korean state television shows kim jong-un at what appeared to be a military drill today, practicing amphibious landings. and the firing is in opposition

of president trump who said they would have fire and fury. and the first since the united nations security council voted to have strict new sanctions on pyongyang in response to the inter-continental ballistic missiles last month. the new sanctions are estimated to cost north korea a billion dollar a year or a third of exports. the hope, neil, the hope was that the sanctions would lead kim jong-un into the negotiating table sooner rather than later. if today is an indication, it's more of the same, at least so far from north korea. neil: so do we know whether the administration, bryan, is going to change its posture? it was sounding very empathetic prior, last week. i would imagine less so now. >> look, we had a graphic up during the hit just now in which we show the missile launches are sort of the norm now and i would say if this was an icbm, you'll

see 13 missiles tests and 21 missile launches, on part, what we saw last year. these were short-range missiles. this wasn't the long form or long-range missiles that we'd seen that could potentially reach guam and north america. the united states said they'd launch fire and fury if they're towards guam. given the fact it's the same from north korea, they would monitor the situation. neil: an understatement. we'll go back to texas for a live update there. right now, it's a category 1, it could soon be a tropical storm. if case you're breathing a sigh of relief some of the storms that have done the most damage to texas and elsewhere were just storms, they weren't hurricanes. in 2001, alison, in texas and rita never struck houston, but prompted more than 100 to die

and did billions of damages after the fact. always, after the fact. after. after this. ♪ music edible arrangements for summer. order in store or online.

>> all right, now, a category 1, maybe soon a tropical storm. no less dangerous right now. casey stegal on the latest on harvey out of galveston, texas. what are you seeing? >> lots of rain. when this could be downgraded to a tropical storm, the only distinction there is wind speed. that's all that they forecast which makes it a hurricane, makes it a tropical depression and the like. so that means that the wind speeds are going down, it has nothing to do with precipitation and that's the concern. we've seen energy crews moving in here. as of now about 34,000 customers

are without power in the galveston area. so, the energy teams are getting through, they've deployed extra team to get some of the downed power lines up and running and they're asking for people's patience. all kinds are workers are moving in, first responders, rescue groups and the like and that includes some 700 national guard troops that have been deployed all through this region to assist. in fact, air assets have been brought in in case they need help with any high water rescues, things of that nature. and then this is interesting, that most people don't think about, galveston here, well, it has a cruise ship terminals and not far from where we're standing. there were two carnival cruise ships en route to galveston, supposed to be docking. obviously, that did not happen. so two ships have been diverted to new orleans. another ship was going to stay

in cozumel mexico for an additional night before trying to make the voyage back. so three carnival cruise ships and then one royal caribbean vessel that was supposed to be docking tomorrow in galveston that could be impacted. about 15,000 passengers total, so, again, many different people affected by this. we've met some people who are stranded and they can't get to their homes. so, lots of different situations folks on the ground are facing here, neil, and they will continue facing in the coming days and weeks. neil: all right, thank you very much, my friend. be safe. the guy has gotten no sleep, but man, oh, man. he's been awesome. we'll have a fallout after this. ♪

it's time for the biggest sale of the year with the new sleep number 360 smart bed. it senses your every move and automatically adjusts on both sides to keep you effortlessly comfortable. and snoring.... does your bed do that? the new 360 smart bed is part of our biggest sale of the year where all beds are on sale. and right now save 50% on the labor day limited edition bed, plus free home delivery. ends saturday! >> all right, we're going to offer continuing coverage of the harvey fallout. on this channel and throughout the rest of the weekend. we'll pick up the baton on fox business network coast to coast when we can finally crunch

numbers and telegraph, what i hate to break it to you, a busy hurricane season whether you like it or not. the economic impact, emotional impact and political impact on fox. thank you very much. >> well, it's the fiercest storm to hit the united states in more than 12 years, slamming into the texas gulf coast. hurricane harvey record ashore last night as a category 4 storm. texans are already feeling his wrath. leland: hundreds of thousands are without power. roofs ripped off and there's more devastating damage to come as the storm lingers over the region, predicted to drop up to and perhaps even over 30 inches of rain. we've got reporters spread out along the gulf coast, an area which the president has already declared a disaster zone. welcome to america's news headquarters from washington and, wow, it's going to be