martin in washington d.c. and here's what's coming up tonight on the big picture the clock continues to tick closer to august seconds debt ceiling deadline and the g.o.p. is holding firm on their way or the highway approach to tax hikes so if a bipartisan budget deal is not reached in time how severe will the recall repercussions be for you and me meanwhile another former power nation prepares for possible economic collapse italy with that country's bonds now under attack what's

to become of the euro and while congress prepares to cut seniors' medical care the leader of the and so i medicare pack is caught sucking back bottles a line priced at three hundred fifty dollars a pop i'll talk to economists and feinberg who caught paul ryan in the ad. you need to know this high stakes talks between republican leadership and the white house fell apart again last night when both sides announced they were gridlocked on a deal that has the administration pushing for four trillion dollars with the deficit cuts over the coming decade and the republicans are refusing to budge on tax hikes speaker john boehner pulled his support for a large scale deal over the weekend and in a press conference this morning reiterated that the republicans will not pass

a bill that includes tax hikes on billionaires or corporate jets and that they really all they really care about is cutting entitlement programs. can you control government spending without fundamentally reforming entitlements. five eight the answer is no but the american people will not accept and the house cannot pass a bill that raises taxes on job creators this is just hours after the president went on the record to say that he would not support any type of short term increase in the debt limit and the only viable solution is for the republicans to compromise on taxes. i do not see a path to drew to a deal if they don't budge period i mean if the basic proposition is it's my way or the highway then we're probably not going to get something done because we've got divided government. i'm happy to consider all options alternatives are looking man

but things that i will not consider are a thirty day or a sixty day or a ninety day four hundred eighty day. temporary stopgap resolution to this problem is the united states of america and we don't manage our affairs in three month increments but while the president and speaker boehner dig in their heels in the august second deadline of when the united states will hit its debt limit is fast approaching and once that happens there will be some very real consequences for americans who depend on any type of government benefits to live their daily lives and the situation may be more dire than anyone realizes right now a new study from the movie analytics shows that nearly two out of every ten dollars that went into americans bank accounts last year came directly from the government in the form of payments like jobless benefits food stamps social security and disability benefits matter what the republicans want you to believe this type of

government spending has not been the cause of our nation's deficit let's just lay it out what's happening right now first of all republicans are replaying the one nine hundred seventy nine jimmy carter playbook will get more of that just to say but to lay out you know where is this deficit coming from and how is it organized here is the a graphic with the tax cuts that would be your basic this is the this is the deficit projected out to twenty nine hundred years two thousand and eleven right here the yellow part here is the bush tax cuts this is this is where we'd be without the bush tax cuts the wars in iraq and afghanistan the impact of the great recession. and the recovery building things like that ok so you're repeating basically there would be no increase in the debt if we ended the wars but most importantly if we got rid of the bush tax cuts but there is republicans now say

they're not going to rid of the bush tax cuts and b. what they've been trying to do is destroy invalid programs from the get go nine hundred thirty five f.d.r. gets social security passed what the republicans want to do take it down they've been fighting it ever since and one hundred seventy eight or nine hundred sixty one when l.b.j. passed medicare they've been fighting that ever since is socialism you know ok but we do so we do not have a spending problem our debt has been fueled by the bush era tax tax cuts and war spending the impact of government spending our deficits and has pretty miniscule here's the here's current job deficit projections ok again the yellow is the wars in iraq and afghanistan the goal here is the bush era tax cuts look at this the biggest part of the blue here is the economic turndown which you know basically if you get rid of these and then this is where we'd be without these factors and there's a there's tarp in the recovery measures and here it's

a loop this little slice now without these things we basically would have no increase in the debt or the deficit or both so what's going on why is the g.o.p. insisting on cutting government spending and not compromising on tax hikes there is an objective here they actually are trying to crash the u.s. economy this is you know back in one nine hundred seventy nine and their sole objective they're making sure obama's not reelected in fact i mean this is not even something radical a new this idea of not making and making sure that that obama's not unlike here's mitch mcconnell talking about it yesterday morning. one of your quotes from last year where you said quote the single most important thing we want to achieve is for president obama to be a one term president so how do you respond to those democratic lines of attack well that is true that's my single most important political go along with every

republican in the country but that's. and you know they tried the same thing in one nine hundred seventy nine jimmy carter was president and the republicans were hysterical but our national debt was a little over eight hundred billion dollars that's point eight trillion we have not yet hit one trillion ronald reagan took us to one trillion blew through that to two trillion blew through that honest a three trillion and then george herbert walker bush blew through that took us up to about five trillion but we had not yet hit one trillion dollars but in seventy nine the republicans wanted to weaken jimmy carter and so they did the exact same thing they're doing with with obama right now they thought important thought and thought and thought said no no no no no until the day of the default. and in fact we actually did default to the tune for one day the tune of as i recall about one hundred twenty million dollars in bonds it hurt the economy it and carter's weak response to the republicans led ted kennedy to primary and ted kennedy came out so

you lose guy you know he's not strong enough and he's not progressive enough and try to push him to the left and try to make him stand up and and you know conventional wisdom is that when a president is primaried then they're going to lose because that weakens them but it could be the other way around we could be confusing cause with effect it could be that a president who's so weak that they get primaried is not going to win and therefore that creates a vacuum that people step into so anyhow it's unlikely that obama's going to face a primary challenge but he's got to realize that these republicans are playing war and he's playing neville chamberlain right now meanwhile we need to do some you know you and i we need to be joining movements movement politics is where this thing is going to come from rebuild the dream dot com for example the van jones as one great get over there get active and in our daily take i'll show you the speech that president obama should have given to.

it's time for a deal is whole your chance to tell us what you think here's today's question if the debt ceiling gets raised with the deal that is moving forward will cause more inequality in america your choices are yes the seventy five percent spending cuts that include social safety nets in the deal will further the divide or no raising taxes on the wealthy two thousand and thirteen will make up for spending cuts are going to target dot com and let us know what you think will be open until tomorrow morning. crazy alert a slippery criminal ohio police are looking for a banana accused of assaulting a gorilla that's right a man dressed up in a gorilla costume for a promotional stunt was standing outside a cell phone store in strongsville ohio when i don't know where another man this one dressed in a banana suit ran up and attacked the gorilla knocking him to the ground and manager of the wireless store describe the attack on their mascot for reporters

made a rare frying like this from playing like a spider ten from three under it kind of except he was a banana. after the altercation the banana man fled the scene unclear what the motive of the takedown was beyond the ironic retribution of a banana getting the best of a monkey which means anyone dressed as a rabbit today should be on the lookout for menacing carrots. carried out all our nation endures financial hardship paul ryan is spotted on capitol hill enjoying a few bottles of wine with the weekly minimum wage of a two income family details of the big spending cap the first.

let's not forget that we had an apartheid regime right here. i think from the one well. we never got the says they're going to continue safe get ready because of their freedom. you know sometimes you see a story and it seems so silly you think you understand it and then you glimpse something else here see some other part of it and realize that everything you thought you don't know i'm sorry is

a big. european investors were screwed today as the markets are going to nosedive amid fears that italy the third largest market the eurozone may be the next european nation to succumb to an economic collapse traders fear italy's banks will take heavy losses

on the debt of bailed out greece ireland and portugal and that the italian government's debt will ultimately prove too big to manage without international help last week ended with a heavy sell off of italian assets and european markets on friday an apparent falling out between prime minister silvio berlusconi as finance minister mr g. . treatment as tensions grew in italy for the eurozone officials met to figure out how to get banks to participate in the next round of bailouts for greece is negotiations have been undermined by threats from ratings agencies that say they're going to consider a bank world order of greek debt as a default so how serious are these threats of collapse in europe and what could it mean for the global economy and for. and prospects here at home how the fact us joining us now to offer more insight on today's news from the euro zone is max prague wealth economist and professor of economics at the new school university graduate program in international affairs max welcome back to the program always

a pleasure to join you thanks for having me thank you how serious is the threat of collapse of your of the euro zone's third largest economy of italy i think that the italian economy is in much better shape than the perception of the italian economy or the trade the italian markets would suggest from the last few days that being said the situation in the euro zone and into a lesser extent in italy is fairly severe as we see continued downgrades of portugal last week major fights between the european union and the three large rating agencies well domicile near where i'm sitting actually in new york city york and continued heavy pressure on ireland and spain and etc so we do see a lot of real serious issues here even if they are slightly overblown and some of the stock trading my day by day basis. you know there's been a whole spectrum of economists from the. kind of fringe to correct me if i'm wrong paul krugman who have been suggesting for some time that the euro that the whole

euro zone that this idea of taking all these very disparate economies and having them all run of the same currency the same central bank is just basically nuts and unsustainable is what's going on right now with greece and italy and portugal and spain proving that or is this just a bump in the road toward you know some something coherent that actually is viable for the long term. well i think the verdict on that still out i do think that the european union involves having a monetary union in which the monetary policies are united under the european central bank and there's a single currency the euro but they never had a common fiscal policy and so the differences between the countries were kind of allied it or ignore it for a while and they're now coming out in an exaggerated form one of the ways we would test that in the marketplace is to look at what it cost the different governments to borrow for ten years already issue what's called the ten year sovereign government issued by arms and the germans can borrow money for ten years for three

percent and the greeks are asked for sixteen percent and the italians are asked for five and a half percent and rising and having that much difference of financial situation inside the single monetary policy and the single european central bank is quite a serious strain and everything that people have ignored and hope for the best about the euro and hope would not assert itself is asserting itself rapidly in a hurry jerky fashion since two thousand is there any kind of parallel between what's going on there with the different countries and what's going on here with the different states you know minnesota shut down right now and you've got other states we have i believe that we had twenty four states the actually raised revenue raised taxes spent more money over the last twelve or eighteen months and saw a decrease in unemployment and an improvement in their economy and we had twenty five states correct me if i'm wrong on the head backwards that did the opposite they cut government spending in the in some cases cut taxes and as

a result their economy saying in their unemployment went up. it is you know do we have that kind of a european problem here or do they i mean is there are there are there any parallels. yeah there's a lot of parallels i mean the biggest parallel it's a very good question is that it's actually the same story part of what we've seen from the united states is a lot of activism from the monetary authority in our case that's the federal reserve which has cut interest rates to between zero one point two five percent for prime brokers and is about to break the record for not just cutting interest rates as low as they've ever been before but keeping them low as long as they've ever been before but we have a fiscal authority that's our tax and spend decision in washington which is not a crass you know august second crash course with destiny that doesn't look too good and the other reason that it's very similar is that the basic underlying problem in the western european context or the american context is the same which is we have a structurally broken economy in other words the government here is being asked to

do more than it can do with the revenues that it has because of its tax policy likewise the story is very similar throughout western europe and we have to figure out how to structurally fix that but instead we're trying to do cyclical responses or act like it's just another recession and it isn't the basic structure of the economy that's broken so the master narrative for the two predictive predicaments are about identical very much similar and the manifestations are culturally and nationally inflected in different ways but are very much similar so the story is yes very much so more. banks who were out of time but i hope we can continue this conversation be fascinating to get into you know should america break up into six or eight states or something i bet it's but we don't have the time for the banks thanks so much for being with us again. my pleasure thank you the irony here is that europe may just be embarking on the road that we've been on the for the past three years according to industry watchers italy is simply too big to fail so our banks toure's and

a credit crisis in italy can put the future of the european monetary union in jeopardy unlike the greek financial crisis which could be compared to the two thousand and eight the laps of lehman brothers for example here in the u.s. italy is too big for the market the overall european market to absorb absorb any kind of a default or even a bailout without major losses and means european banks and policymakers will need to find another solution and you can be sure that what ever plan they come up with it's going to have a hefty price tag and it's not going to be paid for by the banks and cause this mess. what can. what can seven hundred dollars buy in washington these days well if you're a couple making minimum wage that's one week's harder and wages the republican congressman paul ryan that's two bottles of wine that you and your two buddies can share over dinner at one of the swank is restaurants on capitol hill here in d.c. while you're busy discussing how to screw people and privatized medicare on a list of rutgers university professor susan feinberg watched ryan and his

companions sit two bottles of outrageously priced piano off after much fanfare from the restaurant's waitstaff the irony of ryan joins us and actually is where he spends his days on the hill promoting cuts to programs that support seniors and who are simply too much for so she did something about it joining me now to share the details of the event that unfolded during that what was supposed to be a quiet birthday dinner with her husband is economics professor susan feinberg professor welcome thanks so much for having me thank you for joining us would you call yourself it well actually even before we get to that tell us what happened just give us the the the snapshot of what happened when you were there. well we were sitting at a table and after about i guess where the minutes or so congressman ryan came in with two companion who we didn't recognize and one of the companions very loudly ordered a wine and he ordered it by number from the wind really so you know i kind of poked

at my husband and said o'hanley the wireless let's hear what he ordered and you know it turned out it was a three hundred and fifty dollars bottle of wine and i think either is the most or second most expensive bottle of wine on the menu at an expensive restaurant and. about ninety minutes later they ordered a second bottle of wine which you know came to seven hundred dollars total for the trip got all and i was just doing some calculations of well how much time would it take a two income earning couple earning minimum wage working full time to be able to buy that bottle of wine can buy it in a week what salary would you have to make in order to be able to clear enough in a week just to be able to buy it that bottle of you know those two bottles the seven hundred dollar winds and when you look at it in the context of the fact that congressman ryan is the architect of

a budget that will usher in some of the most draconian. budget cuts to america's most boehner bill citizens to our seniors to our low income families. in terms of privatizing medicare and taking health care benefits away from low income families and reducing government subsidies for health care and many many other different kind of budget cuts it struck me as really eerie ironic imperia hypocritical that they were sitting there enjoying that bottle of wine that is just stood up and walked over to their table to have a room or on the way out drop by a sweet finish. their dinner and paid and i walked over to their table and i excuse me congressman ryan i was just wondering how you can live with yourself shrinking seven hundred dollars worth of the wine with salt and issues those boys that have issues so when if you know full time american working family couldn't

even earn enough to buy that wine in one week and i just wanted to know how you can lift yourself while pursuing policies that will hurt those americans disproportionately and and he responded on really he he had no idea how much the wind was clear his response was kind of he looked down and said it cost that much you know like it had no idea he really hadn't looked at the wine list it was somebody else at the table to be a guest with us and that looked as though going into the ordering of the line is this is this is this the guy who manages the twenty six billion dollar hedge fund yes it is it is and and is it true that he dropped the f. bomb on you basically sold you the heat well when so after i approach after i said my piece to congressman ryan cliff asness basically sort of

shouted back at me. well i ordered this why and i'm drinking this wine and i'm paying for this line and i just looked at him and said what are you some kind of lobbyist or something and we proceeded to argue a little more but as soon as i brought up the l. word he got really really angry and confrontational and within i would say about fifteen people standing up and yelling at her remark that remarkable professor just very quickly we have we just have fifteen twenty seconds left what what as an economist what's your opinion of power right spot. i think they're absolutely terrible i think. you know to be that health care expenditures by the government to don't reap a lot of money back to the population we get a lot of productivity dollars mcentee in care of people are making sure that they

have health care and then trading that off for tax cuts to corporations and lowering the top marginal tax brackets to twenty five percent those are things that we're really not going to get very much out of but providing health care to america's workers and america's seniors are things that will benefit all of america for thanks so much for being with us tonight and i don't chip in for having the courage to speak out thank you for all this is pretty crass there's a bigger picture here about how the republicans including paul ryan are using a disaster that they created with thirty years or reaganomics and starve the beast and sanity to frankly try to unseat president obama in two thousand and twelve here's here's the real simple way that works and economy runs on consumer spending but seventy percent of our economy is consumer spending about twenty percent of his government spending about ten fifteen percent of it is business to business spending so basically it's consumers driving the economy and consumers are people

who have money in their pocket and during a time of serious unemployment rate our consumers are broke and they're unemployed and they're spending their unemployment checks which is why we know that if you if you give somebody a dollar and an unemployment check they're going to go to the local restaurant and spend that in a local restaurant going to buy food from the local farmers and local farmers going to go to the local clothing store and on and on and on that dollars going to come two dollars or three dollars or four dollars so it becomes substantial until they finally go to wal-mart the dollar goes to china so what we're or vietnam or whatever and so bottom line here is that unemployment stimulates the economy. so if the republicans are serious in mitch mcconnell's we're going to make obama one term president what do they want to do they want to crash the economy just like when they ran jimmy carter up against the debt limit nine hundred seventy nine and we defaulted for one day and it jacked up interest rates which damaged the economy

as we went into the one nine hundred eighty election i mean it already weakened economy damaged even worse this is a perfect is an absolute replay so you know right now the republicans this is this is why the republicans negotiated with obama that they wanted two years of the bush tax cuts that's right through the elections of two thousand and twelve keep the economy on the edge no more revenues but the only one year of unemployment benefits which will run out at the end of this year which means that another four or five six million people are going to lose their unemployment benefits as we go forward in fact in florida it's going to be four hundred seventy six thousand people in michigan two hundred sixty seven thousand in arizona forty five thousand more one out of every ten unemployed for every job that's been offered this depend on employment on an employed people looking for a job these people are going to stop having money in their pocket they're going to stop stimulating the economy and that's going to be a disaster. coming up rupert murdoch's news corp star suffers

a massive drop in the light of recent backing allegations and the demise of news of the world and of course major crack in the media moguls empire building a wall street journal and five so-called. let's not forget that we had an apartheid regime right. i think profit from a feed of one well. whenever the government says they're going to keep him safe get ready because of their freedom.

you know how sometimes you see a story and it seems so silly you think you understand it and then he limps something else and you hear or see some of the part of it and realize that everything is ok you don't know i'm charming welcome to the big picture. for.