images from the tornados that ravaged the midwest and the south. south. >> a 10 cent jump in one week, nearly 30 cents in a month and now, they're really worried. lawmakers scrambling right now to find a way to bring gas prices down. because if someone here is right, this recovery is about to slam on the brakes. hi, everyone, i'm brenda buttner, this is bulls and bears. tobin smith. gary b smith. jonas max ferris. will soaring prices take the fuel out of the recovery. >> yes, a good chance bringing us back to a double dip recession. you talk about this, if goes is $5 a gallon national average, a good chance what's happening with the middle east right now we could see, you know, not only the recovery end, but what we're going to

see is people driving to and from work. i drive a car and this is going to hurt me. every good i buy is transported from the manufacturer to the retailer. and passed on to me. when i go to the store, i'll buy something, higher than a few months ago and the bigger thing, confidence, if i walk by a big screen, and see gas at $5 then i'm not buying anything. >> brenda: gary b. you're he not sure about that. basically everybody continues to spend even if they're spending on gas, but fuel, basically the economy, doesn't it? >> precisely, brenda. two points, i guess, one the credit suisse did a study, if gas went up another 50 cents it takes about 50 billion out of the economy, that's about 1/2 a percent, not substantial, a soaring economy is little more than we like, i kind of disagree in one respect. as you point out, brenda, 50 billion goes back into the economy.

people pay higher gas prices or in matt's case, maybe saves the money and puts it at the bank and therefore the bank gets more money, but money doesn't just stop flowing, it goes somewhere. everyone just doesn't sit on the money and like i say, even if they sit on the money, it goes somewhere. so, we have more or less, kind of a closed economy, where one part is hurt, but other parts aren't. >> brenda: hold on. >> the money goes overseas-- >> and julian, doesn't it hurt some americans, disproportionalitily and they then have to go to the about federal government for more help? >> well, there's no question, has a reigressive effect and looking at 2% economic growth and gary says shave a 1/2 or 1/4 percentage and i think the data doesn't support matt's argument to lead us into double dip recession, demand for oil is as low as 1977, but prices are skyrocketing and the data is

overwhelmingly showing that speculators, manipulation of the markets has a big role, if not the primary role in the reason for the spikes. >> well, is it speculators or is it some supply disruption, toby? >> well, again, i think if you look, if the data, if speculators were behind this move, then why is it that natural gas is at the lowest price it's been at in ten years, and there's, now, i mean, the economy is kicking the factors in and saying two things, one is dies proportionately, different states. in mississippi, 11% of a take home pay. hitting mississippi harder. in other parts of the country, eighths lower number. matt makes a good point. you look at it as the gas tank and you have to look at extra prices from fed ex, from the movie theater, the guy that you get on an airline with, all of those prices are passing through and probably take a point off of gdp. >> brenda: it does matter

whether it's demand or supply driven, right. >> right, every economy needs gas in 1997, and the fact is flagrantly wrong. america is not growing as much consumption as in the past and other countries like china are. as far as the economy, two kind of high gas prices, agos a result of driving more or buying more, another country or here and here is what i call a service interruption, an iran thing, that high energy price can hurt the economy and reception. one symptom, if you're driving prices up because you're buying more, that's not going to cause a recession, because the strong economy is why it happened in the first place, right now we're into the seeing the service disruptions and i wouldn't get too worried about it, the price goes up and problems on our ends and $5 gas, yeah, could cause a recession and i wouldn't worry about it before because of demand. >> matt, how serious is this? how much do you think that, how high are prices going to go and how is this going to hit the economy? >> and as far as the economy is concerned, this is probably my big s concern going forward and you know, jonas makes a

good point. if it goes up to maybe 3.75, $4 not going to end the growth we're having in the gdp, in the united states. if we get to $5, if you don't spend that much more you a month out of the paycheck, it's psycholocal. when the headline says $5 per gas, when you stop spending as a consumer, it's less supply and demand for the consumer and trickles down. >> if you behave differently, irrationally so and don't spend money because of it. that causes the problem. if you spend money somewhere else, who cares? in the sense of if you buy a sony tv more money goes abroad. >> if you pay more for gasoline. >> brenda: hold on. >> and you guys have been talking. and let me get gary in here, gary? >> i want to go back it another point that jonas made, that goes back to what the data shows. there's no correlation, because sometimes gas prices rise because the economy is

improving, as a matter of fact. and there's no correlation between gas prices and, and gdp. otherwise every time we went from $3 to $4 and 4 to 4.50, the economy keeps, you know, continuing to go in the ditch. that hasn't been the case. the last recession, certainly hasn't been caused, even though we saw along the way, gas prices go up. people just scaled back and did other things. they tell us they spent money on the internet as pointed out earlier. >> making my own point. >> and just at the point we're on the race to become the largest energy producer in the world, it's terribly ironic that we have other issues hitting us in our economy. we just don't have enough flexibility in the economy yet to be able to get there. however, if we had enough million jobs drilling oil wells across the united states, you know what, actually we have flexibility. >> brenda: i've got to get julian in on that point. julian? >> well, i think the point is right. toby's point is right. we're producing more oil now

than we have since the year 2003. we've got more rigs in operation, than anywhere else in the world and the obama administration just to get my partisan point in there, and issued new permits for drilling. so, i think there's no question, i think also just back to the point-- there isn't any data that shows that as you go from 3 to 4 to 5 that there's a major drop-off in consumer spending. marginal, but not maim.jor. this is a three legged stool. we've got to do more about production, we've got to do more about energy efficiency and more about alternative fuel. >> and who says you can't do any-- anyone who says you can't do, who says you're going to do one of those three or two of those three, is lying, we've got to do three of those three. >> brenda: i've got to let matt respond. >> i'd love to see the data you're talking about, you ask any american out there what they'll do if they see $5 per gallon gasoline not just spend

a little less. no way. they'd be lying to you. >> we saw that data, matt, with $4 a gallon gasoline. >> if the economy is good and why prices are going up, more demand yes, it's okay. we're lucky if it 2%, that's not a good economy. >> brenda: gary b. last word. >> one other partisan point, if you will, yes, we're drilling now more than ever and most of that drilling, if not the bulk of it has come from drilling on private property, not the publicly issued permits. >> brenda: all right. it has to be the last word. thanks, guys, coming up. >> back to $4 again? man. >> why is it so high? >> going to put a lot of people out of business. >> it's crazy. >> ridiculous, i think it will have some effect on election. >> brenda: so will the rage at the pump fuel heavy turnout at the polls? neil cavuto has got you covered this super tuesday. tune in first on your world 4 p.m. eastern on fox news channel and again starting at 8 p.m. on fox business network

with special guests such as sarah palin, from pump prices to politicians solutions, to poll results. no one does it better than neil. because your money is primary. but up here first, we'll have an update on that horrible storm slamming the south and midwest, and how officials are dealing with this disaster. for a hot dog cart. my mother said, "well, maybe we ought to buy this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said, "look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years.

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>> this is a fox news weather alert. i'm jamie colby. right now, desperate search for survivor and the death toll rising from a massive tornado outbreak. at least 32 people killed across four states and hundreds injured. take a look at video from alabama, massive thunderstorms spawning dozens of twisters that span from the gulf coast to the great lakes. and here is all that remains of one town in indiana, some communities completely torn to shreds. rescuers now sifting through the rubble and fear the number of dead may rise. it's a powerful system moving

northeast into canada right now. the southeast u.s. may see severe thunderstorms as well today and a threat of more tornados, and we're going to bring you the latest weather warnings that you will need to know throughout the day today, so, keep it right here on the fox news channel. i'm jamie colby, now, back to bulls and bears, keep it on fox. fox. >> it looks like scenes from a war zone. massive storms system leaving a path of destruction across the south and midwest and creating havoc in the east and gary b, the pictures really are devastating and you say even more devastating if he we don't do something right now. what is it? >> absolutely, first of all, brenda, it's tragic and i'm sure everyone feels our hearts go out for all of these people that have been living through this tragedy. it's horrible. but, the real tragedy, brenda, as you allude to, is the fact

na from the federal level on down to the state and local municipalities, everyone seems to need a course in rainy day planning in financial management. you know, we saw this with the snow-mageddon. where states and cities were running out of money for snow removal and the federal government, fema is running out of money for things that do happen. and that's the tragedy. everyone spends like a drunken sailor when times are good and they don't put money away. all of these governments have to get their house in in order. >> and julian, it's not just the local government, but the feds have a real here, too? >> yeah, look, be it an act of terrorism, god forbid, or be it a natural disaster, i think when things like this happen, the country, we should all come together as one big family and put our partisan and philosophical swords down. given what's happened in the

recession the last several years, state and local governments do not have the resources to be able to address and rebuild communities after a devastation like this. i think it is the unique responsibility of the federal government and i think that feema does have the resources to deal with this and we've done a lot of nation building in iraq and afghanistan and elsewhere, i think when something like this happens, it's the national responsibility for us to come together as a family and help the rebuilding process. and this is not like a snowstorm, gary. it's not something that happens day in, day out and it's unpredictable pact of nature that state and local governments don't have the capacity to deal with. >> brenda: toby, it's local in nature and local governments have to come up with the money. >> and we've created a co-dependency and the states and cities don't save enough because they're assured the federal government is going to come in and julian, an excellent point about the the country coming together on these acts of god. but, i also believe that it's not, you know, necessarily the

federal government's job to fund a city or a local type of fund, we call a rainy day fund and there's ways to have forced savings so the moneys will be there. we know the things will happen and he we don't know when and where and we know they're going to happen. particularly if you're in the hurricane belt or tornado belt, et cetera. and i think this now says the states and cities don't want to be co-dependent on the federal government and they need to be dependent on their own self. >> well, there is insurance and beyond that, who needs to step in here? >> yeah, first of all, private property is private market, insurance thing, you can't insure a state government and roads, and it's dicey. at that point, i've got to say i don't think having a rainy day fund in the budget makes sense, for you to have your house and not have fire insurance. for some places these are out of the ordinary events and it's not a flood plain, it's extremely rare, an earthquake

or meteor shower, whatever. and wouldn't want to put the money, a bad news of money. they should pay insurance to the federal government. the federal government budget and have the money for this. but the state and local, i think to them it's a small premium. don't need to put money aside for the one in a hundred year storm, snow or whatever and doesn't make sense economically. >> brenda: matt, your thoughts? >> my thoughts, i tend to agree with jonas, we see these events happening more and more. i think at the state level you have to have some money put aside. looking ahead to fiscal year 2013, 29 states there already have shortfalls over half the states. 47 billion dollars shortfall, so, we have issues going forward. then we have something like this, and a tragic event that hits, you know, anywhere, it could happen anywhere in our country and we have to have the money put aside and the federal government doesn't have the money right now either and i think we need to take this more seriously and put the money aside. if it's not the best use of money, i don't care, i'd

rather have the money for our citizens in our country. >> brenda: there's a role for charity and thankfully the americans are a very generous group. of course our players go out to the victims of this tragedy, thanks to all of you. all right. coming up at the bottom of the hour, the government just finding 51 places to cut, to save hundreds of billions of dollars. so why isn't it? neil's gang is on it. up here first, from 25 billion to nearly 190 billion, blouts only leading to more bailouts? in my line of work, it's not uncommon for the term "hero" to be bandied about.

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>> bailed out fannie mae hitting up taxpayers for another 4.6 billion bucks. the mortgage giant and its twin freddie mac one of the most expensive ever. nearly 190 billion dollars. do you remember the headlines from july of 2008. sbo saying it could cost taxpayers 25 billion dollars. toby, we keep bailing out the bailouts, huh? >> of course we do. a, we're bailing out the lines that they tried to sell us in 2008. we thought 200 billion. we're underestimating it. number two, bailing out the bailouts because there are jennie mae and others we haven't talked about. and they're lying to our face and anybody doing the math, this is what's going to happen when you bail out a bailout. >> brenda: why shrink when you know you're getting more money from uncle sam?

>> absolutely. this is like bailing out in a sense part of the government. the government-sponsored enterprises, look, if you're working at fannie and freddie mac, rather, your whole mission in life is to grow your power base, you don't care about the bottom line, you care about growing bigger and bigger and bigger. that's exactly what the companies are doing. they want more and more money. it will finally choke and starve, the housing sector unless they are dealt with by being removed. >> brenda: julian, what's your take on this? >> i think just a push back on toby for a second. i think the tarp rescue and the auto industry rescue worked out pretty well both for the industries and taxpayers. these are apples and oranges, let's distinguish apples from the oranges. i think the obama administration to their credit, done two things, sec sued fannie and freddie mac and announced they're trying to wind down the two programs because they're not

particularly good business models. i think where there is some debate right now is whether you want to close them down needily. i think if you were to close them down immediately, even though they've done bad things and not a good business model. close them down and the housing market, the impact to gas prices that, would dwarf that impact and shut them down which is where the debate is. >> i'm sorry, i've got to get everybody in here. >> i wish i knew the government would say it would cost hundreds of millions, if they didn't know that. >> wall street didn't know that, bottomless pit. and this one you can't get your money back. theoretically, gm can work out and banks papering you back with interest. and the homes with bottomless pit as the homes go down. probably like why it's going to take ten years out of the fannie mae. we're insuring-- >> 70% of the mortgages. >> and to walk away from it slowly. >> matt, the final word on this. i think what should happen.

they should have realized this and told us the truth. it would cost a couple hundred billion dollars to fix the issue and cut the cord right then. julian is right. you can't cut the cord now and we're stuck. the government is stuck and it's going to hit probably 3, 400 billion ten years from now and coming out of our pockets. >> thanks, guys. and thank you, julian from joining us. >> thanks for having me. >> the volt, now coming to halt, at least temporarily. and bad news for gm, but it might juice up one company's profits. the 

>> predictions? and matt is on the hot seat. >> well, the nasdaq hit the big 13,000 number the first time since 2000, since the tech darling, intel. and i think a 3% dividend. >> brenda: jonas bull or bear. >> 5,000 to de30%, that's not going to happen. >> brenda: gary b, your prediction? >> brenda, at&t came out and

says we're going to cap the amount of data you can download and customers hate it, but as a shareholder, i like it 'cause it's going to bring in more revenue. >> brenda: tobin? >> bear on it and bear on gary. >> brenda: jonas, your pro dixes. >> and gm, i want it to happen, but honda to make other cars that people want and honda motor up 25% in one year. >> brenda: matt, you like it. >> i don't like it, they're not buying the volt or the honda volt, whatever it may be. >> brenda: tobin your prediction. >> statin has memory loss and yeah, oh, yeah, i'm sorry. and astrazeneca is the leading maker and you don't die of memory loss, you die after heart attack, okay. >> brenda: gary b, what do you think, bullr bear? >> i remember one thing, this stock is ugly, avoid it now. >> brenda: you cannot forget the next is show. neil cavuto. cavuto o