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DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.

D.C. Worrying Over Bank Losses as Pension Debt Explodes

Charlie Gasparino: You know, we should point out that they lost two billion on the trade. Even with that loss, they are going to be making something like $3 billion on the trade. This quarter, next quarter they may have a 10-15 billion dollar earnings year. So, there are a lot of political reasons why they are doing these hearings. Jamie Dimon has a huge opponent of some of the policies of Frank, so they want to put his feet to the fire and show why he shouldn't be such an effective spokesman. I will tell you that report that we first got on Fox Business really shows how little this is compared to this huge elephant. Everybody knows it is there by the way Neil. What this report did is it spelled it out in explicit details just how big it is it is undercounted. Even the unfunded mandate is undercounted. Municipalities-if you go by there public statements-it would add up to about a trillion (900 billion according to the report). The real number is, as you said, $4 trillion.

Charles Payne: What the markets have been telling us-and we talk about the markets are melting down and all the risk and fear- it is a lack of leadership. This was just another gutless display in Washington D.C. Another deflection of what is really the problem, who is really to blame. It is there lack of leadership for this country that really is problem number one. Markets know it, people know it, and businesses know it. Everyone has retrenched and is waiting for the you-know-what to hit the fan. Instead, they want to put on these carnival acts and you know what? Dimon turned the tables on them time after time after time.

Dagen McDowell: I think we do know that these pensions are a problem. I think if you look at the state and local level you have republicans in Michigan trying to shift pensions to a 401(k) style program. You had that vote recently in San Diego to do the same thing because individuals at the state level can see how their funding is being cut. They can see bankruptcy breathing down their necks. They are tired of politicians raiding these pensions. They are tired of seeing the people receiving them boosting them up and beefing them up in their later years of service.

Ben Stein: People are very worried about it and we have an odd situation here in which normally that worry would be reflected in higher interest rates but because the fed is suppressing interest rates the market cannot react properly to what is going on. We have an underfunded problem with almost everything in this country. All the pensions are underfunded, all the social security is underfunded, and all the medicare is underfunded. We are looking at a Greek-style catastrophe in this country somewhere down the road. We don't know when, but it is coming and there is no way to avoid it accept with a lot of tears.

Stephane Fitch: I don't know that there is an easy solution, and you are right, this does need to get a lot more attention from congress. I don't think your exactly right that this is not getting any attention from congress on the state level. Certainly in Illinois, which is a state that has had tremendous problems with underfunding, it has gotten a lot of attention. Pat Quinn did sign a bill earlier this year rooting out a lot of the worst abuses-and some of the abuses are just stomach wrenching-I am sure Charlie has written about them on a few occasions. A lot of it goes back to putting too much trust in these sort of fancy-schmancy bankers from Wall Street promised these pension funds.

Obama, Gov. Romney Go Head-to-Head With Jobs Plan

Charles Payne: It is more or less government and more or less accountability from individuals. That is another big thing for this year. The government will do it all-the government has the power. "You don't have the power. You can't do it!" You can't think of the microwave, you can't come up with the internet. Let government take care of everything for you. We are going to make it work. I know it hasn't worked in the last three and a half years-give it a little bit more time.

Stephane Fitch: I guess so, I mean I don't know. The problem is that we are trying to do too many of the wrong things at the same time. There is a time to cut spending-it probably comes later. Right now is not the time to be getting rid of teachers, quitting big infrastructure projects. It is probably the right thing to be spending money on. Yes, eventually we should be working towards a balanced budget. I think we should be spending more now-it is just about timing.

Dagen McDowell: That is a debt problem. Since we can't pay sky high interest rates that is too much borrowing and not enough spending.

Charlie Gasparino: I think the solution to the economic problems is to get more people working at the DMV. Seriously, that is what President Obama said last week. He really said that if we hire more government workers we would solve our economic problems. That is what he believes.

Ben Stein: The whole thing is incredibly unsettling. We are in a box here-we have spent too much for many, many years. We have got to cut spending, but in a very weak economy it is not the time to cut spending. Well then when is the time to cut spending? As president Obama recently said this recession could last ten years. So when do we cut spending? When are we going to find ourselves waking up one day under an enormous mountain of debt? Are we going to go into default? Are we going to find ourselves in a recession that lasts for 12 years? We will just be in a terrible situation. I would like to go to something that Charles Payne often mentions-individual responsibility. Individual responsibility may have a certain role here.

Europeans favoring China as world's top economic power

Charles Payne: I'm not mad at the Europeans for thinking that China has its act together. They don't go to China with hat in hand. It is always America. Listen, when this grand bargain is done. They don't demand money, they know they are going to get money from us. They know the Fed is going to print money or somehow the IMF is going to get money. Who is the biggest contributor to the IMF? We are. So listen, if you have got such a high opinion of them lean on them. Put some pressure on them. Let them help bail you out sometime.

Dagen McDowell: Correct, but they are growing so rapidly and they are communists. They are communists so, of course if you live in Europe, you are gonna love some communists. I want to say that I am not worried about it because I think back to Japan and we were so worried about the power of Japan and that country, for the most part, has been in recession for years. They have very low incomes in China, and they also are losing a lot of their mojo which is very low wages. So as long as we keep the American spirit of drive and power and being entrepreneurs.

Charlie Gasparino: That is the one problem, and we have talked about it. I have family in Europe-there is no entrepreneurial spirit there. When was the last Italian entrepreneur? It's the mob, they are the biggest business there. I will point one thing out, China has a lousy accounting system. You just don't know what you get.

Stephane Fitch: Everything is a sad commentary on us man. Everything.

Ben Stein: Well, it just shows that people don't know what is really going on. We have an enormously bigger economy than China. On a per capita basis we are probably 5 or 6 times as rich as China and yes I think they probably are going to get money from us. They are going to get money from China too but if the world thinks that China is the world's number one economic power, they are extremely mistaken. They are just comically mistaken.