anywhere. >> you know what? the letter of the day is "c" for cavuto, cavuto on business, up next. ♪ >> neil: finally the president focusing on the $16 trillion debt, one problem, he's not our president. this president. i'm neil cavuto and ahead of the final foreign policy debate, fox on top of the nut cracking a number and maybe he has our number. iran's president questioning how long america can remain the world's number one power, with such massive debt. so, if he is getting it and reminding the world about it, what are we going to do about it? is it time to start worrying about a real financial national security threat? we have dagen mcdowell, moving a few inches away...

>> no, not true. >> neil: we have ben stein. >> i'm happy to see dagen. >> neil: the next 30 minutes, our free be to you and welcome to all. ben stein, on the guy i like to call, lord faulteroy. >> he's nutty as a fruit cake but he's right, our national debt is so large it is a national security threat and the reason is, one, it makes us look stupid and impotent and as if we can't control our investing and at some point will require us to cut or defense spending, we have to pull ourselves together an act like statesmen about it. it has gone on way too long, it is ridiculous. >> neil: dagen, he's trying to deflect and, look who is judging us kind of deal and say look at these clowns, right? >> two an extent, but, if we don't heed this warning, i don't know what it will take.

because as a nation, i don't think -- i've said all along, i don't think that until americans feel really pain in some way, whether it is significantly higher interest rates or double-digit inflation which we had in the 1970s and 1980s we'll decide to do something about this. i don't know what it will take, maybe us not being able to defend ourselves or take a national security crisis where we don't have the money to protect the nation at some point. >> do you ever notice the guy is a bad dresser? >> neil: before the united natio nations, would it kill you to wear a tie. >> he wears members only jackets as well, i have seen them. members only. >> neil: cosmetic... >> it distracts me. listen -- >> neil: i understand. >> there is not much that he says that makes sense. the bottom line is this: we are still the tallest midget in the room when it comes to

buying debt. >> neil: how reassuring is that. >> i'm telling you, as long as that is maintained and it will be for a while, there will be no institutional pressure from the markets for us to change. of course we have the fiscal cliff coming up, mandated by law, if they don't come to a deal, you get massive cuts. but unless the markets change there will be no outside pressure for us to change. >> neil: a lot more on the cliff thing, what do you make of this guy calling us out? saying, look, a fine one to judge. the security of the -- or the stability of any nation. >> i don't think we should be taking any tips from this guy. come on, you guys. look at iran. their currency is down 30% against the dollar since obama got to office, the unemployment rate among young iranians is 1 in 4. the "financial times" -- >> neil: wait, that is what ours is!

>> neil, come on... >> neil: they are 25, we're 24 -- we bet 'em! go ahead. >> the "financial times" reported 1 in 9 checks that gets written in iran bounces. the forex reserves are drying up, thanks to the sanctions. i hope he's not watching the show and getting any good business advice, the sooner the economy collapses the better. >> neil: it raises a national security issue, dick cheney when i say had him on and others talked about the idea, when you are in real economic dire straits, it does hurt your credibility around the world, or to charlie's point, as bad as we are, the rest of the world is worse. >> it hurts our credibility and makes people think at some point down the road they will not be able to pay for to enormous defense establishment and we'll wait them out and when they ka no longer afford it we'll go

after whatever prize we want. >> the economic thing is really worrying to me. we'll have -- they'll probably raise taxes to deal with this stuff. and particularly, if president obama is elected. >> i hope so. >> i hope not. >> neil: it is argued that that is what will happen. >> that will be one of the worst things for the economy. if that happens, when we raise taxes, i'm not talking plugging loopholes, really raising marginal rates on a family of four that makes $200,000, and lives on long island, hardly a billionaire, as the president likes to call them, i think will really slow down the economy and i think in this country we'll have to get used to 10% unemployment, like a norm. >> not only are we fools for not demanding congress and demanding our lawmakers do something about the debt, 2/3 of the $16 trillion is owned by u.s. investors, it is owned by its -- by the social security trust fund, we are essentially -- weeds are the problem. we as a nation are the problem. >> neil: wait, you are saying we owe it to ourselves.

>> yes. >> neil: then we don't have to pay it. >> china owns less than 8% of our national debt and that includes the federal reserve, 2/3 of that... is u.s. investors -- >> that is bad. >> neil: why is that bad? because... >> we're the ones, if we are willing to buy it, we'll continue to drive it higher. >> it is funneled back to the treasury and a lot of people buy the scam, there is no -- >> it is a scam. the dollar means nothing. >> it's the fed, social security. >> investors, but -- that is what i just said. it is bad... >> neil: at that point, it is a scam and it is ours. what do you make of that? in the end, that is what it comes down to, the world is onto our scheme and we are onto the ponzi scheme and it seems to be working and has been going smoothly. and, waiting for godot, do we

put it off and don't worry about it? >> it is a long ways off and what is not -- >> neil: what is a long ways off? >> some kind of a -- an economic collapse based on treasuries, the treasury bubble bursting, i think -- i agree with dagen -- >> neil: wait, wait, wait. i hear a long ways off. a long ways off, could be when i'm hungry, can be like, tonight. >> look at japanese interest rates for the last 20 years, you know? people -- >> 20 years? >> yes, sir. >> neil: 20 years. >> 200 years. >> neil: that sounds as reassuring as joe biden saying the iranian threat is a good four years off. >> the iranian economic collapse is only 6 months off according to -- >> neil: unemployment, 25%, among young people. all right, we'll take a quick break here, when we come back this is it. the final presidential debate coming up monday night and, all on foreign policy and we are all

over it. as we always have been, and, like we were for the first three debates. the most important names in business and politics and the most important consequential election of our time, and we keep plugging that and if we were doing it during the depression we'd say the same thing, they didn't have cable in the depression and, if they get angry at each other, in boca raton, maybe they throw like, glasses of chablis at each other, and it continues on through midnight and the guys in the spin room get punchy by that hour and that is when we get 'em. and a lot of people say, neil i love fox news and fox business, what should i do, bill o'reilly says dvr here, he dvrs himself to watch me. catch fox business and stay on us, dvr him and... 50 times during the night, at least, up

next, do any of you remember this? >> the market analysts are steadfastly refusing to mention that word, crash, to describe what is going on now, instead say look at it as a correction that still has to work itself out. but what they don't know, and worry about is how far down the correction really has to go. how long it will take and, exactly how many more people will be hurt in the process. before the market decides, if it decides, to turn around. >> high school. >> neil: 25 years ago. before puberty. an epic market crash. today, that's fine, the market looking crash-proof, looks can be deceiving. my toupee was as effective then as now, as we as a nation... that next.

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[ male announcer ] it's time for medicare open enrollment. are you ready? time to compare plans and see what's new. you don't have to make changes, but it's good to look. maybe you can find better coverage, save money, or both. and check out the preventive benefits you get after the health care law. ♪ medicare open enrollment. now's the time. visit medicare.gov or call 1-800-medicare. ♪ >> live from america's election headquarters, i'm kelly wright, foreign policy at the forefront as the president and governor romney gear up for the third and

final debate of the election season. monday night the two will go head-to-head, according to a series of new polls, the race is in a statistical dead heat. but, in battleground states, support is swinging towards governor mitt romney. brand new video in today of angry protests in lebanon, over a deadly car bombing, as you can see, protesters are burning tires and blocking roads, there are reports the lebanese army is firing back at them. the demonstration today are in response to this car bombing, that killed a top security official, and 7 people, yesterday. the prime minister confirms the blast is linked to neighboring syria's civil war. i'm kelly wright, we take you back now to cavuto on business and for the latest headlines log onto foxnews.com, you are watching the most powerful name in news, foz channel. ♪ -- fox news channel. >> neil: looking at history and won wondering if we'll repeat it, the black monday, the dow losing

a quarter of its value, the equivalent of it losing 3,000 point today and a lot of things happening, 25 years ago, leading to the melt down including a growing housing bubble and growing government debt, the dimensions of which we couldn't appreciate and today record high debt and many say a bubble in interest rates. thanks to the federal reserve printing money on steroids, looking too similar to charlie grass pre gasparino. >> when i was there, i was at the university of missouri, and back then, we were worried about the deficit and had gram ruddiman, and, whatever cuts they did, clinton came into office, and he raised taxes and did it cure the deficit? look at the numbers, it did. but what killed the deficit, economic growth and when we have these discussion about raising taxes and cutting, the one think

we're light on is the fact when you grow the economy, deficits -- >> neil: you can't boom your way out of it. >> if we knew how to create a bomb we have won it but the crash of 1987 was not macroeconomic phenomena, it was micro economic phenomena, portfolio insurance, when you guys were in elementary school... >> neil: everything is sparked by something... >> portfolio, they sold the futures -- >> neil: i'm well aware of that why didn't it happen at any prior moments. >> there was not massive portfolio insurance and it was not triggered. >> neil: no, no, the dree of professional insurance out there was higher in 1986. my point is, there is always a trigger that tests the computers. >> whatever the trigger was, it was portfolio insurance, the market recovered, very, very quickly. there was no economic crash. >> neil: there was no depression, you are right and

dagen the fears we'll see a world economic winter was proven wrong but -- >> but that was -- that was a -- >> neil: a couple years later. >> listen, we had an s and l, what are we missing, the s & l crisis and the junk bond crisis. >> neil: i'm not blaming it on that. >> by 1989 we're in a recession. >> two years later. >> markets are forward predictors. >> that crash... that crash, 25 years ago, was... >> neil: won't change your mind. >> it is totally right. >> neil: we'll see about that. i think i know -- you saw me, in my pre-puberty stage, pontificating okay, please. you were doing hollywood movies, you were clueless. >> i remember the discussion with alan greenspan. >> dave: what year did you do bueller. >> 1985. >> the economy slowed down -- >> here's my point, that was a stock event, an equity event. what we have now, with the

bubble, in bonds and particularly in treasuries and how dangerously expensive they are and what could happen is much more grave, potentially because we're $16 trillion in debt. >> neil: that raises a very -- that is where it comes into play, how it could be different, this go-around. it would be an outside catalyst maybe in washington, and the gig is up, so to speak, that the -- that hits everyone at the same time, and i don't know if it is a fiscal cliff or whatever, what do you say. >> listen, i agree that very, very low interest rates, they are unjustified. i also agree it is a real problem and the problem, scary thing is that it will hang around for the next five or ten years and a lot of older americans who are invested in treasuries are actually going to miss out on income, they should be moving out of those gently, into better investments. and, that is actually... >> neil: like what? like what. >> mid grade bonds and preferreds. >> that is and somewhat of an

absurd statement. >> no, it is not. >> neil: you pointed -- >> here's why, the stock market is being buoyed, pumped up by 0% interest rates, the thing you said shouldn't happen, they should raise interest rates. once interest rates -- >> stocks are cheap right now. >> when stocks -- will they go up or down when they raise interest rates? they will be raising interest rates. >> metrics... >> they are not going to -- the stock market will not be correlated to it, whether the fed raises interest rates? >> the fed will not raise interest rates for a long, long time. don't worry about it. >> it depend on who is president, romney is president, pressure on ben bernanke -- >> if you can predict the future of interest rates, you can do something nobody in the history of the world has ever been able to do. >> i like the peter brady moment, where your voice changes on camera. i want to see that again. >> you looked like wayne newton. >> neil: you are all having...

>> all right. >> sticker shock at the grocery store, americans are feeling the punch and these guys... up next, here, are you ready to jump off the fiscal cliff? apparently the white house is ready to veto a fix and take the plunge, we report, why republicans and their reaction might want to make you hide. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan,

in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's anothereason more investors are saying... [ all ] i'm with scottrade.

playing chicken within economy. a report says the president is ready to play hardball with republicans over the fiscal cliff, threatening veto a bipartisan plan if it doesn't include tax hikes on the rich. bringing everything to a halt. forget about coming together, ben stein. it looks like they're driving further and further apart. >> we don't know but i would not like to say it would be good. a tax increase, spending cut, uncertainty about the future not good for a fragile economy and it's a disgrace the president and congress cannot work together. if it's mr. romney they'll be able to work it out.

mr. obama, he's too dug in. >> he's backed off this before and extended the bush tax cuts. >> if he's reelected he won't. >> can we blame both sides? they didn't want to do hard math and pay for them so we keep moving it down the road. >> i think that is a -- i'm from -- i agree with this. this is obama's way of dealing with the deficit. tark particularly in democrats pick up seats in the senate. >> he talks about a mandate. >> he's going to say i'm done, you don't want to raise taxes on the rich, deal with the deficit this way. we'll have a recession for about a year and things might look better. >> do you think the likelihood -- i know your answer but hope springs eternal you'll surprise me. that the chance for real tax reform are better under a republican than a democrat

because the president is more of the same. that might not be bad but it -- do you think you have a better shot as serious tax reform under a republican? >> i think there will be a better shot at tax changes under republican but unfortunately they won't be help. by the way, the best evidence is that everything's calling this a cliff. it's not -- there will be a deal. >> we'll get a bipartisan -- >> you don't think it's the end of the world? >> no. >> none of you? >> if it's the end of the world, we're covering it first on fox. >> i want to be -- >> neil: stop. so... [ gasps ]

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three picks from ben stein make sure you don't ruin your financial life. >> the first one is one that i've talked about a lot. vti, a very broad worldwide stock index from vanguard. next, splv, a low volatility

index fund. they tend to do well. sdy, a high dividend stocks. it'sen an index fund that does well over long periods of time. that's what we're doing. >> neil: would you play all three together? one is stronger than the other. >> no, they're not -- they could all be strong at the same time. what would will and i am playing them all at once. >> neil: you argue for fun. >> unless your name is buffett. >> or stefan. >> god bless ben because he's responsible but the fact is people are tuning in for cool stock picks. you can learn a lot from owning individual stocks. >> neil: what about any of those choices he just blurted out? >> my complaint is he's telling people to buy stuff they already own. most of us, if you own large mutual funds, you own the market