tax hike only seven months away. are they right? hi, everybody, i'm brenda bud ner, bulls and bears, this week, gary b smith, tobin smith, jonas max ferris, along with locate stock.com ceo and senator joe manchin's chief of staff. and a to-do list, you say there's one thing to get the economy going again? >> brenda, there is only one thing to do, it's to extend those tax cuts. and i mean, we've had presidents for decades, from kennedy to bush to clinton extending tax cuts, lowering tax rates and finding great economic prosperity for americans. what we have now is a president who's done nothing more than deliver uncertainty to the american populace and when you deliver uncertainty, you've delivered small

business men the fear of the unknown. when you fear the unknown, when you don't know if your health care costs are going up. don't know if your taxes are going up. no way in hell you're going to go out there and start hiring people and we have an employment problem right now and no one is going to start hiring, if president obama doesn't want to go out there and say, right now, he's going to extend these tax cut, we need congress to come out and say they're going to do it and give them a reason to think about hiring. >> we might get certainty, but it does come at a cost, doesn't it? >> yeah, it would come at a significant cost. the cost of extending the bush tax cuts, another ten years, would be about two and a half trillion dollars, now, don't forget we alreadyd i for two years, and didn't have the economic, you know, boost that everyone expected, or wanted. and i mean, i think the reality here is, you know, you don't want short-term tax cuts, or long-term tax cuts. what you want is tax reform. just extending the bush tax

cut would be reinforcing a bad policy. if you want to fix the economy and help create if you will, do tax reform. >> tax reform is on the president's list there. if you want to take the president's list or the tax cuts, toby, which one do you choose? >> well, you have to extend the tax cuts right now, for one simple reason and you know, we look at the flexibility that we have in employment, we've not had it and obviously, people not feeling confident as part of it. another part of it. if you were to just pull the revenue out of the hands are the spending people and into the hands of the government. you would be at the tipping point and a higher gas price and other things and back, essentially, the recession or zero growth and that kills confidence more. >> well, jonas, how do you think, is all of this stimulus that basically we can't afford right now? >> yeah, the best thing is not the to-do list, which is unambitious, and not do anything, in fact, if they don't do anything for several years, we're going to get back

on a track of a balanced budget because taxes are going to go back up as they're trying to do and extending and there's actually spending cuts that are-- they don't do anything for defense and medicare and that's all that we need, now that we're not in a recession, out of the hole we dug being in a recession, and it will not happen. not an ambitious list of spending and another tax cut in an and not another recession. >> please, government do nothing, that's pretty much what jonas is saying and does that also include not extending the bush tax cuts or would you put that on your to-do list? >> i definitely would. i agree with-- i think, chris, and actually john kicked it up. you i think we need to extend the tax cuts and reneed tax reform. we do need tax reform and we're not going to immediately have tax reform. what we have in front of us is the tax cuts and chris pointed out that's going to cost us money and i certainly agree, that's why the other part of

the equation, government needs to cut spending, a lot more than what, you know, the spending cuts jonas is talking about, and he needs to massively cut spending. look, i think that government can provide great services and comes down to a philosophical issue, brenda, who is the best manager of the money. do we want the government spending money are private sector spending money? i think it's proven to the private sector, different tax cuts that people can count on, as john said, are great managers of money and spend it more efficiently and effectively and more targeted. that needs to be done and keep the money in the private sector. >> but, john, you get jonas' point here, perhaps we don't need to do anything? >> no, i don't get that point at all and i often disagree with my friend, jonas. but i think what we need to do, we need to create certainty. certainty on one simple thing. and next year if it's a small business man, your taxes are not going up.

they're not going down and not going up. and then someone like most small businesses do, they can go out and they can create their 2013 budget and say, okay, i know one thing is for sure, next year, i'm not going to get an additional bill that i didn't expect and maybe i can spend pa extra $15,000 to the ira part-time. >> and heaven forbid that maybe energy costs would be lower, and maybe heaven forbid that we would actually have lower. and our gas prices, maybe that stuff would kick in and be positive and we start to then accelerate again, to risk the acceleration of the economy under this idea that all of these insane taxes we're going to throw them back in without any accommodations or anything else. >> if those things were to happen and energy costs are going down and we're not in this recession and perhaps we don't need the tax cuts again? >> now, regular gasoline prices are coming down. the fact is natural gas prices already at multi-decade lows and electricity prices are not particularly high in this

country and a lot of that is coming from coal, cheaper than natural gas. if taxes go back to where they were, an imagery tax thing we never had before. you're going to see the energy bryces go down more because of the artificial boost to the economy created by the huge deficit that the the government runs every year will disappear and that's left the-- >> disappear? >> if you don't think, if you don't think that oil prices are going down if taxes don't go up next year, you don't know how the economy works. >> gary b. i hear you, you're raising a octave higher, i'm trying to remove that higher octave. >> we like it, you're excited. go ahead. >> jonas comes up with some of these goofy things, i don't think there's any relationship, i'd like to see a chart relating marginal tax rates to oil prices. first of all, that's a madeup number for crying out loud and

second of all back to my bigger point. we assume that the money is somehow the government's and they're bequestioning that, letting us keep t why is that the case, people out there earn the money and why should the government have the money to spend? we know that government is bloated and inefficient. i don't understand why we don't know more on the tax cutting sides. >> chris, get in here. and here is the fundamental comments. you know, we have a deficit that's going to reach about 21 trillion by 2021. and we're spending more on interest by that time than we do currently in defense, energy and education combined. i love tax cuts. and right now we're spending 24, 25% to grosse pointe woods and we've got about 15% of grosse pointe woo gdp. so he we've got to do something and extending the push tax cuts with he no way to pay for them is just digging yourself a bigger hole

and foolishness. >> that's why i said government needs to cut spending on the other side, also. >> and you didn't cut it gas enough to replace that kind of dollar. >> okay, all right. guys, that's got to be the last word. and well, did you hear this tough love message? >> get off the couch and get yourself a job. [applause] >> you will he' hear more from maine's tough love governor, on cavuto at the bottom of the hour. first, the huge trading loss on jp morgan chase calling for more regulation and some here are saying that's going to cost all of us much more. y wa. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor,

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>> good morning everyone, i'm jamie colby live from america's news headquarters. today, mitt romney will reach out to religious conservatives. he's delivering the

commencement address this morning at virginia's liberty university and give you a live look at that event right now. it's the largest evangelical college in our country. he's hoping his speech will win over those skeptical of his beliefs and conservative credentials and meanwhile, there's news overseas, new fears that al-qaeda may be playing a major role in the syrian conflict. that's right, al-qaeda. and a militant group with suspected links to al-qaeda is claiming responsibility for twin bombings that killed at least 55 people in the capital city of damascus. experts warning those al-qaeda style tactics could turn syria into another iraq. i'm jamie colby, i'll send you back to bulls and bears. keep it right here on fox and foxnews.com for your latest headlines. >> brenda: calls for more regulations mounting in washington as one of the biggest names suffers a massive loss on a bad bet. john, you say the cure is only

going to make things worse? >> brenda, any cure prescribed by washington is probably a bad thing. the way i look the at it, the consumer is the most hurt when you have government regulation come in and cracking down more and more at the end of the day, the consumer is the one that gets hurt. this rule has been in effect already and we see already that the 2 billion dollar loss. so, it hasn't helped and adding on top of it, i can't see it helping any more. we don't need the legislators in washington playing doctor. what we need them to do is sticking to what the people want them to do, it's not adding regulations and costs to the consumers. >> brenda: chris, don't we need more regulation. we've seen this before and what we've got now, are we going to have another bailout, another too big to fail? >> well, clearly raises a lot of anxiety when you see this kind of, you know, loss. i think that the reality when it comes to loss and regulations, a lot of these rules haven't even been written yet and going through the regulatory process which i think adds to the kind of

frustration, and if you will, the consumer protection side as well as the carpet america. they don't know what the rules are. so, i think, the first thing you need to finish that process and then kind of assess what kind of impact they're having or not having, before we kind of make, you know, a sweeping judgment. >> brenda: gary b, why not just let the market happen? i mean, jp morgan chase, their stock went down on friday, 9% or whatever the stock slides. the company has problems. isn't that enough punishment? >> absolutely, brenda. you know, i'm flabbergasted at some of the things i've heard, not to mention what chris said. oh, my gosh, people are worried. and i asked my wife about this, did you hear jp morgan lost 2 billion dollars and she goes, yeah, so? right, right, how is it going to affect her and us? it's not. they're running a business, they made a mistake, whatever, so what? so maybe it cost them the

company. they go out of business. fine. can we live without jp morgan, yes. we're living without lehman brothers for crying out loud. aig is on its last legs and it's not going to pull down the economy. they lost money, so what. >> brenda: no, it's important to note that this is a trading loss of course, it's not a net loss, they're still doing okay. toby, go ahead. >> so, this is-- what really sort of gets me now, is that chris, all due respect. we need to analyze this carefully. the analysis, they have 380 billion dollars of equity capital that they had a 2 billion dollar risk. now, last time i went to med school and that was a long time ago, that is basically pennies on a whole bunch of dollars. number one. they're in the risk business. they weren't risking the cd's or borrowed money, it's their equity capital. stay the hell out of it. it's insane. consumers, if it boiled up because we overregulated the prices would go up for credit cards, and everything else

that we've been careful about regulating and how has that worked for the consumer? >> jonas maybe-- >> i'm not saying there's a lot wrong here, aig had a lot of equity and-- >> wrong analogy, come on. >> brenda: let him talk. >> an indy mack bank had a lot of capital and banker consumers didn't have to worry about that either, but what happened the government had to walk in because the fdic insurance, retail banks, you walk into mom and pops all over the place where your checking account is and gambled it away in investment banking scheme and all of a sudden, shore up everybody's county so they can relax like gary's wife and not worry where their money is. you have that there and that's the core problem and the regulations aren't going to work because the monsters of investment banks hedge funds, all wrapped up in one company have this fdic guarantee of the checking account and allowed to gamble. and gambling in the securities market, that's a free market. don't combine with it a commercial bank.

>> i don't think they did combine it. on top of it. >> they were not, they were-- >> the headline is minus 2 billion. what we don't hear about, they made 4 billion dollars for the quarter. so, i mean, that's what they're in the business of doing. sometimes when you gamble, you walk away with a big stack of chips and sometimes a smaller. and-- >> that would be great. but that's not what happened. as we saw five years ago, that's going to happen because there's no system to not have that happen again. there will be another too big to fail. and hundreds of millions to save the economy again. >> not on a 2 billion dollar loss. >> all right. guys. all right. and thanks very much. another tsa oh, security scan e, correcting dust in warehouses rather than at airports. there's a private solution to save money and maybe even lives, too. does any mother evefeel like their kids are adults?

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>> coming up. new calls to privatize the tsa after reports of hundreds of millions in waste at tsa. and someone here says the

>> the tsa in trouble again. uncovering hundreds of millions in unused equipment piling up in a warehouse, instead of being put to work in airports, this is your tax money, folks! >> and gary b says he knows how to fix it. go ahead, mr. smith. >> three words, brenda, privatize the tsa. you know, you would think the author of the bill that created the tsa would be a firm supporter. you know what he said? let me read you a couple of quotes. he says, one, the program has been hijacked by bureaucrats, and it's mushrooming into an

army, brenda. they've spent 1 billion dollars training workers, they actually train more workers than they have on the job and the saddest thing is, they've failed to detect a threat in the last ten years, everything they do a reactive. privatize is, someone else's rear end is on line. >> brenda: john, do you agree? >> i'm he a free market capitalist and here my only problem is this, the private sector looks at one thing and answers to one thing, the bottom line. we're dealing with homeland security and we don't want to be worried about the bottom line. what i think we need, better management, we need people that can look from the top down and say what are we doing wrong, keep it in mind and maybe, just maybe, returning war veterans should be hired by the tsa because they've already looked at enemy in the eye. >> brenda: jonas, if you take the biz, you have to take the liability, too. >> it was a private obviously, privatized after 9/11 and took

away the liability from the airlines and everybody else who screwed up for 9/11. you can't-- private industry works when they're liable for mistakes and you can't take that away and i'm sorry all the airlines would have been sued out of business, but that's the free market in part. this government a bunch of years ago essentially decided to go communist and take away private industry and liability from private industry. you've got to go back in that direction. >> jonas. >> that's the way it's got to be. >> tsa took them ten years it the get the pre-check, i now use four times a week and private sector would have come quicker and incentives to have less people working making bigger decisions the same thing they do checking 18 month old child, et cetera and would have gotten the job done faster. >> shouldn't go back into the private sector, but the down side of-- >> and i'll take the down side, give me the tsa every place and-- >> chris, does the government need to have a hand in this? >> he needs to have a hand and

need to continue some kind of oversight role, but you know, i'm with some of the folks on the panel. my preference would be probably to privatize it or at least some kind of public partnership. >> way to go. >> because i think in this, you just see too many examples with this agency not functioning. now, do i think that the government should be taken completely out. absolutely not. you have to have an oversight role to make sure they're meeting certain standards. >> brenda: do you agree with that, toby? >> no, give an agenda to the company incentivize people for getting through faster and they'll spend time at people at risk and 99.9% who have no risk. >> i met you halfway, man, halfway. >> chris, get on the kool-aid, man. >> i don't like kool-aid. >> brenda: john, ten seconds. >> let's put some military personnel in front of the potential enemy and let's let the government-- >> that's hard to argue with, john. >> brenda: that is.

>> darn it! >> that's the final word right now. thank you, guys and thanks to chris for joining us. appreciate it. up next, you heard about jp morgan's big loss earlier in the show. now, hear how it could become your big gain. plus, state lawmakers overturning a ban on school bake sales. now, one stock is ready to turn a big fat profit for you because of this. ♪ ♪ why do you whisper, green grass? ♪ [ all ] shh! ♪ why tell the trees what ain't so? ♪ [ male announcer ] dow solutions use vibration reduction technology to help reduce track noise so trains move quieter througurban areas all over the world. together, the elements of science and the human element can solve anything. [ all ] shh! [ male announcer ] solutionism. the new optimism. go schedule a meeting that's a little more worthwhile. and go to bass pro shops for great deals like these ladies drawstring shorts for under $10.

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>> predictions, gary b. af got it. >> we talked about 2 billion dollars in trading losses, just trading losses for jpf is a buying student that's going to be shrugged off. the stock is up. >> brenda: john, bull or bear. >> big giant bear. >> brenda: toby predictions. >> they credited the mortgage kickback thing, one guy that's going to benefit is capital one. if we cut the the mortgages people have more money to pay credit cards. >> brenda: jonas, bull or bear.

>> the credit cards, bear. >> brenda: and your prediction, jonas. >> and somebody brought the-- 78 feet waves, this guy surfed. i say zumiez, the surf shop. >> brenda: yeah, bull or bear. >> you're more than that guy that did that 78-- >> and your prediction? >> bring back the bake sale, betty crocker, general mills up. >> brenda: and gary b, you can't be a bear on that. >> cowabunga, dude! >> i don't like this one. >> brenda: and neil is up next. >> well, we told you there would be fallout. little do we know it would be this bad and talk about france putting america in the friar. and french p